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Office of Personnel Management.
Final rule.
The Office of Personnel Management is issuing final regulations to implement the Wounded Warriors Federal Leave Act of 2015, which establishes a separate new leave category, to be known as “disabled veteran leave,” available during a 12-month period beginning on the first day of employment to be used by an employee who is a veteran with a service-connected disability rated at 30 percent or more for purposes of undergoing medical treatment for such disability. We are also rescinding two obsolete leave-related regulations.
This final rule is effective on November 5, 2016.
Doris Rippey by telephone at (202) 606-2858 or by email at
On June 6, 2016, the Office of Personnel Management (OPM) published proposed regulations (81 FR 36186) to add a new subpart M, Disabled Veteran Leave, in part 630 (Absence and Leave) of title 5, Code of Federal Regulations, and rescind two obsolete regulations. These final regulations implement the Wounded Warriors Federal Leave Act of 2015 (Pub. L. 114-75, November 5, 2015) (hereafter referred to as “the Act”). The Act adds section 6329 to title 5, United States Code, which establishes a separate new leave category, to be known as “disabled veteran leave.” This new leave category entitles any employee who is a veteran with a qualifying service-connected disability to use disabled veteran leave during a 12-month period beginning on the first day of employment for the purposes of undergoing medical treatment for such disability.
Disabled veteran leave available to an eligible employee may not exceed 104 hours for a regular full-time employee. Disabled veteran leave not used during the established 12-month period may not be carried over to subsequent years and will be forfeited. By law, disabled veteran leave is available only to covered employees who are hired (as defined at § 630.1303) on or after November 5, 2016.
The 30-day comment period for the proposed regulations ended on July 6, 2016. We received comments from 12 individuals, 1 agency, and 1 Federal labor organization. This
We organized our responses to comments by the affected regulatory section number. We did not receive comments on all regulatory sections. Therefore, not all sections are discussed within this Supplementary Information.
We received comments expressing general support for the new type of leave for disabled veterans. A Federal labor organization expressed that “disabled veteran leave is an excellent way to help mitigate the adverse effects of military service and prevent veterans from experiencing unnecessary personal hardships as they transition into the civilian workforce.” The labor organization stated that having the new 104-hour leave entitlement available during the initial 12-month period of employment “will greatly contribute to assisting veterans in making a more seamless transition to civilian duty by affording them the flexibility they need to undergo medical treatment.”
Comments from individuals reflected that veterans often have multiple appointments necessary to treat their service-connected disabilities and may not have sufficient accrued sick or annual leave to attend those appointments. The comments expressed that the new leave category will make it possible for veterans to obtain necessary medical treatment for their service-connected disabilities (during the 12-month eligibility period) without having to take leave without pay, use accrued sick or annual leave, or become indebted for advanced sick or annual leave.
We received several comments from individuals suggesting changes that would be contrary to the statutory requirements in law. These comments fell into three general categories: (1) The requirement that the disabled veteran leave benefit is applicable only to those hired on or after November 5, 2016, (2) the amount of disabled veteran leave provided (up to 104 hours), and (3) the 12-month period in which to use disabled veteran leave (
A labor organization provided a comment on a section of the Supplementary Information of the proposed regulations related to § 630.1304 (Eligibility) (81 FR 36189). In that section, we stated it is important that agencies be able to identify as soon as possible whether an employee is entitled to the benefit since the disabled veteran leave is only available during the first 12 months after the first day of employment. However, we also noted that employees have a responsibility to provide proper documentation/certification from the Veterans Benefits Administration (VBA), a subcomponent of the Department of Veterans Affairs (VA) to enable agencies to make determinations about eligibility for disabled veteran leave. The labor organization stated that the proposed regulations place the burden on veteran employees to provide the necessary documentation upon being employed to gain access to this benefit. The labor organization stated that our proposed regulations are silent on how employees will be notified of the existence of this benefit when they become employed and recommended that agencies provide
We agree that agencies should strive to make employees aware of the disabled veteran leave benefit. While we do not believe it is necessary to incorporate a formal notice requirement in regulations, we will encourage agencies through other means to educate and notify employees regarding the disabled veteran leave benefit. We have also informed VBA of the labor organization's recommendation that it notify veterans of this Federal employee leave benefit when it certifies that they have a 30 percent service-connected disability rating.
Commenters expressed that it was “unfair” to provide this leave benefit only to veterans hired on or after November 5, 2016, and expressed the need for the new leave category to apply to all veterans with a 30 percent or more service-connected disability rating.
Section 2(c) of the Act specifically provides that disabled veteran leave is available to veterans with a 30 percent or more service-connected disability rating who are hired on or after November 5, 2016. Thus, comments received regarding the application of the disabled veteran leave benefit only to those hired on or after November 5, 2016, are outside the scope of OPM's authority and regulations. OPM cannot prescribe regulations that are contrary to statutory requirements.
While current Federal employees who were hired before November 5, 2016, are not eligible for disabled veteran leave, the Federal Government offers a wide range of leave options and workplace flexibilities available to assist employees who need to be away from the workplace, including veterans who must take time off from work to receive medical treatment for their service-connected disabilities. These options include advanced annual leave or advanced sick leave, alternative work schedules, earned credit hours under a flexible work schedule, and earned compensatory time off. Depending on an employee's particular circumstances, leave without pay under the Family and Medical Leave Act (FMLA) or donated leave under the voluntary leave transfer program or voluntary leave bank program may also be options for employees needing time away from work for the treatment of their service-connected disabilities. (See also the discussion of leave rights under Executive Order 5396 at the end of this Supplementary Information.)
Since the term “hired” is not defined in the statute, we define the term “hired” within these regulations to be broader than merely an employee's first appointment with the Federal Government. As discussed in the Supplementary Information of the proposed regulations, although the legislative history of the Act indicates that Congress was focused on the most common scenario—addressing veterans with 30 percent or more service-connected disabilities who are “new” employees and begin their Federal careers with zero hours of sick leave (see House Report 114-180 and Senate Report 114-89)—the law itself does not exclude those with previous Federal civilian service.
Therefore, we provide in these regulations that employees also will be considered to have a hiring event that may qualify them for disabled veteran leave (assuming they meet all other eligibility requirements) if, on or after November 5, 2016, they are (1) reappointed with at least a 90-day break in service or (2) return to civilian duty following a break in civilian duty (with continuous civilian leave status) to perform military service. (See definition of the term
One commenter expressed concern that some employees may wait until after they are hired to file a claim for VA disability benefits, which would “leave little or no time to make this process work,” given the delays in the VA process for making disability determinations.
This comment appeared to reflect a misunderstanding of when the 12-month eligibility period begins. The 12-month eligibility period begins on the
As discussed in the Supplementary Information for the proposed regulations, the effective date of a service-connected disability is generally either the day after the date of military discharge (if the person filed a disability claim within 1 year of discharge date) or the date the claim was filed. Thus, a delay in a determination by VBA can prevent an employee from using disabled veteran leave during the earlier portion of the 12-month eligibility period that may be retroactively established for certain employees. However, the regulations in § 630.1306(c) address this situation by allowing such employees to retroactively substitute disabled veteran leave for other leave they may have taken for covered medical treatment.
We received one comment regarding the requirement in proposed § 630.1304(b) that, “[i]n order to be eligible for disabled veteran leave, an employee must provide to the agency documentation from the Veterans Benefits Administration certifying that the employee has a qualifying service-connected disability.” The commenter expressed concerns about the VBA's ability “to provide timely decisions” and suggested that, in addition to the VBA rating, we also consider using the following documentation as a proof of a service-connected disability rated at 30 percent or more: A Report of Separation showing medically retired (30 percent) or Temporary Disability Retired List (TDRL) and/or a Medical Evaluation Board (MEB)/Physical Evaluation Board (PEB) evaluation from the service department concerned.
The commenter also expressed concerns that “while many veterans will seamlessly transition from active duty to VA care, there will be those who do not immediately file a claim with VBA.” The commenter stated that “for those who wait to file until after they are hired there may be little or no time to make this process work,” and “[i]f the veteran does not have the decision in
The Act requires a formal finding by VA under title 38 that an employee is a veteran with a service-connected disability rated at 30 percent or more. (The Act relies on the title 38 definitions of terms “veteran” and “service-connected.” Only VA issues service-connected disability ratings to veterans under title 38.) The regulations already provide that a temporary disability rating by VA under 38 U.S.C. 1156 is considered a valid rating as long as it is in effect. (See definition of the term
For example, assume a veteran is discharged from the military in July 2014 and is hired to fill a qualifying Federal civilian position on December 1, 2016, but has not filed a claim for veteran disability benefits. The agency cannot credit the employee with the disabled veteran leave at the time of hire because the employee's eligibility for the benefit has not been established by VA. Subsequently, on March 4, 2017, the employee files a claim and on June 5, 2017, VBA issues a decision that the employee has a service-connected disability rating of 30 percent. In this case, the disability rating is effective on the date the employee filed the claim, March 4, 2017. After the employee provides the employing agency with documentation, the agency establishes March 4, 2017, as the “first day of employment” (as a veteran with a service-connected disability of 30 percent or more) and as the beginning date of the employee's 12-month eligibility period, and credits the employee with disabled veteran leave. The employee will have a 12-month period starting on March 4, 2017, and ending on March 3, 2018, in which to use the leave.
While the disability may have existed as the employee awaited the VBA determination, the Act provides that disabled veteran leave may be provided only to an employee who actually has a service-connected disability rating of 30 percent or more in effect. VBA provides disability ratings to veterans in order to determine compensation benefits related to the veteran's service-connected disability.
In the example scenario, the employee was retroactively determined to be eligible for disabled veteran leave starting on March 4, 2017; however, the determination was not made until June 5, 2017. Thus, the employee was not allowed to use disabled veteran leave during the March 4-June 4 period; however, as provided by § 630.1306(c), the agency must allow the employee to substitute disabled veteran leave retroactively for a qualifying period of absence during the March 4-June 4 period (including leave without pay, sick leave, annual leave, compensatory time off, or other paid time off, but excluding periods of suspension or absence without leave (AWOL)).
We received three comments regarding the crediting of 104 hours of disabled veteran leave on a one-time basis. One commenter thought 104 hours was too much and recommended the regulations be changed to provide a maximum of 80 hours. The commenter also suggested that those 80 hours be provided on an annual basis and recommended changing the effective date from November 5, 2016, to January 1, 2017, to avoid providing the leave benefit twice to an employee in a short amount of time.
This comment is misdirected, as it appears that the commenter believes that disabled veteran leave is provided to qualified employees on a recurring annual basis. As the law clearly provides—and as stated in the proposed and final regulations—employees who otherwise qualify are provided disabled veteran leave only once during their Federal careers. The intent of the Act is to allow qualifying veterans access to this special category of leave during a single 12-month eligibility period that commences on the employee's “first day of employment.” The focus of Congress was to address the problem of new Federal employees who have a zero balance of sick leave when initially appointed. In subsequent years, employees can use accrued sick and annual leave balances to receive medical treatment for their service-connected disabilities. Also, contrary to the commenter's assumption, disabled veteran leave is granted for an individualized 12-month eligibility period, not on a calendar year or leave year basis.
Another commenter also recommended that the benefit be provided on an annual basis if the employee has a need for it and if the employee continues to have the service-connected disability.
A third commenter stated that 104 hours was not enough time to cover the various medical appointments veterans with service-connected disabilities rated at 30 percent or more have. The commenter also stated that the location and operating hours of VA medical centers should have been taken into account when determining the amount of hours of disabled veteran leave to provide to an employee. The commenter suggested that VA medical appointments should be authorized as “company time.” The commenter did not feel he should have to supplement disabled veteran leave by using his own accrued sick leave to attend VA medical appointments.
The comments received regarding the amount of leave to credit under the new leave category and how often this leave is made available are outside the scope of OPM's authority and regulations; therefore, no changes were made to the regulations based on these comments. Under section 6329(b)(1), the amount of disabled leave credited to an employee may not exceed 104 hours. The Act provides a one-time benefit of up to 104 hours of disabled veteran leave to an eligible veteran to be used during the12-month period beginning on the first day of employment.
One commenter expressed concern that the retroactive substitution provisions at § 630.1306(c) are too complex. These provisions allow an employee to substitute disabled veteran leave retroactively for other leave or paid time off used for the medical treatment of a qualifying service-connected disability during the employee's established 12-month eligibility.
We disagree and do not view these provisions as too complex to implement. In addition, the provisions allowing for retroactive substitution are necessary to assist employees who have not yet received their disability determination rating of 30 percent or more from the VBA. Therefore, we are not adopting any changes to this portion of the rule.
We received one agency comment regarding this section. The agency recommended that, in the final rule, § 630.1307(b)(1) be changed from “A statement by the health care provider that the medical treatment is for one or more service-connected disabilities of the employee rated at 30 percent or more” to read as “A statement by the health care provider that the medical treatment is for one or more service-connected disabilities of the employee that resulted in 30 percent or more disability rating” or other similar statement. The agency stated that the proposed section could be interpreted to mean that only individual disabilities rated at 30% or higher are eligible when in reality the leave may be used for any of the disabilities listed in the veteran's disability rating determination that were combined to reach a total disability rating of 30 percent or more. The agency acknowledges that the intent of this section is covered elsewhere in the proposed rule, but expressed concern that this particular verbiage could be misunderstood.
We agree with the comment and are adopting the recommended language for § 630.1307(b)(1) in the final rule.
The same agency also commented on the proposed language regarding the time limits within which an employee must provide any required written medical certification to the agency after the agency requests it. In § 630.1307(c)(1) of the proposed rule, the employee must provide the requested medical certification no later than 15 calendar days after the date the agency requests it.
However, § 630.1307(c)(2) provides that if it is not practicable under the particular circumstances to provide the requested medical certification within 15 calendar days after the date requested by the agency despite the employee's diligent, good faith efforts, the employee must provide the medical certification within a reasonable period of time under the circumstances involved, but no later than 30 calendar days after the date the agency requests such documentation.
The agency recommended removing the phrase “diligent, good faith effort” from the final regulations stating that “good faith” is not further clarified or defined in the proposed rule and agencies will have difficulty defending determinations that an employee did not meet “diligent and good faith efforts.”
While we understand the commenter's concerns, we are not adopting a change to the final regulations. We recognize there may be circumstances in which the employee cannot provide the requested documentation within this prescribed time period; therefore, we provide a limited extended time period for the employee. The employee should make every effort to meet the initial 15 calendar days. However, if more time is needed by the employee, the agency should allow for additional days. The employee bears the responsibility for the required medical certification, and part of his or her effort should be periodic updates to the agency on the status of the required medical certification. The employee must provide the required medical certification no later than 30 days after the agency's initial request for such documentation.
Analogous language regarding an employee's “diligent, good faith efforts” is also included in the medical certification provisions of both the sick leave regulations at § 630.405(b) and the Family and Medical Leave Act (FMLA) regulations at § 630.1208(h). We included parallel provisions in these regulations, so that agencies have one standard to administer regarding the timeframes for employees to provide supporting medical documentation to them. Additionally, we have not had any feedback from agencies expressing any difficulty in administering the sick leave and FMLA provisions based upon the “diligent, good faith efforts” language included under those regulations.
We received one comment regarding Executive Order (E.O.) 5396 issued on July 17, 1930. E.O. 5396 provides a basic entitlement for any veteran to use annual leave, sick leave, or leave without pay when absent from work for medical treatment of a service-connected disability (regardless of the disability rating). The commenter questioned why E.O. 5396 is not mentioned in the proposed rule. The commenter stated that “the will of Congress was to expand the intent of the E.O. by actually paying the disabled Vet for some of the leave without pay (LWOP) that they were granted in the 1930 E.O. and that this E.O. is still in effect.” The commenter further recommended that the final rule provide that E.O. 5396 be the first choice after disabled veteran leave has been exhausted.
While we agree that E.O. 5396 is still in effect and valid, we did not mention it in the proposed rule because the rights provided by the Executive order and benefits under the disabled veteran leave law are two separate entitlements. OPM is authorized to issue regulations on disabled veteran leave under section 2(d) of Public Law 114-75. OPM has no authority to issue regulations regarding E.O. 5396. These disabled veteran leave regulations do not change an employee's entitlement under E.O. 5396 to use annual leave, sick leave, or leave without pay for medical treatment of the employee's service-connected disability.
The commenter was also concerned that the term AWOL (absent without leave) was mentioned several times within the proposed rule and expressed concerns that “management would be quick to build up reasons to fire an individual.”
The regulations include two references to AWOL. The first reference to AWOL in the proposed rule simply states that disabled veteran leave cannot be applied retroactively to time charged as AWOL, but may be applied retroactively to time initially charged as leave without pay (LWOP). The second instance permits an employee to be charged as AWOL if he or she fails to produce the medical documentation required by the agency. See § 630.1306 and 630.1307. We have no reason to believe agencies will abuse this authority. Therefore, no change was made to the regulations based on this comment.
The Office of Management and Budget has reviewed this rule in accordance with E.O. 13563 and 12866.
I certify that this regulation will not have a significant economic impact on a substantial number of small entities because it will apply only to Federal agencies and employees.
Government employees.
Office of Personnel Management.
Accordingly, OPM is amending part 630 of title 5 of the Code of Federal Regulations as follows:
5 U.S.C. 6311; § 630.205 also issued under Pub. L. 108-411, 118 Stat 2312; § 630.301 also issued under Pub. L. 103-356, 108 Stat. 3410 and Pub. L. 108-411, 118 Stat 2312; § 630.303 also issued under 5 U.S.C. 6133(a); §§ 630.306 and 630.308 also issued under 5 U.S.C. 6304(d)(3), Pub. L. 102-484,
This subpart implements 5 U.S.C. 6329, which establishes a leave category, to be known as “disabled veteran leave,” for an eligible employee who is a veteran with a service-connected disability rated at 30 percent or more. Such an employee is entitled to this leave for purposes of undergoing medical treatment for such disability. Disabled veteran leave must be used during the 12-month period beginning on the first day of employment. OPM's authority to regulate section 6329 is found in section 2(d) of Public Law 114-75.
This subpart applies to an employee who is a veteran with a service-connected disability rated at 30 percent or more, subject to the conditions specified in this subpart. This subpart does not apply to employees of the United States Postal Service or the Postal Regulatory Commission who are subject to regulations issued by the Postmaster General under section 2(d)(2) of Public Law 114-75. This subpart applies only to an employee who is hired on or after November 5, 2016.
(1) The earliest date an employee is hired after the effective date of the employee's qualifying service-connected disability, as determined by the Veterans Benefits Administration; or
(2) The effective date of the employee's qualifying service-connected disability, as determined by the Veterans Benefits Administration.
(1) Receiving an initial appointment to a civilian position in the Federal Government in which the service qualifies as employment under this subpart;
(2) Receiving a qualifying reappointment to a civilian position in the Federal Government in which the service qualifies as employment under this subpart; or
(3) Returning to duty status in a civilian position in the Federal Government in which the service qualifies as employment under this subpart, when such return immediately followed a break in civilian duty (with the employee in continuous civilian leave status) to perform military service.
(a) An employee who is a veteran with a qualifying service-connected disability is entitled to disabled veteran leave under this subpart, which will be available for use during the 12-month eligibility period beginning on the first day of employment. For each employee, there is a single first day of employment.
(b) In order to be eligible for disabled veteran leave, an employee must provide to the agency documentation from the Veterans Benefits Administration certifying that the employee has a qualifying service-connected disability. The documentation should be provided to the agency—
(1) Upon the first day of employment, if the employee has already received such certifying documentation; or
(2) For an employee who has not yet received such certifying documentation from the Veterans Benefit
(c) Notwithstanding paragraph (b) of this section, an employee may submit certifying documentation at a later time, including after a period of absence for medical treatment, as described in § 630.1306(c). The 12-month eligibility period is fixed based on the first day of employment and is not affected by the timing of when certifying documentation is provided.
(d) If an employee's service-connected disability rating is decreased or discontinued during the 12-month eligibility period such that the employee no longer has a qualifying service-connected disability—
(1) The employee must notify the agency of the effective date of the change in the disability rating; and
(2) The employee is no longer eligible for disabled veteran leave as of the effective date of the rating change.
(a) Upon receipt of the certifying documentation under § 630.1304, an agency must credit 104 hours of disabled veteran leave to a full-time, nonseasonal employee or a proportionally equivalent amount for employees with part-time, seasonal, or uncommon tours of duty, except as otherwise provided in this section.
(b) The proportional equivalent of 104 hours for a full-time employee is determined for employees with other schedules as follows:
(1) For an employee with a part-time work schedule, the 104 hours is prorated based on the number of hours in the part-time schedule (as established for leave charging purposes) relative to a full-time schedule (
(2) For an employee with a seasonal work schedule, the 104 hours is prorated based on the total projected hours to be worked in an annual period of 52 weeks (based on the seasonal employee's seasonal work periods and full-time or part-time schedule during those periods) relative to a full-time work year of 2,080 hours (
(3) For an employee with an uncommon tour of duty (as defined in § 630.201 and described in § 630.210), 104 hours is proportionally increased based on the number of hours in the uncommon tour relative to the hours in a regular full-time tour (
(c) When an employee is converted to a different tour of duty for leave purposes, the employee's balance of unused disabled veteran leave must be converted to the proper number of hours based on the proportion of hours in the new tour of duty compared to the former tour of duty. For seasonal employees, hours must be annualized in determining the proportion.
(d) The amount of disabled veteran leave initially credited to an employee under paragraphs (a) and (b) of this section must be offset by the number of hours of sick leave an employee has credited to his or her account as of the first day of employment. For example, if an employee is being reappointed and having sick leave recredited upon such reappointment, the amount of disabled veteran leave must be reduced by the amount of such recredited sick leave. Similarly, if an employee is returning to civilian duty status after a period of leave for military service, that employee may have a balance of sick leave, which must be used to offset the disabled veteran leave.
(e)(1) An employee who was previously employed by an agency whose employees were not subject to 5 U.S.C. 6329 must certify, at the time the employee is hired in a position subject to 5 U.S.C. 6329, whether or not that former agency provided entitlement to an equivalent disabled veteran leave benefit to be used in connection with the medical treatment of a service-connected disability rated at 30 percent or more. The employee must certify the date he or she commenced the period of eligibility to use disabled veteran leave in the former agency.
(2) If 12 months have elapsed since the commencing date referenced in paragraph (e)(1) of this section, the employee will be considered to have received the full amount of an equivalent benefit and no benefit may be provided under this subpart.
(3) If the employee is still within the 12-month period that began on the commencing date referenced in paragraph (e)(1) of this section, the employee must certify the number of hours of disabled veteran leave used at the former agency. The gaining agency must offset the number of hours of disabled veteran leave to be credited to the employee by the number of such hours used by the employee at such agency, while making no offset under paragraph (d) of this section. If the employee had a different type of work schedule at the former agency, the hours used at the former agency must be converted before applying the offset, consistent with § 630.1305(c).
(a) An employee may use disabled veteran leave only for the medical treatment of a qualifying service-connected disability. The medical treatment may include a period of rest, but only if such period of rest is specifically ordered by the health care provider as part of a prescribed course of treatment for the qualifying service-connected disability.
(b)(1) An employee must file an application—written, oral, or electronic, as required by the agency—to use disabled veteran leave. The application must include a personal self-certification by the employee that the requested leave will be (or was) used for purposes of being furnished medical treatment for a qualifying service-connected disability. The application must also include the specific days and hours of absence required for the treatment. The application must be submitted within such time limits as the agency may require.
(2) An employee must request approval to use disabled veteran leave in advance unless the need for leave is critical and not foreseeable—
(c)(1) When an employee did not provide the agency with certification of a qualifying service-connected disability before having a period of absence for treatment of such disability, the employee is entitled to substitute approved disabled veteran leave retroactively for such period of absence (excluding periods of suspension or absence without leave (AWOL), but including leave without pay, sick leave, annual leave, compensatory time off, or other paid time off) in the 12-month eligibility period. Such retroactive substitution cancels the use of the original leave or paid time off and requires appropriate adjustments. In the case of retroactive substitution for a period when an employee used advanced annual leave or advanced sick leave, the adjustment is a liquidation of the leave indebtedness covered by the substitution.
(2) An agency may require an employee to submit the medical certification described in § 630.1307(a)
(a) In addition to the employee's self-certification required under § 630.1306(b)(1), an agency may additionally require that the use of disabled veteran leave be supported by a signed written medical certification issued by a health care provider.
(b) When an agency requires a signed written medical certification by a health care provider, the agency may specify that the certification include—
(1) A statement by the health care provider that the medical treatment is for one or more service-connected disabilities of the employee that resulted in 30 percent or more disability rating;
(2) The date or dates of treatment or, if the treatment extends over several days, the beginning and ending dates of the treatment;
(3) If the leave was not requested in advance, a statement that the treatment required was of an urgent nature or there were other circumstances that made advanced scheduling not possible; and
(4) Any additional information that is essential to verify the employee's eligibility.
(c)(1) An employee must provide any required written medical certification no later than 15 calendar days after the date the agency requests such medical certification, except as otherwise allowed under paragraph (c)(2) of this section.
(2) If the agency determines it is not practicable under the particular circumstances for the employee to provide the requested medical certification within 15 calendar days after the date requested by the agency despite the employee's diligent, good faith efforts, the employee must provide the medical certification within a reasonable period of time under the circumstances involved, but no later than 30 calendar days after the date the agency requests such documentation.
(3) An employee who does not provide the required evidence or medical certification within the specified time period is not entitled to use disabled veteran leave, and the agency may, as appropriate and consistent with applicable laws and regulations—
(i) Charge the employee as absent without leave (AWOL); or
(ii) Allow the employee to request that the absence be charged to leave without pay, sick leave, annual leave, or other forms of paid time off.
(a) Disabled veteran leave not used during the 12-month eligibility period may not be carried over to subsequent years and must be forfeited.
(b) If a change in the employee's disability rating during the 12-month eligibility period causes the employee to no longer have a qualifying service-connected disability (as described in § 630.1304(d)), any unused disabled veteran leave to the employee's credit as of the effective date of the rating change must be forfeited.
(c) When an employee with a positive disabled veteran leave balance transfers between positions in different agencies, or transfers from the United States Postal Service or Postal Regulatory Commission to a position in another agency, during the 12-month eligibility period, the agency from which the employee transfers must certify the number of unused disabled veteran leave hours available for credit by the gaining agency. The losing agency must also certify the expiration date of the employee's 12-month eligibility period to the gaining agency. Any unused disabled veteran leave will be forfeited at the end of that eligibility period. For the purpose of this paragraph, the term “transfers” means movement from a position in one agency (or the United States Postal Service or Postal Regulatory Commission) to a position in another agency without a break in employment of 1 workday or more in circumstances where service in both positions qualifies as employment under this subpart.
(d)(1) An employee covered by this subpart, or an employee of the United States Postal Service or Postal Regulatory Commission, with a balance of unused disabled veteran leave who has a break in employment of at least 1 workday during the employee's 12-month eligibility period, and later recommences employment covered by 5 U.S.C. 6329 within that same eligibility period, is entitled to a recredit of the unused balance.
(2) When an employee has a break in employment as described in paragraph (d)(1) of this section, the losing agency must certify the number of unused disabled veteran leave hours available for recredit by the gaining agency. The losing agency must also certify the expiration date of the employee's 12-month eligibility period. Any unused disabled veteran leave must be forfeited at the end of that eligibility period.
(3) In the absence of the certification described in paragraph (d)(2) of this section, the recredit of disabled veteran leave may also be supported by written documentation available to the employing agency in its official personnel records concerning the employee, the official records of the employee's former employing agency, copies of contemporaneous earnings and leave statement(s) provided by the employee, or copies of other contemporaneous written documentation acceptable to the agency.
(e) An employee may not receive a lump-sum payment for any unused disabled veteran leave under any circumstance.
Agricultural Marketing Service, USDA.
Direct final rule.
The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations, decreasing the value assigned to imported cotton for the purposes of calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. This amendment is required each year to ensure that assessments collected on imported cotton and the cotton content of imported products will be the same as those paid on domestically produced cotton.
This direct rule is effective October 4, 2016, without further action or notice, unless significant adverse comment is received by September 6, 2016. If significant adverse comment is received, AMS will publish a timely withdrawal of the amendment in the
Written comments may be submitted to the addresses specified below. All comments will be made available to the public. Please do not include personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publically disclosed. All comments may be posted on the Internet and can be retrieved by most Internet search engines. Comments may be submitted anonymously.
Comments, identified by AMS-CN-16-0012, may be submitted electronically through the
Shethir M. Riva, Director, Research and Promotion, Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406, telephone (540) 361-2726, facsimile (540) 361-1199, or email at
Amendments to the Cotton Research and Promotion Act (7 U.S.C. 2101-2118) (Act) were enacted by Congress under Subtitle G of Title XIX of the Food, Agriculture, Conservation, and Trade Act of 1990 (Pub. L. 101-624, 104 Stat. 3909, November 28, 1990). These amendments contained two provisions that authorize changes in the funding procedures for the Cotton Research and Promotion Program. These provisions provide for: (1) The assessment of imported cotton and cotton products; and (2) termination of refunds to cotton producers. (Prior to the 1990 amendments to the Act, producers could request assessment refunds.)
As amended, the Cotton Research and Promotion Order (7 CFR part 1205) (Order) was approved by producers and importers voting in a referendum held July 17-26, 1991, and the amended Order was published in the
This direct final rule would amend the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR 1205.510(b)(2)) that is used to determine the Cotton Research and Promotion assessment on imported cotton and cotton products. The total value of assessment levied on cotton imports is the sum of two parts. The first part of the assessment is based on the weight of cotton imported—levied at a rate of $1 per bale of cotton, which is equivalent to 500 pounds, or $1 per 226.8 kilograms of cotton. The second part of the import assessment (referred to as the supplemental assessment) is based on the value of imported cotton lint or the cotton contained in imported cotton products—levied at a rate of five-tenths of one percent of the value of domestically produced cotton.
Section 1205.510(b)(2) of the Cotton Research and Promotion Rules and Regulations provides for assigning the calendar year weighted average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products is the same. The source for the average price statistic is
The current value of imported cotton as published in 2015 in the
An example of the complete assessment formula and how the figures are obtained is as follows:
One bale is equal to 500 pounds.
One kilogram equals 2.2046 pounds.
One pound equals 0.453597 kilograms.
A 500-pound bale equals 226.8 kg. (500 × 0.453597).
$1 per bale assessment equals $0.002000 per pound or $0.2000 cents per pound (1/500) or $0.004409 per kg or $0.4409 cents per kg. (1/226.8).
The 2015 calendar year weighted average price received by producers for Upland cotton is $0.599 per pound or $1.321 per kg. (0.599 × 2.2046).
Five tenths of one percent of the average price equals $0.006603 per kg. (1.321 × 0.005).
The total assessment per kilogram of raw cotton is obtained by adding the $1 per bale equivalent assessment of $0.004409 per kg. and the supplemental assessment $0.006603 per kg., which equals $0.011012 per kg.
The current assessment on imported cotton is $0.012013 per kilogram of imported cotton. The revised assessment in this direct final rule is $0.011012, a decrease of $0.001001 per kilogram. This decrease reflects the decrease in the average weighted price of Upland cotton received by U.S. farmers during the period January through December 2015.
Import Assessment Table in section 1205.510(b)(3) indicates the total assessment rate ($ per kilogram) due for each Harmonized Tariff Schedule (HTS) number that is subject to assessment. This table must be revised each year to reflect changes in supplemental assessment rates and any changes to the HTS numbers. In this direct final rule, AMS is amending the Import Assessment Table.
AMS believes that these amendments are necessary to ensure that assessments collected on imported cotton and the cotton content of imported products are the same as those paid on domestically produced cotton. Accordingly, changes reflected in this rule should be adopted and implemented as soon as possible since it is required by regulation.
Rulemaking under section 553 of the Administrative Procedure Act (5 U.S.C. 551
As described in this
Also, this direct-final rulemaking furthers the objectives of Executive Order 13563, which requires that the regulatory process “promote predictability and reduce uncertainty” and “identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends.”
AMS has used the direct rule rulemaking process since 2013 and has not received any adverse comments; however, if AMS does receives significant adverse comment during the comment period, it will publish, in a timely manner, a document in the
This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.
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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action has been designated as a “non-significant regulatory action” under § 3(f) of Executive Order 12866, and therefore, review has been waived, and this action has not been reviewed by the Office of Management and Budget.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 12 of the Act, any person subject to an order may file with the Secretary of Agriculture (Secretary) a petition stating that the order, any provision of the plan, or any obligation imposed in connection with the order is not in accordance with law and requesting a modification of the order or to be exempted therefrom. Such person is afforded the opportunity for a hearing on the petition. After the hearing, the Secretary would rule on the petition. The Act provides that the District Court of the United States in any district in which the person is an inhabitant, or has his principal place of business, has jurisdiction to review the Secretary's ruling, provided a complaint is filed within 20 days from the date of the entry of the Secretary's ruling.
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has examined the economic impact of this rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such action so that small businesses will not be unduly or disproportionately burdened. The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (importers) as having receipts of no more than $7,500,000. In 2015, an estimated 20,000 importers are subject to the rules and regulations issued pursuant to the Cotton Research and Promotion Order. Most are considered small entities as defined by the Small Business Administration.
This rule would only affect importers of cotton and cotton-containing products and would lower the assessments paid by the importers under the Cotton Research and Promotion Order. The current assessment on imported cotton is $0.012013 per kilogram of imported cotton. The amended assessment would be $0.011012, which was calculated based on the 12-month weighted average of price received by U.S. cotton farmers. Section 1205.510, “Levy of assessments”, provides “The rate of the supplemental assessment on imported cotton will be the same as that levied on cotton produced within the United States.” In addition, section 1205.510 provides that the 12-month weighted average of prices received by U.S. farmers will be used as the value of imported cotton for the purpose of levying the supplemental assessment on imported cotton.
Under the Cotton Research and Promotion Program, assessments are used by the Cotton Board to finance research and promotion programs designed to increase consumer demand for Upland cotton in the United States and international markets. In 2014 (the last audited year), producer assessments totaled $37.8 million and importer assessments totaled $38.3 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2016, one could expect a decrease of assessments by approximately $3,845,000.
Imported organic cotton and products may be exempt from assessment if eligible under section 1205.519 of the Order.
There are no Federal rules that duplicate, overlap, or conflict with this rule.
In compliance with Office of Management and Budget (OMB) regulations (5 CFR part 1320) which implement the Paperwork Reduction Act (PRA) (44 U.S.C. Chapter 35) the information collection requirements contained in the regulation to be amended have been previously approved by OMB and were assigned control number 0581-0093, National Research, Promotion, and Consumer Information Programs. This rule does not result in a change to the information collection and recordkeeping requirements previously approved.
A 30-day comment period is provided to comment on the changes to the Cotton Board Rules and Regulations proposed herein. This period is deemed appropriate because this rule would decrease the assessments paid by importers under the Cotton Research and Promotion Order. An amendment is required to adjust the assessments collected on imported cotton and the cotton content of imported products to be the same as those paid on domestically produced cotton. Accordingly, the change in this rule, if adopted, should be implemented as soon as possible.
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, AMS amends 7 CFR part 1205 as follows:
7 U.S.C. 2101-2118.
(b) * * *
(2) The 12-month average of monthly weighted average prices received by U.S. farmers will be calculated annually. Such weighted average will be used as the value of imported cotton for the purpose of levying the supplemental assessment on imported cotton and will be expressed in kilograms. The value of imported cotton for the purpose of levying this supplemental assessment is $1.1012 cents per kilogram.
(3) * * *
7 U.S.C. 2101-2118
Internal Revenue Service (IRS), Treasury.
Temporary regulations.
This document contains temporary regulations pursuant to section 1101(g)(4) of the Bipartisan Budget Act of 2015 regarding an election to apply the new partnership audit regime enacted by that act to certain returns of a partnership. The regulations provide the time, form, and manner for making this election. The regulations affect any partnership that wishes to elect to have the new partnership audit regime apply to its returns filed for certain taxable years beginning before January 1, 2018.
Jenni M. Black at (202) 317-6834 (not a toll-free number).
This document contains amendments to the Procedure and Administration Regulations (26 CFR part 301) to provide rules for the time, form, and manner of making the election under section 1101(g)(4) of the Bipartisan Budget Act of 2015, Public Law 114-74 (BBA) with respect to returns filed for partnership taxable years beginning after November 2, 2015 and before January 1, 2018.
The BBA was enacted on November 2, 2015, and was amended by the Protecting Americans from Tax Hikes Act of 2015, Public Law 114-113, div. Q (PATH Act) on December 18, 2015. Section 1101(a) of the BBA removes subchapter C of chapter 63 of the Internal Revenue Code (Code) effective for partnership taxable years beginning after December 31, 2017. Subchapter C of chapter 63 contains the unified partnership audit and litigation rules that were enacted as part of the Tax Equity and Fiscal Responsibility Act of 1982, Public Law 97-248 (TEFRA). These partnership audit and litigation rules are commonly referred to as the TEFRA partnership procedures.
Section 1101(b) of the BBA also removes subchapter D of chapter 63 of the Code (containing audit rules for electing large partnerships) and part IV of subchapter K of chapter 1 of the Code (prescribing the income tax treatment for electing large partnerships), effective for partnership taxable years beginning after December 31, 2017.
Section 1101(c) of the BBA replaces the rules to be removed by sections 1101(a) and (b) with a new partnership audit regime. Section 1101(c) adds a new subchapter C to chapter 63 of the Code, including amended Code sections 6221-6241. The BBA also makes related and conforming amendments to other provisions of the Code.
On December 18, 2015, President Obama signed into law the PATH Act. Section 411 of the PATH Act corrects and clarifies certain amendments made by the BBA. The amendments under the PATH Act are effective as if included in section 1101 of the BBA, and therefore, subject to the effective dates in section 1101(g) of the BBA.
Section 6221(a) as added by the BBA provides that, in general, any adjustment to items of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year (and any partner's distributive share thereof) shall be determined, and any tax attributable thereto shall be assessed and collected, at the partnership level. The applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share shall also be determined at the partnership level. Section 6221(b) as added by the BBA provides rules for partnerships that are required to furnish 100 or fewer Schedules K-1,
Section 6223 as amended by the BBA provides that the partnership shall designate, in the manner prescribed by the Secretary, a partner or other person with a substantial presence in the United States as the partnership representative who shall have the sole authority to act on behalf of the partnership under subchapter C of chapter 63 of the Code, as amended by the BBA. In any case in which such a designation is not in effect, the Secretary may select any person as the partnership representative. A partnership and all partners of such partnership shall be bound by actions taken under subchapter C by the partnership and by any final decision in a proceeding brought under subchapter C with respect to the partnership.
Section 6225 as amended by the BBA generally addresses partnership adjustments made by the IRS and the calculation of any resulting imputed underpayment. Section 6225(a) generally provides that the amount of any imputed underpayment resulting from an adjustment must be paid by the partnership. Section 6225(b) describes how an imputed underpayment is determined, and section 6225(c) describes modifications that, if approved by the IRS, may reduce the amount of an imputed underpayment. The PATH Act added to section 6225(c) a special rule addressing certain passive losses of publicly traded partnerships.
Section 6226 as amended by the BBA provides an exception to the general rule under section 6225(a)(1) that the partnership must pay the imputed underpayment. Under section 6226, the partnership may elect to have the reviewed year partners take into account the adjustments made by the IRS and pay any tax due as a result of those adjustments. In this case, the partnership is not required to pay the imputed underpayment. Section 6225(d)(1) defines the reviewed year to mean the partnership taxable year to which the item(s) being adjusted relates.
Under section 6227 as amended by the BBA, the partnership may request an administrative adjustment, which is taken into account in the partnership taxable year the administrative adjustment request (AAR) is made. The partnership generally has three years from the date of filing the return to make an AAR for that year, but may not make an AAR for a partnership taxable year after the IRS has mailed the partnership a notice of an administrative proceeding initiated with respect to the taxable year.
Section 6231 as amended by the BBA describes notices of proceedings and adjustments, including certain time
Section 6234 as amended by the BBA generally provides that a partnership may seek judicial review of the adjustments within 90 days of the date the notice of final partnership adjustment is mailed. Section 6235 as amended by the BBA provides the period of limitations on making adjustments.
Section 6241 as amended by the BBA provides definitions and special rules, including rules addressing bankruptcy and treatment when a partnership ceases to exist. In particular, section 6241(4) as amended by the BBA provides that no deduction is allowed under subtitle A for any payment required to be made by a partnership under the new partnership audit regime.
Pursuant to section 1101(g)(1) of the BBA, the amendments made by section 1101, which repeal the TEFRA partnership procedures and the rules applicable to electing large partnerships and which create the new partnership audit regime, generally apply to returns filed for partnership taxable years beginning after December 31, 2017. Section 1101(g)(2) of the BBA provides that, in the case of an AAR under section 6227 as amended by the BBA, the amendments made by section 1101 apply to requests with respect to returns filed for partnership taxable years beginning after December 31, 2017. Similarly, section 1101(g)(3) of the BBA provides that, in the case of an election to use the alternative to payment of the imputed underpayment by the partnership under section 6226 as amended by the BBA, the amendments made by section 1101 apply to elections with respect to returns filed for partnership taxable years beginning after December 31, 2017.
Section 1101(g)(4) of the BBA provides that a partnership may elect (at such time and in such form and manner as the Secretary may prescribe) for the amendments made under section 1101 (other than the election out of the new partnership audit regime under section 6221(b) as added by the BBA) to apply to any of its partnership returns filed for partnership taxable years beginning after November 2, 2015 (the date of the enactment of the BBA) and before January 1, 2018.
This Treasury decision adopts temporary regulations set forth in § 301.9100-22T to provide the time, form, and manner for a partnership to make an election pursuant to section 1101(g)(4) of the BBA to have the new partnership audit regime apply to any of its partnership returns filed for a partnership taxable year beginning after November 2, 2015 and before January 1, 2018. Section 301.9100-22T(a) provides the general rule that a partnership may elect at the time and in such form and manner as described in § 301.9100-22T for amendments made by section 1101 of the BBA, except section 6221(b) added by the BBA, to apply to any return of the partnership filed for an eligible taxable year (as defined in § 301.9100-22T(d)). Accordingly, a partnership that elects to apply the new partnership audit regime to a partnership return filed for an eligible taxable year may not elect out of the new rules under the small partnership exception under section 6221(b) as added by BBA, with respect to that return.
Section 301.9100-22T(a) further provides that an election made not in accordance with these temporary regulations is not valid, and an election, once made, may only be revoked with consent of the IRS. An election is also not valid if it frustrates the purposes of section 1101 of the BBA, which include the collection of any imputed underpayment that may be due by the partnership under section 6225(a) as amended by the BBA. In addition, partnerships may not request an extension of time for making an election described in § 301.9100-22T under § 301.9100-3.
Section 301.9100-22T(d)(1) generally provides that for purposes of the temporary regulations, an eligible taxable year is any partnership taxable year beginning after November 2, 2015 and before January 1, 2018. Section 301.9100-22T(d)(2) provides exceptions to the definition of an eligible taxable year to avoid proceedings under both the TEFRA partnership procedures and the new partnership audit regime for the same partnership taxable year. To avoid these multiple proceedings, an election under these temporary regulations does not apply if the partnership has taken the affirmative step to apply the TEFRA partnership procedures with respect to the partnership return for that taxable year. This occurs when the tax matters partner has filed a request for an administrative adjustment for the partnership taxable year under section 6227(c) of the TEFRA partnership procedures with respect to a partnership taxable year. Similarly, an election under these temporary regulations also does not apply if a partnership that is not subject to the TEFRA partnership procedures has filed an amended return of partnership income for the partnership taxable year.
Under the general rule in § 301.9100-22T(b), an election to have the new partnership audit regime apply must be made when the IRS first notifies the partnership in writing that a partnership return for an eligible taxable year has been selected for examination (a “notice of selection for examination”). Section 301.9100-22T(b)(1) provides that a partnership that wishes to make an election must do so within 30 days of the date of the notice of selection for examination. The notice of selection for examination referred to in § 301.9100-22T(b) is a notice that precedes the notice of an administrative proceeding required under section 6231(a) as amended by the BBA. Section 301.9100-22T(b) provides that the IRS will not issue a notice of an administrative proceeding, which cuts off the partnership's time for filing an AAR under section 6227 as amended by the BBA, for at least 30 days after it receives a valid election filed in accordance with § 301.9100-22T(b). During the period of at least 30 days after the IRS receives a valid election and before the IRS mails the notice of an administrative proceeding, the partnership may file an AAR under section 6227 as amended by the BBA.
Section 301.9100-22T(b)(2) provides that an election must be in writing and include a statement that the partnership is electing to have the partnership audit regime enacted by the BBA apply to the partnership return identified in the IRS notification of selection for examination. The partnership must write “Election under Section 1101(g)(4)” at the top of the statement. The statement must be provided to the individual identified in the notice of selection for examination as the IRS contact for the examination. In addition, the statement must be dated and signed by the tax matters partner, as defined under section 6231(a)(7) of the TEFRA partnership procedures and the applicable regulations, or an individual who has the authority to sign the partnership return for the taxable year under examination under section 6063 of the Code, the regulations thereunder, and applicable forms and instructions. The statement must include the name,
A partnership electing into the new partnership audit regime under the BBA will also be required to designate the partnership representative, as defined in section 6223 as amended by the BBA, and provide the partnership representative's name, taxpayer identification number, address and daytime telephone number, and any other information as required in future guidance regarding the partnership representative. The Treasury Department and the IRS expect to issue additional guidance regarding designation of a partnership representative, including who is eligible to be a partnership representative, under section 6223 as amended by the BBA.
Section 301.9100-22T(c) provides an exception to the general rule in § 301.9100-22T(b) that a partnership may only elect into the new partnership audit regime after first receiving a notice of selection for examination. This exception provides that a partnership that has not received a notice of selection for examination described in § 301.9100-22T(b) may make an election to have the new partnership audit regime apply to a partnership return for an eligible taxable year if the partnership wishes to file an AAR under section 6227 as amended by the BBA. Once an election is made under § 301.9100-22T(c), all aspects of the new partnership audit regime, except section 6221(b) as added by the BBA, apply to the return filed for the eligible taxable year subject to the election. As with an election under § 301.9100-22T(b), an election under § 301.9100-22T(c) may not be revoked without consent of the IRS.
An election under § 301.9100-22T(c) must be made only in the manner prescribed by the IRS in accordance with the forms and instructions and other guidance issued by the IRS. In no case may an election under § 301.9100-22T(c) be made earlier than January 1, 2018. Consequently, an AAR under section 6227 as amended by the BBA may not be filed before January 1, 2018 (except by partnerships that have been issued a notice of selection for examination pursuant to the procedures discussed above). An AAR filed before that date (other than an AAR filed by a partnership that made a valid election under § 301.9100-22T(b)) will be treated as an AAR by the partnership under section 6227 of the TEFRA partnership procedures, or as an amended return of partnership income for partnerships not subject to the TEFRA partnership procedures, and will prevent the partnership taxable year for which the request, or return, is filed from being an eligible taxable year.
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 has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this regulation. These temporary regulations are published pursuant to section 7805(b)(2) of the Code to provide the time, form, and manner for a partnership to make an election pursuant to section 1101(g)(4) of the BBA to have the new partnership audit regime apply to any of its returns filed for a partnership taxable year beginning after November 2, 2015 and before January 1, 2018. Without this necessary guidance, a partnership would not be able to make a valid election pursuant to section 1101(g)(4) of the BBA. For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the Special Analyses section of the cross-reference notice of proposed rulemaking published in the Proposed Rules section of this issue of the
The principal author of these temporary regulations is Jenni M. Black of the Office of the Associate Chief Counsel (Procedure and Administration). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 301 is amended as follows:
26 U.S.C. 7805 * * *
Section 301.9100-22T is also issued under section 1101(g)(4) of Public Law 114-74.
(a)
(b)
(2)
(ii)
(A) The partnership's name, taxpayer identification number, and the partnership taxable year for which the election described in this paragraph (b) is being made;
(B) The name, taxpayer identification number, address, and daytime telephone number of the individual who signs the statement;
(C) Language indicating that the partnership is electing application of section 1101(c) of the BBA for the partnership return for the eligible taxable year identified in the notice of selection for examination;
(D) The information required to properly designate the partnership representative as defined by section 6223 as amended by the BBA, which must include the name, taxpayer identification number, address, and daytime telephone number of the partnership representative and any additional information required by applicable regulations, forms and instructions, and other guidance issued by the IRS;
(E) The following representations—
(
(
(
(
(F) A representation, signed under penalties of perjury, that the individual signing the statement is duly authorized to make the election described in this paragraph (b) and that, to the best of the individual's knowledge and belief, all of the information contained in the statement is true, correct, and complete.
(iii)
(c)
(2)
(3)
(4)
(d)
(2)
(i) The tax matters partner has filed an AAR under section 6227(c) (prior to amendment by the BBA),
(ii) The partnership is deemed to have filed an AAR under section 6227(c) (prior to the amendment by the BBA) in accordance with paragraph (c)(4) of this section, or
(iii) An amended return of partnership income has been filed or has been deemed to be filed under paragraph (c)(4) of this section.
(e)
(f)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a 100 yard temporary moving safety zone around the M/V Zhenhuan 14 during its inbound and outbound transit as well as all movements in between the Charleston Harbor entrance buoy and the Wando Welch Terminal on the Charleston Harbor, and Wando River, Charleston, SC. The M/V Zhenhuan 14 will be transporting 5 gantry cranes between the dates of August 5, 2016 through August 17, 2016. The safety zone is necessary to protect the public from hazards associated with transporting the large cranes. Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port Charleston or a designated representative.
This rule is effective from August 5, 2016 through August 17, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant John Downing, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Coast Guard was notified of this situation only 10 days prior to the vessel arrival. It is impracticable to publish a NPRM because we must establish this safety zone by August 5, 2016 to protect vessels and people in the vicinity of the M/V Zhenhuan 14's transit.
We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Charleston (COTP) has determined that potential hazards associated with the Transit of the M/V Zhenhuan 14 will be a safety concern for anyone within a 100-yard radius around the outer most points of the vessel. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the vessel is transiting.
The legal basis for this rule is the Coast Guard's Authority to establish a safety zone: 33 U.S.C. 1231. The purpose of the proposed rule is to ensure safety of life on the navigable water of the United States during the transit of the M/V Zhenhuan 14.
This rule establishes a safety zone on August 5, 2016 through August 17, 2016 during all movements of the M/V Zhenhuan 14 with its cranes in the downward position. The vessel is 815 ft long with a beam of 450 ft with the cranes in the downward position. The safety zone will cover all navigable waters within a 100-yard radius around the outer most points of the vessel. The duration of the zone is intended to protect personnel, vessels, and the marine environment while the vessel is transiting the Charleston Harbor, and Wando River, Charleston, SC. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we 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 rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
The economic impact of this rule is not significant for the following reasons: (1) Although persons and vessels will not be able to enter, transit through, anchor in, or remain within the regulated area without authorization from the Captain of the Port Charleston or a designated representative, they will be able to operate in the surrounding area during the enforcement periods; (2) persons and vessels will still be able to enter, transit through, anchor in, or remain within the regulated area if authorized by the Captain of the Port Charleston or a designated representative; and (3) the Coast Guard will provide advance notification of the regulated area to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.
The Regulatory Flexibility Act of 1980, 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 rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
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 rule. If the rule would affect your small business, organization, or governmental
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a 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 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 rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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 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 rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a temporary safety zone, that will prohibit entry within a 100-yard radius around the outer most points of the vessel.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1226, 1231; 50 U.S.C. 191; 33 CFR 1.05-1(g), 6.04-1, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a
(b)
(c)
(2) Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the Captain of the Port Charleston by telephone at (843) 740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within the regulated area is granted, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative.
(3) The Coast Guard will provide notice of the regulated area by Marine Safety Information Bulletins, Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.
(d)
Coast Guard, DHS.
Final rule.
The Coast Guard is establishing a safety zone on the Columbia River in Hood River, OR. This safety zone is necessary to help ensure the safety of the maritime public during a cross channel swim and will do so by prohibiting unauthorized persons and vessels from entering the safety zone unless authorized by the Sector Columbia River Captain of the Port or his designated representatives.
This rule is effective on September 5, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Ken Lawrenson, Waterways Management Division, Marine Safety Unit Portland, U.S. Coast Guard; telephone 503-240-9319, email
On April 20, 2016, the Hood River County Chamber of Commerce notified the Coast Guard that it will be conducting a cross-channel swim on the Columbia River in Hood River, OR for the Annual Roy Webster Cross-Channel Swim. In response, on May 16, 2016 the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Annual Roy Webster Cross-Channel Swim, Columbia River, Hood River, OR (81 FR 30503). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this marine event. During the comment period that ended on June 16, 2016 we received no comments.
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port, Sector Columbia River (COTP) has determined that potential hazards associated with cross-channel swims could be a safety concern for the event participants, any other mariners transiting the area during the event hours, and a potential threat to the marine environment. The purpose of this rule is to ensure the safety of event participants, the marine environment and the protection of the navigable waterway before, during, and after the scheduled event.
As noted above, we received no comments on our NPRM published May 16, 2016. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.
This rule establishes a safety zone that will be enforced from 6 a.m. to noon on Labor Day each year. The safety zone will encompass all navigable waters of the Columbia River between River Mile 169 and River Mile 170. The duration of the zone is intended to ensure the safety of vessels, participants and these navigable waters before, during, and after the scheduled cross-channel swim. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we 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 rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the size, location, short duration, and the event's long history. Commercial vessel traffic will be able to transit the area if they obtain permission from the COTP or a designated representative. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 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 received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
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 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
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against
This rule will not call for a 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 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 rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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 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 rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting approximately 6 hours annually that will prohibit entry within a specific section of the Columbia River in the vicinity of Hood River, OR. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(1) Non-participant persons and vessels may request authorization to enter, transit through, anchor in, or remain within the regulated area by contacting the Captain of the Port Sector, Columbia River or a designated representative via VHF radio on channel 16. If authorization is granted by the Captain of the Port, Sector Columbia River or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Sector, Columbia River or a designated representative.
(2) The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners and on-scene designated representatives.
(d)
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA or the Agency) is taking
This rule is effective on October 4, 2016 without further notice, unless EPA receives adverse comment by August 22, 2016. If EPA receives adverse comment, we will publish a timely withdrawal notice in the
Submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2016-0274, at
For information concerning this direct final rule, contact Steve Souders, Office of Resource Conservation and Recovery, Environmental Protection Agency, 5304P, Washington, DC 20460; telephone number: (703) 308-8431; email address:
This direct final rule applies only to those owners or operators of inactive CCR surface impoundments that meet all three of the following conditions: (1) Complied with the requirement at 40 CFR 257.105(i)(1) by placing in their facility's written operating record a notification of intent to initiate closure of the CCR unit as required by 40 CFR 257.100(c)(1), no later than December 17, 2015; (2) complied with the requirement at 40 CFR 257.106(i)(1) by providing notification to the relevant State Director and/or appropriate Tribal authority by January 19, 2016, of the intent to initiate closure of the CCR unit; and (3) complied with the requirement at 40 CFR 257.107(i)(1) by placing the notification of intent to initiate closure of the CCR unit on the owner or operator's publicly accessible CCR Web site no later than January 19, 2016.
If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding
EPA is publishing this rule without a prior proposed rule because we view this as a noncontroversial action and anticipate no adverse comment. This direct final rule merely extends the deadlines for the owners and operators of those inactive CCR surface impoundments that had taken advantage of the “early closure” provisions of 40 CFR 257.100, who became newly subject to the rule's requirements for existing CCR surface impoundments on June 14, 2016 when the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) ordered the vacatur of those provisions. This rule provides time for these owners and operators to bring their units into compliance with the rule's substantive requirements, but does not otherwise amend the rule or otherwise impose new requirements on those units. However, in the “Proposed Rules” section of this
If EPA receives adverse comment, we will publish a timely withdrawal in the
These regulations are established under the authority of sections 1006(b), 1008(a), 2002(a), 4004, and 4005(a) of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6906(b), 6907(a), 6912(a), 6944, and 6945(a).
On April 17, 2015 EPA finalized national regulations to regulate the disposal of coal combustion residuals (CCR) as solid waste under subtitle D of the Resource Conservation and Recovery Act (RCRA) titled, “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities,” (80 FR 21302) (“CCR rule”). The CCR rule established national minimum criteria for existing and new CCR landfills and existing and new CCR surface impoundments and all lateral expansions consisting of location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements and post-closure care, and recordkeeping, notification and internet posting requirements. The rule also required any existing unlined CCR surface impoundment that is contaminating groundwater above a regulated constituent's groundwater protection standard to stop receiving CCR and either retrofit or close, except in limited circumstances. It also established requirements for inactive CCR surface impoundments,
On June 14, 2016 the United States Court of Appeals for the D.C. Circuit ordered the vacatur of these “early closure” provisions in 40 CFR 257.100. The effect of the vacatur is that all
As a consequence of the order issued by the United States Court of Appeals for the D.C. Circuit on June 14, 2016, EPA is removing certain provisions of the CCR rule at 40 CFR 257.100(b), (c), and (d) related to the “early closure” of inactive CCR surface impoundments by April 17, 2018.
As a result of this order, owners and operators of inactive CCR surface impoundments that had relied on these “early closure” provisions must now comply with all of the requirements for existing CCR surface impoundments. These technical requirements are found in the following sections of the CCR rule: Location criteria; design and operating requirements, air criteria, inspection requirements, groundwater monitoring and corrective action; closure and post-closure care; and recordkeeping, notification and publicly accessible internet site requirements. Each of these requirements contained associated compliance deadlines, which must also be met. But the owners and operators of these units would have substantially less time than EPA had originally determined was needed to come into compliance; indeed some of these deadlines have already passed, prior to the issuance of the court's order. In the absence of an extension, these units would, through no fault of their own, become “open dumps” under the statute.
Accordingly, EPA is extending the compliance deadlines associated with these newly applicable regulatory requirements to allow the owners or operators of these units adequate time to come into compliance. The Agency is extending each of these compliance deadlines by 547 days, which is the amount of time between the signature date of the final rule and the last business day of the week during which the order from the court granting the motion to vacate 40 CFR 257.100 (b), (c), and (d) was signed. Thus, the 547 days represents the amount of time between December 19, 2014, and June 17, 2016.
EPA defines the units subject to this extension rule as exclusively those units whose owners and operators of inactive CCR surface impoundments have complied with the following three requirements: (1) The requirement at 40 CFR 257.105(i)(1), by placing in their facility's written operating record a notification of intent to initiate closure of the CCR unit as required by 40 CFR 257.100(c)(1), by no later than December 17, 2015; (2) the requirement at 40 CFR 257.106(i)(1), by providing notification to the relevant State Director and/or appropriate Tribal authority no later than January 19, 2016, of the intent to initiate closure of the CCR unit; and (3) the requirement of 40 CFR 257.107(i)(1) by placing the notification of intent to initiate closure of the CCR unit on the owner or operator's publicly accessible CCR Web site, by no later than January 19, 2016.
A brief discussion of the requirements with which these inactive CCR surface impoundments must comply is presented below for the ease of the reader. However, EPA is not soliciting comment on any of these requirements, including the original deadlines associated with these requirements, and is not otherwise reopening any aspect of the final CCR rule. EPA will not consider any comment on any topic other than the extension of the deadlines for the newly subject inactive CCR surface impoundments to be part of the record for this rule, and will not respond to such comments.
To ensure that CCR surface impoundments are appropriately sited, the CCR rule established location restrictions, including restrictions relating to placement of CCR above the uppermost aquifer, in wetlands, within fault areas, in seismic impact zones, and in unstable areas. See 40 CFR 257.60 through 257.64. As discussed in the CCR rule, all of these location restrictions require the owner or operator of a CCR surface impoundment to demonstrate that they meet the specific criteria, as well as providing a deadline by when the demonstrations much be completed. In addition, the CCR rule requires existing CCR surface impoundments that cannot make the required demonstrations to close the unit. However, owners or operators of certain inactive CCR surface impoundments—those owners or operators that elected to comply with the now-vacated “early closure” provisions under 40 CFR 257.100(b)—were exempt from the location restrictions finalized in the CCR rule. With the vacatur of the exemption, these inactive CCR surface impoundments become subject to the location restrictions. This direct final rule provides owners or operators of eligible inactive CCR surface impoundments until April 16, 2020 to comply with the requirements for location restrictions; otherwise, the CCR unit must be closed. See also 80 FR 21359 -21368, April 17, 2015.
Owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(3)(i) must by April 17, 2018 comply with the requirements at 40 CFR 257.71(a) and (b) and document, certified by a qualified professional engineer, whether their inactive CCR surface impoundment is constructed with any one of the three liner types: (1) A liner consisting of a minimum of two feet of compacted soil with a hydraulic
Except for incised CCR surface impoundments as defined in 40 CFR 257.53, owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(3)(ii) are subject to 40 CFR 257.73(a)(1) that requires the placement of a permanent identification marker, at least six feet high on or immediately adjacent to the CCR unit with the name associated with the CCR unit and the name of the owner or operator. The placement of the permanent marker must be completed by the owner or operator of the inactive CCR surface impoundment no later than June 16, 2017.
Except for incised CCR surface impoundments as defined in 40 CFR 257.53, owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(3)(v) must complete the initial periodic hazard potential classification assessment as required by 40 CFR 257.73 (a)(2) no later than April 17, 2018. Section 257.73(a)(3) requires any CCR surface impoundment that is determined by the owner or operator, through the certification by a qualified professional engineer, to be either a high hazard potential or a significant hazard potential CCR surface impoundment to prepare and maintain a written Emergency Action Plan (EAP). An EAP is a document that identifies potential emergency conditions at a CCR surface impoundment and specifies actions to be followed to minimize loss of life and property damage. In order to prepare an EAP, the owner or operator must accurately and comprehensively identify potential failure modes and at risk developments. Inactive surface impoundments that have been identified as having either a high hazard potential or a significant hazardous potential are subject to the provisions of the new 40 CFR 257.100(e)(3)(iii) and must prepare and maintain an EAP as required by 40 CFR 257.73 no later than October 16, 2018. See also 80 FR 21377-21379, April 17, 2015.
CCR surface impoundments that either have: (1) A height of five feet or more and a storage volume of 20 acre feet or more; or (2) have a height of 20 feet or more are required to document the design and construction of the CCR surface impoundment as required in 40 CFR 257.73(b) and (c). Owners or operators of inactive CCR surface impoundments that meet this size threshold and are subject to the provisions of the new 40 CFR 257.100(e)(3)(iv) must document the construction history of the CCR unit no later than April 17, 2018. See also 80 FR 21379-21380, April 17, 2015.
CCR surface impoundments meeting the size threshold discussed in section IV.E of this preamble, are also subject to two different types of technical assessments: (1) A structural stability assessment; and (2) a safety factor assessment. Owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(3)(v) are required to conduct an initial assessment addressing both structural stability and safety factors by April 17, 2018. These requirements can be found at 40 CFR 257.73(b), (d), (e), and (f). See also 80 FR 21380-21386, April 17, 2015.
The owner or operator of a CCR unit is required under 40 CFR 257.80(b) to adopt measures that will effectively minimize CCR from becoming airborne at the facility, including CCR fugitive dust originating from CCR units, roads, and other CCR management and material handling activities. To meet this requirement, the owner or operator of the CCR unit must prepare and operate in accordance with a fugitive dust control plan. Owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(4)(i) must complete this plan no later than April 18, 2017. See also 80 FR 21386-21388, April 17, 2015.
Owners or operators of all CCR surface impoundments are required to design, construct, operate, and maintain hydraulic and hydrologic capacity to adequately manage flow both into and from a CCR surface impoundment during and after the peak discharge resulting from the inflow design flood, which is based on the Hazard Potential Classification of the CCR surface impoundment (40 CFR 257.82(a)). The rule requires the preparation of an initial inflow design flood control system plan (40 CFR 257.82(c)). Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(4)(ii) must complete the inflow design flood control system plan by April 17, 2018. See also 80 FR 21390-21392, April 17, 2015.
Under 40 CFR 257.83(a) all CCR surface impoundments must be examined by a qualified person at least once every seven days for any appearance of actual or potential structural weakness or other conditions that are disrupting or that have the potential to disrupt the operation or safety of the CCR unit. The results of the inspection by a qualified person must be recorded in the facility's operating record. Weekly inspections are intended to detect, as early as practicable, signs of distress in a CCR surface impoundment that may result in larger more severe conditions. Inspections are also designed to identify potential issues with hydraulic structures that may affect the structural safety of the unit and impact its hydraulic and hydrologic capacity. 40 CFR 257.83(a) also requires the monitoring of all instrumentation supporting the operation of the CCR unit to be conducted by a qualified person no less than once per month. Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(4)(iii) must initiate the inspection requirements set forth in 40 CFR 257.83(a) no later than April 18, 2017. See also 80 FR 21394-21395, April 17, 2015.
Any CCR surface impoundment exceeding the size threshold discussed in section IV.E of this preamble, is required to conduct annual inspections of the CCR unit throughout its operating life (40 CFR 257.83(b)). These inspections are focused primarily on the structural stability of the unit and must ensure that the operation and
Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(5)(i) are required to comply with the provisions of 40 CFR 257.90(b) no later than April 17, 2019. These provisions require the installation of a groundwater monitoring system as required by 40 CFR 257.91 and the development of a groundwater sampling and analysis program. This program is to include selection of the statistical procedures to be used for evaluating groundwater monitoring data as required by 40 CFR 257.93. It also includes the initiation of the detection monitoring program and includes obtaining a minimum of eight independent samples for each background and downgradient wells as required by 40 CFR 257.94(b) and to begin evaluating the groundwater monitoring data for a statistically significant increase over background levels for the constituents listed in appendix III as required by 40 CFR 257.94. See also 80 FR at 21396-21407, April 17, 2015.
Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(5)(ii) are required to comply with the provisions of 40 CFR 257.90(e) no later than August 1, 2019 (and annually thereafter) that require the preparation of an annual groundwater monitoring and corrective action report. The report must contain specific information identified in the regulations including but not limited to maps, aerial images or diagrams showing the CCR unit and all upgradient (background) and downgradient wells, identification of any monitoring wells installed or decommissioned in the previous year; monitoring data collected under 40 CFR 257.90-257.98 and a narrative discussion of any transition between monitoring programs (
Consistent with the groundwater monitoring requirements previously discussed in section IV.K of this preamble, no later than April 17, 2019, owners or operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(5)(i) must collect a minimum of eight independent samples from each background and down gradient well and analyze for constituents listed in appendix III and IV of this part as required under 40 CFR 257.94(b).
The closure plan describes the steps necessary to close a CCR unit at any point during the active life of the unit based on recognized and generally accepted good engineering practices. Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(6)(i) are required to comply with the requirements of 40 CFR 257.102, including 40 CFR 257.102(b) requiring the preparation of a written closure plan no later than April 17, 2018. A written closure plan includes information that sets out how the closure of the unit will be conducted. It includes information such as a narrative description of the closure process, whether the closure of the CCR unit will be accomplished by leaving CCR in place or through clean closure. If the CCR is left in place, the closure plan must provide a description of the final cover system and how the final cover system will achieve the regulatory performance standards. The written closure plan must also provide a schedule for completing all activities necessary to satisfy the closure criteria of the rule. See also 80 FR 21410-21425, April 17, 2015.
40 CFR 257.104(d) requires that an owner or operator of a CCR unit prepare a written post-closure plan. The content of the plan includes among other things, a description of the monitoring and maintenance activities required for the unit and the frequency that these activities will be performed. Owners and operators of inactive CCR surface impoundments subject to the provisions of the new 40 CFR 257.100(e)(6)(ii) are required to comply with the requirements of 40 CFR 257.104, including 40 CFR 257.104(d) requiring the preparation of a written post-closure plan no later than April 17, 2018.
Inactive CCR surface impoundments subject to the revised compliance deadlines being finalized in this direct final rule are also subject to the recordkeeping, notification and publicly accessible internet reporting requirements. The CCR rule requires the owner or operator of a CCR unit(s) to maintain files of all required information (
Owners or operators are also required to notify State Directors and/or the appropriate Tribal authority when specific documents have been placed in the operating record and on the owner or operators publicly accessible internet site. In most instances, these notifications must be certified by a qualified professional engineer and may, in certain instances, be accompanied with additional information or data supporting the notification. Notification requirements can be found at 40 CFR 257.106, and are required for location criteria, design criteria, operating criteria, groundwater monitoring and corrective action and closure and post-closure care.
Owners and operators of CCR units are also required to establish and maintain a publicly accessible Internet site, titled “CCR Rule Compliance Data and Information.” Unless provided otherwise in the rule, information posted to the Internet site must be available for a period no less than 3 years from the initial posting date. Posting of information must be completed no later than 30 days from the submittal of the information to the operating record. Owners and operators of inactive CCR surface impoundments subject to the new provisions of § 257.100(e) have 30 days from the revised compliance deadlines to post applicable information on their publicly accessible internet site.
The preceding discussion provides an abbreviated summary of the compliance deadlines for owners or operators of inactive CCR surface impoundments affected by this direct final rule. These inactive CCR surface impoundments are now also subject to all applicable requirements under 40 CFR part 257, subpart D for existing CCR surface impoundments. The new compliance deadlines for inactive CCR surface impoundments have been collected in a new paragraph (e) under § 257.100.
The CCR rule established minimum federal criteria for existing and new CCR surface impoundments and CCR landfills. The regulations promulgated under subtitle D of RCRA require owner or operators of these units to comply with the requirements of the rule without any additional action by a state or federal regulatory agency. As discussed at length in the CCR rule preamble (80 FR 21429-21433, April 17, 2015), under the provisions of subtitle D applicable to solid waste, states are not required to adopt or implement these regulations, to develop a permit program, or submit a program covering these units to EPA for approval and there is no mechanism for EPA to officially approve or authorize a state program to operate “in lieu of” the federal regulations. In the CCR rule, however, EPA strongly encouraged states to adopt at least the federal minimum requirements into their regulations. EPA further acknowledged that some states have already adopted requirements that go beyond the minimum federal requirements; for example, some states currently impose financial assurance requirements for CCR units, and require a permit for some or all of these units. The federal criteria promulgated in the CCR rule are minimum requirements and do not preclude states' from adopting more stringent requirements where they deem to be appropriate. EPA also encouraged states to revise their solid waste management plan (SWMP) to address the issuance of the revised federal requirements and to submit the revisions of these plans to EPA for review, using the provision contained in 40 CFR part 256.
This rule amends the final CCR rule to reflect the vacatur of specific provisions of that rule applicable to certain CCR surface impoundments (
Under Executive Order 12866 (58 FR 51735, October 4, 1993) and Executive Order 13563 (76 FR 3821, January 21, 2011), this action is not a “significant regulatory action” and is therefore not subject to OMB review. Because this action is not subject to notice and comment requirements under the Administrative Procedures Act or any other statute, it is not subject to the Regulatory Flexibility Act (5 U.S.C. 601
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Beneficial use, Coal combustion products, Coal combustion residuals, Coal combustion waste, Disposal, Hazardous waste, Landfill, Surface impoundment.
For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is amended as follows:
42 U.S.C. 6907(a)(3), 6912(a)(1), 6944(a), and 6949a(c); 33 U.S.C. 1345(d) and (e).
(a) All CCR landfills, CCR surface impoundments, and lateral expansions of CCR units are subject to the groundwater monitoring and corrective action requirements under §§ 257.90 through 257.98.
The revisions and additions read as follows:
(a) Inactive CCR surface impoundments are subject to all of the requirements of this subpart applicable to existing CCR surface impoundments.
(e)
(i) The owner or operator must have prepared and placed in the facility's operating record by December 17, 2015, a notification of intent to initiate closure of the inactive CCR surface impoundment pursuant to § 257.105(i)(1);
(ii) The owner or operator must have provided notification to the State Director and/or appropriate Tribal authority by January 19, 2016, of the intent to initiate closure of the inactive CCR surface impoundment pursuant to § 257.106(i)(1); and
(iii) The owner or operator must have placed on its CCR Web site by January 19, 2016, the notification of intent to initiate closure of the inactive CCR surface impoundment pursuant to § 257.107(i)(1).
(2)
(A) Complete the demonstration for placement above the uppermost aquifer as set forth by § 257.60(a), (b), and (c)(3);
(B) Complete the demonstration for wetlands as set forth by § 257.61(a), (b), and (c)(3);
(C) Complete the demonstration for fault areas as set forth by § 257.62(a), (b), and (c)(3);
(D) Complete the demonstration for seismic impact zones as set forth by § 257.63(a), (b), and (c)(3); and
(E) Complete the demonstration for unstable areas as set forth by § 257.64(a), (b), (c), and (d)(3).
(ii) An owner or operator of an inactive CCR surface impoundment who fails to demonstrate compliance with the requirements of paragraph (e)(2)(i) of this section is subject to the closure requirements of § 257.101(b)(1).
(3)
(i) No later than April 17, 2018, complete the documentation of liner type as set forth by § 257.71(a) and (b).
(ii) No later than June 16, 2017, place on or immediately adjacent to the CCR unit the permanent identification marker as set forth by § 257.73(a)(1).
(iii) No later than October 16, 2018, prepare and maintain an Emergency Action Plan as set forth by § 257.73(a)(3).
(iv) No later than April 17, 2018, compile a history of construction as set forth by § 257.73(b) and (c).
(v) No later than April 17, 2018, complete the initial hazard potential classification, structural stability, and safety factor assessments as set forth by § 257.73(a)(2), (b), (d), (e), and (f).
(4)
(i) No later than April 18, 2017, prepare the initial CCR fugitive dust control plan as set forth in § 257.80(b).
(ii) No later than April 17, 2018, prepare the initial inflow design flood control system plan as set forth in § 257.82(c).
(iii) No later than April 18, 2017, initiate the inspections by a qualified person as set forth by § 257.83(a).
(iv) No later than July 19, 2017, complete the initial annual inspection by a qualified professional engineer as set forth by § 257.83(b).
(5)
(i) No later than April 17, 2019, comply with groundwater monitoring requirements set forth in §§ 257.90(b) and 257.94(b); and
(ii) No later than August 1, 2019, prepare the initial groundwater monitoring and corrective action report as set forth in § 257.90(e).
(6)
(i) No later than April 17, 2018, prepare an initial written closure plan as set forth in § 257.102(b); and
(ii) No later than April 17, 2018, prepare an initial written post-closure care plan as set forth in § 257.104(d).
(a) * * *
(1) Except as provided by paragraph (a)(2) of this section, § 257.104 applies to the owners or operators of CCR landfills, CCR surface impoundments, and all lateral expansions of CCR units that are subject to the closure criteria under § 257.102.
Federal Emergency Management Agency, DHS.
Final rule.
This rule identifies communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed within this rule because of noncompliance with the floodplain management requirements of the program. If the Federal Emergency Management Agency (FEMA) receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in this rule, the suspension will not occur and a notice of this will be provided by publication in the
If you want to determine whether a particular community was suspended on the suspension date or for further information, contact Patricia Suber, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 400 C Street SW., Washington, DC 20472, (202) 646-4149.
The NFIP enables property owners to purchase Federal flood insurance that is not otherwise generally available from private insurers. In return, communities agree to adopt and administer local floodplain management measures aimed
In addition, FEMA publishes a Flood Insurance Rate Map (FIRM) that identifies the Special Flood Hazard Areas (SFHAs) in these communities. The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year on FEMA's initial FIRM for the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment procedures under 5 U.S.C. 553(b), are impracticable and unnecessary because communities listed in this final rule have been adequately notified.
Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days.
Flood insurance, Floodplains.
Accordingly, 44 CFR part 64 is amended as follows:
42 U.S.C. 4001
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure of Angling category northern area trophy fishery.
NMFS closes the northern area Angling category fishery for large medium and giant (“trophy” (
Effective 11:30 p.m., local time, August 6, 2016 through December 31, 2016.
Sarah McLaughlin or Brad McHale, 978-281-9260.
Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971
NMFS is required, under § 635.28(a)(1), to file a closure notice with the Office of the Federal Register for publication when a BFT quota is reached or is projected to be reached. On and after the effective date and time of such notification, for the remainder of the fishing year or for a specified period as indicated in the notification, retaining, possessing, or landing BFT under that quota category is prohibited until the opening of the subsequent quota period or until such date as specified in the notice.
The 2016 BFT fishing year, which is managed on a calendar-year basis and subject to an annual calendar-year quota, began January 1, 2016. The Angling category season opened January 1, 2016, and continues through December 31, 2016. The currently codified Angling category quota is 195.2 mt, of which 4.5 mt is allocated for the harvest of large medium and giant (trophy) BFT from the regulatory area by vessels fishing under the Angling category quota, with 1.5 mt allocated for each of the following areas: North of 39°18′ N. lat. (off Great Egg Inlet, NJ); south of 39°18′ N. lat. and outside the Gulf of Mexico; and in the Gulf of Mexico. Trophy BFT measure 73 inches (185 cm) curved fork length or greater.
As of July 26, 2016, reported landings from the NMFS Automated Catch Reporting System total approximately 1.7 mt. NMFS has determined that the codified Angling category northern area trophy BFT subquota has been reached and that a closure of the northern area trophy BFT fishery is warranted at this time. Therefore, retaining, possessing, or landing large medium or giant BFT north of 39°18′ N. lat. by persons aboard vessels permitted in the HMS Angling category and the HMS Charter/Headboat category (when fishing recreationally) must cease at 11:30 p.m. local time on August 6, 2016. This closure will remain effective through December 31, 2016. This action is intended to prevent any further overharvest of the Angling category northern area trophy BFT subquota, and is taken consistent with the regulations at § 635.28(a)(1).
If needed, subsequent Angling category adjustments will be published in the
HMS Angling and HMS Charter/Headboat category permit holders may catch and release (or tag and release) BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. Anglers are also reminded that all BFT that are released must be handled in a manner that will maximize survival, and without removing the fish from the water, consistent with requirements at § 635.21(a)(1). For additional information on safe handling, see the “Careful Catch and Release” brochure available at
The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:
The regulations implementing the 2006 Consolidated HMS FMP, as amended, provide for inseason retention limit adjustments and fishery closures to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. The closure of the northern area Angling category trophy fishery is necessary to prevent any further overharvest of the northern area trophy fishery subquota. NMFS provides notification of closures by publishing the notice in the
These fisheries are currently underway and delaying this action would be contrary to the public interest as it could result in excessive trophy BFT landings that may result in future potential quota reductions for the Angling category, depending on the magnitude of a potential Angling category overharvest. NMFS must close the northern area trophy BFT fishery before additional landings of these sizes of BFT accumulate. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For all of the above reasons, there is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.
This action is being taken under 50 CFR 635.28(a)(1), and is exempt from review under Executive Order 12866.
16 U.S.C. 971
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Reopening of public comment period.
On May 31, 2016, the U.S. Department of Energy (DOE) published in the
The comment period for the proposed rule published on May 31, 2016 (81 FR 34440) is reopened. DOE will accept comments, data, and information regarding the notice of proposed rulemaking received no later than August 30, 2016.
No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” section of the May 31, 2016 NOPR. 81 FR 34440, 34532-33.
A link to the docket Web page can be found at:
On May 31, 2016, DOE published in the
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2003-18-06, for certain Airbus Model A319-131 and -132 airplanes; Model A320-231, -232, and -233 airplanes; and Model A321-131 and -231 airplanes. AD 2003-18-06 currently requires installing new anti-swivel plates and weights on the engine fan cowl door (FCD) latches and a new cowl door hold-open device. Since we issued AD 2003-18-06, we have received reports of additional engine FCD in-flight losses, and a new FCD front latch and keeper assembly has been developed to address this unsafe condition. This proposed AD would retain the current actions and require modifying the engine FCDs, installing placards, and re-identifying the FCDs with the new part numbers. This proposed AD would also revise the applicability to include all Model A319-131 and -132 airplanes; Model A320-231, -232, and -233 airplanes; and Model A321-131 and -231 airplanes. We are proposing this AD to prevent in-flight loss of an engine FCD and possible consequent damage to the airplane and hazards to persons or property on the ground.
We must receive comments on this proposed AD by September 19, 2016.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this NPRM, 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 invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On August 29, 2003, we issued AD 2003-18-06, Amendment 39-13297 (68 FR 53501, September 11, 2003) (“AD 2003-18-06”). AD 2003-18-06 requires actions intended to address an unsafe condition on certain Airbus Model A319-131 and -132 airplanes; Model A320-231, -232, and -233 airplanes; and Model A321-131 and -231 airplanes.
Since we issued AD 2003-18-06, we have received reports of additional engine FCD in-flight losses, and a new FCD front latch and keeper assembly has been developed to address this unsafe condition.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0053, dated March 14, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A319-131 and -132; A320-231, -232, and -233; and A321-131 and -231 airplanes. The MCAI states:
Fan Cowl Door (FCD) losses during take-off were reported on aeroplanes equipped with IAE V2500 engines. Prompted by these occurences, [Direction Générale de l'Aviation Civile] DGAC France issued AD 2000-444-156(B), mandating FCD latch improvements. This [DGAC] AD was later superseded by AD 2001-381(B) [which corresponds to FAA AD 2003-18-06], requiring installation of additional fan cowl latch improvement by installing a hold open device.
Since that [DGAC] AD was issued, further FCD in flight losses were experienced in service. Investigations confirmed that in all
This condition, if not corrected, could lead to in-flight loss of a FCD, possibly resulting in damage to the aeroplane and/or injury to persons on the ground.
Prompted by these recent events, new FCD front latch and keeper assembly were developed, having a specific key necessary to un-latch the FCD. This key cannot be removed unless the FCD front latch is safely closed. The key, after removal, must be stowed in the flight deck at a specific location, as instructed in the applicable Aircraft Maintenance Manual. Applicable Flight Crew Operating Manual has been amended accordingly. After modification, the FCD is identified with a different Part Number (P/N).
For the reasons described above, this [EASA] AD retains the requirements of DGAC AD 2001-381(B), which is superseded, and requires modification and re-identification of FCD.
Airbus has issued Service Bulletin A320-71-1069, dated December 18, 2015. The service information describes procedures for modifying the engine FCDs, installing placards, and re-identifying the FCDs with the new part numbers. 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
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
We estimate that this proposed AD affects 558 airplanes of U.S. registry.
The actions required by AD 2003-18-06, and retained in this proposed AD, take about 8 work-hours per product, at an average labor rate of $85 per work-hour. Required parts cost about $1,500 per product. Based on these figures, the estimated cost of the actions that are required by AD 2003-18-06 is $2,180 per product.
We also estimate that it would take about 6 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $4,813 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $2,970,234, or $5,323 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
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 proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by September 19, 2016.
This AD replaces AD 2003-18-06, Amendment 39-13297 (68 FR 53501, September 11, 2003) (“AD 2003-18-06”).
This AD applies to Airbus Model A319-131 and -132 airplanes; Model A320-231, -232, and -233 airplanes; and Model A321-131 and -231 airplanes; certificated in any category; all manufacturer serial numbers.
Air Transport Association (ATA) of America Code 71, Powerplant.
This AD was prompted by reports of engine fan cowl door (FCD) in-flight losses. We are issuing this AD to prevent in-flight loss of an engine FCD and possible consequent damage to the airplane and hazards to persons or property on the ground.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (a) of AD 2003-18-06, with no changes. Within 18 months after October 16, 2003 (the effective date of AD 2003-18-06), do the action(s) specified in paragraph (g)(1) or (g)(2) of this AD, as applicable.
(1) For Configuration 01 airplanes identified in Airbus Service Bulletin A320-71-1028, dated March 23, 2001: Modify the door latches of the fan cowl of both engines (
(2) For Configuration 02 airplanes identified in Airbus Service Bulletin A320-71-1028, dated March 23, 2001: Install a new hold-open device, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-71-1028, dated March 23, 2001.
Within 36 months after the effective date of this AD, do the actions required by paragraphs (h)(1), (h)(2), and (h)(3) of this AD, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-71-1069, dated December 18, 2015.
(1) Modify the left-hand and right-hand FCDs on engines 1 and 2.
(2) Install a placard on the box located at the bottom of the 120 VU panel or at the bottom of the coat stowage, as applicable.
(3) Re-identify both engine FCDs with the new part numbers (P/Ns), as specified in table 1 to paragraph (h) of this AD and table 2 to paragraph (h) of this AD, as applicable.
(1) Replacing an engine FCD having a part number listed as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable, with a FCD having the corresponding part number listed as “New Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable, is an acceptable method of compliance with the requirements of paragraphs (h)(1) and (h)(3) of this AD for that engine FCD only.
(2) An airplane on which Airbus Modification 157516 has been embodied in production is compliant with the requirements of paragraph (h)(1) and (h)(3) of this AD, provided no engine FCD, having a part number identified as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable, is installed on that airplane.
(3) An airplane on which Airbus Modification 157718 has been embodied in production is compliant with the requirements of paragraph (h)(2) of this AD.
(1) For an airplane with an engine FCD installed having a part number identified as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable: After modification of that airplane as required by paragraph (h) of this AD, do not install an engine FCD, having a part number identified as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable.
(2) For an airplane that does not have an engine FCD installed having a part number identified as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable: On or after the effective date of this AD, do not install an engine FCD, having a part number identified as “Old Part Number” in table 1 to paragraph (h) of this AD or table 2 to paragraph (h) of this AD, as applicable.
Installation on an engine of a right-hand and left-hand engine FCD having a part number approved after the effective date of this AD is a method of compliance with the requirements of paragraphs (g), (h)(1), and (h)(3) of this AD for that engine only, provided the part number is approved, and the installation is accomplished, in accordance with a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2016-0053, dated March 14, 2016, for related information. This MCAI may be found in the AD docket on the Internet at
(2) 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
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (NPRM); reopening of comment period.
We are revising an earlier proposed airworthiness directive (AD) for certain Empresa Brasileira de Aeronautica S.A. (Embraer) Model EMB-135 airplanes and Model EMB-145, -145ER, -145MR, -145LR, -145MP, and -145EP airplanes. The NPRM proposed to require a detailed inspection for chafing on the electrical harness of each electrical fuel pump in the fuel tanks, replacement of the affected electrical fuel pump with a new or serviceable pump if necessary, and installation of clamps on the fuel pump electrical harnesses. The NPRM was prompted by a report of chafing found between the fuel pump electrical harness and the fuel pump tubing during scheduled maintenance. This action revises the NPRM by expanding the proposed applicability and revising the compliance time for the detailed inspection. We are proposing this supplemental NPRM (SNPRM) to detect and correct chafing of the fuel pump harnesses with other parts inside the fuel tank, which could present a potential ignition source that could result in a fire or fuel tank explosion. Since certain actions impose an additional burden over those proposed in the NPRM, we are reopening the comment period to allow the public the chance to comment on these proposed changes.
We must receive comments on this SNPRM by September 19, 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 SNPRM, contact Empresa Brasileira de Aeronautica S.A. (Embraer), Technical Publications Section (PC 060), Av. Brigadeiro Faria Lima, 2170—Putim—12227-901 São Jose dos Campos—SP—Brasil; telephone +55 12 3927-5852 or +55 12 3309-0732; fax +55 12 3927-7546; email
You may examine the AD docket on the Internet at
Todd Thompson, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1175; fax 425-227-1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Empresa Brasileira de Aeronautica S.A. (Embraer) Model EMB-135 airplanes and Model EMB-145, -145ER, -145MR, -145LR, -145MP, and -145EP airplanes. The NPRM published in the
Since we issued the NPRM, we have determined that certain airplanes were inadvertently omitted from the applicability, and the compliance time for the detailed inspection required by paragraph (h)(1) of this AD must be revised to “within 5,000 flight hours or 24 months after the effective date of this AD, whichever occurs first.”
The Agência Nacional de Aviação Civil (ANAC), which is the aviation authority for Brazil, has issued Brazilian Airworthiness Directive 2015-03-01, effective March 23, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on certain Empresa Brasileira de Aeronautica S.A. (Embraer) Model EMB-135 airplanes and Model EMB-145, -145ER, -145MR, -145LR, -145MP, and -145EP airplanes. The MCAI states:
Chafing between the fuel pump electrical harness and fuel pump tubing was detected during scheduled maintenance. We are issuing this [Brazilian] AD to protect the fuel pump harnesses against chafing with other parts inside the fuel tank, which could present a potential ignition source that could result in a fire or fuel tank explosion.
The required actions include a detailed inspection for chafing on the electrical harness of each electrical fuel pump in the fuel tanks, replacement of the affected electrical fuel pump with a new or serviceable pump if necessary, and installation of clamps on the fuel pump electrical harnesses. You may examine the MCAI in the AD docket on the Internet at
Embraer has issued Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010; and Service Bulletin 145LEG-28-0032, Revision 01, dated November 20, 2012. The service information describes procedures for a detailed inspection for chafing on the electrical harness of each electrical fuel pump in the fuel tanks, replacement of the affected electrical fuel pump with a new or serviceable pump if necessary, and installation of clamps on the fuel pump electrical harnesses. 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 gave the public the opportunity to participate in developing this proposed AD. We considered the comments received.
ExpressJet Airlines stated that the airplane effectivity in Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010, included Model EMB-145XR airplanes. ExpressJet Airlines stated that Model EMB-145XR airplanes are not included in paragraph (c), “Applicability,” of the proposed AD (in the NPRM) and asked if this is the intent of the NPRM or if the Model EMB-145XR airplanes should be included.
We agree with the commenter to clarify the applicability of this SNPRM. Although ANAC unintentionally omitted Model EMB-145XR airplanes from the applicability of its AD, the serial numbers corresponding to Model EMB-145XR airplanes are identified in the Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010. We have added Model EMB-145XR airplanes to the applicability of this SNPRM. We have coordinated this issue with ANAC.
ExpressJet requested that we revise the compliance time for the detailed inspection in the proposed AD (in the NPRM) to “within 5,000 flight hours or 24 months after the effective date of this AD, whichever occurs first,” instead of “within 2,500 flight hours or 24 months after the effective date of this AD, whichever occurs first.” ExpressJet stated that this would allow the majority of the airplanes to be inspected during a C-check interval, which would be the most effective time to accomplish the task as the fuel tanks have to be drained and vented for the inspection to be performed. ExpressJet commented that these limits also line up with the current recommendations in the service information.
We agree with the commenter for the reasons stated previously. Data from Embraer confirms that increasing the flight hours another 2,500 flight hours is acceptable. We have changed this SNPRM accordingly.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
Certain changes described above expand the scope of the NPRM. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.
We estimate that this SNPRM affects 731 airplanes of U.S. registry.
We estimate that it would take about 11 work-hours per product to comply with the new basic requirements of this SNPRM. The average labor rate is $85 per work-hour. Required parts would cost about $0 per product. Based on these figures, we estimate the cost of this SNPRM on U.S. operators to be $683,485, or $935 per product.
In addition, we estimate that any necessary follow-on actions would take about 6 work-hours and would require parts costing $11,242, for a cost of $11,752 per product. We have no way of determining the number of aircraft that might need this action.
According to the manufacturer, some of the costs of this SNPRM may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
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 proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by September 19, 2016.
None.
This AD applies to the airplanes specified in paragraphs (c)(1) and (c)(2) of this AD.
(1) Empresa Brasileira de Aeronautica S.A. (Embraer) Model EMB-135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145MP, -145EP, and -145XR airplanes, certificated in any category, as identified in Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010.
(2) Empresa Brasileira de Aeronautica S.A. (Embraer) Model EMB-135BJ airplanes,
Air Transport Association (ATA) of America Code 28, Fuel.
This AD was prompted by a report of chafing found between the fuel pump electrical harness and the fuel pump tubing during scheduled maintenance. We are issuing this AD to detect and correct chafing of the fuel pump harnesses with other parts inside the fuel tank, which could present a potential ignition source that could result in a fire or fuel tank explosion.
Comply with this AD within the compliance times specified, unless already done.
Do the actions specified in paragraphs (g)(1) and (g)(2) of this AD at the applicable times specified in paragraph (h)(1) or (h)(2) of this AD.
(1) Do a detailed inspection for chafing on the electrical harness of each electrical fuel pump in the fuel tanks, in accordance with the Accomplishment Instructions of Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010 (for Model EMB-135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145MP, -145EP, and -145XR airplanes); or Embraer Service Bulletin 145LEG-28-0032, Revision 01, dated November 20, 2012 (for Model EMB-135BJ airplanes). If any chafing is found, before further flight, replace the affected electrical fuel pump with a new or serviceable pump having the same part number, in accordance with the Accomplishment Instructions of Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010; or Embraer Service Bulletin 145LEG-28-0032, Revision 01, dated November 20, 2012; as applicable.
(2) Install clamps on the fuel pump electrical harnesses, in accordance with the Accomplishment Instructions of Embraer Service Bulletin 145-28-0030, Revision 01, dated October 22, 2010 (for Model EMB-135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145MP, -145EP, and -145XR airplanes); or Embraer Service Bulletin 145LEG-28-0032, Revision 01, dated November 20, 2012 (for Model EMB-135BJ airplanes).
(1) For Model EMB-135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145MP, -145EP, and -145XR airplanes: Do the actions specified in paragraph (g) of this AD within 5,000 flight hours or 24 months after the effective date of this AD, whichever occurs first.
(2) For Model EMB-135BJ airplanes: Do the actions specified in paragraph (g) of this AD within 4,800 flight hours or 48 months after the effective date of this AD, whichever occurs first.
This paragraph provides credit for actions required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Embraer Service Bulletin 145-28-0030, dated September 1, 2010 (for Model EMB-135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145MP, -145EP, and -145XR airplanes); or Embraer Service Bulletin 145LEG-28-0032, dated September 15, 2011 (for Model EMB-135BJ airplanes), as applicable. This service information is not incorporated by reference in this AD.
The following provisions also apply to this AD:
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Brazilian Airworthiness Directive 2015-03-01, effective March 23, 2015, for related information. This MCAI may be found in the AD docket on the Internet by searching for and locating Docket No. FAA-2015-3143.
(2) For service information identified in this AD, contact Empresa Brasileira de Aeronautica S.A. (Embraer), Technical Publications Section (PC 060), Av. Brigadeiro Faria Lima, 2170—Putim—12227-901 São Jose dos Campos—SP—Brasil; telephone +55 12 3927-5852 or +55 12 3309-0732; fax +55 12 3927-7546; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for all Airbus Model A300 series airplanes; and 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). This proposed AD was prompted by reports of cracks in certain pins in the main landing gear (MLG). This proposed AD would require repetitive detailed visual inspections of the pins for cracks, and replacing the MLG leg if necessary. We are proposing this AD to detect and correct cracking of certain pins in the MLG, which could result in a MLG collapse, and consequent damage to the airplane and injury to the airplane occupants.
We must receive comments on this proposed AD by September 19, 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 NPRM, 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 invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2016-0058, dated March 21, 2016, (referred to after this as “the MCAI”), to correct an unsafe condition for all Airbus Model A300 series airplanes; and 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:
Two cases were reported of finding a cracked main landing gear (MLG) hinge arm/barrel pin, one was discovered in service during a maintenance task and the other one was identified during MLG overhaul.
This condition, if not detected and corrected, could lead to MLG collapse, resulting in damage to the aeroplane and potential injury to occupants.
To address this potential unsafe condition, and awaiting a final fix establishment, Airbus issued Alert Operators Transmission (AOT) 32W008-16 to provide instructions for detailed visual inspections (DET) to detect through cracks.
For the reasons described above, this [EASA] AD requires repetitive DET of the MLG hinge arm/barrel pin and, depending on findings, replacement of the affected MLG leg.
You may examine the MCAI in the AD docket on the Internet at
We reviewed Airbus Alert Operators Transmission (AOT) 32W008-16, dated February 25, 2016. This service information describes detailed visual inspection and replacement procedures for the MLG hinge arm and barrel pin. 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
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
We estimate that this proposed AD affects 128 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary replacement that would be required based on the results of the proposed inspection. We have no way of determining the number of airplanes that might need this replacement.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this proposed AD is 2120-0056. The paperwork cost associated with this proposed AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this proposed AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.
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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
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 proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by September 9, 2016.
None.
This AD applies to Airbus airplanes identified in paragraphs (c)(1) through (c)(5) of this AD, certificated in any category, all manufacturer serial numbers.
(1) Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and B4-203 airplanes.
(2) Model A300 B4-601, B4-603, B4-620, and B4-622 airplanes.
(3) Model A300 B4-605R and B4-622R airplanes.
(4) Model A300 F4-605R and F4-622R airplanes.
(5) Model A300 C4-605R Variant F airplanes.
Air Transport Association (ATA) of America Code 32, Landing Gear.
This AD was prompted by reports of cracks in certain pins in the main landing gear (MLG). We are issuing this AD to detect and correct cracking of certain pins in the MLG, which could result in a MLG collapse, and consequent damage to the airplane and injury to the airplane occupants.
Comply with this AD within the compliance times specified, unless already done.
Within the compliance time specified in paragraphs (g)(1) and (g)(2) of this AD, whichever occurs later, and thereafter at intervals not to exceed 100 flight cycles, accomplish a detailed visual inspection of the internal diameter of each affected MLG hinge arm/barrel pin, in accordance with the instructions of Airbus Alert Operators Transmission (AOT) A32W008-16, dated February 25, 2016. The affected MLG hinge arm/barrel pins are those with part number C66441-(x) and part number C65543-(x), where the x represents a variable number.
(1) Within 30 months since the pin's first flight on an airplane, or since the pin's first flight on an airplane after overhaul, as applicable.
(2) Within 30 days after the effective date of this AD.
If any crack is found during any inspection required by paragraph (g) of this AD, before further flight, replace the MLG leg with a serviceable unit, in accordance with the instructions of Airbus AOT A32W008-16, dated February 25, 2016. Replacement of a MLG leg does not constitute terminating action for the repetitive inspections required by paragraph (g) of this AD.
At the applicable time specified in paragraph (i)(1) or (i)(2) of this AD, report the results of the inspections required by paragraph (g) of this AD to Airbus in accordance with the instructions of Airbus AOT A32W008-16, dated February 25, 2016.
(1) If the inspection was done on or after the effective date of this AD: Submit the report within 30 days after the inspection.
(2) If the inspection was done before the effective date of this AD: Submit the report within 30 days after the effective date of this AD.
The following provisions also apply to this AD:
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2016-0058, dated March 21, 2016, for related information. This MCAI may be found in the AD docket on the Internet at
(2) 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
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2012-08-11 for certain Bombardier, Inc. Model DHC-8-400 series airplanes. AD 2012-08-11 currently requires repetitive detailed inspections for defects and damage of the retract port flexible hoses on the left and right Main Landing Gear (MLG) retraction actuator, and replacement of the flexible hoses if necessary. Since we issued AD 2012-08-11, we determined that the orientation of the retraction actuator ports must be revised to address the identified unsafe condition. This proposed AD would continue to require the actions required by AD 2012-08-11, and would require reorientation of the retraction actuator of the MLG, which would terminate the repetitive inspections. This proposed AD would also remove airplanes from the applicability. We are proposing this AD to prevent hydraulic fluid leakage in the event of a damaged retract port flexible hose failure; this condition could lead to an undamped extension of the MLG and could result in MLG structural failure, leading to an unsafe, asymmetric landing configuration.
We must receive comments on this proposed AD by September 19, 2016.
You may send comments by any of the following methods:
•
•
•
•
• For Bombardier service information identified in this NPRM, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
You may examine the AD docket on the Internet at
Cesar Gomez, Mechanical Systems Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7318; fax 516-794-5531.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On April 11, 2012, we issued AD 2012-08-11, Amendment 39-17028 (77 FR 24351, April 24, 2012) (“AD 2012-08-11”). AD 2012-08-11 requires actions intended to address an unsafe condition on certain Bombardier, Inc. Model DHC-8-400 series airplanes.
Since we issued AD 2012-08-11, we determined that the left and right MLG retraction actuator ports must be reoriented and the retract port flexible hoses replaced with hydraulic tube assemblies to address the identified unsafe condition. Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2011-14R1, dated May 21, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or ”the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model DHC-8-400, -401, and -402 airplanes. The MCAI states:
Testing has shown that in the event of a main landing gear (MLG) retraction actuator retract port flexible hose failure, in-flight vibrations may cause excessive hydraulic fluid leakage. This could potentially lead to an undamped extension of the MLG, which may result in MLG structural failure, leading to an unsafe asymmetric landing configuration.
The original issue of this [Canadian] AD mandated the [detailed] inspection [for defects and damage] of the retract port flexible hose and its replacement [installing a new retract port flexible hose], when required, to prevent damage to the MLG caused by undamped gear extensions.
Revision 1 of this [Canadian] AD mandates the reorientation of the MLG Retraction Actuator to prevent hydraulic fluid leakage in the event of a damaged retract port flexible hose.
This proposed AD also would remove certain airplanes from the applicability of AD 2012-08-11. Airplanes having serial number 4425 and on were modified in production and therefore the identified unsafe condition does not apply to these airplanes. You may examine the MCAI in the AD docket on the Internet at
Bombardier, Inc. has issued Bombardier Service Bulletin 84-32-105, Revision A, dated April 24, 2015; and Service Bulletin 84-32-106, Revision A, dated April 24, 2015. The service information describes procedures to reorient the retraction actuator, which includes modifying and reorienting the retraction actuator assembly, and installing reconfigured hydraulic tube assemblies.
Goodrich Aerospace Canada Ltd. has issued Service Bulletin 46550-32-99 R2, dated February 19, 2015; and Service Bulletin 46455-32-100 R1, dated March 20, 2013. This service information describes procedures for reworking and re-identifying the retraction actuator hydraulic tube assembly and dressed yoke assembly, and reworking the retraction actuators.
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
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.
We estimate that this proposed AD affects 82 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need this replacement:
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
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
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
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 proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by September 19, 2016.
This AD replaces AD 2012-08-11, Amendment 39-17028 (77 FR 24351, April 24, 2012) (“AD 2012-08-11”).
This AD applies to Bombardier, Inc. Model DHC-400, -401, and -402 airplanes, certificated in any category, serial numbers 4001 through 4424 inclusive.
Air Transport Association (ATA) of America Code 32, Landing gear.
This AD was prompted by test reports that showed that failure of a retract port flexible hose of a main landing gear (MLG) retraction actuator could cause excessive hydraulic fluid leakage. We are issuing this AD to prevent hydraulic fluid leakage in the event of a damaged retract port flexible hose failure; this condition could lead to an undamped extension of the MLG and could result in MLG structural failure, leading to an unsafe asymmetric landing configuration.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2012-08-11, with new reference to terminating action. Within 600 flight hours after May 29, 2012 (the effective date of AD 2012-08-11), do a detailed inspection for defects and damage of the retract port flexible hose of the left and right MLG retraction actuators, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-32-89, dated March 22, 2011. Repeat the inspection thereafter at intervals not to exceed 600 flight hours. If any defect or damage is found, before further flight, replace the retract port flexible hose with a new or serviceable retract port flexible hose, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-32-89, dated March 22, 2011. Doing the actions required by paragraph (h) of this AD terminates the inspections required by this paragraph.
Within 6,000 flight hours or 36 months, whichever occurs first after the effective date of this AD: Reorient the MLG retraction actuator by incorporating Bombardier ModSums 4-902418 and 4-902327, in accordance with the Accomplishment Instructions of the applicable service information specified in paragraphs (h)(1) and (h)(2) of this AD. Accomplishment of the actions required by this paragraph terminates the actions required by paragraph (g) of this AD.
(1) Bombardier Service Bulletin 84-32-105, Revision A, dated April 24, 2015, including Goodrich Service Bulletin 46550-32-99 R2, dated February 19, 2015.
(2) Bombardier Service Bulletin 84-32-106, Revision A, dated April 24, 2015, including Goodrich Service Bulletin 46455-32-100 R1, dated March 20, 2013.
This paragraph provides credit for actions required by paragraph (h) of this AD, if those actions were performed before the effective date of this AD using the service information identified in paragraphs (i)(1)and (i)(2) of this AD.
(1) Bombardier Service Bulletin 84-32-105, dated September 28, 2012.
(2) Bombardier Service Bulletin 84-32-106, dated September 10, 2012.
The following provisions also apply to this AD:
(1)
(i) 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.
(ii) AMOCs approved previously for AD 2012-08-11 are approved as AMOCs for the corresponding provisions of this AD.
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2011-24R1, dated May 21, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For Bombardier service information identified in this AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
Consumer Product Safety Commission.
Announcement of meeting.
The Consumer Product Safety Commission (CPSC, Commission, or we) staff is holding a 1-day Flammable Fabrics Act (FFA) Children's Sleepwear Seminar (the Seminar). The Seminar will focus on testing, certification, and other compliance guidance relating to mandatory FFA standards and requirements for children's sleepwear. The Seminar will be held on October 20, 2016, at the CPSC offices in Bethesda Towers, Bethesda, MD. We invite interested parties to participate in or attend the Seminar.
The Seminar will be held on October 20, 2016 at 8:30 a.m. Individuals interested in serving on panels or presenting information at the Seminar should register by August 26, 2016; all other individuals who wish to attend in person should register as soon as possible because available spots may fill up.
The Seminar will be held in the 4th floor Hearing Room at the CPSC offices in Bethesda Towers, 4330 East West Highway, Bethesda, MD 20814. Persons interested in serving on a panel, presenting information, or attending the Seminar should register online at:
Carolyn Carlin, Textile Flammability Compliance Officer, Office of Compliance, 4330 East West Highway, Room 610-33, Bethesda, MD 20814. Telephone: 301-504-7889, Email:
The FFA, 15 U.S.C. 1191-1204, regulates the manufacture of highly flammable clothing, including children's sleepwear. The FFA standards governing the flammability of children's sleepwear are found at 16 CFR parts 1615 and 1616. These regulations protect children from burns by requiring that children's sleepwear must be flame resistant, as demonstrated through prescribed flammability tests, and self-extinguish if the item catches fire.
The goal of the Seminar is to bring together CPSC staff and stakeholders (manufacturers, importers, retailers, suppliers, legal counsel, testing laboratories and other interested parties) to discuss testing, certification, and other compliance guidance relating to mandatory FFA standards and requirements for children's sleepwear products. The Seminar will include presentations by CPSC staff and industry representatives, as well as a panel discussion among manufacturers, importers, retailers, suppliers, legal counsel, testing laboratories, and other parties involved in the children's sleepwear industry. Topics covered during the Seminar may include:
Issues and questions about testing and compliance for children's sleepwear products regulated under the FFA.
challenges faced in implementing testing, certification, and quality control programs to ensure that regulated products are accurately identified, tested according to applicable children's sleepwear testing methods, and certified as conforming to the applicable children's sleepwear standard.
Staff intends to organize and develop panels to address these topics, informed by responses to this announcement. In addition, participants may present individually. If you would like to be a presenter or panel member, you should register by August 26, 2016 (see the
Commodity Futures Trading Commission.
Proposed rule.
The Commodity Futures Trading Commission (“Commission”) is proposing to amend one of its regulations. The proposed amendment would amend the conditions under which persons located outside the United States (“U.S.”) acting in the capacity of a futures commission merchant (“FCM”), an introducing broker (“IB”), commodity trading advisor (“CTA”), or commodity pool operator (“CPO”) in connection with commodity interest transactions solely on behalf of persons located outside the U.S., or on behalf of certain international financial institutions, would qualify for an exemption from registration with the Commission.
Comments must be received on or before September 6, 2016.
You may submit comments, identified by RIN number 3038-AE46, by any of the following methods:
•
•
•
•
Please submit your comments using only one of these methods.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
Frank Fisanich, Chief Counsel, or Andrew Chapin, Associate Chief Counsel, at (202) 418-5430, Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581. Electronic mail:
Part 3 of the Commission's regulations governs the registration of intermediaries engaged in the offer and sale of, and providing advice concerning, all commodity interest transactions, including those futures, options on futures, and swaps traded on U.S. trading facilities, including both designated contract markets (“DCMs”) and swap execution facilities (“SEFs”). Commission Regulation 3.10 sets forth the manner in which intermediaries, including FCMs, IBs, CPOs, and CTAs, must apply for registration with the Commission. Currently, § 3.10(c) provides an exemption from registration, subject to certain conditions, for certain persons located outside the U.S. (such intermediaries are referred to herein as “Foreign Intermediaries”) acting as intermediaries with respect to persons also located outside the U.S., even though such transactions may be executed bilaterally, or on or subject to the rules of a DCM or SEF.
As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
With respect to activities involving commodity interest transactions (which, as explained above, includes swaps) executed bilaterally, or made on or subject to the rules of any DCM or SEF, existing Regulation 3.10(c)(3)(i) provides an exemption from registration as a CPO, CTA, or IB if a person
1. The person is located outside the U.S.;
2. The person acts only on behalf of persons located outside the U.S.; and
3. The commodity interest transaction is submitted for clearing through a registered FCM.
Regulation 3.10(c)(2)(i) provides a similar exemption from registration for any Foreign Intermediary acting as an FCM.
In 2015 and 2016, the Commission's Division of Swap Dealer and Intermediary Oversight (“Division”) issued staff no-action relief that permitted Foreign Intermediaries to rely on the exemption from registration in § 3.10(c)(3)(i) if their activities involve swaps that are not subject to a Commission clearing requirement.
Similarly, pursuant to additional no-action relief provided in 2015, the Division also provided relief from registration as an IB or CTA for intermediaries acting for International Financial Institutions (“IFIs”).
Given the various execution venues and clearing requirements applicable to swaps,
The Commission notes at the outset that the exemptions from registration in § 3.10(c)(2) and (3) do not in themselves excuse any person (including any IFI) from compliance with any provision of the CEA or Commission regulations otherwise applicable to such persons, including, without limitation, any requirement that a resulting commodity interest transaction be cleared by a DCO registered or exempt from registration with the Commission. Commission Regulation 3.10 in its current form makes it a condition of the Foreign Intermediary's exemption that its foreign located customer's commodity interest transactions be cleared through a registered FCM. However, as explained above, not all commodity interest transactions are subject to a clearing requirement under the CEA or Commission regulations, and some are not available for clearing by any DCO registered with the Commission.
Thus, the Commission is proposing to amend the language of the exemptions by removing the clearing requirement because persons located outside the U.S. that are subject to any applicable clearing requirement for futures or swaps, or any other applicable provision of the CEA or Commission regulations, must comply with those requirements regardless of any registration exemption for a Foreign Intermediary.
The Commission has come to the view that the focus of the exemption should be the activity of the Foreign Intermediary, not its customer. Accordingly, the Commission believes that the proposed amendments are consistent with its longstanding policy to focus its customer protection activities upon domestic firms and upon firms soliciting or accepting orders from domestic participants. Where a Foreign Intermediary's customers are located outside the U.S., the Commission believes the jurisdiction where the customer is located has the preeminent interest in protecting such customers.
Further to the foregoing, with respect to the amended rule text, the Commission is proposing to eliminate from § 3.10(c)(2)(i) and (3)(i) both the clearing requirement and references to DCMs and SEFs. The Commission is retaining the reference to the definition of “foreign broker” in paragraph (c)(2)(i) because “foreign broker” is not a Commission intermediary registration category (as are IB, CTA, and CPO) and the definition is necessary to make clear that a foreign broker is one who is “engaged in soliciting or in accepting orders
Finally, because the Commission is proposing to codify the registration relief in No-Action Letter 15-37 with respect to intermediary activities on behalf of IFIs, the Commission proposes to add a new § 3.10(c)(6) to define IFIs for the purposes of § 3.10 in order to provide legal clarity on the scope of the registration exemption.
The Commission requests comment on all aspects of this proposed rulemaking.
The Regulatory Flexibility Act (“RFA”) requires Federal agencies, in promulgating regulations, to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. Each Federal agency is required to conduct an initial and final regulatory flexibility analysis for each rule of general applicability for which the agency issues a general notice of proposed rulemaking.
The rule proposed by the Commission would affect only FCMs, IBs, CTAs, and CPOs. The Commission has previously determined that FCMs and CPOs are not small entities for purposes of the RFA. Therefore, the requirements of the RFA do not apply to those entities.
With respect to CTAs and IBs, the Commission has found it appropriate to consider whether such registrants should be deemed small entities for purposes of the RFA on a case-by-case basis, in the context of the particular Commission regulation at issue.
The Paperwork Reduction Act of 1995 (“PRA”) imposes certain requirements on Federal agencies, including the Commission, in connection with their conducting or sponsoring any collection of information, as defined the PRA.
The Commission invites the public and other interested parties to comment on any aspect of the reporting burdens. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission generally solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (3) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (4) mitigate the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology. The Commission specifically invites public comment on the accuracy of its estimate that no additional information collection requirements or changes to existing collection requirements would result from the rules proposed herein.
Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566 or by email at
Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before issuing new regulations under the Act.
The proposed regulation should foster: (1) The protection of market participants and the public by providing greater legal certainty to the commodity interest activities of persons located outside the U.S.; and (2) greater efficiency, competitiveness and financial integrity of financial markets; price discovery; and sound risk management practices by ensuring greater depth in swaps markets accessed by U.S. persons. The Commission invites public comment on its cost-benefit considerations.
Definitions, Consumer protection, Foreign futures, Foreign options, Registration requirements.
For the reasons set forth in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 3 as follows:
5 U.S.C. 552, 552b; 7 U.S.C. 1a, 2, 6a, 6b, 6b-1, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21, 23.
The revisions and addition to read as follows:
(c) * * *
(2)(i) A person located outside the United States, its territories, or possessions (a “foreign located person”) engaged in activity that meets the definition of a futures commission merchant in the Act and § 1.3(p) of this chapter is not required to register as a futures commission merchant if such activity is either solely that of a foreign broker as defined in § 1.3(xx) of this chapter or solely on behalf of international financial institutions.
(3)(i) A foreign located person engaged in activity that meets the definition of an introducing broker, commodity trading advisor, or commodity pool operator, as defined in the Act and in § 1.3(mm), (bb), and (nn) of this chapter, respectively, is not required to register as an introducing broker, commodity trading advisor, or commodity pool operator if such activity is either solely on behalf of foreign located persons or international financial institutions.
(6) For the purposes of this section, “international financial institution” means each of the following and any other international financial institution that the Commission may designate: Int'l Monetary Fund, Int'l Bank for Reconstruction and Development, European Bank for Reconstruction and Development, Int'l Development Association, Int'l Finance Corp., Multilateral Investment Guarantee Agency, African Development Bank, African Development Fund, Asian Development Bank, Inter-American Development Bank, Bank for Economic Cooperation and Development in the Middle East and North Africa, Inter-American Investment Corp., Council of Europe Development Bank, Nordic Investment Bank, Caribbean Development Bank, European
The following appendix 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.
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (Commission or CFTC) is proposing to amend certain of its regulations applicable to the Annual Report that each person registered or required to be registered as a commodity pool operator (CPO) must distribute for each commodity pool that it operates (Proposal). Specifically, the Proposal addresses the use of additional alternative generally accepted accounting principles, standards or practices, and the Annual Report audit requirement where the first fiscal year of a pool consists of a period of three months or less from the date of formation of the pool.
Comments must be received on or before September 6, 2016.
You may submit comments, identified by RIN 3038-AE47 and “Commodity Pool Operator Annual Report,” by any of the following methods:
•
•
•
•
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
Christopher W. Cummings, Special Counsel, 202-418-5445,
Part 4 of the Commission's regulations governs the operations and activities of CPOs.
Over the past years, and pursuant to authority delegated to it by Regulation 140.93, Commission staff has provided exemptive relief from specific Part 4 requirements on a case-by-case basis.
Regulation 140.93 currently delegates to the Director of DSIO “all functions reserved to the Commission” in Regulation 4.12(a)—which provides that the Commission “may exempt any person or any class or classes of persons from any provision of this Part 4 if it finds that the exemption is not contrary to the public interest and the purposes of the provisions from which the exemption is sought” and, further, that the Commission “may grant the exemption subject to such terms and conditions as it may find appropriate.”
Regulation 4.22 requires, in general, that each CPO registered or required to be registered with the Commission to distribute to each participant in each commodity pool it operates, and to submit to the National Futures Association (NFA),
As noted above, Regulation 4.22 also requires each CPO registered or required to be registered to distribute to each participant in each commodity pool it operates an unaudited periodic Account Statement for the pool. Specifically, Regulation 4.22(a) prescribes the financial information the Account Statement must contain, and Regulation 4.22(b) prescribes the frequency of distribution of the Account Statement (quarterly or monthly, depending on the size of the pool).
In connection with the adoption of the Annual Report requirement, the Commission explained that the purpose of the Annual Report is to provide pool participants “with the information necessary to assess the overall trading performance and financial condition of the pool” and that the purpose of the requirement that the Annual Report be audited is to “promote greater accuracy in financial statements and provide an independent review of the pool's activities.”
Regulation 4.22(d) specifies how the financial statements in the Annual Report must be presented and computed. Currently, paragraph (d)(1) of the regulation requires that these financial statements must be presented and computed in accordance with generally accepted accounting principles consistently applied, and paragraph (d)(2) of the regulation makes available an exception to this requirement by permitting the use of International Financial Reporting Standards (IFRS) where certain criteria are met. A CPO seeking to avail itself of Regulation 4.22(d)(2) must claim the relief by filing a signed notice with NFA representing that: (1) The pool is organized under the laws of a foreign jurisdiction; (2) the Annual Report will include a schedule of investments (condensed unless a full schedule is required under IFRS); (3) the use of IFRS to prepare the Annual Report is not inconsistent with representations set forth in the pool's disclosures to participants; (4) any special allocations of ownership equity will be reported in accordance with Regulation 4.22(e); and (5) in the event that IFRS requires consolidated financial statements for the pool (
At the time that the Commission proposed to amend Regulation 4.22(d) to permit the use of IFRS, it acknowledged that its staff had also been granting relief on a case-by-case basis to allow CPOs operating commodity pools located outside the United States to use accounting standards established in certain other jurisdictions, and it invited such CPOs if they otherwise met the criteria of Regulation 4.22(d)(2) to continue requesting such relief from staff on a case-by-case basis.
As stated above, Regulation 4.22(g) governs the election of a fiscal year by a CPO. It: Permits the CPO to initially elect any fiscal year for its pool, provided that the pool's first fiscal year does not end more than one year after the pool's formation;
Because Regulation 4.22(c) requires that an Annual Report be distributed to pool participants and submitted to NFA within 90 calendar days after the end of the pool's fiscal year, and because Regulation 4.22(d) requires that the Annual Report be audited by an independent public accountant, the CPO of a pool that was formed, for example, two months before the end of the pool's first fiscal year would be required to distribute and submit an audited Annual Report for that two-month fiscal year, regardless of particular circumstances—for example, where there are a limited number of participants in the pool and a limited amount of funds have been contributed to the pool. In those circumstances, the cost of an audit for the short period of time of the pool's operation would likely be unduly burdensome relative to the size of the pool.
The Commission is now proposing to amend Regulation 4.22(g)(2) to provide for an exemption from the audit requirement applicable to the Annual Report for a pool's first fiscal year when the period from formation of the pool to the end of the pool's first fiscal year is
For the purpose of determining eligibility for relief, the following persons and their capital contributions would not be counted: (1) The pool's CPO, its CTA, and any of their principals; (2) a child, sibling, or parent of the participants described in category (1); (3) the spouse of any of the participants described in category (1) or (2); (4) any relative of one of the participants described in categories (1) through (3); and (5) an entity that is wholly-owned by one or more of the participants described in categories (1) through (4). In this regard, the Commission notes that the CPO could count a non-natural person as a single participant. But if that non-natural person was also a commodity pool, its CPO would have to separately qualify for relief under (proposed) Regulation 4.22(g)(2)(ii) in order for that (second) CPO to claim the relief. The 15-participant limit and the categories of participants and respective contributions that need not be counted are taken from Regulation 4.13(a)(2), which makes available a CPO registration exemption for the operator of a family, club or small pool.
The Commission explained that it had adopted this registration exemption “because the costs of compliance with the Part 4 rules outweighs the benefits to be gained from regulating family, club and small pools.” 44 FR 1918, 1919 (Jan. 8, 1979).
To avail itself of the relief, a CPO would be required to obtain, prior to the date on which the Annual Report for the pool's first fiscal year is due, a specified written waiver of the right to receive an audited Annual Report for that fiscal year from each person who has been a participant in the pool during the first fiscal year. The CPO would be required to retain the waiver in accordance with Regulation 4.23. Then, on or before the date on which the Annual Report for the pool's first fiscal year is due, the CPO would be required to file a notice of claim with NFA, along with a certification that the CPO had received the specified written waiver from each of the pool's participants. This notice would be based on the notice required to claim relief to present and compute an Annual Report in accordance with IFRS, under existing Regulation 4.22(d)(2)(ii). Finally, the CPO would be required to include on the cover of each Annual Report for which relief had been claimed under Regulation 4.22(g)(2) a prescribed statement that provided information on whether the Annual Report was unaudited or audited and the period of time that the Annual Report covered.
Regulation 4.22(c)(7) makes available various exceptions to Annual Report requirements to the CPO of a pool that ceases operation prior to, or at the end of, the pool's fiscal year. In particular, paragraph (c)(7)(iii) provides that a report distributed and submitted pursuant to Regulation 4.22(c)(7) is not required to be audited if the CPO complies with the conditions stated in the regulation. To ensure that an audit is conducted at least once in the life of a commodity pool, the Commission is proposing an amendment to paragraph (c)(7)(iii) of Regulation 4.22 that would make the audit requirement relief under that paragraph unavailable where a CPO has not previously distributed an audited Annual Report to pool participants or submitted the audited Annual Report to NFA—
The Commission requests comment generally on all aspects of the Proposal. In particular, the Commission requests comment on the following:
1. Is there any information required to be included in an Annual Report prepared in accordance with U.S. GAAP that would not be included under generally accepted accounting principles, standards or practices in the U.K., Ireland, Luxembourg or Canada? If so, what is that information and should the Commission require that such information be separately presented in an Annual Report prepared under any such alternative accounting principles, standards or practices? Are there, for example, any specific line items where treatment under one of the referenced sets of accounting principles, standards or practices (or under IFRS) differs from the treatment under U.S. GAAP and for which reconciliation to U.S. GAAP should be required?
2. Should the Commission adopt a provision whereby a CPO could claim relief from the Annual Report audit requirement for a pool in which the only participants were the CPO and one or more other “insiders” (
3. Are there any other issues relevant to the Proposal that the Commission should consider?
The Regulatory Flexibility Act (RFA) requires Federal agencies to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the
Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 6065(b) that the Proposal, if adopted, will not have a significant economic impact on a substantial number of small entities.
The Paperwork Reduction Act of 1995 (PRA)
The Proposal contains collections of information for which the Commission has previously received control numbers from OMB. The title for these collections of information is “Registration under the Commodity Exchange Act, OMB control number 3038-0005.”
The responses to these collections of information are mandatory. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number issued by OMB.
The collections of information in this Proposal would provide to eligible CPOs: (1) An optional alternative to complying with the requirement to compute and present the financial statements in a pool Annual Report in accordance with U.S. GAAP (or in accordance with IFRS); and (2) an optional alternative to complying with the audit requirement for the Annual Report for a pool's first fiscal year, all as described above. In each case, eligible persons would have the option to elect the alternative, but no obligation to do so. For this reason, except to the extent that the Commission is amending the subject OMB control number for PRA purposes to reflect these alternatives, the Proposal is not expected to impose any new burdens on CPOs. Rather, to the extent that the Proposal provides alternative means to comply with existing requirements, and an alternative is elected by a CPO, it is reasonable for the Commission to infer that the alternative is less burdensome to such CPO.
Collection 3038-0005 is currently in force with its control number having been provided by OMB. As discussed above, the Proposal would add a new exemption to permit a CPO to use accounting principles, standards or practices established in the U.K., Ireland, Luxembourg or Canada. In order to qualify for this exemption, an eligible CPO would be required to take the steps stated in the Proposal, including providing appropriate notification in the pool's Disclosure Document and submitting the required notice to NFA. The Proposal would further add a new exemption to permit a CPO to distribute and submit an unaudited Annual Report for its pool's first (partial) fiscal year and an audited Annual Report for the combined period covered by the pool's first (partial) fiscal year plus the pool's first twelve-month fiscal year. In order to qualify for this exemption, an eligible CPO would be required to take the steps stated in the Proposal, including obtaining waivers from pool participants, submitting the required notice and certification to NFA, providing appropriate notification in the Annual Report, and maintaining the waivers as records. Requiring such actions on the part of an eligible CPO would result in revisions to collection 3038-0005. Therefore, the Commission proposes to revise collection 3038-0005.
Commission staff has received approximately 8 requests in each of 2014 and 2015 from CPOs asking for relief from the requirement to prepare the pool's financial statements in accordance with U.S. GAAP. If the same relief can be claimed with a notice filing (without submitting a request for an individual exemptive letter) additional CPOs are likely to apply. Therefore, the Commission estimates that CPOs will submit 10 notices per year to take advantage of the alternative provided in this Proposal. Similarly, because staff has received approximately 10 requests in each of 2014 and 2015 from CPOs asking for relief from the requirement to distribute and submit an audited Annual Report for a pool's first fiscal year, the Commission estimates that CPOs will submit 12 notices per year to take advantage of the alternative provided in this Proposal.
Collection 3038-0005 relates to collections of information from CPOs and other Commission registrants. Based on the above, the estimated additional hour burden for collection 3038-0005 of 34 hours is calculated as follows:
The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper
Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566, or by email at
Section 15(a) of the Act
The Proposal would require a CPO to make a notice filing in order to be able either to use alternative accounting principles, standards or practices other than U.S. GAAP or IFRS, or to distribute and submit an unaudited Annual Report for its pool's first (partial-year) fiscal year and an audited Annual Report that combines information for the pool's first (partial-year) fiscal year with information for the following, first twelve-month fiscal year. In either case, the required filing is patterned after that required by existing Regulation 4.22(d)(2) that a CPO must submit in order to use IFRS. Thus, the notice would contain such information as the CPO's name, address and telephone number, the NFA identification numbers of the CPO and the pool, and representations that the CPO complies with the requisite criteria. Additionally, in the second case, the notice would include a certification that the CPO had obtained written waivers from pool participants of their right to receive an audited Annual Report for the pool's first (partial-year) fiscal year. Finally, the Proposal makes unavailable the audit requirement exemption in Regulation 4.22(c)(7), such that the CPO of a pool that is opened and closed in the same fiscal year must distribute and submit audited financial statements.
The Commission believes that the differences in the costs of compliance between the Proposal and existing Regulations 4.22(d)(2) and 4.22(g) would be small because the notice filing is designed to mimic the relevant features of existing Regulation 4.22(d)(2). Nevertheless, the Commission believes that the Proposal will lower costs to CPOs relative to a case-by-case staff-issued exemption, because the Proposal is more standardized. In addition, due to the unavailability of the audit requirement exemption, there is a small cost to the CPO of a pool that is opened and closed in the same fiscal year, because the CPO would now have to distribute and submit audited financial statements for the pool.
There may also be some cost savings if the conditions of the exemption are met, because a CPO who operated a pool that met those conditions would be allowed to distribute to shareholders and submit to NFA an unaudited Annual Report for its pool's first (partial-year) fiscal year and an audited Annual Report that combines information for the pool's first (partial-year) fiscal year with information for the following, first twelve-month fiscal year. The Commission believes that the envisioned costs savings would be due to the independent public accountant only needing to conduct an audit of the pool once and only issuing one opinion on the pool's financial statements. The Commission seeks comment concerning whether or not the Proposal will reduce costs for CPOs relative to existing Regulations 4.22(d)(2) and 4.22(g).
An advantage of a notice filing over a Commission staff-processed exemption is timeliness. For instance, a CPO that filed a notice under the Proposal would not have to wait for Commission staff to process a request for an individual exemption letter. There is also the benefit that pool participants would receive financial statements for the pool's first fiscal year.
The Commission believes there will be no net benefit from the Proposal as compared to existing Regulations 4.22(d)(2) and 4.22(g) with respect to financial disclosures. By codifying exemptions previously provided by Commission staff on a case-by-case basis, the Proposal would continue to assist pool participants by providing them the information necessary to assess the overall trading performance and financial condition of their pool, but with a lower overall burden to certain CPOs. The Commission believes that pool participants are knowledgeable enough to evaluate financial statements prepared under principles, standards or practices established in the U.K., Ireland, Luxembourg or Canada, provided that the relevant accounting principles, standards or practices are properly disclosed to them. The Commission seeks public comment concerning whether or not use of the specified different systems of accounting principles, standards and practices might lead to material differences in financial statements that pool participants might not be able to understand. For example, should the Commission require CPOs to disclose in the footnotes to the pool's financial statements when material difference exist between U.S. GAAP and alternative accounting principles, standards or practices? Additionally, the Commission believes that there will be minimal loss in the level of confidence of pool participants in their pool's financial statements, because an independent public accountant will still have to issue an opinion on an audited Annual Report that combines information for the pool's first (partial-year) fiscal year with information for the following, first twelve-month fiscal year. The Commission seeks public comment concerning whether this belief is correct or not.
As noted above, Section 15(a) of the Commodity Exchange Act (CEA or Act) requires the Commission to consider the costs and benefits of its actions before promulgating a regulation or issuing
The Commission believes that the Proposal will provide the same level of protection to commodity pool participants through the disclosure of financial statements as do existing Regulations 4.22(d)(2) and 4.22(g). The Commission believes that pool participants are knowledgeable enough to evaluate financial statements prepared under accounting principles, standards and practices established in the U.K., Ireland, Luxembourg or Canada, provided that the relevant accounting principles, standards and practices are properly disclosed to them. By codifying exemptions previously provided by Commission staff on a case-by-case basis, the Proposal would continue to assist pool participants by providing them the information necessary to assess the overall trading performance and financial condition of their pool, but with a lower overall burden to certain CPOs. Additionally, the Commission believes that there will be minimal loss in the level of confidence of pool participants in their pool's financial statements, because an independent public accountant will still have to issue an opinion on the financial statements included in an Annual Report that combines information for the pool's first (partial-year) fiscal year with information for the following, first twelve-month fiscal year.
The Commission has not identified any impact that the Proposal would have on efficiency, competitiveness, and financial integrity of markets.
The Commission has not identified any impact that the Proposal would have on price discovery.
The Commission has not identified any impact that the Proposal would have on sound risk management practices.
The Commission has not identified any impact on any other public interest considerations that the Proposal would have, but seeks public comment on any public interest the Commission should consider in this rulemaking.
The Commission invites public comment on its cost-benefit considerations, including the Section 15(a) factors described above. Commenters are invited to submit with their comment letters any data or other information that they may have that quantifies or qualifies the costs and benefits of the Proposal.
Advertising, Brokers, Commodity futures, Commodity pool operators, Commodity trading advisors, Consumer protection, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 4 as follows:
7 U.S.C. 1a, 2, 6(c), 6b, 6c, 6l, 6m, 6n, 6o, 12a, and 23.
The revisions and addition to read as follows:
(c) * * *
(7) * * *
(iii) A report filed pursuant to paragraph (c)(7) of this section that would otherwise be required by paragraph (c) of this section is not required to be audited in accordance with paragraph (d) of this section if the commodity pool operator obtains from all participants written waivers of their rights to receive an audited Annual Report, and at the time of filing the Annual Report with the National Futures Association, certifies that it has received waivers from all participants. The commodity pool operator must maintain the waivers in accordance with § 1.31 of this chapter and must make the waivers available to the Commission or National Futures Association upon request. Notwithstanding the provisions of paragraph (g)(2)(ii) of this section, the relief made available by this paragraph (c)(7)(iii) shall not be available where the commodity pool operator has not previously distributed an audited Annual Report to pool participants and submitted an audited Annual Report to the National Futures Association.
(d)(1) Subject to the provisions of paragraphs (d)(2) and (g)(2) of this section, the financial statements in the Annual Report required by this section or by § 4.7(b)(3) must be presented and computed in accordance with United States generally accepted accounting principles consistently applied and must be audited by an independent public accountant. The requirements of § 1.16(g) of this chapter shall apply with respect to the engagement of such independent public accountants, except that any related notifications to be made may be made solely to the National Futures Association, and the certification must be in accordance with § 1.16 of this chapter, except that the following requirements of that section shall not apply:
(2)(i) Where a commodity pool is organized in a jurisdiction other than the United States, the financial statements in the Annual Report required by this section or by § 4.7(b)(3) may be presented and computed in accordance with the generally accepted accounting principles, standards or practices followed in such other jurisdiction;
(A) The other jurisdiction follows accounting principles, standards or practices set forth in paragraph (d)(2)(ii) of this section and the Annual Report presents and computes the financial statements of the pool in accordance with the applicable accounting principles, standards or practices followed by such other jurisdiction;
(B) The Annual Report includes a condensed schedule of investments, or, if required by the applicable accounting principles, standards or practices followed by such other jurisdiction, a full schedule of investments;
(C) The Annual Report reports special allocations of ownership equity in accordance with paragraph (e)(2) of this section;
(D) The Disclosure Document or offering memorandum for the pool identifies the accounting principles, standards or practices of the other jurisdiction pursuant to which the Annual Report presents and computes the financial statements of the pool; and
(E) Where the accounting principles, standards or practices of the other jurisdiction require consolidated financial statements for the pool, such as a feeder fund consolidating with its master fund, all applicable disclosures required by United States generally accepted accounting principles for the feeder fund must be presented with the reporting pool's consolidated financial statements.
(ii) For purposes of paragraph (d)(2)(i) of this section, the following alternative accounting principles, standards or practices may be employed in the preparation and computation of the financial statements in the Annual Report of the commodity pool;
(A) International Financial Reporting Standards;
(B) Generally Accepted Accounting Practice in the United Kingdom;
(C) New Irish Generally Accepted Accounting Practice;
(D) Luxembourg Generally Accepted Accounting Principles; or
(E) Canadian Generally Accepted Accounting Principles.
(iii) To claim the relief available under this paragraph (d)(2), a commodity pool operator must file a notice with the National Futures Association within 90 calendar days after the end of the pool's first fiscal year.
(A) The notice must contain: The name, main business address, main telephone number and National Futures Association registration identification number of the commodity pool operator; the name and identification number of the commodity pool for which the pool operator is claiming relief; and the alternative accounting principles, standards or practices pursuant to which the financial statements in the Annual Report will be presented and computed;
(B) The notice must include a representation that the commodity pool operator complies with each of the conditions specified in paragraphs (d)(2)(i)(A) through (D) of this section and, if applicable, paragraph (d)(2)(i)(E) of this section; and
(C) The notice must be signed by the commodity pool operator in accordance with paragraph (h) of this section.
(g) * * *
(2)(i) If a commodity pool operator elects a fiscal year other than the calendar year, it must give written notice of the election to all participants and must file the notice with the National Futures Association within 90 calendar days after the date of the pool's formation. If this notice is not given, the pool operator will be deemed to have elected the calendar year as the pool's fiscal year.
(ii) If the time period from the formation of the pool to the end of the pool's first fiscal year is three months or less, the first Annual Report for the pool may be unaudited;
(A) Throughout the period of formation through the end of the pool's first fiscal year, the pool had no more than fifteen participants and no more than $1,500,000 in aggregate gross capital contributions. For the purpose of satisfying these criteria, the commodity pool operator may exclude the following persons and their contributions:
(
(
(
(
(
(B) The next Annual Report for the pool is audited and covers the time period from the formation of the pool to the end of the pool's first 12-month fiscal year.
(C) To claim the relief available under paragraph (g)(2)(ii) of this section, a commodity pool operator must:
(
(
(
(
(
(D)(
(
(E) The commodity pool operator must maintain in accordance with § 4.23 of this chapter each waiver it has obtained to claim the relief available under paragraph (g)(2)(ii) of this section.
The following appendix 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.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
This document contains proposed regulations pursuant to section 1101(g)(4) of the Bipartisan Budget Act of 2015 regarding an election to apply the new partnership audit regime enacted by that act to certain returns of a partnership. The regulations provide the time, form, and manner for making this election. The regulations affect any partnership that wishes to elect to have the new partnership audit regime apply to its returns filed for certain taxable years beginning before January 1, 2018.
Written or electronic comments and requests for a public hearing must be received by October 4, 2016.
Send submissions to: CC:PA:LPD:PR (REG-105005-16), Room 5207, 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-105005-16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224, or sent electronically via the Federal eRulemaking Portal at
Jenni M. Black at (202) 317-6834 (not a toll-free number).
This notice of proposed rulemaking cross-references to temporary regulations published in the Rules and Regulations section of this issue of the
The text of the temporary regulations also serves as the text of these proposed regulations. The Background and Explanation of Provisions contained in the preamble to the temporary regulations explains these proposed regulations.
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.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that the collection of information contained in this regulation will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that the collection of information contained in this regulation is voluntary and will only occur if a partnership elects into the new partnership audit regime enacted by the BBA for taxable years beginning after November 2, 2015 and before January 1, 2018. In addition, the new partnership audit regime is new, and the IRS has yet to provide guidance on the application of the new partnership audit regime generally. As a result, the IRS estimates that there will not be a substantial number of small entities that elect into the regime for an eligible taxable year. However, even if a substantial number of small entities elect into the new BBA regime for an eligible taxable year, the election under this regulation requires only a short statement containing limited and readily available information. Therefore, the IRS estimates that the economic impact on electing small entities will not be significant. Accordingly, a regulatory flexibility analysis is not required.
Pursuant to section 7805(f) of the Code, these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any electronic and written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. The IRS and Treasury request comments on all aspects of the proposed rules. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the
The principal author of these proposed regulations is Jenni M. Black of the Office of the Associate Chief Counsel (Procedure and Administration). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 301 is amended as follows:
26 U.S.C. 7805 * * *
Section 301.9100-22 also issued under section 1101(g)(4) of Pub. L. 114-74.
[The text of this proposed section is the same as the text of § 301.9100-22T
Department of Veterans Affairs.
Proposed rule.
The Department of Veterans Affairs (VA) proposes to amend its medical regulations governing the release of VA medical records. Specifically, VA proposes to eliminate the restriction on protecting a negative test result for the human immunodeficiency virus (HIV). HIV testing is a common practice today in healthcare and the stigma of testing that may have been seen in the 1980s when HIV was first discovered is no longer prevalent. Continuing to protect negative HIV tests causes delays and an unnecessary burden to veterans when VA tries to share electronic medical information with the veterans' outside providers for their treatment through health information exchange efforts. For this same reason, VA would also eliminate negative test results of sickle cell anemia as protected medical information. This proposed rule would eliminate the current barriers to electronic medical information exchange.
Comments must be received on or before October 4, 2016.
Written comments may be submitted through
Stephania H. Griffin, Director, Information Access and Privacy Office (10P2C), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420; (704) 245-2492. (This is not a toll-free number.)
The Veterans Omnibus Health Care Act of 1976, Public Law 94-581, codified at 38 U.S.C. 7332, ensured confidentiality of medical records relating to drug abuse, alcoholism, and sickle cell anemia by establishing sanctions for unauthorized disclosure of information while meeting the legitimate needs for disclosure under certain conditions. In 1988, Public Law 100-322 added to this list the confidentiality of medical records relating to infection with the human immunodeficiency virus (HIV). Section 7332 states that records of the identity, diagnosis, prognosis, or treatment of any patient or subject which are maintained in connection with the performance of any program or activity (including education, training, treatment, rehabilitation, or research) of any patient or subject relating to drug abuse, alcoholism or alcohol abuse, infection with the human immunodeficiency virus (HIV), or sickle cell anemia shall only be disclosed under certain circumstances. The intent of section 7332 is to protect the medical records of those veterans who are undergoing treatment or have a positive diagnosis for the conditions stated in this section. Due to the stigma associated with HIV and HIV testing at the time, VA determined that the results of HIV testing should be protected regardless of the outcome of the test. However, HIV testing is common practice today. In the past, VA required health care providers to counsel patients as part of the informed consent process prior to ordering HIV testing. Currently, HIV testing is considered part of routine health care under VA policy, similar to other types of diagnostic laboratory testing, and while oral informed consent is still required no pre-testing counseling is required.
The continued protection of negative HIV tests has posed significant obstacles to the sharing of medical information between VA and non-VA medical providers, and also places an undue burden on veterans. If VA conducts an HIV test on a veteran, VA is prevented from electronically disclosing the veteran's medical information to the veteran's non-VA medical provider, even if the test result is negative, unless VA first obtains a specific written authorization that meets title 38 regulatory requirements from the veteran to share the medical information. Medical information sharing is crucial to treating a veteran who has outside medical providers and is significant in making certain that a veteran is not prescribed a medication that may negatively interact with other medications. Under section 7332, sickle cell anemia is also considered protected medical information. As with negative HIV test results, the prohibition on sharing negative test results for sickle cell anemia has posed challenges for the timely provision of medical care. This rulemaking would eliminate the current restrictions on sharing negative test results of veterans for HIV and sickle cell anemia and would be in line with the intent of the statute. As for positive HIV or sickle cell anemia test results, VA would continue to require a qualifying written authorization from the veteran prior to disclosure of such information.
Section 1.460 defines terms that apply to §§ 1.460 through 1.499, which cover the release of information from VA records relating to drug abuse, alcoholism or alcohol abuse, infection with HIV, or sickle cell anemia. The term “HIV” is defined as the presence of laboratory evidence for human immunodeficiency virus infection. The definition for “HIV” also states that “[f]or the purposes of §§ 1.460 through 1.499 of this part, the term includes the testing of an individual for the presence of the virus or antibodies to the virus and information related to such testing (including tests with negative results).” We propose to modify this definition because VA would only restrict the release of health information for positive results. The proposed definition would define “HIV” to mean “the presence of laboratory evidence for human immunodeficiency virus infection. The term does not include negative results from the testing of an individual for the presence of the virus or antibodies to the virus, or such testing of an individual where the results are negative.” As previously stated in this rulemaking, negative results are not protected under this provision.
The term “patient” is defined in part in § 1.460 to state that it includes an individual or subject who is tested for infection with HIV or sickle cell anemia. We propose to amend this definition to state that the term `patient' for purpose of infection with the human immune
Paragraph (a)(1)(i) of 38 CFR 1.461 states the restrictions on disclosure of medical information, specifically information that would identify a patient as an alcohol or drug abuser, an individual tested for or infected with the human immunodeficiency virus (HIV), hereafter referred to as HIV, or an individual with sickle cell anemia, either directly, by reference to other publicly available information, or through verification of such an identification by another person. As previously stated in this rulemaking, we would no longer consider 7332-protected medical information to include a negative test for HIV or sickle cell anemia. Therefore, we propose to amend § 1.461(a)(1)(i) by removing the restriction on disclosure of medical information for an individual who has tested negative for HIV or sickle cell anemia. Paragraph (a)(1)(i) would only protect medical information for individuals who have tested positive for or are infected with HIV, or have tested positive for or have sickle cell anemia.
The Code of Federal Regulations, as proposed to be revised by this proposed rulemaking, would represent the exclusive legal authority on this subject. No contrary rules or procedures would be authorized. All VA guidance would be read to conform with this proposed rulemaking if possible or, if not possible, such guidance would be superseded by this rulemaking.
This proposed rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).
The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed rule would directly affect only individuals and would not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking would be exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”
The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector.
The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care; and 64.024, VA Homeless Providers Grant and Per Diem Program.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Gina S. Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, approved this document on August 1, 2016, for publication.
Administrative practice and procedure, Archives and records, Cemeteries, Claims, Courts, Crime, Flags, Freedom of information, Government contracts, Government employees, Government property, Infants and children, Inventions and patents, Parking, Penalties, Postal Service, Privacy, Reporting and recordkeeping requirements, Seals and insignia, Security measures, Wages.
For the reasons set out in the preamble, Department of Veterans Affairs proposes to amend 38 CFR part 1 as follows:
38 U.S.C. 501(a), and as noted in specific sections.
The revisions read as follows:
(a) * * *
(1) * * *
(i) Would identify a patient as an alcohol or drug abuser, an individual who tested positive for or is infected with the human immunodeficiency virus (HIV), hereafter referred to as HIV, or an individual who tested positive for or has sickle cell anemia, either directly, by reference to other publicly available information, or through verification of such an identification by another person; and
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA or the Agency) is proposing to extend for certain inactive coal combustion residuals (CCR) surface impoundments the compliance deadlines established by the regulations for the disposal of CCR under subtitle D of the Resource Conservation and Recovery Act (RCRA). These revisions are being proposed in response to a partial vacatur ordered by the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) on June 14, 2016.
Written comments must be received by August 22, 2016. Comments postmarked after the close of the comment period will be stamped “late” and may or may not be considered by the Agency.
Submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2016-0274, at
For information concerning this proposed rule, contact Steve Souders, Office of Resource Conservation and Recovery, Environmental Protection Agency, 5304P, Washington, DC 20460; telephone number: (703) 308-8431; email address:
This proposed rule applies only to those owners or operators of inactive CCR surface impoundments that meet all three of the following conditions: (1) Complied with the requirement at 40 CFR 257.105(i)(1) by placing in their facility's written operating record a notification of intent to initiate closure of the CCR unit as required by 40 CFR 257.100(c)(1), no later than December 17, 2015; (2) complied with the requirement at 40 CFR 257.106(i)(1) by providing notification to the relevant State Director and/or appropriate Tribal authority by January 19, 2016, of the intent to initiate closure of the CCR unit; and (3) complied with the requirement at 40 CFR 257.107(i)(1) by placing the notification of intent to initiate closure of the CCR unit on the owner or operator's publicly accessible CCR Web site no later than January 19, 2016.
If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding
This action proposes to extend the deadlines for the owners and operators of those inactive CCR surface impoundments that had taken advantage of the “early closure” provisions of 40 CFR 257.100, who became newly subject to the rule's requirements for existing CCR surface impoundments on June 14, 2016 when the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) ordered the vacatur of those provisions. This proposed rule provides time for these owners and operators to bring their units into compliance with the rule's substantive requirements, but does not otherwise amend the rule or otherwise impose new requirements on those units. In the “Rules and Regulations” section of this
If we receive no adverse comment, we will not take further action on this proposed rule and the direct final rule will become effective as provided in that action. If we do receive adverse comment, we will publish a timely notice in the
The regulatory text for this proposal is identical to that for the direct final rule published in the Rules and Regulations section of the
These regulations are established under the authority of sections 1006(b), 1008(a), 2002(a), 4004, and 4005(a) of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6906(b), 6907(a), 6912(a), 6944, and 6945(a).
For a complete discussion of all of the administrative requirements applicable to this action, see the direct final rule in the Rules and Regulations section of this
Environmental protection, Beneficial use, Coal combustion products, Coal combustion residuals, Coal combustion waste, Disposal, Hazardous waste, Landfill, Surface impoundment.
Research, Education, and Economics, USDA.
Solicitation for membership.
In accordance with the Federal Advisory Committee Act, 5 U.S.C. App., the United States Department of Agriculture announces the solicitation for nominations to fill vacancies on the National Agricultural Research, Extension, Education, and Economics Advisory Board and its subcommittees. There are 7 vacancies on the NAREEE Advisory Board, 3 vacancies on the Specialty Crop Committee, 4 vacancies on the National Genetics Advisory Council, and 6 vacancies on the Citrus Disease Committee.
Correction.
In the Federal Register of July 29, 2016 in FR Doc. 146, on page 49922, of the date section should read as follows:
Food and Nutrition Service, USDA.
Notice.
This notice announces the annual adjustments to the national average payment rates for meals and snacks served in child care centers, outside-school-hours care centers, at-risk afterschool care centers, and adult day care centers; the food service payment rates for meals and snacks served in day care homes; and the administrative reimbursement rates for sponsoring organizations of day care homes, to reflect changes in the Consumer Price Index. Further adjustments are made to these rates to reflect the higher costs of providing meals in the States of Alaska and Hawaii. The adjustments contained in this notice are made on an annual basis each July, as required by the laws and regulations governing the Child and Adult Care Food Program.
These rates are effective from July 1, 2016 through June 30, 2017.
Jessica Saracino, Branch Chief, Program Monitoring and Operational Support Division, Child Nutrition Programs, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 640, Alexandria, Virginia 22302-1594; phone 703-457-7743.
The terms used in this notice have the meanings ascribed to them in the Child and Adult Care Food Program regulations, 7 CFR part 226.
Pursuant to sections 4, 11, and 17 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1753, 1759a and 1766), section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) and 7 CFR 226.4, 226.12 and 226.13 of the Program regulations, notice is hereby given of the new payment rates for institutions participating in the Child and Adult Care Food Program (CACFP). These rates are in effect during the period, July 1, 2016 through June 30, 2017.
As provided for under the law, all rates in the CACFP must be revised annually, on July 1, to reflect changes in the Consumer Price Index (CPI), published by the Bureau of Labor Statistics of the United States Department of Labor, for the most recent 12-month period. In accordance with this mandate, the United States Department of Agriculture (USDA) last published the adjusted national average payment rates for centers, the food service payment rates for day care homes, and the administrative reimbursement rates for sponsoring organizations of day care homes, for the period from July 1, 2015 through June 30, 2016, on July 17, 2015, in the
The following national average payment factors and food service payment rates for meals and snacks are in effect from July 1, 2016 through June 30, 2017. All amounts are expressed in dollars or fractions thereof. Due to a higher cost of living, the reimbursements for Alaska and Hawaii are higher than those for all other States. The District of Columbia, Virgin Islands, Puerto Rico, and Guam use the figures specified for the contiguous States. These rates do not include the value of USDA Foods or cash-in-lieu of USDA Foods which institutions receive as additional assistance for each lunch or supper served to participants under the Program. A notice announcing the value of USDA Foods and cash-in-lieu of USDA Foods is published separately in the
Payments for breakfasts served are:
Payments for lunch or supper served are:
Payments for snack served are:
Payments for breakfast served are:
Payments for lunch and supper served are:
Payments for snack served are:
Monthly administrative payments to sponsors for each sponsored day care home are:
The following chart illustrates the national average payment factors and food service payment rates for meals and snacks in effect from July 1, 2016, through June 30, 2017.
The changes in the national average payment rates for centers reflect a 2.64 percent increase during the 12-month period, May 2015 to May 2016, (from 255.322 in May 2015, as previously published in the
The changes in the food service payment rates for day care homes reflect a 0.69 percent decrease during the 12-month period, May 2014 to May 2015, (from 241.019 in May 2015, as previously published in the
The changes in the administrative reimbursement rates for sponsoring organizations of day care homes reflect a 1.02 percent increase during the 12-month period, May 2015 to May 2016 (from 237.805 in May 2015, as previously published in the
The total amount of payments available to each State agency for distribution to institutions participating in CACFP is based on the rates contained in this notice.
This action is not a rule as defined by the Regulatory Flexibility Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that Act. This notice has been determined to be exempt under Executive Order 12866.
CACFP is listed in the Catalog of Federal Domestic Assistance under No. 10.558 and is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 2 CFR 415.3-415.6).
This notice has been determined to be not significant and was reviewed by the Office of Management and Budget (OMB) in conformance with Executive Order 12866.
This notice imposes no new reporting or recordkeeping provisions that are subject to OMB review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3518).
Sections 4(b)(2), 11, 17(c) and 17(f)(3)(B) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1753(b)(2), 1759a, 1766(f)(3)(B)) and section 4(b)(1)(B) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)(B)).
Food and Nutrition Service, USDA.
Notice.
This Notice announces the annual adjustments to the “national average payments,” the amount of money the Federal Government provides States for lunches, afterschool snacks and breakfasts served to children participating in the National School Lunch and School Breakfast Programs; to the “maximum reimbursement rates,” the maximum per lunch rate from Federal funds that a State can provide a school food authority for lunches served to children participating in the National School Lunch Program; and to the rate of reimbursement for a half-pint of milk served to non-needy children in a school or institution which participates in the Special Milk Program for Children. The payments and rates are prescribed on an annual basis each July. The annual payments and rates adjustments for the National School Lunch and School Breakfast Programs reflect changes in the Food Away From Home series of the Consumer Price Index for All Urban Consumers. Food and Nutrition Service has approved a 17-percent increase in school meal reimbursement rates for Puerto Rico to reflect their higher cost of providing school meals. The rate adjustment will take effect beginning July 1, 2016, for school year 2016-2017. This increase is based on data indicating that the cost of producing school lunches, breakfasts, and snacks are higher than those in the continental United States, as well as other factors impacting Puerto Rico's school meal program. The annual rate adjustment for the Special Milk Program reflects changes in the Producer Price Index for Fluid Milk Products.
These rates are effective from July 1, 2016 through June 30, 2017
Jessica Saracino, Branch Chief, Program Monitoring and Operational Support Division, Child Nutrition Programs, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 640, Alexandria, Virginia 22302-1594; phone 703-457-7743.
For the period July 1, 2016 through June 30, 2017, the rate of reimbursement for a half-pint of milk served to a non-needy child in a school or institution which participates in the Special Milk Program is 19.75 cents. This reflects a decrease of .25 cents from the School Year (SY) 2015-16 level, based on the 1.32 percent decrease in the Producer Price Index for Fluid Milk Products from May 2015 to May 2016 (from a level of 219.0 in May 2015, as previously published in the
As a reminder, schools or institutions with pricing programs that elect to serve milk free to eligible children continue to receive the average cost of a half-pint of milk (the total cost of all milk purchased during the claim period divided by the total number of purchased half-pints) for each half-pint served to an eligible child.
To supplement these section 4 payments, section 11 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1759a) provides special cash assistance payments to aid schools in providing free and reduced price lunches. The section 11 National Average Payment Factor for each reduced price lunch served is set at 40 cents less than the factor for each free lunch.
As authorized under sections 8 and 11 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1757 and 1759a), maximum reimbursement rates for each type of lunch are prescribed by the Department in this Notice. These maximum rates are to ensure equitable disbursement of Federal funds to school food authorities.
The following specific section 4, section 11 and section 17A National Average Payment Factors and maximum reimbursement rates for lunch, the afterschool snack rates, and the breakfast rates are in effect from July 1, 2016 through June 30, 2017. Beginning July 1, 2016, Puerto Rico will receive a 17-percent increase adjustment to these rates due to the higher cost of producing a meal in Puerto Rico. In addition, the average payments and maximum reimbursements for Alaska and Hawaii are higher due to the higher cost of living in these States. The District of Columbia, Virgin Islands, and Guam use the figures specified for the contiguous States.
In school food authorities which served 60 percent or more free and reduced price lunches in School Year 2014-2015, payments are:
School food authorities certified to receive the performance-based cash assistance will receive an additional 6 cents (adjusted annually) added to the above amounts as part of their section 4 payments.
For schools “not in severe need” the payments are:
For schools in “severe need” the payments are:
The following chart illustrates the lunch National Average Payment Factors with the sections 4 and 11 already combined to indicate the per lunch amount; the maximum lunch reimbursement rates; the reimbursement rates for afterschool snacks served in afterschool care programs; the breakfast National Average Payment Factors including “severe need” schools; and the milk reimbursement rate. All amounts are expressed in dollars or fractions thereof. The payment factors and reimbursement rates used for the District of Columbia, Virgin Islands, and Guam are those specified for the contiguous States.
This action is not a rule as defined by the Regulatory Flexibility Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that Act.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), no new recordkeeping or reporting requirements have been included that are subject to approval from the Office of Management and Budget.
This notice has been determined to be not significant and was reviewed by the Office of Management and Budget in conformance with Executive Order 12866.
National School Lunch, School Breakfast and Special Milk Programs are listed in the Catalog of Federal Domestic Assistance under No. 10.555, No. 10.553 and No. 10.556, respectively, and are subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 2 CFR 415.3-415.6).
Sections 4, 8, 11 and 17A of the Richard B. Russell National School Lunch Act, as amended, (42 U.S.C. 1753, 1757, 1759a, 1766a) and sections 3 and 4(b) of the Child Nutrition Act, as amended, (42 U.S.C. 1772 and 42 U.S.C. 1773(b)).
Forest Service USDA, Bureau of Land Management DOI, Fish and Wildlife Service DOI, National Park Service DOI, and Bureau of Indian Affairs DOI.
Notice and request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Forest Service is seeking comments from all interested individuals and organizations on the new information collection, Cooperative Wildland Fire Management and Stafford Act Response Agreements.
Comments must be received in writing on or before October 4, 2016 to be assured of consideration. Comments received after that date will be considered to the extent practicable.
Comments concerning this notice should be addressed to Tim Melchert, Cooperative Fire Specialist, USDA Forest Service, 1400 Independence Avenue SW., Washington, DC 20250.
Comments also may be submitted via facsimile to 208-387-5398 or by email to:
The public may inspect comments received at Forest Service, U.S. Department of Agriculture, 1400 Independence Avenue SW., Washington, DC 20250 during normal business hours. Visitors are encouraged to call ahead to 202-205-1637 to facilitate entry to the building.
Tim Melchert, Cooperative Fire Specialist, at USDA Forest Service, 208-387-5887.
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339 twenty-four hours a day, every day of the year, including holidays.
In accordance with the Paperwork Reduction Act of 1995, Forest Service will submit a request for a new information collection to Office of Management and Budget.
To negotiate, develop, and administer Cooperative Wildland Fire Management and Stafford Act Response Agreements, the USDA Forest Service, DOI Bureau of Land Management, DOI Fish and Wildlife Service, DOI National Park Service, and DOI Bureau of Indian Affairs DOI must collect information from willing State, local, and Tribal governments from the pre-agreement to the closeout stage via telephone calls, emails, postal mail, and person-to-person meetings. There are multiple means for cooperators to communicate responses, which include forms, optional forms, templates, electronic documents, in person, telephone, and email. The scope of information collected includes the project type, project scope, financial plan, statement of work, and cooperator's business information. Without the collected information, authorized Federal agencies would not be able to negotiate, create, develop, and administer cooperative agreements with cooperators for to wildland fire protection, approved severity activities, and presidentially declared emergencies or disasters. Authorized Federal agencies would be unable to develop or monitor projects, make payments, or identify financial and accounting errors.
The regulations governing Federal financial assistance relationships are not applicable to agreement templates under this information collection request. The regulations in 2 CFR 200 set forth the general rules that are applicable to all grants and cooperative agreements made by the USDA and DOI. Because the Federal Government's use of Cooperative Wildland Fire Management and Stafford Act Response Agreements entered into under cited Federal statutes are not financial assistance for the benefit of the recipient but instead are entered into for the mutual benefit of the Federal government and the non-Federal cooperators, the assistance regulations in 2 CFR 200, as adopted and supplemented by the USDA and DOI, are not applicable to such agreements.
This is a new information collection request. The Cooperative Wildland Fire Management and Stafford Act Response Agreement template can be viewed at
All comments received in response to this notice, including names and addresses when provided, will be a matter of public record. Comments will be summarized and included in the submission request toward Office of Management and Budget approval.
Forest Service, USDA.
Notice of meeting.
The Siskiyou County Resource Advisory Committee (RAC) will meet in Yreka, California. 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 September 6, 2016, at 5:00 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 Klamath National Forest (NF) Supervisor's Office, Conference Room, 1711 South Main Street, Yreka, California.
Written comments may be submitted as described under
Natalie Stovall, RAC Coordinator, by phone at 530-841-4411 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 to:
1. Approve prior meeting notes,
2. Update on ongoing projects,
3. Public comment period,
4. Review meeting schedule,
5. Proposal reviews, and
6. Vote on proposals.
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. 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 may be sent to Natalie Stovall, RAC Coordinator, 1711 S. Main Street, Yreka, California 96097; by email to
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 (FACA), that a briefing meeting of the South Dakota Advisory Committee to the Commission will convene at 1:00 p.m. (CDT) on Thursday, August 25, 2016, in the Community Room on the 1st Floor of the Aberdeen Public Safety Building, 114 2nd Avenue SE., Aberdeen, SD 57401.
The purpose of the briefing meeting is to examine the subtle effects of racism in South Dakota. The briefing topics will include the value of the use of body-worn cameras in law enforcement, and minority policing that impacts Native Americans and immigrant communities. The South Dakota Advisory Committee will hear from law enforcement, tribal officials, advocacy groups, community organizations, representatives of local, state, and Federal agencies, and the public.
If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at ebohor
Time will be set aside at the end of the briefing so that members of the public may address the Committee after the formal presentations have been completed. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Monday, September 26. Written comments may be mailed to the Rocky Mountain Regional Office, U.S. Commission on Civil Rights, 1961 Stout Street, Suite 13-201, Denver, CO 80294, faxed to (303) 866-1050, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Thursday, August 25, 2016 (CDT).
Aberdeen Public Safety Building, Community Room, 1st Floor, 114 2nd Avenue SE., Aberdeen, SD 57401.
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 (FACA) that an orientation and planning meeting of the Vermont Advisory Committee to the Commission will convene at 12:00 p.m. (EDT) on Friday, August 19, 2016, at Community College of Vermont, 660 Elm St., Montpelier, 05602. The purpose of the orientation meeting is to inform the newly appointed Committee members about the rules of operation of federal advisory committees and to select additional officers, as determined by the Committee. The purpose of the planning meeting is to discuss potential topics that the Committee may wish to study. The Committee will also review draft reports on Housing Discrimination and Racial Profiling and vote on submission of these reports to the Commission.
Persons who plan to attend the meeting and who require other accommodations, please contact Evelyn Bohor at
Members of the public are invited to submit written comments; the comments must be received in the regional office by Monday, September 19, 2016. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
The activities of this advisory committee, including records and documents discussed during the meeting, will be available for public viewing, as they become available at:
Friday, August 19, 2016, at 1:30 p.m. (EDT).
Community College of Vermont, 660 Elm St., Montpelier, 05602
Ivy L. Davis at
U.S. 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 Georgia (State) Advisory Committee will hold a meeting on Wednesday, August 31, 2016, for the purpose of welcoming the new committee.
The meeting will be held on Wednesday, August 31, 2016 12:00 p.m. EST.
The meeting will be by teleconference. Toll-free call-in number: 888-487-0360, conference ID: 4411088.
Members of the public can listen to the discussion. This meeting is available to the public through the following toll-free call-in number: 888-487-0360, conference ID: 4411088. 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 speak at the open session at the end of the meeting. In addition, members of the public may submit written comments; the comments must be received in the regional office by September 25, 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
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
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 Wisconsin Advisory Committee (Committee) will hold a meeting on Monday, August 22, 2016, at 2:00 p.m. CDT for the purpose of discussing final preparations for a hearing on hate crime in the state.
The meeting will be held on Monday, August 22, 2016, at 2:00 p.m. CDT.
This meeting is open to the public through the following toll-free call-in number: 888-312-9841, conference ID: 4502335. 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 to the Committee during the scheduled 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 after the meeting at
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 and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Wisconsin Advisory Committee (Committee) will hold a meeting on Monday, July 29, 2016, from 1:00 p.m.-4:30 p.m. CDT. The Committee will hear testimony regarding civil rights and hate crimes in the state.
The meeting will be held on Monday August 29, 2016, from 1:00 p.m.-4:30 p.m. CDT.
This meeting is open to the public, and will take place at the Hampton Inn and Suites Conference Center, 8201 W. Greenfield Avenue, West Allis, WI 53214. Members of the public are invited to make statements during the open comment period beginning at 4:00 p.m. 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 priorto and following the meeting at
Melissa Wojnaroski, DFO, at 312-353-8311 or
Bureau of the Census, Department of Commerce.
Notice of 2020 Census tribal consultation meetings.
Pursuant to Executive Order 13175, the Bureau of the Census (Census Bureau) is continuing tribal consultation meetings through calendar year 2016 with federally recognized tribes across the country as part of our ongoing government-to-government relations. The Census Bureau is planning to conduct tribal consultation meetings with federally recognized tribes across the country between September 2016 and December 2016. These meetings will provide a forum for tribes to share insights, make recommendations and discuss concerns related to the 2020 Census. The Census Bureau's procedures for outreach, notice and consultation will ensure involvement of tribes, to the extent practicable and permitted by law, before making decisions or implementing policies, rules or programs that affect federally recognized tribal governments. The Census Bureau requests that interested members of the public comment with any questions or topics they would like to see considered in these meetings. For a list of dates, locations and times please check
Any questions or topics to be considered in the tribal consultation meetings must be received in writing by September 9, 2016.
Please direct all comments on this notice to Dee Alexander, Tribal Affairs Coordinator, Office of Congressional and Intergovernmental Affairs, Intergovernmental Affairs Office, U.S. Census Bureau Washington, DC 20233; telephone (301) 763-9335 or fax (301) 763-3780 or by email
Dee Alexander, Tribal Affairs Coordinator, Office of Congressional and Intergovernmental Affairs, Intergovernmental Affairs Office, U.S. Census Bureau, at the above listed address and telephone number.
The Census Bureau's Decennial Directorate and the Intergovernmental Affairs Office is responsible for the development and implementation of outreach and promotion activities to assist in obtaining a complete and accurate census count in 2020 among all residents including the American Indian and Alaska Native (AIAN) populations. This program is one part of the overall outreach and promotion efforts directed at building awareness about the importance of the census and motivating response to the census in communities all across the country.
In accordance with Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, issued November 6, 2000, the Census Bureau will be adhering to its tribal consultation policy by seeking the input of tribal governments in the planning and implementation of the 2020 Census with the goal of ensuring the most accurate counts and data for the American Indian and Alaska Native population. In that regard, we are seeking comments with regard to the following operational topics:
For additional information on the tribal consultation sessions please visit:
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
Whereas, the Board adopted the alternative site framework (ASF) (15 CFR Sec. 400.2(c)) as an option for the establishment or reorganization of zones;
Whereas, the Greater Detroit Foreign-Trade Zone, Inc., grantee of Foreign-Trade Zone 70, submitted an application to the Board (FTZ Docket B-10-2016, docketed February 18, 2016, amended June 9, 2016) for authority to expand the service area of the zone to include Livingston County and a portion of Lenawee County, as described in the application, adjacent to the Detroit Customs and Border Protection port of entry;
Whereas, notice inviting public comment was given in the
Whereas, the Board adopts the findings and recommendations of the examiner's report, and finds that the requirements of the FTZ Act and the Board's regulations are satisfied;
Now, Therefore, the Board hereby orders:
The amended application to reorganize FTZ 70 to expand the service area under the ASF to include Livingston County and a portion of Lenawee County is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13, and to the Board's standard 2,000-acre activation limit for the zone.
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to reorganize FTZ 172 under the ASF is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13, to the Board's standard 2,000-acre activation limit for the zone, and to an ASF sunset provision for magnet sites that would terminate authority for Site 7 if not activated within five years from the month of approval.
On March 31, 2016, the City of Waterville, Maine, grantee of FTZ 186, submitted a notification of proposed production activity to the FTZ Board on behalf of Flemish Master Weavers, within Subzone 186A, in Sanford, Maine.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce
Brenda E. Waters, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-4735.
Each year during the anniversary month of the publication of an
All deadlines for the submission of comments or actions by the Department discussed below refer to the number of calendar days from the applicable starting date.
In the event the Department limits the number of respondents for individual examination for administrative reviews initiated pursuant to requests made for the orders identified below, the Department intends to select respondents based on U.S. Customs and Border Protection (“CBP”) data for U.S. imports during the period of review. We intend to release the CBP data under Administrative Protective Order (“APO”) to all parties having an APO within five days of publication of the initiation notice and to make our decision regarding respondent selection within 21 days of publication of the initiation
In the event the Department decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, the Department finds that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that requests a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that, with regard to reviews requested on the basis of anniversary months on or after August 2016, the Department does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day deadline will be made on a case-by-case basis.
The Department is providing this notice on its Web site, as well as in its “Opportunity to Request Administrative Review” notices, so that interested parties will be aware of the manner in which the Department intends to exercise its discretion in the future.
Opportunity to request a review: Not later than the last day of August 2016,
In accordance with 19 CFR 351.213(b), an interested party as defined by section 771(9) of the Act may request in writing that the Secretary conduct an administrative review. For both antidumping and countervailing duty reviews, the interested party must specify the individual producers or exporters covered by an antidumping finding or an antidumping or countervailing duty order or suspension agreement for which it is requesting a review. In addition, a domestic interested party or an interested party described in section 771(9)(B) of the Act must state why it desires the Secretary to review those particular producers or exporters. If the interested party intends for the Secretary to review sales of merchandise by an exporter (or a producer if that producer also exports merchandise from other suppliers) which was produced in more than one country of origin and each country of origin is subject to a separate order, then the interested party must state specifically, on an order-by-order basis, which exporter(s) the request is intended to cover.
Note that, for any party the Department was unable to locate in prior segments, the Department will not accept a request for an administrative review of that party absent new information as to the party's location. Moreover, if the interested party who files a request for review is unable to locate the producer or exporter for which it requested the review, the interested party must provide an explanation of the attempts it made to locate the producer or exporter at the same time it files its request for review, in order for the Secretary to determine if the interested party's attempts were reasonable, pursuant to 19 CFR 351.303(f)(3)(ii).
As explained in
Further, as explained in
All requests must be filed electronically in Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”) on Enforcement and Compliance's ACCESS Web site at
The Department will publish in the
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period of the order, if such a gap period is applicable to the period of review.
This notice is not required by statute but is published as a service to the international trading community.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the “Department”) is conducting the first administrative review of the antidumping duty order on monosodium glutamate (“MSG”) from the People's Republic of China (“PRC”) covering the period of review (“POR”) May 8, 2014 through October 31, 2015. This review covers 38 manufacturers/exporters (“the companies”) of the subject merchandise. None of these companies have filed a separate rate application (“SRA”) and/or a separate rate certification (“SRC”) to establish its separate rate status. Therefore, the Department preliminarily finds that the companies are part of the PRC-wide entity. We invite interested parties to comment on these preliminary results.
Effective August 5, 2016.
Kathryn Wallace or Alexander Cipolla, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-6251 or (202) 482-4956, respectively.
On November 3, 2015, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on MSG from the PRC.
The product covered by this order is MSG, whether or not blended or in solution with other products. Specifically, MSG that has been blended or is in solution with other product(s) is included in this scope when the resulting mix contains 15 percent or more of MSG by dry weight. Products with which MSG may be blended include, but are not limited to, salts, sugars, starches, maltodextrins, and various seasonings. Further, MSG is included in this order regardless of physical form (including, but not limited to, in monohydrate or anhydrous form, or as substrates, solutions, dry powders of any particle size, or unfinished forms such as MSG slurry), end-use application, or packaging. MSG in monohydrate form has a molecular formula of C5H8NO4Na-H
The Department is conducting this review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.213.
The Department's policy regarding conditional review of the PRC-wide entity applies to this administrative review.
The Department preliminarily determines that the 38 companies subject to review are part of the PRC-wide entity. None of the 38 companies filed an SRA or an SRC. No review has been requested for the PRC-wide entity. Therefore, the Department preliminarily determines that these companies have not demonstrated their eligibility for separate rate status and are part of the PRC-wide entity. The PRC-wide entity rate is 40.41 percent.
Interested parties are invited to comment on the preliminary results and may submit case briefs and/or written comments, filed electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS), within 30 days after the date of publication of these preliminary results of review.
Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Department within 30 days of the date of publication of this notice.
Upon issuance of the final results of this review, the Department will determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries of subject merchandise covered by this review.
The following cash deposit requirements will be effective upon publication of the final results of this review for shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by sections 751(a)(2)(C) of the Act: (1) For companies that have a separate rate, the cash deposit rate will be that established in the final results of this review (except, if the rate is zero or
This notice also serves as a reminder to importers of their responsibility under 19 CFR 315.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these preliminary results in accordance with sections 751(a)(1) and 777(i) of the Act, and 19 CFR 351.213(h) and 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Every five years, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”), the Department of Commerce (“the Department”) and the International Trade Commission automatically initiate and conduct a review to determine whether revocation of a countervailing or antidumping duty order or termination of an investigation suspended under section 704 or 734 of the Act would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the case may be) and of material injury.
The following Sunset Reviews are scheduled for initiation in September 2016 and will appear in that month's Notice of Initiation of Five-Year Sunset Review (“Sunset Review”).
The Department's procedures for the conduct of Sunset Reviews are set forth in 19 CFR 351.218. The Notice of Initiation of Five-Year (“Sunset”) Reviews provides further information regarding what is required of all parties to participate in Sunset Reviews.
Pursuant to 19 CFR 351.103(c), the Department will maintain and make available a service list for these proceedings. To facilitate the timely preparation of the service list(s), it is requested that those seeking recognition as interested parties to a proceeding contact the Department in writing within 10 days of the publication of the Notice of Initiation.
Please note that if the Department receives a Notice of Intent to Participate from a member of the domestic industry within 15 days of the date of initiation, the review will continue. Thereafter, any interested party wishing to participate in the Sunset Review must provide substantive comments in response to the notice of initiation no later than 30 days after the date of initiation.
This notice is not required by statute but is published as a service to the international trading community.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of this sunset review, the Department of Commerce (the Department) finds that revocation of the antidumping duty order on aluminum extrusions from the People's Republic of China (PRC) would be likely to lead to continuation or recurrence of dumping at the levels indicated in the “Final Results of Sunset Review” section of this notice.
Deborah Scott or Robert James, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-2657 or (202) 482-0649, respectively.
On May 26, 2011, the Department published the notice of the antidumping duty order on aluminum extrusions from the PRC.
The merchandise covered by the order is aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body equivalents).
Imports of the subject merchandise are provided for under the following categories of the Harmonized Tariff Schedule of the United States (HTSUS): 8424.90.9080, 9405.99.4020, 9031.90.90.95, 7616.10.90.90, 7609.00.00, 7610.10.00, 7610.90.00, 7615.10.30, 7615.10.71, 7615.10.91, 7615.19.10, 7615.19.30, 7615.19.50, 7615.19.70, 7615.19.90, 7615.20.00, 7616.99.10, 7616.99.50, 8479.89.98, 8479.90.94, 8513.90.20, 9403.10.00, 9403.20.00, 7604.21.00.00, 7604.29.10.00, 7604.29.30.10, 7604.29.30.50, 7604.29.50.30, 7604.29.50.60, 7608.20.00.30, 7608.20.00.90, 8302.10.30.00, 8302.10.60.30, 8302.10.60.60, 8302.10.60.90, 8302.20.00.00, 8302.30.30.10, 8302.30.30.60, 8302.41.30.00, 8302.41.60.15, 8302.41.60.45, 8302.41.60.50, 8302.41.60.80, 8302.42.30.10, 8302.42.30.15, 8302.42.30.65, 8302.49.60.35, 8302.49.60.45, 8302.49.60.55, 8302.49.60.85, 8302.50.00.00, 8302.60.90.00, 8305.10.00.50, 8306.30.00.00, 8414.59.60.90, 8415.90.80.45, 8418.99.80.05, 8418.99.80.50, 8418.99.80.60, 8419.90.10.00, 8422.90.06.40, 8473.30.20.00, 8473.30.51.00, 8479.90.85.00, 8486.90.00.00, 8487.90.00.80, 8503.00.95.20, 8508.70.00.00, 8515.90.20.00, 8516.90.50.00, 8516.90.80.50, 8517.70.00.00, 8529.90.73.00, 8529.90.97.60, 8536.90.80.85, 8538.10.00.00, 8543.90.88.80, 8708.29.50.60, 8708.80.65.90, 8803.30.00.60, 9013.90.50.00, 9013.90.90.00, 9401.90.50.81, 9403.90.10.40, 9403.90.10.50, 9403.90.10.85, 9403.90.25.40, 9403.90.25.80, 9403.90.40.05, 9403.90.40.10, 9403.90.40.60, 9403.90.50.05, 9403.90.50.10, 9403.90.50.80, 9403.90.60.05, 9403.90.60.10, 9403.90.60.80, 9403.90.70.05, 9403.90.70.10, 9403.90.70.80, 9403.90.80.10, 9403.90.80.15, 9403.90.80.20, 9403.90.80.41, 9403.90.80.51, 9403.90.80.61, 9506.11.40.80, 9506.51.40.00, 9506.51.60.00, 9506.59.40.40, 9506.70.20.90, 9506.91.00.10, 9506.91.00.20, 9506.91.00.30, 9506.99.05.10, 9506.99.05.20, 9506.99.05.30, 9506.99.15.00, 9506.99.20.00, 9506.99.25.80, 9506.99.28.00, 9506.99.55.00, 9506.99.60.80, 9507.30.20.00, 9507.30.40.00, 9507.30.60.00, 9507.90.60.00, and 9603.90.80.50.
The subject merchandise entered as parts of other aluminum products may be classifiable under the following additional Chapter 76 subheadings: 7610.10, 7610.90, 7615.19, 7615.20, and 7616.99, as well as under other HTSUS chapters. In addition, fin evaporator coils may be classifiable under HTSUS numbers: 8418.99.80.50 and 8418.99.80.60. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this
A complete discussion of all issues raised in this review, including the likelihood of continuation or recurrence of dumping in the event of revocation and the magnitude of the margins likely to prevail if the order were revoked, is provided in the accompanying Issues and Decision Memorandum, which is hereby adopted by this notice. The Issues and Decision Memorandum 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
Pursuant to sections 751(c)(1) and 752(c)(1) and (3) of the Act, the Department determines that revocation of the
This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act, 19 CFR 351.218, and 19 CFR 351.221(c)(5)(ii).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Effective August 5, 2016.
As a result of this sunset review, the Department of Commerce (the Department) finds that revocation of the antidumping duty order on certain in-shell (raw) pistachios (pistachios) from the Islamic Republic of (Iran) would be likely to lead to continuation or recurrence of dumping at the rates identified in the “Final Results of Review” section of this notice.
Jacqueline Arrowsmith or Madeline Heeren, AD/CVD Operations, Offices VII and VI, respectively, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-5255 and (202) 482-9179, respectively.
The Department published the antidumping duty order on pistachios from Iran on July 17, 1986.
On April 29, 2016, and May 2, 2016, the Department received an adequate substantive response to the notice of initiation from WP&A and APG, respectively, within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i). The Department did not receive any timely filed responses from the respondent interested parties,
The products covered by the order are raw,
The issues discussed in the Decision Memorandum
Pursuant to sections 752(c)(1) and (3) of the Act, we determine that revocation of the antidumping duty order of pistachios from Iran would be likely to lead to continuation or recurrence of dumping at weighted average margins up to the following:
This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return of destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
The Department is issuing and publishing these final results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act and 19 CFR 351.218.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Effective August 5, 2016.
Cindy Robinson at (202) 482-3797, AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On April 5, 2016, the Department of Commerce (the Department) initiated an antidumping duty investigation of imports of phosphor copper from the Republic of Korea.
Sections 733(c)(1)(B)(i) and (ii) of the Act permit the Department to postpone the time limit for the preliminary determination if it concludes that the parties concerned are cooperating and determines that the case is extraordinarily complicated by reason of the number and complexity of the transactions to be investigated or adjustments to be considered, the novelty of the issues presented, or the number of firms whose activities must be investigated, and additional time is necessary to make the preliminary determination. Under this section of the Act, the Department may postpone the preliminary determination until no later than 190 days after the date on which the Department initiated the investigation.
The Department determines that the parties involved in this phosphor copper investigation are cooperating, and that the investigation is extraordinarily complicated. Additional time is required to analyze the questionnaire responses and issue appropriate requests for clarification and additional information.
Therefore, in accordance with section 733(c)(1)(B) of the Act and 19 CFR 351.205(f)(1), the Department is postponing the time period for the preliminary determination of this investigation by 50 days, to October 5, 2016. Pursuant to section 735(a)(l) of the Act and 19 CFR 351.210(b)(1), the deadline for the final determination will continue to be 75 days after the date of the preliminary determination, unless postponed at a later date.
This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1).
Enforcement and Compliance, International Trade Administration, Department of Commerce
The Department of Commerce (the Department) finds that revocation of the countervailing duty (CVD) order on aluminum extrusions from the People's Republic of China (PRC) would likely lead to the continuation or recurrence of a countervailable subsidy at the levels indicated in the Final Results of Review section of this notice.
Tyler Weinhold, Office VI, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-1121.
On April 1, 2016, the Department initiated the first sunset review of the
The Department received an adequate substantive response from Petitioners within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i).
The merchandise covered by the order{s} is aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body equivalents). Specifically, the subject merchandise made from aluminum alloy with an Aluminum Association series designation commencing with the number 1 contains not less than 99 percent aluminum by weight. The subject merchandise made from aluminum alloy with an Aluminum Association series designation commencing with the number 3 contains manganese as the major alloying element, with manganese accounting for not more than 3.0 percent of total materials by weight. The subject merchandise is made from an aluminum alloy with an Aluminum Association series designation commencing with the number 6 contains magnesium and silicon as the major alloying elements, with magnesium accounting for at least 0.1 percent but not more than 2.0 percent of total materials by weight, and silicon accounting for at least 0.1 percent but not more than 3.0 percent of total materials by weight. The subject aluminum extrusions are properly identified by a four-digit alloy series without either a decimal point or leading letter. Illustrative examples from among the approximately 160 registered alloys that may characterize the subject merchandise are as follows: 1350, 3003, and 6060.
Aluminum extrusions are produced and imported in a wide variety of shapes and forms, including, but not limited to, hollow profiles, other solid profiles, pipes, tubes, bars, and rods. Aluminum extrusions that are drawn subsequent to extrusion (drawn aluminum) are also included in the scope.
Aluminum extrusions are produced and imported with a variety of finishes (both coatings and surface treatments), and types of fabrication. The types of coatings and treatments applied to subject aluminum extrusions include, but are not limited to, extrusions that are mill finished (
Subject extrusions may be identified with reference to their end use, such as fence posts, electrical conduits, door thresholds, carpet trim, or heat sinks (that do not meet the finished heat sink exclusionary language below). Such goods are subject merchandise if they otherwise meet the scope definition, regardless of whether they are ready for use at the time of importation. The following aluminum extrusion products are excluded: Aluminum extrusions made from aluminum alloy with an Aluminum Association series designations commencing with the number 2 and containing in excess of 1.5 percent copper by weight; aluminum extrusions made from aluminum alloy with an Aluminum Association series designation commencing with the number 5 and containing in excess of 1.0 percent magnesium by weight; and aluminum extrusions made from aluminum alloy with an Aluminum Association series designation commencing with the number 7 and containing in excess of 2.0 percent zinc by weight.
The scope also excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels. The scope also excludes finished goods containing aluminum extrusions that are entered unassembled in a “finished goods kit.” A finished goods kit is understood to mean a packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication, such as cutting or punching, and is assembled “as is” into a finished product. An imported product will not be considered a “finished goods kit” and therefore excluded from the scope of the investigation merely by including fasteners such as screws, bolts,
The scope also excludes aluminum alloy sheet or plates produced by other than the extrusion process, such as aluminum products produced by a method of casting. Cast aluminum products are properly identified by four digits with a decimal point between the third and fourth digit. A letter may also precede the four digits. The following Aluminum Association designations are representative of aluminum alloys for casting: 208.0, 295.0, 308.0, 355.0, C355.0, 356.0, A356.0, A357.0, 360.0, 366.0, 380.0, A380.0, 413.0, 443.0, 514.0, 518.1, and 712.0. The scope also excludes pure, unwrought aluminum in any form. The scope also excludes collapsible tubular containers composed of metallic elements corresponding to alloy code 1080A as designated by the Aluminum Association where the tubular container (excluding the nozzle) meets each of the following dimensional characteristics: (1) Length of 37 millimeters (“mm”) or 62 mm, (2) outer diameter of 11.0 mm or 12.7 mm, and (3) wall thickness not exceeding 0.13 mm.
Also excluded from the scope of this order are finished heat sinks. Finished heat sinks are fabricated heat sinks made from aluminum extrusions the design and production of which are organized around meeting certain specified thermal performance requirements and which have been fully, albeit not necessarily individually, tested to comply with such requirements.
Imports of the subject merchandise are provided for under the following categories of the Harmonized Tariff Schedule of the United States (HTSUS): 8424.90.9080, 9405.99.4020, 9031.90.90.95, 7616.10.90.90, 7609.00.00, 7610.10.00, 7610.90.00, 7615.10.30, 7615.10.71, 7615.10.91, 7615.19.10, 7615.19.30, 7615.19.50, 7615.19.70, 7615.19.90, 7615.20.00, 7616.99.10, 7616.99.50, 8479.89.98, 8479.90.94, 8513.90.20, 9403.10.00, 9403.20.00, 7604.21.00.00, 7604.29.10.00, 7604.29.30.10, 7604.29.30.50, 7604.29.50.30, 7604.29.50.60, 7608.20.00.30, 7608.20.00.90, 8302.10.30.00, 8302.10.60.30, 8302.10.60.60, 8302.10.60.90, 8302.20.00.00, 8302.30.30.10, 8302.30.30.60, 8302.41.30.00, 8302.41.60.15, 8302.41.60.45, 8302.41.60.50, 8302.41.60.80, 8302.42.30.10, 8302.42.30.15, 8302.42.30.65, 8302.49.60.35, 8302.49.60.45, 8302.49.60.55, 8302.49.60.85, 8302.50.00.00, 8302.60.90.00, 8305.10.00.50, 8306.30.00.00, 8414.59.60.90, 8415.90.80.45, 8418.99.80.05, 8418.99.80.50, 8418.99.80.60, 8419.90.10.00, 8422.90.06.40, 8473.30.20.00, 8473.30.51.00, 8479.90.85.00, 8486.90.00.00, 8487.90.00.80, 8503.00.95.20, 8508.70.00.00, 8515.90.20.00, 8516.90.50.00, 8516.90.80.50, 8517.70.00.00, 8529.90.73.00, 8529.90.97.60, 8536.90.80.85, 8538.10.00.00, 8543.90.88.80, 8708.29.50.60, 8708.80.65.90, 8803.30.00.60, 9013.90.50.00, 9013.90.90.00, 9401.90.50.81, 9403.90.10.40, 9403.90.10.50, 9403.90.10.85, 9403.90.25.40, 9403.90.25.80, 9403.90.40.05, 9403.90.40.10, 9403.90.40.60, 9403.90.50.05, 9403.90.50.10, 9403.90.50.80, 9403.90.60.05, 9403.90.60.10, 9403.90.60.80, 9403.90.70.05, 9403.90.70.10, 9403.90.70.80, 9403.90.80.10, 9403.90.80.15, 9403.90.80.20, 9403.90.80.41, 9403.90.80.51, 9403.90.80.61, 9506.11.40.80, 9506.51.40.00, 9506.51.60.00, 9506.59.40.40, 9506.70.20.90, 9506.91.00.10, 9506.91.00.20, 9506.91.00.30, 9506.99.05.10, 9506.99.05.20, 9506.99.05.30, 9506.99.15.00, 9506.99.20.00, 9506.99.25.80, 9506.99.28.00, 9506.99.55.00, 9506.99.60.80, 9507.30.20.00, 9507.30.40.00, 9507.30.60.00, 9507.90.60.00, and 9603.90.80.50.
The subject merchandise entered as parts of other aluminum products may be classifiable under the following additional Chapter 76 subheadings: 7610.10, 7610.90, 7615.19, 7615.20, and 7616.99, as well as under other HTSUS chapters. In addition, fin evaporator coils may be classifiable under HTSUS numbers: 8418.99.80.50 and 8418.99.80.60. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this
All issues raised in this review are addressed in the Issues and Decision Memorandum, which is dated concurrently with and adopted by this notice.
Pursuant to sections 752(b)(1) and (3) of the Act, we determine that revocation of the
This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
The Department is issuing and publishing these final results and this notice in accordance with sections 751(c), 752(b), and 777(i)(1) of the Act.
Enforcement and Compliance, International Trade Administration, Department of Commerce
On April 13, 2016, the Department of Commerce (“Department”) published its
Effective August 5, 2016.
Lilit Astvatsatrian, AD/CVD Operations, Office IV, Enforcement & Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-6412.
On April 13, 2016, the Department published its
The products covered by this order are certain steel grating, consisting of two or more pieces of steel, including load-bearing pieces and cross pieces, joined by any assembly process, regardless of: (1) Size or shape; (2) method of manufacture; (3) metallurgy (carbon, alloy, or stainless); (4) the profile of the bars; and (5) whether or not they are galvanized, painted, coated, clad or plated. Steel grating is also commonly referred to as “bar grating,” although the components may consist of steel other than bars, such as hot-rolled sheet, plate, or wire rod.
The scope of this order excludes expanded metal grating, which is comprised of a single piece or coil of sheet or thin plate steel that has been slit and expanded, and does not involve welding or joining of multiple pieces of steel. The scope of this order also excludes plank type safety grating which is comprised of a single piece or coil of sheet or thin plate steel, typically in thickness of 10 to 18 gauge, that has been pierced and cold formed, and does not involve welding or joining of multiple pieces of steel.
Certain steel grating that is the subject of this order is currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) under subheading 7308.90.7000. While the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.
In the
Upon issuance of the final results, the Department will determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries covered by this review. The Department intends to issue assessment instructions to CBP 15 days after the publication date of the final results of this review. The Department intends to instruct CBP to liquidate any entries of subject merchandise from Ningbo Haitian at 145.18 percent (the PRC-wide rate).
Additionally, pursuant to the Department's practice in non-market economy cases, given that we have continued to find that Yantai Xinke had no shipments of subject merchandise during the POR, any suspended entries of subject merchandise from Yantai Xinke will be liquidated at the PRC-wide rate.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of review, as provided by section 751(a)(2)(C) of the Act: (1) For previously investigated or reviewed PRC and non-PRC exporters, which are not under review in this
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of the antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (“APOs”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation that is subject to sanction.
This notice of the final results of this antidumping duty administrative review is issued and published in accordance with sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213 and 19 CFR 351.221(b)(5).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Correction of a public meeting notice.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Herring
This meeting will be held on Tuesday, August 16, 2016 at 9:30 a.m.
The meeting will be held at the Holiday Inn, 31 Hampshire Street, Mansfield, MA 02048; telephone: (508) 339-2200; fax: (508) 339-1040.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The original notice published in the
The Advisory Panel will give a brief update on the next steps for Management Strategy Evaluation of Atlantic Herring Acceptable Biological Catch control rules being considered in Amendment 8 to the Atlantic Herring Fishery Management Plan (FMP). The Advisory Panel will also review preliminary PDT analysis and develop measures related to localized depletion to be considered in Amendment 8 to the Atlantic Herring FMP. The Advisory Panel will review progress and provide input on Framework Adjustment 5 to the Atlantic Herring FMP, an action considering modification of accountability measures (AMs) that trigger if the sub-ACL of Georges Bank haddock is exceeded by the midwater trawl herring fishery. Additionally, they will start initial discussions of work priorities for the Herring FMP in 2017. Other business may be discussed as necessary.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Correction of a public meeting notice.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Herring
This meeting will be held on Wednesday, August 17, 2016 at 9 a.m.
The meeting will be held at the Holiday Inn, 31 Hampshire Street, Mansfield, MA 02048; telephone: (508) 339-2200; fax: (508) 339-1040.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The original notice published in the
The Committee will give a brief update on the next steps for Management Strategy Evaluation of Atlantic Herring Acceptable Biological Catch control rules being considered in Amendment 8 to the Atlantic Herring Fishery Management Plan (FMP). The Committee will also review preliminary PDT analysis and develop measures related to localized depletion to be considered in Amendment 8 to the Atlantic Herring FMP. The Committee will review progress and provide input on Framework Adjustment 5 to the Atlantic Herring FMP, an action considering modification of accountability measures (AMs) that trigger if the sub-ACL of Georges Bank haddock is exceeded by the midwater trawl herring fishery. Additionally, they will also start initial discussions of work priorities for the Herring FMP in 2017. Other business may be discussed as necessary.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a joint public meeting of its Monkfish Advisory Panel to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Wednesday, August 17, 2016 at 9 a.m.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Advisory Panel will meet to receive an update on the 2016 operational assessment. The Advisory Panel will discuss the SSC recommendations for Allowable Biological Catch (ABC) for FYs 2017-19, the potential range of alternatives for the specifications package, and priorities for 2017. The Advisory Panel will discuss other business, as needed.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and Deletions from the Procurement List.
This action adds products and services to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes products and a service from the Procurement List previously furnished by such agencies.
Effective on September 4, 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 2/12/2016 (81 FR 7510-7511), 5/13/2016 (81 FR 29848), 5/20/2016 (81 FR 31917-31918), 5/27/2016 (81 FR 33665-33666), and 6/10/2016 (81 FR 37581-37582), the Committee for Purchase From People Who Are Blind or Severely Disabled published notices of proposed additions to the Procurement List.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the products and services and impact of the additions on the current or most recent contractors, the Committee has determined that the products and services listed below are 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 any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the products and services to the Government.
2. The action will result in authorizing small entities to furnish the products and 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 products and services proposed for addition to the Procurement List.
Accordingly, the following products and services are added to the Procurement List:
The U.S. AbilityOne Commission, whose mission is to provide employment opportunities for people who are blind or have significant disabilities in the manufacture and delivery of products and services to the Federal Government, received two public comments both more than 90 days after the expiration of the notice and comment period required by 5 U.S.C. 500, formerly known as the Administrative Procedure Act (APA). Notwithstanding that, the Commission is addressing the comments.
The Commenters recommended against the addition of these prescription eyewear products from the Commission's Procurement List. The Commenters did not assert a personal financial hardship or impact, one on behalf of its client and the other, itself, should the addition of these products to the Procurement List occur. Rather, the Commenters highlighted there may be an alternate method for the procurement of these products through veteran-owned sources and that addition of the products to the Procurement List may cause the Department of Veterans Affairs to be non-compliant no matter how it proceeds with such a procurement.
While the Commission appreciates there may be methods for purchasing the subject prescription eyewear products from veteran-owned sources, the Commission's mission and duty is to
On 7/1/2016 (81 FR 43191), 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 products and service 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 furnish the products and service 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 and service deleted from the Procurement List.
Accordingly, the following products and service are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed Deletions from the Procurement List.
The Committee is proposing to delete products and services from the Procurement List that were previously furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Comments must be received on or before September 4, 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.
The following products and services are proposed for deletion from the Procurement List:
Council on Environmental Quality.
Notice of Availability.
The Council on Environmental Quality (CEQ) is issuing its final guidance on considering greenhouse gas (GHG) emissions and climate change in National Environmental Policy Act (NEPA) reviews. Many projects and programs proposed by, or requiring the approval of, Federal agencies have the potential to emit or sequester GHGs and may be affected by climate change. It follows that, under NEPA, Federal decision-makers and the public should be informed about a proposal's GHG emissions and climate change implications. Such information can help a decision-maker make an informed choice between alternative actions that will result in different levels of GHG emissions or consider mitigation measures that reduce climate change impacts. This final guidance applies to all types of proposed Federal agency actions, including land and resource management actions, and provides agencies with a framework for agency consideration of the effects of GHGs and climate change to ensure efficient and transparent agency decision-making.
The guidance is effective August 5, 2016.
The Final Guidance is available at
Council on Environmental Quality (ATTN: Ted Boling, Associate Director for the National Environmental Policy Act), 722 Jackson Place NW., Washington, DC 20503. Telephone: (202) 395-5750.
Enacted by Congress in 1969, the National Environmental Policy Act (NEPA), 42 U.S.C. 4321
On December 24, 2014, CEQ issued revised draft guidance
There were over 100 public comments from a broad range of stakeholders, including private citizens, members of Congress, corporations, environmental organizations, trade associations, academics, tribes, and Federal, state, and local agencies. CEQ considered the comments and the revised guidance reflects its consideration of the input.
This guidance is not a regulation. It presents CEQ's interpretation of what is appropriate under NEPA and the CEQ Regulations for Implementing the Procedural Provisions of NEPA, 40 CFR parts 1500-1508 (CEQ Regulations). This guidance does not change or substitute for any law, regulation, or other legally binding requirement. With this guidance, CEQ provides Federal agencies with an overarching framework for determining how to consider GHG emissions and climate change effects in NEPA reviews. Consequently, this guidance could reduce agency uncertainty and avoid impacts on project timelines and costs that stem from such uncertainty.
Agency discretion is an integral aspect of NEPA implementation and this guidance offers an approach to agencies on how to exercise that discretion. This guidance preserves agency discretion and recognizes agencies' abilities to evaluate the facts in the NEPA review at hand and determine how GHG emissions and climate change should be taken into account, the appropriate depth and scope for meaningfully comparing alternatives, and the appropriate GHG emission quantification tools.
The final guidance recommends that agencies use projected GHG emissions as a proxy for assessing potential climate change effects when preparing a NEPA analysis for a proposed agency action; recommends that agencies quantify projected direct and indirect GHG emissions, taking into account available data and GHG quantification tools that are suitable for the proposed agency action; and recommends that where agencies do not quantify the GHG emissions for a proposed agency action because tools, methodologies, or data inputs are not reasonably available, agencies include a qualitative analysis in the NEPA document and explain the basis for determining that quantification is not reasonably available. The guidance also:
• Counsels agencies to use information developed during the NEPA review to consider alternatives that would make the actions and affected communities more resilient to the effects of a changing climate.
• Outlines special considerations for analysis of biogenic carbon dioxide sources and carbon stocks associated with land and resource management actions.
• Encourages agencies to use and leverage existing NEPA tools and practices to assist in their analyses, such as scoping, broad-scale reviews and tiering, incorporation by reference, and available information.
• Advises agencies to rely on their expert judgment and experience to determine which tools and methodologies should be used when they conduct their analyses.
This guidance is effective for use on all new proposals when a NEPA review is initiated. CEQ recommends that agencies consider applying this guidance to projects in ongoing EIS or EA processes where GHG emissions may be a significant aspect of the proposal.
The final guidance is available on the National Environmental Policy Act Web site (
42 U.S.C. 4332, 4342, 4344 and 40 CFR parts 1500, 1501, 1502, 1503, 1505, 1506, 1507, and 1508.
Global Positioning System Directorate (GPSD), Department of the Air Force, Department of Defense.
Notice of meeting—2016 Public Interface Control Working Group and Open Forum for the NAVSTAR GPS public documents.
This notice informs the public that the Global Positioning Systems (GPS) Directorate will host the 2016 Public Interface Control Working Group and Open Forum on 21 and 22 September 2016 for the following NAVSTAR GPS public documents: IS-GPS-200 (Navigation User Interfaces), IS-GPS-705 (User Segment L5 Interfaces), IS-GPS-800 (User Segment L1C Interface), ICD-GPS-240 (NAVSTAR GPS Control Segment to User Support Community Interfaces), and ICD-GPS-870 (NAVSTAR GPS Control Segment to User Support Community Interfaces). Additional logistical details can be found below.
The purpose of this meeting is to update the public on GPS public document revisions and collect issues/comments for analysis and possible integration into future GPS public document revisions. All outstanding comments on the GPS public documents will be considered along with the comments received at this year's open forum in the next revision cycle. The 2016 Interface Control Working Group and Open Forum are open to the general public. For those who would like to attend and participate, we request that you register no later than September 7, 2016. Please send the registration information to
Comments will be collected, catalogued, and discussed as potential inclusions to the version following the current release. If accepted, these changes will be processed through the formal directorate change process for IS-GPS-200, IS-GPS-705, IS-GPS-800, ICD-GPS-240, and ICD-GPS-870. All comments must be submitted in a Comments Resolution Matrix (CRM). These forms along with current versions of the documents and the official meeting notice are posted at:
Please submit comments to the SMC/GPS Requirements (SMC/GPER) mailbox at
Registration/check-in on 21 Sept 2016 will begin at 0800 hrs
* Identification will be required at the entrance of the PCT facility (
Captain Robyn Anderson,
Office of Fossil Energy, Department of Energy.
Record of decision.
The U.S. Department of Energy (DOE) announces its decision in Lake Charles LNG Export Company, LLC (Lake Charles LNG Export), DOE/FE Docket No. 13-04-LNG,
The EIS and this Record of Decision (ROD) are available on DOE's National Environmental Policy Act (NEPA) Web site at:
To obtain additional information about the EIS or the ROD, contact Mr. Kyle W. Moorman, U.S. Department of Energy (FE-34), Office of Regulation and International Engagement, Office of Oil and Natural Gas, Office of Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-5600, or Mr. Edward Le Duc, U.S. Department of Energy (GC-51), Office of the Assistant General Counsel for Environment, 1000 Independence Avenue SW., Washington, DC 20585.
DOE prepared this ROD and Floodplain Statement of Findings pursuant to the National Environmental Policy Act of 1969 (42 United States Code [U.S.C.] 4321,
Lake Charles LNG Export is a Delaware limited liability company, with its principal place of business in Houston, Texas.
The Terminal is owned and operated by a corporate affiliate currently known as Lake Charles LNG Company, LLC (Lake Charles LNG).
Lake Charles LNG Export states that FERC certificated the Terminal in 1977 and the original construction was completed in 1981.
Among other features, the Liquefaction Project will include a new liquefaction facility consisting of three liquefaction trains, modifications and upgrades at the existing Terminal, and approximately 0.5 miles of 48-inch diameter feed gas line in Calcasieu Parish, Louisiana, to supply natural gas to the liquefaction facility from existing gas transmission pipelines.
Lake Charles LNG Export states that, following completion of the Liquefaction Project, the Terminal will be bi-directional, meaning it will be capable of importing or exporting LNG, and its peak and sustained sendout capabilities will not be affected.
FERC was the lead federal agency and initiated the NEPA process by publishing a Notice of Intent (NOI) to prepare an EIS in the
The final EIS recommended that FERC subject any approval of Lake Charles LNG Export's proposed Liquefaction Project to 96 conditions to reduce the environmental impacts that would otherwise result from the construction and operation of the project. On December 17, 2015, FERC issued an Order Granting Section 3 and Section 7 Authorizations and Approving Abandonment (FERC Order),
In accordance with 40 CFR 1506.3, after an independent review of FERC's final EIS, DOE/FE adopted FERC's final EIS for the Lake Charles Liquefaction Project (DOE/EIS-0491), and the U.S. Environmental Protection Agency published a notice of the adoption on July 15, 2016 (81 FR 46077).
On June 4, 2014, DOE/FE published the Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas From the United States (Draft Addendum) for public comment (79 FR 32258). The purpose of this review was to provide additional information to the public concerning the potential environmental impacts of unconventional natural gas exploration and production activities, including hydraulic fracturing. Although not required by NEPA, DOE/FE prepared the Addendum in an effort to be responsive to the public and to provide
The 45-day comment period on the Draft Addendum closed on July 21, 2014. DOE/FE received 40,745 comments in 18 separate submissions, and considered those comments in issuing the Final Addendum on August 15, 2014. DOE provided a summary of the comments received and responses to substantive comments in Appendix B of the Addendum. DOE/FE has incorporated the Draft Addendum, comments, and Final Addendum into the record in this proceeding.
The EIS assessed alternatives that could achieve the Liquefaction Project objectives. The range of alternatives analyzed included the No-Action Alternative, system alternatives, pipeline system alternatives, alternative liquefaction facility sites, alternative terminal configurations, alternative aboveground facility sites for pipeline expansion, and alternative power sources. Alternatives were evaluated and compared to the Liquefaction Project to determine if the alternatives were environmentally preferable.
Under the No-Action Alternative, the Liquefaction Project would not be developed. Additionally, the potential adverse and beneficial environmental impacts discussed within the EIS would not occur. Furthermore, this alternative could also require that potential end-users make different arrangements to obtain natural gas services, use other fossil fuel energy sources (
The EIS evaluated system alternatives for the Liquefaction Project, including six operating LNG import terminals in the Gulf of Mexico area, and several proposed or planned export projects along the Gulf Coast. All of the system alternatives were eliminated from further consideration for reasons that include the need for substantial construction beyond that currently proposed, production volume limitations, in-service dates scheduled significantly beyond Lake Charles LNG Export's commitments to its customers, and potential environmental impacts that were considered comparable to or greater than those of the Liquefaction Project.
The EIS evaluated three pipeline system alternatives for the Liquefaction Project. In order to be a viable pipeline system alternative, the alternative system would have to transport all or a part of the volume of natural gas required for liquefaction at the proposed new facility and cause significantly less impact on the environment. Additionally, a legitimate pipeline alternative must either connect directly to the proposed facility or to the existing pipeline system. Each of the three alternatives pipeline systems considered would require significant expansions in their looping and compression capabilities to achieve the necessary delivery capacity and require the construction of new segments to connect directly with the liquefaction facility. The construction associated with the alternatives, including significantly increasing pipeline looping capability or expansion would result in environmental impacts equal to or greater than the proposed pipeline system. As a result, none of the three proposed pipeline alternatives would provide a significant environmental advantage over the existing and proposed pipeline system.
The EIS evaluated five Liquefaction Project sites (including the current proposed site), all within relative close proximity to the existing Terminal. Construction of the Terminal at each of the alternative sites would have greater environmental impacts when compared to the proposed Terminal site; therefore, none of the four other sites evaluated were determined to be environmentally preferred.
For the Liquefaction Project configuration (
The EIS evaluated several alternative sites for the proposed above-ground facilities (
When compared against the other action alternatives assessed in the EIS, as discussed above, the Lake Charles Liquefaction Project is the environmentally preferred alternative. While the No-Action Alternative would avoid the environmental impacts identified in the EIS, adoption of this alternative would not meet the Liquefaction Project objectives.
DOE has decided to issue Order No. 3868 authorizing Lake Charles LNG Export to export domestically produced LNG by vessel from the Terminal located in Lake Charles, Calcasieu Parish, Louisiana, in a volume up to the equivalent to 730 Bcf/yr of natural gas for a term of 20 years to commence on the earlier of the date of first export or seven years from the date that the Order is issued.
Concurrently with this Record of Decision, DOE is issuing Order No. 3868 in which it finds that the requested authorization has not been shown to be inconsistent with the public interest and the Application should be granted subject to compliance with the terms and conditions set forth in the Order, including the environmental conditions recommended in the EIS and adopted in the FERC Order at Appendix B. Additionally, this authorization is conditioned on Lake Charles LNG Export's compliance with any other preventative and mitigative measures imposed by other Federal or state agencies.
DOE's decision is based upon the analysis of potential environmental impacts presented in the EIS, and DOE's determination in Order No. 3868 that the opponents of Lake Charles LNG Export's Application have failed to overcome the statutory presumption that the proposed export authorization is not inconsistent with the public interest. Although not required by NEPA, DOE/FE also considered the Addendum, which summarizes available information on potential upstream impacts associated with unconventional natural gas activities, such as hydraulic fracturing.
As a condition of its decision to issue Order No. 3868 authorizing Lake Charles LNG Export to export LNG to non-FTA countries, DOE is imposing requirements that will avoid or minimize the environmental impacts of the project. These conditions include the environmental conditions recommended in the EIS and adopted in the FERC Order at Appendix B. Mitigation measures beyond those included in Order No. 3868 that are enforceable by other Federal and state agencies are additional conditions of Order No. 3868. With these conditions, DOE/FE has determined that all practicable means to avoid or minimize environmental harm from the Liquefaction Project have been adopted.
DOE prepared this Floodplain Statement of Findings in accordance with DOE's regulations entitled “Compliance with Floodplain and Wetland Environmental Review Requirements” (10 CFR part 1022). The required floodplain assessment was conducted during development and preparation of the EIS (see Sections 3.3.1, 3.3.2, 4.1.3.4, and 4.13.2.1 of the EIS). DOE determined that the placement of some project components within floodplains would be unavoidable. However, the current design for the Lake Charles Liquefaction Project minimizes floodplain impacts to the extent practicable.
Office of Fossil Energy, Department of Energy.
Record of decision.
The U.S. Department of Energy (DOE) announces its decision in Lake Charles Exports, LLC (LCE), DOE/FE Docket No. 11-59-LNG, to issue DOE/FE Order No. 3324-A, granting final long-term, multi contract authorization for LCE to engage in the export of domestically produced liquefied natural gas (LNG) from the Lake Charles Terminal located in Lake Charles, Calcasieu Parish, Louisiana (Terminal), in a volume equivalent to 730 Bcf/yr of natural gas for a term of 20 years. LCE is seeking to export LNG from the Terminal to countries with which the United States has not entered into a free trade agreement (FTA) that requires national treatment for trade in natural gas, and with which trade is not prohibited by U.S. law or policy (non-FTA countries). Order No. 3324-A is issued under section 3 of the Natural Gas Act (NGA)
The EIS and this Record of Decision (ROD) are available on DOE's National Environmental Policy Act (NEPA) Web site at:
To obtain additional information about the EIS or the ROD, contact Mr. Kyle W. Moorman, U.S. Department of Energy (FE-34), Office of Regulation and International Engagement, Office of Oil and Natural Gas, Office of Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-5600, or Mr. Edward Le Duc, U.S. Department of Energy (GC-51), Office of the Assistant General Counsel for Environment, 1000 Independence Avenue SW., Washington, DC 20585.
DOE prepared this ROD and Floodplain Statement of Findings pursuant to the National Environmental Policy Act of 1969 (42 United States Code [U.S.C.] 4321,
LCE is a Delaware limited liability company with its principal place of business in Houston, Texas. In a Notice of Change in Control recently submitted to DOE/FE,
On May 6, 2011, LCE filed the application (Application) with DOE/FE seeking authorization to export domestically produced LNG from proposed liquefaction facilities (Liquefaction Project) to be located at the existing Terminal in Lake Charles, Louisiana. LCE proposes to export this LNG to non-FTA countries in a total volume equivalent to 730 billion cubic feet per year (Bcf/yr) of natural gas.
The Terminal is owned and operated by Lake Charles LNG Company, LLC (Lake Charles LNG, formerly Trunkline LNG Company, LLC), a corporate affiliate of LCE.
On August 7, 2013, DOE/FE issued Order No. 3324 (Conditional Order) to LCE, conditionally granting the portion of LCE's Application that requested long-term, multi-contract authority to export domestically produced LNG to non-FTA countries. Under the terms of that Conditional Order, LCE is conditionally authorized to export up to 15 mtpa, which LCE states is equivalent to approximately 730 billion Bcf/yr of natural gas (2.0 Bcf/d), by vessel from the Terminal for a term of 20 years. The Conditional Order reviewed the record evidence and entered findings on all non-environmental issues considered under NGA section 3(a), including the economic impacts, international impacts, and security of natural gas supply associated with LCE's proposed exports. Because DOE must also consider environmental issues, DOE/FE conditioned the order on: (i) FERC's satisfactory completion of the NEPA environmental review process, and (ii) DOE/FE's own issuance of a finding of No Significant Impact (FONSI) or a Record of Decision (ROD) under NEPA.
LCE states that FERC certificated the Terminal in 1977 and the original construction was completed in 1981.
According to LCE, the Terminal currently has a firm sustained sendout capacity of 1.8 Bcf/d and a peak sendout capacity of 2.1 Bcf/day. The Terminal has four LNG storage tanks with a combined capacity of approximately 425,000 cubic meters of LNG, or approximately 9.0 Bcf of natural gas. The Terminal's natural gas liquids processing facilities allow the extraction of ethane and other heavier hydrocarbons from the LNG stream.
Among other features, the Liquefaction Project will include a new liquefaction facility consisting of three liquefaction trains, modifications and upgrades at the existing Terminal, and approximately 0.5 miles of 48-inch diameter feed gas line in Calcasieu Parish, Louisiana, to supply natural gas to the liquefaction facility from existing gas transmission pipelines.
LCE states that, following completion of the Liquefaction Project, the Terminal will be bi-directional, meaning it will be capable of importing or exporting LNG, and its peak and sustained sendout capabilities will not be affected.
FERC was the lead federal agency and initiated the NEPA process by publishing a Notice of Intent (NOI) to prepare an EIS in the
The final EIS recommended that FERC subject any approval of LCE's proposed Liquefaction Project to 96 conditions to reduce the environmental impacts that would otherwise result from the construction and operation of the project. On December 17, 2015, FERC issued an Order Granting Section 3 and Section 7 Authorizations and Approving Abandonment (FERC Order),
In accordance with 40 CFR 1506.3, after an independent review of FERC's final EIS, DOE/FE adopted FERC's final EIS for the Lake Charles Liquefaction Project (DOE/EIS-0491), and the U.S. Environmental Protection Agency published a notice of the adoption on July 15, 2016 (81 FR 46077).
On June 4, 2014, DOE/FE published the Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas From the United States (Draft Addendum) for public comment (79 FR 32258). The purpose of this review was to provide additional information to the public concerning the potential environmental impacts of unconventional natural gas exploration and production activities, including hydraulic fracturing. Although not required by NEPA, DOE/FE prepared the Addendum in an effort to be responsive to the public and to provide the best information available on a subject that had been raised by commenters in this and other LNG export proceedings.
The 45-day comment period on the Draft Addendum closed on July 21, 2014. DOE/FE received 40,745 comments in 18 separate submissions, and considered those comments in issuing the Final Addendum on August 15, 2014. DOE provided a summary of the comments received and responses to substantive comments in Appendix B of the Addendum. DOE/FE has incorporated the Draft Addendum, comments, and Final Addendum into the record in this proceeding.
The EIS assessed alternatives that could achieve the Liquefaction Project objectives. The range of alternatives analyzed included the No-Action Alternative, system alternatives, pipeline system alternatives, alternative liquefaction facility sites, alternative terminal configurations, alternative aboveground facility sites for pipeline expansion, and alternative power sources. Alternatives were evaluated and compared to the Lake Charles Liquefaction Project to determine if the alternatives were environmentally preferable.
Under the No-Action Alternative, the Liquefaction Project would not be developed. Additionally, the potential adverse and beneficial environmental impacts discussed within the EIS would not occur. Furthermore, this alternative could also require that potential end-users make different arrangements to obtain natural gas services, use other fossil fuel energy sources (
The EIS evaluated system alternatives for the Liquefaction Project, including six operating LNG import terminals in the Gulf of Mexico area, and several proposed or planned export projects along the Gulf Coast. All of the system alternatives were eliminated from further consideration for reasons that include the need for substantial construction beyond that currently proposed, production volume limitations, in-service dates scheduled significantly beyond LCE's commitments to its customers, and potential environmental impacts that were considered comparable to or greater than those of the Liquefaction Project.
The EIS evaluated three pipeline system alternatives for the Liquefaction Project. In order to be a viable pipeline system alternative, the alternative system would have to transport all or a part of the volume of natural gas required for liquefaction at the proposed new facility and cause significantly less impact on the environment. Additionally, a legitimate pipeline alternative must either connect directly to the proposed facility or to the existing pipeline system. Each of the three alternatives pipeline systems considered would require significant expansions in their looping and compression capabilities to achieve the necessary delivery capacity and require the construction of new segments to connect directly with the liquefaction facility. The construction associated with the alternatives, including significantly increasing pipeline looping capability or expansion, would result in environmental impacts equal to or greater than the proposed pipeline system. As a result, none of the three proposed pipeline alternatives would provide a significant environmental advantage over the existing and proposed pipeline system.
The EIS evaluated five Liquefaction Project sites (including the current proposed site), all within relative close proximity to the existing Terminal. Construction of the Terminal at each of the alternative sites would have greater environmental impacts when compared to the proposed Terminal site; therefore, none of the four other sites evaluated were determined to be environmentally preferred.
For the Liquefaction Project configuration (
The EIS evaluated several alternative sites for the proposed above-ground facilities (
When compared against the other action alternatives assessed in the EIS, as discussed above, the Lake Charles Liquefaction Project is the environmentally preferred alternative. While the No-Action Alternative would avoid the environmental impacts identified in the EIS, adoption of this alternative would not meet the Liquefaction Project objectives.
DOE has decided to issue Order No. 3324-A authorizing LCE to export domestically produced LNG by vessel from the Terminal located in Lake Charles, Calcasieu Parish, Louisiana, in a volume up to the equivalent to 730 Bcf/yr of natural gas for a term of 20 years to commence on the earlier of the date of first export or seven years from the date that the Order is issued.
Concurrently with this Record of Decision, DOE is issuing Order No. 3324-A in which it finds that the requested authorization has not been shown to be inconsistent with the public interest, and the Application should be granted subject to compliance with the terms and conditions set forth in the Order, including the environmental conditions recommended in the EIS and adopted in the FERC Order at Appendix B. Additionally, this authorization is conditioned on LCE's compliance with any other preventative and mitigative measures imposed by other Federal or state agencies.
DOE's decision is based upon the analysis of potential environmental impacts presented in the EIS, and DOE's determination in Order No. 3324-A that the opponents of LCE's Application have failed to overcome the statutory presumption that the proposed export authorization is not inconsistent with the public interest. Although not required by NEPA, DOE/FE also considered the Addendum, which summarizes available information on potential upstream impacts associated with unconventional natural gas activities, such as hydraulic fracturing.
As a condition of its decision to issue Order No. 3324-A authorizing LCE to export LNG to non-FTA countries, DOE is imposing requirements that will avoid or minimize the environmental impacts of the project. These conditions include the environmental conditions recommended in the EIS and adopted in the FERC Order at Appendix B. Mitigation measures beyond those included in Order No. 3324-A that are enforceable by other Federal and state agencies are additional conditions of Order No. 3324-A. With these conditions, DOE/FE has determined that all practicable means to avoid or minimize environmental harm from the Liquefaction Project have been adopted.
DOE prepared this Floodplain Statement of Findings in accordance with DOE's regulations, entitled “Compliance with Floodplain and Wetland Environmental Review Requirements” (10 CFR part 1022). The required floodplain assessment was conducted during development and preparation of the EIS (see Sections 3.3.1, 3.3.2, 4.1.3.4, and 4.13.2.1 of the EIS). DOE determined that the placement of some project components within floodplains would be unavoidable. However, the current design for the Lake Charles Liquefaction Project minimizes floodplain impacts to the extent practicable.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment (EA) for the Northern Access 2016 Project, proposed by National Fuel Gas Supply Corporation and Empire Pipeline, Inc. (National Fuel) in the above-referenced dockets. National Fuel requests authorization to construct, operate, and maintain about 99 miles of natural gas transmission pipeline and related facilities in McKean County, Pennsylvania and Allegany, Cattaraugus, Erie, and Niagara Counties, New York. The Project would provide 350,000 dekatherms per day of capacity to markets in the northeastern United States and Canada.
The EA assesses the potential environmental effects of the construction and operation of the Northern Access 2016 Project in accordance with the requirements of the National Environmental Policy Act (NEPA). 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. Army Corps of Engineers and New York State Department of Agriculture and Markets participated as cooperating agencies in the preparation of the EA. Cooperating agencies have jurisdiction by law or special expertise with respect to resources potentially affected by the proposal and participate in the NEPA analysis.
The proposed Northern Access 2016 Project includes the following facilities:
• 96.9 miles of 24-inch-diameter pipeline in McKean County, Pennsylvania and Allegany, Cattaraugus, and Erie Counties, New York;
• 0.9 mile of 16-inch-diameter pipeline and 1.2 miles of 24-inch-diameter pipeline in Niagara County, New York;
• a new 22,000 horsepower (hp) compressor station in Niagara County;
• an additional 5,000 hp of compression at an existing compressor station in Erie County;
• a metering, regulation, and delivery station in Erie County;
• a dehydration facility in Niagara County;
• tie-ins in McKean, Cattaraugus, and Erie Counties;
• modification of tie-in facilities in Niagara County;
• mainline block valves in McKean, Allegany, Cattaraugus, and Erie Counties; and
• access roads and contractor/staging yards in McKean, Allegany, Cattaraugus, and Erie Counties.
The FERC staff mailed copies of the EA to federal, state, and local officials; agency representatives; conservation organizations; local libraries and newspapers; Native American groups; property owners affected by the Project facilities; and parties to this proceeding. 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 August 26, 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 (CP15-115-000 or CP15-115-001) 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: Kimberly D. Bose, 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 (18 CFR 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
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
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j. This application is not ready for environmental analysis at this time.
m. You may also register online at
o. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
As previously noticed on March 4, 2015, the staff of the Federal Energy Regulatory Commission (FERC or Commission) is preparing an environmental impact statement (EIS) that will discuss the environmental impacts of the Alaska LNG Project that could result from construction and operation of facilities by Alaska Gasline Development Corporation; BP Alaska LNG LLC; Conoco Phillips Alaska LNG Company; and ExxonMobil Alaska LNG LLC (Applicants) in Alaska. This notice explains the additional scoping process that will be used to gather input from the public and interested agencies on a route alternative to be evaluated for crossing the Denali National Park and Preserve (DNPP).
The route currently planned by Alaska LNG is closely aligned with the Parks Highway, but deviates from the highway where the Parks Highway passes through the DNPP entrance area (see figure in appendix 1.
This Supplemental Notice announces the opening of a limited scoping period to gather input from the public and interested agencies on the DNPP Alternative route. You can make a difference by providing us with your specific comments or concerns about the DNPP Alternative route. 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 EIS. 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 September 25, 2016.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should
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, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” is 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. In all instances, please reference the project docket number (PF14-21-000) 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
(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 (PF14-21-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
In addition, if you have questions regarding the FERC process and our review of the alternative, FERC staff will be available to answer questions on Tuesday, August 23, 2016, between 4:00 and 6:00 p.m. at the Murie Dining Hall within Denali National Park (next to the Murie Science and Learning Center),
Please note this is not your only public input opportunity; please refer to the review process flow chart in appendix 2.
The Applicants are planning to transport and liquefy supplies of natural gas from the production fields at the Point Thomson and Prudhoe Bay Units (PTU and PBU, respectively) on Alaska's North Slope for export and potential in-state deliveries. To do this, the Alaska LNG Project would consist of a new Gas Treatment Plant (GTP) on the North Slope and associated pipelines to deliver the gas from the PTU and PBU to the GTP, as well as a pipeline to deliver natural gas processing byproducts from the GTP back to the PBU. The GTP would treat/process the natural gas for delivery to an approximately 800-mile-long, 42-inch-diameter pipeline that would transport the natural gas to a new planned liquefaction facility on the eastern shore of Cook Inlet in the Nikiski area of the Kenai Peninsula. Alaska LNG anticipates starting construction in late 2019, with construction and startup taking approximately 8 years. On this basis, the full planned Project system would be placed into service about 2027.
As previously described, the alternative we are scoping involves an alternative route directly through the DNPP entrance area and closely aligned with the Parks Highway (see figure in appendix 1). We are requesting input from stakeholders on both the DNPP Alternative route and the current route that is located outside the park.
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 EIS we will discuss impacts that could occur as a result of the construction and operation of the planned project under these general headings:
• Alternatives
• Geology and soils;
• Land use;
• Water resources, fisheries, and wetlands;
• Cultural resources;
• Vegetation and wildlife;
• Air quality and noise;
• Endangered and threatened species;
• Transportation;
• Socioeconomics;
• Public safety; and
• Cumulative impacts.
We will also evaluate possible alternatives to the planned project or portions of the project, and make recommendations on how to lessen or avoid 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 already met with the Applicants, jurisdictional agencies, Alaska Native tribes, local officials, and other interested stakeholders to discuss the project and identify issues/impacts and concerns before the FERC receives an application.
In October and November 2016, FERC conducted a total of 12 scoping meetings throughout Alaska. During the scoping meetings, we garnered feedback from the local communities, including residents, elected officials, tribal leaders, community leaders, and other interested stakeholders.
Our independent analysis of the issues will be presented in the EIS. The draft EIS will be published and distributed for public review and comment. We will consider all timely comments and revise the document, as necessary, before issuing a final EIS. To ensure your comments are considered, please carefully follow the instructions in the Public Participation section of this notice.
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 planned project.
Copies of the completed draft EIS 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 3).
Once the Applicants file their 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. Instructions for becoming an intervenor are in the User's Guide under the “efiling” link on the Commission's Web site. Please note that the Commission will not accept requests for intervenor status at this time. You must wait until the Commission receives a formal application for the project.
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
Further, public meetings or site visits will be posted on the Commission's calendar located at
Commission staff will meet with representatives of the Klamath Tribes (Tribes), the Oregon State Historic Preservation Officer and other state and federal agencies (to the extent they wish to participate), and Swan Lake North Hydro LLC regarding the proposed Swan Lake North Pumped Storage Project (Project No. 13318-003). The meeting will be held at the location and time listed below: Klamath Tribes, Tribal Administration Building, 501 Chiloquin Blvd., Chiloquin, OR 97624, Phone: (541) 783-2219, Thursday, August 11, 2016, 9:00 a.m. PDT.
Members of the public and intervenors in the referenced proceeding may attend this meeting; however, participation will be limited to tribal representatives and agency personnel. If the Tribes decide to disclose information about a specific location which could create a risk or harm to an archeological site or Native American cultural resource, the public will be excused for that portion of the meeting.
On June 15, 2016, the New Jersey Conservation Foundation and Stony Brook-Millstone Watershed Association (Movants), filed with the Federal Energy Regulatory Commission (Commission) a pleading styled as a Rule 206 Complaint and Rule 212 Motion against PennEast Pipeline Company, LLC (PennEast), alleging that PennEast's application for a Certificate of Public Convenience and Necessity does not contain substantial evidence of public benefit, as required by the Natural Gas Act.
While styled as a complaint under Rule 206, the pleading, filed in the PennEast certificate proceeding, Docket No. CP15-558-000, seeks resolution of the issue pending before the Commission in that proceeding,
On July 13, 2016, Neshkoro Power Associates, LLC (transferor) and Wisconsin8, LLC (transferee) filed an application for the transfer of license of the Big Falls Milldam Hydroelectric Project No. 2550. The project is located on the Little Wolf River in Waupaca County, Wisconsin. The project does not occupy federal lands.
The applicants seek Commission approval to transfer the license for the Big Falls Milldam Hydroelectric Project from the transferor to the transferee.
Applicants Contact: For transferor: Mr. Bernard H. Cherry, Neshkoro Power Associates, LLC, c/o Eagle Creek Renewable Energy, LLC, 65 Madison Avenue, Morristown, NJ 07960, Phone: 973-998-8400, 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
On July 13, 2016, N.E.W. Hydro, LLC (transferor) and Wisconsin8, LLC (transferee) filed an application for the transfer of license of the Weyauwega Hydroelectric Project No. 2550. The project is located on the Waupaca River in Waupaca County, Wisconsin. The project does not occupy federal lands.
The applicants seek Commission approval to transfer the license for the Weyauwega Hydroelectric Project from the transferor to the transferee.
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
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
The Federal Energy Regulatory Commission (Commission) hereby gives notice that members of the Commission and/or Commission staff may attend the 2016 National Association of Regulatory Utility Commissioners Summer Committee Meetings, including the following:
July 27, 2016, 9:00 a.m.-10:30 a.m. (CDT)
The above-referenced meeting will be held at: Omni Nashville Hotel, 250 Fifth Avenue South, Nashville, TN 37203.
Further information may be found at
The discussions at the meeting described above may address matters at issue in the following proceedings:
For more information, contact Sandra Waldstein, Office of External Affairs, Federal Energy Regulatory Commission at (202) 502-8092 or
Take notice that on July 13, 2016, Annova LNG Common Infrastructure, LLC, Annova LNG Brownsville A, LLC, Annova LNG Brownsville B, LLC, and Annova LNG Brownsville C, LLC (collectively Annova LNG), 100 Constellation Way, Suite 500C, Baltimore, MD 21202, filed an application, in Docket No. CP16-480-000, pursuant to section 3(a) of the Natural Gas Act (NGA) and Part 153 of the Commission's Regulations, requesting authorization to site, construct, modify, and operate a natural gas liquefaction and liquefied natural gas export facility, located on the Brownsville Ship Channel in Cameron County, Texas. This filing may be viewed on the web at
Any questions regarding this application should be directed to Christopher D. Young, Exelon Corporation, 100 Constellation Way, Suite 500C, Baltimore, MD 21202, by phone at (410) 470-3500, or by email at
Specifically, Annova LNG proposes to construct a LNG liquefaction and export terminal on the Port of Brownsville ship channel. The terminal will consist of six liquefaction trains with a total capacity of 0.9 Bcf per day, two LNG tanks capable of storing 6.8 Bcf of LNG, gas pretreatment facilities, boil-off gas handling system, flare system, marine transfer facilities, and all necessary ancillary and support facilities. Natural gas will be supplied by a third party-owned and operated intrastate pipeline.
On March 27, 2015, Commission staff granted Annova LNG's request to use the National Environmental Policy Act (NEPA) Pre-Filing Process and assigned Docket No. PF15-15-000 to staff activities involving the proposed facilities. Now, as of the filing of this application on July 13, 2016, the NEPA Pre-Filing Process for this project has ended. From this time forward, this proceeding will be conducted in Docket No. CP16-480-000, as noted in the caption of this Notice.
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding, or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 5 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings
Motions to intervene, protests and comments may be filed electronically via the Internet in lieu of paper; see, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site under the “e-Filing” link. The Commission strongly encourages electronic filings.
Environmental Protection Agency (EPA).
Notice; extension of comment period.
EPA issued two notices in the
Comments must be received on or before September 1, 2016.
Follow the detailed instructions provided under
For the Guidance for Pesticide Registrants on Pesticide Resistance Management Labeling; Notice of Availability, contact Nikhil Mallampalli, Biological and Economic Analysis Division (7503P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number: (703) 308-1924; email address:
This document extends the public comment period established in two
To submit comments, or access the docket, please follow the detailed instructions provided under
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:
Export-Import Bank of the United States.
Submission for OMB Review and Final Comments Request.
The Export-Import Bank of the United States (EXIM Bank), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
The Application for Special Buyer Credit Limit under the Multi-Buyer Export Credit Insurance Policy is used by policyholders, the majority of whom are U.S. small businesses, who export U.S. goods and services. This application provides EXIM Bank with the credit information necessary to make a determination of eligibility of a transaction for EXIM Bank support with a foreign buyer credit request and to obtain legislatively required assurance of repayment and fulfills other statutory requirements.
The application can be reviewed at:
Comments should be received on or before September 6, 2016 to be assured of consideration.
Comments may be submitted electronically on
The only change to this form is to move a question about the buyer to an earlier section of the form. No new information is being collected.
This form affects entities involved in the export of U.S. goods and services.
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 October 4, 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.
In a Report and Order, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, CS Docket No. 96-83, FCC 96-328, released August 6, 1996, the Commission fully implemented Section 207 of the 1996 Act by adopting final rules for a preemption of state, local and non-governmental regulations that impair viewers ability to receive over-the-air signals. In doing so, the FCC acknowledged the necessity of allowing
Also, state, local and non-governmental entities were permitted to file petitions for waivers.
On September 25, 1998, the Commission released an Order on Reconsideration, FCC 98-214, in this proceeding that further modified and clarified Section 207 rules. Among other things, the Order on Reconsideration clarified how declaratory rulings and waivers in this matter are to be served on all interested parties. If a local government seeks a declaratory ruling or a waiver, it must take steps to afford reasonable, constructive notice to residents in its jurisdiction (
In this regard, the petitioner should provide the Commission with a copy of the notice and an explanation of where the notice was placed and how many people the notice might reasonably have reached.
Effective January 22, 1999, FCC 98-273, the Commission amended the rules so that it applies to rental property where the renter has an exclusive use area, such as a balcony or patio.
In FCC 00-366, the Commission then further amended the rule so that it applies to customer-end antennas that receive and transmit fixed wireless signals. This amendment became effective on May 25, 2001.
The Federal Communications Commission will hold an Open Meeting on the subjects listed below on Thursday, August 4, 2016 which is scheduled to commence at 10:30 a.m. in Room TW-C305, at 445 12th Street SW., Washington, DC.
The Commission will consider the following subjects listed below as a consent agenda and these items will not be presented individually:
The meeting site is fully accessible to people using wheelchairs or other mobility aids. Sign language interpreters, open captioning, and assistive listening devices will be provided on site. Other reasonable accommodations for people with disabilities are available upon request. In your request, include a description of the accommodation you will need and a way we can contact you if we need more information. Last minute requests will be accepted, but may be impossible to fill. Send an email to:
Additional information concerning this meeting may be obtained from the Office of Media Relations, (202) 418-0500; TTY 1-888-835-5322. Audio/Video coverage of the meeting will be broadcast live with open captioning over the Internet from the FCC Live Web page at
For a fee this meeting can be viewed live over George Mason University's Capitol Connection. The Capitol Connection also will carry the meeting live via the Internet. To purchase these services, call (703) 993-3100 or go to
The Federal Deposit Insurance Corporation (FDIC), as Receiver for 10259 Metro Bank of Dade County, Miami, Florida (Receiver) has been authorized to take all actions necessary to terminate the receivership estate of Metro Bank of Dade County (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 August 1, 2016, the Receivership Estate has been terminated, the Receiver discharged, and the Receivership Estate has ceased to exist as a legal entity.
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 34.6, 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 10480, Pisgah Community Bank, Asheville, North Carolina (Receiver) has been authorized to take all actions necessary to terminate the receivership estate of Pisgah 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 August 1, 2016, the Receivership Estate has been terminated, the Receiver discharged, and the Receivership Estate has ceased to exist as a legal entity.
The Federal Deposit Insurance Corporation (FDIC), as Receiver for 10475 Heritage Bank of North Florida, Orange Park, Florida (Receiver) has been authorized to take all actions necessary to terminate the receivership estate of Heritage Bank of North Florida (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 August 1, 2016, the Receivership Estate has been terminated, the Receiver discharged, and the Receivership Estate has ceased to exist as a legal entity.
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 34.6, 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.
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 34.6, 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.
NOTICE IS HEREBY GIVEN that the Federal Deposit Insurance Corporation (“FDIC”) as Receiver for Bayside Savings Bank, Port Saint Joe, Florida (“the Receiver”) intends to terminate its receivership for said institution. The FDIC was appointed receiver of Bayside Savings Bank on July 30, 2010. The liquidation of the receivership assets has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors.
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 34.6, 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.
Federal Labor Relations Authority.
Notice.
The Federal Labor Relations Authority (FLRA) publishes the names of the persons selected to serve on its SES Performance Review Board (PRB). This notice supersedes all previous notices of the PRB membership.
Upon publication.
Written comments about this final rule can be emailed to
Gina Grippando, Counsel for Regulatory and Public Affairs, Federal Labor Relations Authority, Washington, DC 20424, (202) 218-7776.
Section 4314(c) of Title 5, U.S.C. requires each agency to establish, in accordance with regulations prescribed by the Office of Personnel Management, one or more PRBs. The PRB shall review and evaluate the initial appraisal of a senior executive's performance by the supervisor, along with any response by the senior executive, and make recommendations to the final rating authority relative to the performance of the senior executive.
The following individuals have been selected to serve on the FLRA's PRB:
Sarah Whittle Spooner, Executive Director; Peter A. Sutton, Deputy
Federal Trade Commission.
Consent Order and Statement of the Commission.
The Commission has approved a final consent order in this matter, settling alleged violations of federal law prohibiting unfair methods of competition, and has issued a Statement of the Commission. The attached Analysis to Aid Public Comment and Statement of the Commission describe both the allegations in the Complaint and the terms of the Decision and Order.
Issued on July 13, 2016.
The Federal Trade Commission has approved a final consent order with Victrex plc and its wholly owned subsidiaries Invibio Limited and Invibio, Inc. (collectively, “Invibio”). Invibio makes and sells implant-grade PEEK, a high-performance polymer contained in implantable devices used in spinal interbody fusion and other medical procedures. The order seeks to address allegations that Invibio used exclusive supply contracts to maintain its monopoly power in the market for implant-grade PEEK, in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45.
The order requires Invibio to cease and desist from enforcing most exclusivity terms in current supply contracts and generally prohibits Invibio from requiring exclusivity in future contracts. The order also prevents Invibio from adopting other mechanisms, such as market-share discounts or retroactive volume discounts, to maintain its monopoly power.
The order was placed on the public record for 30 days in order to receive comments from interested persons. Comments received during this period became part of the public record. After the public comment period, the Commission determined to make the proposed order final.
The purpose of this analysis, which was placed on the Commission Web site on April 27, 2016, was to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint, the consent agreement, or the order, or to modify their terms in any way. The consent agreement is for settlement purposes only and does not constitute an admission by Invibio that the law has been violated as alleged in the complaint or that the facts alleged in the complaint, other than jurisdictional facts, are true.
The complaint makes the following allegations.
Implant-grade PEEK has properties, such as elasticity, machinability, and radiolucency, that are distinct from other materials used in implantable medical devices, such as titanium and bone. These properties make PEEK especially suitable for many types of implantable medical devices, particularly spinal interbody fusion devices. Invibio was the first company to develop and sell implant-grade PEEK. The United States Food and Drug Administration (“FDA”) first cleared a medical device containing Invibio PEEK in 1999. Upon introducing implant-grade PEEK, Invibio sold the product to its medical device maker customers under long-term supply contracts, many of which included exclusivity requirements.
For a number of years, Invibio was the only supplier of implant-grade PEEK. In the late 2000s, however, first Solvay Specialty Polymers LLC (“Solvay”) and then Evonik Corporation (“Evonik”) took steps to enter the market. The FDA cleared the first spinal implant device containing Solvay PEEK in 2010, and the first one containing Evonik PEEK in 2013.
Invibio responded to Solvay's and Evonik's entry by tightening and expanding the scope of exclusivity provisions in its supply contracts with medical device makers. Invibio did this to impede Solvay and Evonik from developing into effective rivals. Invibio knew that if Solvay and Evonik could gain reputation and experience, in particular, by developing supply relationships with leading medical device makers, this would validate their status as PEEK suppliers with other potential PEEK buyers and ultimately lead to significant price competition—painful for Invibio but beneficial to medical device makers.
Invibio extracted exclusivity terms from customers both by threatening to withhold critical supply or support services and by offering minor inducements. For example, Invibio threatened to withhold access to new brands of its PEEK and to Invibio's FDA master file if a customer declined to purchase exclusively from Invibio. Where necessary, Invibio offered small price discounts in exchange for exclusivity.
Due to Invibio's efforts, nearly all medical device makers that purchase PEEK from Invibio do so under contracts that impose some form of exclusivity. Although precise exclusivity terms vary, they generally take one of three forms: (1) Requiring the use of Invibio PEEK for all PEEK-containing devices; (2) requiring the use of Invibio PEEK for a broad category of PEEK-containing devices; or (3) requiring the use of Invibio PEEK for a list of identified PEEK-containing devices. Even where exclusivity terms apply at the device level,
Both direct and indirect evidence demonstrate that Invibio has monopoly power in the market for implant-grade PEEK. Invibio has priced its PEEK substantially higher than competing versions of PEEK, without ceding material market share, and has impeded competitors through its exclusive contracts. In addition, Invibio has consistently held an over-90% share of a relevant market with substantial entry barriers, which indirectly evidences its monopoly power. PEEK has distinctive properties from other materials used in spinal and other implants. Physician preferences typically drive the choice of materials used in an implant, and these preferences largely reflect material properties rather than price. Other materials are therefore not sufficiently
Through its exclusive contracting strategy, Invibio has maintained its monopoly power and harmed competition by marginalizing its competitors. In addition, Invibio's exclusive contracts have prevented its customers from exercising a meaningful choice between implant-grade PEEK suppliers and from enjoying the full benefits of competition, including price competition.
Invibio's exclusivity terms have prevented Solvay and Evonik from achieving a significant volume of implant-grade PEEK sales, notwithstanding their offering of significantly lower prices. Invibio has also excluded Solvay and Evonik from forming supply relationships with key medical device makers. As a result, Solvay and Evonik have been unable to achieve significant market share and have consistently missed sales targets. There is a significant risk that continued enforcement of Invibio's exclusive contracts would preclude Solvay and Evonik from achieving sufficient returns to justify future investments, including in innovative technologies. Without those investments, the firms would be even less effective competitors in the future.
Additionally, Invibio's exclusive contracts have deprived medical device makers of the opportunity to make a meaningful choice among competing suppliers and thereby enjoy the benefits of price, innovation, and quality competition. Even medical device makers that would not have switched to a competitor of Invibio would have benefited from a more competitive market. In addition, many medical device makers prefer to have more than one source of PEEK in order to mitigate risk and for other commercial benefits. Absent Invibio's exclusivity requirements, a significant number of device makers would contract with Solvay or Evonik to secure lower-priced PEEK and additional or alternate sources of supply. However, medical device makers locked into long-term exclusive contracts have been precluded from pursuing their preferred procurement strategy.
Monopolization is among the “unfair methods of competition” prohibited by Section 5 of the FTC Act.
Exclusive dealing by a monopolist may be condemned when it “allows [the] monopolist to maintain its monopoly power by raising its rivals' costs sufficiently to prevent them from growing into effective competitors.”
The factual allegations in the complaint support a finding of monopolization. Invibio's exclusivity strategy has not prevented entry entirely. But its exclusivity terms—whether full exclusivity terms or terms that apply at the product or product category level across a wide range of products—have foreclosed its rivals from a substantial portion of available sales opportunities in the relevant market and prevented those rivals from competing effectively. Among the foreclosed sales opportunities are key customers that would validate the reputations of Solvay and Evonik as legitimate rivals of Invibio, notwithstanding their more recent entry into the market. Invibio's exclusionary conduct has also reduced incentives to innovate and prevented PEEK consumers from exercising a meaningful choice among suppliers.
A monopolist may rebut a showing of competitive harm by demonstrating that the challenged conduct is reasonably necessary to achieve a procompetitive benefit.
The Decision and Order remedies Invibio's anticompetitive conduct and imposes certain fencing-in requirements in order to prevent
Paragraph I of the order defines the key terms used throughout the rest of the order.
Paragraph II addresses the core of Invibio's anticompetitive conduct. Paragraph II.A prohibits Invibio from adopting or implementing any agreement or policy that results in “exclusivity” with customers. “Exclusivity” is defined to include any limit or prohibition by Invibio on its customers dealing with a competing implant-grade PEEK supplier or any requirement by Invibio that a customer use only Invibio PEEK in (1) all of its devices, (2) in any group of devices, or (3) in any one device. The order thus applies to all forms of exclusivity that appear in Invibio's contracts.
Under Paragraph II.A, Invibio may not require exclusivity for any new contract, except in the limited circumstances set forth in Paragraph II.E (described below). Further, Invibio may not enforce exclusivity terms in an existing contract with any medical device maker that chooses to use an alternate implant-grade PEEK supplier instead of Invibio for any or all future devices. In addition, Paragraph II.A, in conjunction with Paragraph II.F (described below), prohibits Invibio from enforcing provisions in an existing contract that would prevent a medical device maker from using other suppliers of implant-grade PEEK for any device, or from switching suppliers for any current device, provided that the device maker agrees to the tracking requirements contained in Exhibit C of the order. The
Paragraph II.B prohibits Invibio from retaliating against customers for using or preparing to use an alternate PEEK supplier. Prohibited retaliation includes cutting off PEEK sales or withholding access to regulatory support.
Paragraph II.C contains provisions designed to prevent
Paragraph II.D allows Invibio to condition its provision of certain types of extraordinary support to a customer for new devices on minimum purchase requirements for three years after the date of FDA clearance for such devices, so long as the minimum purchase amounts to less than 30 percent of the customer's implant-grade PEEK requirements for the device(s) that received the support. Extraordinary support excludes routine services such as maintaining and granting access to Invibio's FDA master file.
Paragraph II.E contains provisions designed to allow for procompetitive collaboration with a customer and preserve Invibio's incentives to innovate, including through investments that may be susceptible to free-riding by competitors. The paragraph allows Invibio to enter into a mutually exclusive contract with a customer when Invibio and the customer have engaged in the joint development of a new product that has required the contribution of significant capital, intellectual property rights, or labor by both Invibio and the customer, or when a customer asks that Invibio manufacture a custom component to the customer's specifications. Current PEEK sales subject to such contracts represent a small portion of the relevant market. Nonetheless, several limitations apply under this paragraph. The contracts must be: In writing, time-limited, applicable only to the jointly developed or custom product, and notified to the Commission. Invibio may not tie the availability of other forms, grades, or types of PEEK to a customer's willingness or agreement to enter into this type of contract. Further, sales resulting from these exclusive contracts may not account for more than 30 percent of Invibio's total annual sales.
Paragraph II.F allows Invibio to maintain limited exclusivity in existing contracts if customers do not agree to certain tracking requirements. Specifically, Invibio may enforce specified product-level exclusivity terms in existing contracts if the customer does not accept the terms set forth in Exhibit C to the order, thereby agreeing: (1) Not to mix (commingle) PEEK from different suppliers in a single unit of a device; (2) to maintain records that identify which supplier's PEEK is used in any batch of devices that are dual-sourced; and (3) to notify Invibio in the event of an adverse event related to Invibio's PEEK. These tracking requirements are generally consistent with existing industry practice.
Paragraph III requires Invibio to implement an antitrust compliance program, which includes providing notice of the order to Invibio's customers. Paragraphs IV-VI impose reporting and other compliance requirements.
The Decision and Order will expire on July 13, 2036.
The Commission has approved a final consent order settling charges that Victrex plc, together with its subsidiaries Invibio Limited and Invibio, Inc. (collectively “Invibio”), violated Section 5 of the Federal Trade Commission Act by using exclusive supply contracts to maintain Invibio's monopoly power in the market for a high performance polymer used in medical implants known as polyetheretherketone or PEEK. Our order aims to facilitate price competition, spur innovation, and provide medical device makers with a meaningful choice among PEEK suppliers. This enforcement action reflects our commitment to intervene when a dominant firm employs exclusionary practices to maintain its monopoly power and harm competition.
It is well established that exclusive dealing can promote or harm competition, depending on the circumstances.
Invibio was the first, and for several years the only, PEEK supplier in the market. We charge that, when faced with the entry of two new rivals in the late 2000s, Solvay Specialty Polymers LLC and Evonik Corporation, Invibio sought to lock up its customers and lock out these rivals. Invibio recognized that denying Solvay and Evonik access to the largest and most influential customers was critical to preventing the two entrants from validating their reputations in the market and achieving the experience needed to pose a serious threat to Invibio's market dominance.
As described in our complaint, Invibio had entered into long-term exclusive contracts with nearly every medical device maker producing implants using PEEK. We allege that, to prevent Solvay and Evonik from gaining scope, experience, and supply relationships, Invibio tightened the exclusivity terms of its supply agreements. Some of these provisions explicitly require the use of Invibio's PEEK for all of a customer's PEEK-containing devices, while others impose exclusivity for a list of product categories or designated products that often comprise nearly every PEEK-containing device in a customer's portfolio.
Invibio threatened customers that resisted its demand for exclusivity with retaliation, including termination of the
As alleged in the complaint, this strategy worked. Even after Solvay and Evonik's entry, Invibio still accounted for approximately 90 percent of implant-grade PEEK sales. Invibio's exclusive dealing policy foreclosed a substantial majority of PEEK sales for which its rivals otherwise could have competed. The evidence shows that Invibio has been able to charge supracompetitive prices to many device makers notwithstanding Solvay and Evonik's entry. Largely limited to competing for small or start-up device makers that do not have exclusive contracts with Invibio, Solvay and Evonik missed their respective sales targets. Absent the Commission's enforcement action, Invibio's conduct would continue to deny Solvay and Evonik the opportunity to contest most sales opportunities. They would be unable to achieve sales volumes sufficient to incentivize continued investment in the business that would yield further innovations in PEEK technology. Importantly, Invibio has failed to identify any procompetitive justification that would offset the harm that its exclusive supply contracts inflicted on competition.
In order to safeguard competition, the Commission's order generally prohibits Invibio from entering into exclusive supply contracts and from preventing current customers from using an alternative source of PEEK in new products. The order also prohibits Invibio from imposing contract terms that would deter a customer from purchasing additional units of PEEK from a rival. In general, Invibio may neither condition price or other sales terms on a customer's purchase of a specified portion or percentage of its PEEK requirements from Invibio, nor offer volume discounts that are applied retroactively once a customer's total purchases of Invibio PEEK reach a specified threshold. Invibio may, however, offer volume discounts that are not retroactive.
At the same time, we recognize that collaborative research and development efforts involving a PEEK supplier and a device maker present a different set of issues, including potential concerns about free riding. Consequently, our order leaves room for limited exclusive arrangements where Invibio and a device maker jointly research and develop new or custom PEEK products or devices.
In sum, our order appropriately addresses Invibio's exclusionary conduct, provides its rivals a meaningful opportunity to compete, and opens the door for price competition, innovation, and more choice for PEEK customers.
By direction of the Commission.
Federal Trade Commission.
Proposed Consent Agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before August 22, 2016.
Interested parties may file a comment at
Alexis Gilman (202-326-2579) or Dan Ducore (202-326-2526), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for July 22, 2016), on the World Wide Web, at
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before August 22, 2016. Write “In the Matter of Koninklijke Ahold N.V. and Delhaize Group NV/SA File No. 151-0175—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of Koninklijke Ahold N.V. and Delhaize Group NV/SA File No. 151-0175—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“Commission”) has accepted for public comment, subject to final approval, an Agreement Containing Consent Order (“Consent Order”) from Koninklijke Ahold N.V. (“Ahold”) and Delhaize Group NV/SA (“Delhaize”) (collectively, the “Respondents”). Pursuant to an Agreement and Plan of Merger dated June 24, 2015, Ahold and Delhaize will combine their businesses through a merger of equals, resulting in a combined entity valued at approximately $28 billion (“the Merger”). The purpose of the proposed Consent Order is to remedy the anticompetitive effects that otherwise would result from the Merger. Under the terms of the proposed Consent Order, Respondents are required to divest 81 supermarkets and related assets in 46 local geographic markets (collectively, the “relevant markets”) in seven states to seven Commission-approved buyers. The divestitures must be completed within a time-period ranging from 60 to 360 days following the date of the Merger. The Commission and Respondents have agreed to an Order to Maintain Assets that requires Respondents to operate and maintain each divestiture store in the normal course of business through the date the store is ultimately divested to a buyer.
The proposed Consent Order has been placed on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission again will review the proposed Consent Order and any comments received, and decide whether it should withdraw the Consent Order, modify the Consent Order, or make the Consent Order final.
The Commission's Complaint alleges that the Merger, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by removing an actual, direct, and substantial supermarket competitor in each of the 46 local geographic markets. The elimination of this competition would result in significant competitive harm; specifically, the Merger will allow the merged firm to increase prices above competitive levels, unilaterally or through coordinated interaction among the remaining market participants. Similarly, absent a remedy, there is significant risk that the merged firm may decrease quality and service aspects of its stores below competitive levels. The proposed Consent Order would remedy the alleged violations by requiring divestitures to replace competition that otherwise would be lost in the relevant markets because of the Merger.
Respondent Ahold is a Dutch company that operates in the United States through its principal U.S. subsidiary Ahold U.S.A., Inc. As of June 24, 2015, Ahold operated 760 supermarkets in the United States under the Stop & Shop, Giant, and Martin's banners. Ahold's stores are located in Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.
Delhaize is a Belgian company that operates in the United States through its principal U.S. subsidiary Delhaize America, LLC. As of June 24, 2015, Delhaize operated 1,291 supermarkets in the United States under the Food Lion and Hannaford banners, dispersed throughout Delaware, Georgia, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Vermont, and West Virginia.
The Merger presents substantial antitrust concerns for the retail sale of food and other grocery products in supermarkets. Supermarkets are traditional full-line retail grocery stores that sell food and non-food products that customers regularly consume at home—including, but not limited to, fresh produce and meat, dairy products, frozen foods, beverages, bakery goods, dry groceries, household products, detergents, and health and beauty products. Supermarkets also provide service options that enhance the shopping experience, including deli, butcher, seafood, bakery, and floral counters. This broad set of products and services provides consumers with a “one-stop shopping” experience by enabling them to shop in a single store for all of their food and grocery needs. The ability to offer consumers one-stop shopping is the critical difference between supermarkets and other food retailers.
The relevant product market includes supermarkets within “hypermarkets” such as Walmart Supercenters.
Other types of retailers, such as hard discounters, limited assortment stores, natural and organic markets, ethnic specialty stores, and club stores, also sell food and grocery items. These types of retailers are not in the relevant product market because they offer a more limited range of products and services than supermarkets and because they appeal to a distinct customer type. Shoppers typically do not view these other food and grocery retailers as adequate substitutes for supermarkets.
The relevant geographic markets in which to analyze the effects of the Merger are areas that range from one-tenth of a mile to a ten-mile radius around each of the Respondents' supermarkets, though the majority of Respondents' overlapping supermarkets raising concerns are within six miles or less of each other.
The 46 geographic markets in which to analyze the effects of the Merger are local areas in and around:
(1) Lewes & Rehoboth Beach, Delaware; (2) Millsboro, Delaware; (3) Millville, Delaware; (4) Accokeek, Maryland; (5) Bowie, Maryland; (6) California, Maryland; (7) Columbia, Maryland; (8) Cumberland & Frostburg, Maryland; (9) Easton, Maryland; (10) Edgewater, Maryland; (11) Gaithersburg, Maryland; (12) Hagerstown (north), Maryland; (13) Hagerstown (south), Maryland; (14) La Plata, Maryland; (15) Lusby, Maryland; (16) Owings Mills, Maryland; (17) Prince Frederick, Maryland; (18) Reisterstown, Maryland; (19) Salisbury, Maryland; (20) Sykesville, Maryland; (21) Upper Marlboro, Maryland; (22) Gardner, Massachusetts; (23) Kingston, Massachusetts; (24) Mansfield & South Easton, Massachusetts; (25) Milford, Massachusetts; (26) Norwell, Massachusetts; (27) Norwood & Walpole, Massachusetts; (28) Quincy, Massachusetts; (29) Saugus, Massachusetts; (30) Mahopac & Carmel, New York; (31) New Paltz & Modena, New York; (32) Poughkeepsie & Lagrangeville, New York; (33) Rhinebeck & Red Hook, New York; (34) Wappingers Falls, New York; (35) Chambersburg, Pennsylvania; (36) Waynesboro, Pennsylvania; (37) York, Pennsylvania; (38) Culpeper, Virginia; (39) Fredericksburg, Virginia; (40) Front Royal, Virginia; (41) Purcellville, Virginia; (42) Richmond, Virginia; (43) Stafford, Virginia; (44) Stephens City, Virginia; (45) Winchester, Virginia; and (46) Martinsburg, West Virginia.
Under the 2010 Department of Justice and Federal Trade Commission Horizontal Merger Guidelines, an acquisition that results in an HHI in excess of 2,500 and increases the HHI by more than 200 significantly increases concentration in a highly concentrated market and therefore is presumed anticompetitive. With the exception of one market,
The relevant markets are also highly concentrated in terms of the number of remaining market participants post-Merger. Of the 46 geographic markets, the Merger will result in a merger-to-monopoly in three markets and a merger-to-duopoly in 14 markets. In the remaining markets, the Merger will reduce the number of market participants from four to three in 18 markets, from five to four in ten markets, and from seven to six in one market.
The anticompetitive implications of such significant increases in market concentration are reinforced by substantial evidence demonstrating that Ahold and Delhaize are close and vigorous competitors in terms of price, format, service, product offerings, promotional activity, and location in each of the relevant geographic markets. Absent relief, the Merger would eliminate significant head-to-head competition between Ahold and Delhaize and would increase the ability and incentive of Ahold to raise prices unilaterally post-Merger. The Merger would also decrease incentives to compete on non-price factors, such as service levels, convenience, and quality. Lastly, the high levels of concentration also increase the likelihood of competitive harm through coordinated interaction.
New entry or expansion in the relevant markets is unlikely to deter or counteract the anticompetitive effects of the Merger. Even if a prospective entrant existed, the entrant must secure an economically-viable location, obtain the necessary permits and governmental approvals, build its retail establishment or renovate an existing building, and open to customers before it could begin operating and serve as a relevant competitive constraint. As a result, new entry sufficient to achieve a significant market impact and act as a competitive constraint is unlikely to occur in a timely manner.
The proposed remedy, which requires the divestiture of either Ahold or Delhaize supermarkets in each relevant market to seven Commission-approved upfront buyers (the “proposed buyers”) will restore fully the competition that otherwise would be eliminated in these markets as a result of the Merger. Specifically, Respondents have agreed to divest:
• 1 store in Maryland to New Albertson's Inc. (“Albertsons”);
• 7 stores in Massachusetts to Big Y Foods, Inc. (“Big Y”);
• 10 stores in Virginia to Publix North Carolina, LP (“Publix”);
• 1 store in Pennsylvania to Saubel's Market, Inc. (“Saubels”);
• 18 stores in Maryland, Pennsylvania, Virginia, and West Virginia to Shop `N Save East, LLC (“Supervalu”);
• 6 stores in Massachusetts and New York to Tops Markets, LLC (“Tops”); and
• 38 stores in Delaware, Maryland, and Virginia to Weis Markets Inc. (“Weis”).
The proposed buyers appear to be highly suitable purchasers that are well positioned to enter the relevant geographic markets through the divested stores and prevent the increase in market concentration and likely competitive harm that otherwise would have resulted from the Merger. The supermarkets currently owned by the proposed buyers are all located outside the relevant geographic markets in which they are purchasing divested stores.
Albertsons is a large supermarket chain operating over 2,200 stores around the country. Albertsons will purchase the Salisbury, Maryland, store. Big Y is a regional supermarket operator with 61 stores in Connecticut and Massachusetts. Big Y will purchase seven divested stores in Massachusetts. Publix is a large supermarket chain with approximately 1,100 supermarkets in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. Publix will purchase ten divested stores in Richmond, Virginia. Saubels is a small supermarket chain with three stores in Pennsylvania and Maryland. Saubels will purchase the York, Pennsylvania, store. Tops operates 165 supermarkets in New York, Pennsylvania, and Vermont. Tops will purchase five divested stores in New York and one divested store in Massachusetts. Supervalu is a wholesale food distributor that operates corporate-owned stores. Supervalu will purchase 18 divested stores in Maryland, Pennsylvania, Virginia, and West Virginia. Because Supervalu has in the past sold or assigned its rights in corporate-owned stores to independent operators, the Order requires Supervalu to seek prior approval for any such transfer of the divested stores for a period of three years. Weis is a regional supermarket operating 163 stores in Maryland, New Jersey, New York, Pennsylvania, and West Virginia. Weis will purchase 38 divested stores in Delaware, Maryland, and Virginia.
The proposed Consent Order requires Respondents to divest: (a) The Salisbury, Maryland, asset to Albertsons within 60 days of the date of Merger; (b) the Massachusetts (except Gardner) assets to Big Y within 90 days from the date of the Merger; (c) the Richmond, Virginia, assets to Publix in three groupings (the first within 180 days of the date of Merger, the second within 240 days, and the third within 360 days); (d) the York, Pennsylvania, asset to Saubels within 60 days of the date of Merger; (e) the Chambersburg and Waynesboro, Pennsylvania, assets, the Hagerstown, Maryland, assets, certain of the Virginia assets, and the West Virginia assets to Supervalu within 105 days of the date of the Merger; (f) the New York and Gardner, Massachusetts, assets to Tops within 60 days of the date of the Merger; and (g) the Delaware, Maryland (except Hagerstown and Salisbury), and certain of the Virginia assets to Weis in two phases (the first within 90 days of the date of the Merger, and the second within 230 days).
The variation in divestiture date deadlines is a function of the number of stores being acquired by each proposed buyer, as those acquiring a larger number of stores have requested and need a longer acquisition and transition period than those acquiring a smaller number of stores. In the case of Publix, the divestiture schedule is extended in order to give Publix sufficient time prior to the divestitures to secure permits and approvals needed for remodeling and construction work for the store locations it is acquiring. Publix is planning to make significant improvements to the acquired stores, including rebuilding several of them, in order to conform them to a typical Publix store. In addition, the extended divestiture schedule will reduce the time periods these stores will need to be closed before being reopened as Publix stores. The proposed Consent Order and the Order to Maintain Assets require Respondents to continue operating and maintaining the divestiture stores in the normal course of business until the date that each store is sold to the proposed buyer. If, at the time before the proposed Consent Order is made final, the Commission determines that any of the proposed buyers are not acceptable buyers, Respondents must rescind the divestiture(s) and divest the assets to a different buyer that receives the Commission's prior approval.
The proposed Consent Order contains additional provisions designed to ensure the adequacy of the proposed relief. For example, Respondents have agreed to an Order to Maintain Assets that will be issued at the time the proposed Consent Order is accepted for public comment. The Order to Maintain Assets requires Ahold and Delhaize to operate and maintain each divestiture store in the normal course of business through the date the store is ultimately divested to a buyer. Since the divestiture schedule with certain stores runs for an extended period of time (potentially up to 360 days following the Merger date), the proposed Consent Order appoints Brad Wise
The sole purpose of this Analysis is to facilitate public comment on the proposed Consent Order. This Analysis does not constitute an official interpretation of the proposed Consent Order, nor does it modify its terms in any way.
By direction of the Commission.
Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before August 29, 2016.
Interested parties may file a comment at
Michael Moiseyev (202-326-3106), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for July 27, 2016), on the World Wide Web, at
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before August 29, 2016. Write “In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151-0196, C-4589—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of Teva Pharmaceutical Industries Ltd. and Allergan plc, File No. 151-0196, C-4589—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an Agreement Containing Consent Orders (“Consent Agreement”) from Teva Pharmaceutical Industries Ltd. (“Teva”) and Allergan plc (“Allergan”), which is designed to remedy the anticompetitive effects resulting from Teva's proposed acquisition of Allergan's generic pharmaceutical business. The proposed Consent Agreement requires the parties (1) to divest rights and assets related to pharmaceutical markets for one or more strengths of seventy-nine pharmaceutical products and (2) provide certain Teva active pharmaceutical ingredient (“API”) customers that market one or more of fifteen pharmaceutical products with the option to enter into long-term API supply contracts.
The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments from interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again evaluate the proposed Consent Agreement, along with the comments received, to make a final decision as to whether it should withdraw from the proposed Consent Agreement or make final the Decision and Order (“Order”).
On July 26, 2015, Teva proposed to acquire Allergan's generic pharmaceutical business for approximately $40.5 billion. The Commission alleges in its Complaint that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15
Generic drugs are chemically and therapeutically equivalent to branded drugs. When a physician prescribes a particular branded drug, a pharmacy may only dispense that branded drug or its generic equivalent, which is “AB-rated” to the branded product. State laws permit or require pharmacies to automatically substitute the generic equivalent for the prescribed branded drug unless a physician expressly states not to do so.
The 1984 Hatch-Waxman Act provides the statutory framework for the Food and Drug Administration (“FDA”) to approve generic drugs. Under Hatch-Waxman, a generic drug manufacturer can rely on an already-approved branded drug's safety and efficacy data in its own application—called an Abbreviated New Drug Application (“ANDA”)—to the FDA, substantially lowering the research and development cost of the generic drug. Upon FDA approval, a generic drug typically launches at a discount to the branded drug's price. When there is only one generic drug on the market, the branded drug usually competes with the generic drug on price, either directly or through an authorized generic version. As subsequent generic drugs launch, a generic-only market typically forms, with competition among generics driving pricing. When multiple generic drugs are available, customers usually substitute between the generics only—not the branded drug—and solicit bids exclusively from generic drug suppliers.
Teva's proposed acquisition of Allergan's generic pharmaceutical business will lessen current or future competition by reducing the number of current or future suppliers in the pharmaceutical markets for one or more strengths of seventy-nine pharmaceutical products. Those markets fall into three categories: (1) Current competition between Teva and Allergan; (2) future competition between Teva and Allergan in an existing generic market; and (3) future competition between Teva and Allergan in a future generic market (
APIs are central inputs in the manufacture of finished dose form pharmaceutical products. API supply sources must be designated in a drug's FDA marketing authorization. Switching to a non-designated API source requires a drug maker to supplement its New Drug Application or ANDA, a process that can take as long as two years or even more. Consequently, a generic drug manufacturer's API supply options are limited to the sources qualified under its ANDA. If only one API supplier is qualified under an ANDA, the ANDA holder has no immediate recourse if its designated API supplier elects to raise its prices or refuse to supply.
Teva is world's largest API supplier and supplies API to Allergan's competitors in a number of generic markets. The proposed acquisition may lessen current or future competition in fifteen pharmaceutical products markets by creating the incentive and ability for Teva to foreclose rival suppliers of fifteen newly acquired Allergan pharmaceutical products by withholding supply of the following eight Teva API products:
• Betamethasone dipropionate API;
• Betamethasone valerate API;
• Clobetasol propionate API;
• Desonide API;
• Fluocinolone API;
• Fluorouracil API;
• Probenecid API; and
• Triamcinolone acetonide API.
The fifteen downstream pharmaceutical markets in which competition would be lessened as a result of the acquisition are:
• Betamethasone dipropionate augmented ointment, 0.05%;
• Betamethasone dipropionate cream, 0.05%;
• Betamethasone dipropionate lotion, 0.05%;
• Betamethasone dipropionate ointment, 0.05%;
• Betamethasone valerate cream, 0.1%;
• Betamethasone valerate ointment, 0.1%;
• Clobetasol propionate shampoo, 0.05%;
• Clobetasol propionate ointment, 0.05%;
• Desonide cream, 0.05%;
• Probenecid tablets, 500 mg;
• Probenecid/colchicine tablets, 500 mg/0.5 mg;
• Nystatin/triamcinolone acetonide cream, 100,000 units/gm/0.1%;
• Nystatin/triamcinolone acetonide ointment, 100,000 units/gm/0.1%; and
• Two pipeline products.
Entry into these pharmaceutical markets would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the proposed acquisition. Introducing generic pharmaceutical products is costly and lengthy due to drug development times and regulatory requirements, including approval by the FDA. Additionally, it can take up to two years for an API manufacturer to qualify as a new API supplier for a generic pharmaceutical product, leaving the generic pharmaceutical product with no alternative to its existing qualified API supplier or suppliers.
The proposed acquisition likely would cause significant anticompetitive harm by eliminating current or future competition in markets for one or more strengths of seventy-nine pharmaceutical products where the parties currently sell or are developing generic drugs. In each of these markets, Teva and Allergan are two of a limited number of current or likely future suppliers in the United States. Customers and competitors have observed that the price of generic pharmaceutical products decreases with new entry even after several suppliers have entered the market. Removal of an independent generic pharmaceutical supplier from the relevant markets in which Teva and Allergan currently compete would result in significantly higher prices post-acquisition. Similarly, the elimination of a future independent competitor would prevent the price decreases that are likely to result from the firm's entry. Thus, absent a remedy, the proposed acquisition would likely result in significantly higher prices for these generic drugs.
Additionally, the proposed acquisition likely would cause competitive harm in markets for fifteen pharmaceutical products in which Teva supplies API for a generic pharmaceutical product that currently competes or will compete in the near future with an Allergan generic pharmaceutical product. Those generic pharmaceutical markets already have or will have a limited number of competitors, some of which are supplied API by Teva. Teva has the ability to foreclose these competitors by denying them API from their only approved source. Post-acquisition, Teva would have the incentive to foreclose one or more competitors because the lost API sales would be less than the recouped profits on additional sales gained from the foreclosed competitor(s) and the increased prices. Such foreclosure would harm consumers because market concentration and price would result in significantly higher prices.
The remedy reflected in the proposed Consent Agreement would eliminate the likely anticompetitive effects of the proposed acquisition by requiring the parties to divest rights and assets related to the pharmaceutical products in each relevant market. The acquirers are: Mayne Pharma Group Ltd. (“Mayne”), Impax Laboratories, Inc. (“Impax”), Dr. Reddy's Laboratories Ltd. (“Dr. Reddy's”), Sagent Pharmaceuticals, Inc. (“Sagent”), Cipla Limited (“Cipla”), Zydus Worldwide DMCC (“Zydus”), Mikah Pharma LLC (“Mikah”), Perrigo Pharma International D.A.C. (“Perrigo”), Aurobindo Pharma USA, Inc. (“Aurobindo”), Prasco LLC (“Prasco”), and 3M Company (“3M”) (collectively, the “Acquirers”). The parties must
The Commission's goal in evaluating possible acquirers of divested assets is to maintain the competitive environment that existed prior to the acquisition. The Commission thoroughly reviewed the assets to be divested, the transitional services to be provided by Teva, and the capabilities and plans of each Acquirer. The interim monitors, who will oversee the divestiture process, have worked closely with Commission staff to ensure the viability of the divestiture and anticipate logistical and technical challenges. Additionally, Teva—in conjunction with the Acquirers, Allergan, and interim monitors—has prepared a comprehensive divestiture plan to guide the process of transferring the divested products to their new proposed owners. If the Commission determines that an Acquirer is not acceptable, or that the manner of the divestitures is not acceptable, the parties must unwind the sale or release of rights to that Acquirer and divest the products to a Commission-approved acquirer within six months of the date the Order becomes final. In that circumstance, the Commission may appoint a trustee to divest the products if the parties fail to divest the products as required.
The proposed Consent Agreement contains provisions to help ensure the divestitures are successful. The parties must take all action to maintain the economic viability, marketability, and competitiveness of the divestiture products until they are divested. The parties must provide transitional services to the Acquirers to assist them in establishing independent manufacturing capabilities. These transitional services include technical assistance to manufacture the divestiture products in substantially the same manner and quality employed or achieved by the parties, as well as advice and training from knowledgeable employees. The goal of the transitional services is to ensure that the acquirers will be able to operate independently of the parties in the manufacture and sale of the divested products. The proposed Consent Agreement also requires the parties to supply product to the Acquirers so that the Acquirers can market them independently while the parties transfer the associated technology to the production facilities of the Acquirer or its chosen third-party manufacturer(s). The Consent Agreement allows sufficient time to complete the manufacturing transfers, and for products in development, to gain FDA approval before completing manufacturing transfers. To ensure that the buyers of divestiture products for which Teva or Allergan supply API will have access to adequate supplies of reasonably priced API until they are able to qualify alternative suppliers, the proposed Consent Agreement requires Teva to supply API for up to four years after closing at prices not to exceed those set forth in binding letters of intent, recently executed by Teva and the buyers. Nothing in the Consent Agreement precludes the buyers from sourcing other divestiture product inputs from Teva on a negotiated basis.
In addition, to address the anticompetitive effects likely to arise in the fifteen pharmaceutical markets where Teva supplies API to Allergan competitors, the Consent Agreement requires Teva to give API customers in those markets the option of entering into long-term API supply contracts. Teva must notify each affected API customer of the option to enter a contract within ten days of consummating the proposed acquisition, and such customers may exercise their options at any point up to three years after the date of the Consent Agreement. Any such API supply contracts executed pursuant to the option shall be renewable for up three years after the date of the Consent Agreement, which will give the customers sufficient time to qualify alternative API suppliers if they wish to do so.
The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Order or to modify its terms in any way.
The Commission has accepted a proposed consent order in connection with Teva Pharmaceutical Industries Ltd.'s proposed acquisition of the generic pharmaceutical business of Allergan plc. We believe the consent order remedies the anticompetitive effects that would otherwise likely result from this transaction by requiring the divestiture of nearly 80 drug products to buyers that appear well positioned to replicate the competition that would have occurred absent the merger. The consent order includes a number of safeguards to help achieve our remedial goals.
Both Teva and Allergan are global pharmaceutical companies that are among the largest suppliers of generic pharmaceuticals in the United States. Teva is currently the largest generic drug company in the United States, with an overall generic market share of approximately 13%; Allergan is third, accounting for approximately 9% of generic sales.
Despite the industry's relatively low concentration, the Commission appreciates that the price, quality, and availability of generic pharmaceutical products have a significant impact on American consumers' daily lives and on healthcare costs nationwide. We therefore looked closely at every possible aspect of this transaction that could result in competitive harm. We examined not only particular product overlaps but also whether the combination between Teva and Allergan would result in other adverse consequences to competition. Our comprehensive investigation included the review of extensive documents from the merging parties and other industry players as well as interviews with dozens of customers and more than 50 competitors. We concluded that the substantial divestitures required by the consent order resolve the competitive concerns resulting from the transaction.
As detailed in our complaint, we have reason to believe that, absent a remedy, the transaction would likely substantially reduce competition in 79 markets for pharmaceutical products, including oral contraceptives, steroidal medications, mental health drugs, and many other products. These markets include individual strengths of pharmaceutical products where Teva and Allergan currently offer competing products as well as products where there would likely be future competition absent the merger because one or both of the parties are developing competing products.
In settling this case, we rely on the Commission's extensive experience with divestitures in the pharmaceutical industry, including prior divestitures involving Teva and Allergan and have structured the divestitures in a way to minimize potential risks. This includes breaking the divested products into smaller packages to ease the load on any single buyer and requiring Teva to divest the easier-to-divest product of the overlapping products whenever possible. We also undertook an extensive review process to ensure that the divestiture buyers are acceptable and have the resources they need to compete successfully in the relevant markets. The buyers have identified third-party contract research organizations or contract manufacturers they intend to use and provided us with executed contracts. We involved interim monitors early in the divestiture negotiation process to ensure a smooth divestiture process and harmonize Teva's technological transfer plans with those of the acquirors of the divested assets. And we are requiring Teva to dedicate a full-time organization to implement the technology transfers and other measures necessary to effectuate the divestitures.
In assessing whether the combination of the parties' generic businesses would harm competition or create a firm with a greater ability to engage in anticompetitive conduct, we evaluated three additional potential theories of harm beyond individual product overlaps.
First, we considered whether the merger would likely lead to anticompetitive effects from the bundling of generic products. Although both Teva and Allergan have broad generic drug portfolios today, the evidence did not show that the breadth of their portfolios significantly affects their ability to win business in individual drug product markets. Nor have they been able to use their portfolios to foreclose smaller competitors. Even with one of the broadest generic product portfolios in the industry, Teva's overall share of U.S. generic prescriptions has steadily declined from 2010 to 2015, and the share of total prescriptions filled by the five largest generic suppliers has similarly fallen during this period. Generic sales occur at the individual product level, and customers sometimes even break up purchases by specific strengths to obtain more favorable pricing. As a result, smaller firms with much smaller portfolios compete head-to-head against larger generic firms and are the leading suppliers in the markets for many individual generic treatments. Additionally, purchasers actively seek to diversify their supplier base by sourcing from smaller suppliers. On the facts here, we concluded that anticompetitive effects arising from the merged company's portfolio of products are unlikely to occur.
Second, we examined whether the merger would likely decrease incentives to challenge the patents held by brand-name pharmaceutical companies and bring new generic drugs to market. The regulatory framework governing generic pharmaceuticals, the Hatch-Waxman Act, provides specific procedures for identifying and resolving patent disputes related to new generic drugs. Under the Hatch-Waxman Act, a company seeking to introduce a new generic drug may file what is commonly known as a “Paragraph IV challenge” to a brand-name pharmaceutical product's patent. This filing triggers a process, including potential litigation, to resolve patent issues surrounding the proposed generic product's entry into the marketplace.
We considered whether the merger would likely result in fewer or less effective Paragraph IV challenges, but the evidence did not support such a conclusion. A major incentive to file Paragraph IV challenges is the 180-day exclusivity period awarded to the first generic drug that the Food and Drug Administration approves in a market. The financial rewards associated with this “first-to-file” exclusivity period provide a strong incentive for generic drug companies of all sizes to challenge brand drug patents and litigate against brand drug companies. Indeed, first-to-file Paragraph IV challenges are not concentrated among a small group of firms. To the contrary, many firms, including small ones, have been active and successful first filers. In 2014, for example, twenty-five different companies were the first to file Paragraph IV challenges. For eight of those companies, that was their very first Paragraph IV challenge. Thus, while Teva and Allergan have actively filed Paragraph IV challenges, we found no evidence that either one has been better positioned to win the first-to-file race or that they have substantially greater incentives or ability to succeed in Paragraph IV challenges than many other generic companies. Nor did we see evidence that a merger between the two would diminish the combined firm's incentive to continue to pursue Paragraph IV challenges.
Finally, we analyzed whether the proposed transaction might dampen incentives to develop new generic products. For example, certain types of generic drugs are especially difficult to develop. For the most part, however, the parties' in-house technical capabilities to develop complex generic drugs do not overlap. And to the extent that there are complex products for which both companies have engaged in development efforts, we found that there are a number of other firms with similar capabilities such that the transaction would not substantially lessen competition. Moreover, generic firms, including the merging parties, often partner with third parties (
We therefore concluded that the proposed merger is unlikely to produce anticompetitive effects beyond the markets discussed above. That conclusion is necessarily limited to the facts of this case. Another set of facts presented by a different transaction might lead us to find that there are competitive concerns that extend beyond markets for individual pharmaceutical products.
The extensive investigation and detailed consent order reflect the Commission's dedication to ensuring that pharmaceutical markets, including generic markets, remain competitive. We will continue to take enforcement actions, where appropriate, to ensure that any merger or acquisition complies with the antitrust laws and does not
By direction of the Commission.
Federal Trade Commission.
Consent order.
The Commission has approved a final consent order in this matter, settling alleged violations of federal law prohibiting deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the Complaint and the terms of the Decision and Order.
Issued on June 21, 2016.
The Federal Trade Commission (“FTC” or “Commission”) has approved a final consent order applicable to Very Incognito Technologies, Inc. dba Vipvape (“Vipvape”).
The consent order was placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period became part of the public record. After the public comment period, the Commission reviewed the agreement and the comments received, and determined to make the proposed order final.
This matter concerns allegedly false representations that Vipvape made to consumers concerning its participation in the Asia-Pacific Economic Cooperation (“APEC”) Cross Border Privacy Rules (“CBPR”) system. The APEC CBPR system is a voluntary, enforceable mechanism that certifies a company's compliance with the principles in the CBPR and facilitates privacy-respecting transfers of data amongst APEC member economies. The APEC CBPR system is based on nine data privacy principles: Preventing harm, notice, collection limitation, use choice, integrity, security safeguards, access and correction, and accountability. Companies that seek to participate in the APEC CBPR system must undergo a review by an APEC-recognized Accountability Agent, which certifies companies that meet the standards.
Companies under the FTC's jurisdiction are eligible to apply for APEC CBPR certification. The names of certified companies are posted on a public-facing Web site,
Vipvape makes and distributes hand-held vaporizers. According to the Commission's complaint, Vipvape has set forth on its Web site,
The Commission's complaint alleges that Vipvape falsely represented that it was a participant in the APEC CBPR system when, in fact, it never sought or obtained certification.
Part I of the order prohibits Vipvape from making misrepresentations about its participation in any privacy or security program sponsored by a government or any self-regulatory or standard-setting organization, including, but not limited to, the APEC CBPR system.
Parts II through VI of the order are reporting and compliance provisions. Part II requires acknowledgment of the order and dissemination of the order now and in the future to persons with responsibilities relating to the subject matter of the order. Part III ensures notification to the FTC of changes in corporate status and mandates that Vipvape submit an initial compliance report to the FTC. Part IV requires Vipvape to retain documents relating to its compliance with the order for a five-year period. Part V mandates that Vipvape make available to the FTC information or subsequent compliance reports, as requested. Part VI is a provision that “sunsets” the order on June 21, 2036, with certain exceptions.
The purpose of this analysis, which was placed on the Commission Web site on May 4, 2016, was to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or order or to modify the order's terms in any way.
By direction of the Commission.
Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before August 29, 2016.
Interested parties may file a comment at
Christina Perez (202-326-2350), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before August 29, 2016. Write “In the Matter of Mylan N.V., File No. 161-0102—Consent Agreement” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “In the Matter of Mylan N.V., File No. 161-0102—Consent Agreement” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an Agreement Containing Consent Orders (“Consent Agreement”) from Mylan N.V. (“Mylan”) that is designed to remedy the anticompetitive effects resulting from Mylan's acquisition of Meda AB (“Meda”). Under the terms of the proposed Consent Agreement, Mylan is required to divest all of its rights and assets related to 400 mg and 600 mg generic felbamate tablets to Alvogen Pharma US, Inc. (“Alvogen”), and to return all of its marketing rights and ownership interests in generic carisoprodol tablets to Indicus Pharma LLC (“Indicus”) the abbreviated new drug application owner for this product.
The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments from interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again evaluate the proposed Consent Agreement, along with the comments received, to make a final decision as to whether it should withdraw from the proposed consent Agreement or make final the Decision and Order (“Order”).
Pursuant to a public offer to the shareholders of Meda announced on February 10, 2016, Mylan intends to acquire 100% of the issued and outstanding shares of Meda for a total equity value at announcement of approximately $7.2 billion. The Commission alleges in its Complaint that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by lessening current competition in the markets for 400 mg and 600 mg generic felbamate tablets and future competition in the market for 250 mg generic carisoprodol tablets in the United States. The proposed Consent Agreement will remedy the alleged violations by preserving the competition that otherwise would be eliminated by the proposed acquisition.
The proposed acquisition would reduce the number of current suppliers in the markets for 400 mg and 600 mg generic felbamate tablets and reduce the number of future suppliers in the market for 250 mg generic carisoprodol tablets.
Generic felbamate tablets treat severe refractory epilepsy and are available in 400 mg and 600 mg strengths. Three firms—Mylan, Meda, and Amneal Pharmaceuticals LLC—sell generic felbamate in the United States. A fourth firm, CorePharma LLC, has received U.S. Food and Drug Administration (“FDA”) approval for each strength of generic felbamate tablets, but it is not yet on the market.
Generic carisoprodol is a muscle relaxer that works by blocking pain sensations between the nerves and the brain. Two firms market generic carisoprodol tablets: Meda and Vensun Pharmaceuticals. Mylan owns the U.S.
Entry into the three relevant markets would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the proposed acquisition. The combination of drug development times and regulatory requirements, including approval by the United States Food and Drug Administration (“FDA”), is costly and lengthy.
The proposed acquisition likely would cause significant anticompetitive harm to consumers by eliminating competition between Mylan and Meda in the markets for 400 mg and 600 mg generic felbamate tablets. Market participants characterize generic felbamate tablets as commodity products, and prices are inversely correlated with the number of competitors in each market. As the number of suppliers offering a therapeutically equivalent drug increases, the price for that drug generally decreases due to the direct competition between the existing suppliers and each additional supplier. The proposed acquisition would combine two of three companies offering the 400 mg and 600 mg strengths of generic felbamate tablets, likely leading consumers to pay higher prices.
In addition, the proposed acquisition likely would cause significant anticompetitive harm to consumers by eliminating future competition that would otherwise have occurred in the 250 mg generic carisoprodol market if Mylan and Meda remained independent. The evidence shows that anticompetitive effects are likely to result from the proposed acquisition due to the elimination of an additional independent entrant in the market for 250 mg generic carisoprodol. Customers expect that the price of this pharmaceutical product will decrease with new entry by Mylan. Thus, absent a remedy, the proposed acquisition will likely cause U.S. consumers to pay significantly higher prices for 250 mg generic carisoprodol tablets.
The proposed Consent Agreement remedies the competitive concerns raised by the acquisition in the markets at issue by requiring Mylan to divest all its rights and assets relating to 400 mg and 600 mg generic felbamate tablets to Alvogen. Founded in 2009, Alvogen is an international pharmaceutical company with commercial operations in thirty-four countries. In addition, the proposed Consent Agreement requires Mylan to return its rights to market generic carisoprodol tablets in the United States to Indicus, the abbreviated new drug application owner for this product.
The Commission's goal in evaluating possible purchasers of divested assets is to maintain the competitive environment that existed prior to the proposed acquisition. If the Commission determines that Alvogen is not an acceptable acquirer, or that the manner of the divestitures is not acceptable, the proposed Order requires Mylan to unwind the sale of rights to Alvogen and then divest the products to a Commission-approved acquirer within six months of the date the Order becomes final. The proposed Order further allows the Commission to appoint a trustee in the event the parties fail to divest the products as required.
The proposed Consent Agreement and Order contain several provisions to help ensure that the divestitures are successful. The proposed Order requires that Mylan transfer its manufacturing technology for felbamate to Alvogen and provide transitional services to assist Alvogen in establishing its manufacturing capabilities and securing all of the necessary FDA approvals. The transitional services include technical assistance to manufacture the product in substantially the same manner and quality employed or achieved by Mylan, and advice and training from knowledgeable employees of Mylan. In addition, Mylan must supply Alvogen with 400 mg and 600 mg generic felbamate tablets until Alvogen is able to manufacture generic felbamate successfully in commercial quantities.
To remedy competitive concerns raised by the acquisition in the market for generic 250 mg carisoprodol tablets, the proposed Order requires Mylan to terminate its agreement with Indicus that gives Mylan the exclusive right to market and sell in the United States all strengths of carisoprodol tablets manufactured by Indicus. Indicus has existing relationships with suppliers of generic drugs that it can and expects to use to replace Mylan as its marketing partner for its carisoprodol products.
The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Order or to modify its terms in any way.
By direction of the Commission.
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice.
This quarterly notice lists CMS manual instructions, substantive and interpretive regulations, and other
It is possible that an interested party may need specific information and not be able to determine from the listed information whether the issuance or regulation would fulfill that need. Consequently, we are providing contact persons to answer general questions concerning each of the addenda published in this notice.
The Centers for Medicare & Medicaid Services (CMS) is responsible for administering the Medicare and Medicaid programs and coordination and oversight of private health insurance. Administration and oversight of these programs involves the following: (1) Furnishing information to Medicare and Medicaid beneficiaries, health care providers, and the public; and (2) maintaining effective communications with CMS regional offices, state governments, state Medicaid agencies, state survey agencies, various providers of health care, all Medicare contractors that process claims and pay bills, National Association of Insurance Commissioners (NAIC), health insurers, and other stakeholders. To implement the various statutes on which the programs are based, we issue regulations under the authority granted to the Secretary of the Department of Health and Human Services under sections 1102, 1871, 1902, and related provisions of the Social Security Act (the Act) and Public Health Service Act. We also issue various manuals, memoranda, and statements necessary to administer and oversee the programs efficiently.
Section 1871(c) of the Act requires that we publish a list of all Medicare manual instructions, interpretive rules, statements of policy, and guidelines of general applicability not issued as regulations at least every 3 months in the
This quarterly notice provides only the specific updates that have occurred in the 3-month period along with a hyperlink to the full listing that is available on the CMS Web site or the appropriate data registries that are used as our resources. This is the most current up-to-date information and will be available earlier than we publish our quarterly notice. We believe the Web site list provides more timely access for beneficiaries, providers, and suppliers. We also believe the Web site offers a more convenient tool for the public to find the full list of qualified providers for these specific services and offers more flexibility and “real time” accessibility. In addition, many of the Web sites have listservs; that is, the public can subscribe and receive immediate notification of any updates to the Web site. These listservs avoid the need to check the Web site, as notification of updates is automatic and sent to the subscriber as they occur. If assessing a Web site proves to be difficult, the contact person listed can provide information.
This notice is organized into 15 addenda so that a reader may access the subjects published during the quarter covered by the notice to determine whether any are of particular interest. We expect this notice to be used in concert with previously published notices. Those unfamiliar with a description of our Medicare manuals should view the manuals at
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 (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 September 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 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
1.
Individual-level data will be collected two times using the TEFT FASI Item Set. The first data collection effort will collect data that can be analyzed to evaluate the reliability and validity of the FASI items when used with the five waiver populations. Assessors will conduct functional assessments in client homes using the TEFT FASI Item Set. Changes may be recommended to individual TEFT FASI items, to be made prior to releasing the TEFT FASI items for use by the states. The FASI Field Test Report will be released to the public.
The second data collection will be conducted by the states to demonstrate their use of the FASI data elements. The assessment data could be used by the states for multiple purposes. They may use the standardized items to determine individual eligibility for state programs, or to help determine levels of care within which people can receive services, or other purposes. In the second round of data collection, states will demonstrate their proposed uses, manage their FASI data collection and conduct their own analysis, to the extent they propose to do such tasks. The states have been funded under the demonstration grant to conduct the round 2 data collection and analysis. These states will submit reports to CMS describing their experience in the Round 2 data collection, including the items they collected, how they planned to use the data, and the types of challenges and successes they encountered in doing so. The reports may be used by CMS in their evaluation of the TEFT grants.
Subsequent to the publication of our 60-day
Centers for Medicare & Medicaid Services, HHS.
Notice.
This notice announces the request for nominations for membership on the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC). Among other duties, the MEDCAC provides advice and guidance to the Secretary of the Department of Health and Human Services (the Secretary) and the Administrator of the Centers for Medicare & Medicaid Services (CMS) concerning the adequacy of scientific evidence available to CMS in making coverage determinations under the Medicare program.
The MEDCAC reviews and evaluates medical literature and technology assessments, and hears public testimony on the evidence available to address the impact of medical items and services on health outcomes of Medicare beneficiaries.
Nominations must be received by Tuesday, September 6, 2016.
You may mail nominations for membership to the following address: Centers for Medicare & Medicaid Services, Center for Clinical Standards and Quality, Attention: Maria Ellis, 7500 Security Boulevard, Mail Stop: S3-02-01, Baltimore, MD 21244 or send via email to
Maria Ellis, Executive Secretary for the 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
The Secretary signed the initial charter for the Medicare Coverage Advisory Committee (MCAC) on November 24, 1998. A notice in the
The MEDCAC is governed by provisions of the Federal Advisory Committee Act, Pub. L. 92-463, as amended (5 U.S.C. App. 2), which sets forth standards for the formulation and use of advisory committees, and is authorized by section 222 of the Public Health Service Act as amended (42 U.S.C. 217A).
We are requesting nominations for candidates to serve on the MEDCAC. Nominees are selected based upon their individual qualifications and not solely as representatives of professional associations or societies. We wish to ensure adequate representation of the interests of both women and men, members of all ethnic groups, and physically challenged individuals. Therefore, we encourage nominations of qualified candidates who can represent these interests.
The MEDCAC consists of a pool of 100 appointed members including: 94 at-large standing members (6 of whom are patient advocates), and 6 representatives of industry interests. Members generally are recognized authorities in clinical medicine including subspecialties, administrative medicine, public health, biological and physical sciences, epidemiology and biostatistics, clinical trial design, health care data management and analysis, patient advocacy, health care economics, medical ethics or other relevant professions.
The MEDCAC works from an agenda provided by the Designated Federal Official. The MEDCAC reviews and evaluates medical literature and technology assessments, and hears public testimony on the evidence available to address the impact of medical items and services on health outcomes of Medicare beneficiaries. The MEDCAC may also advise the Centers for Medicare & Medicaid Services (CMS) as part of Medicare's “coverage with evidence development” initiative.
As of January 2017, there will be 31 membership terms expiring. Of the 31 memberships expiring, 3 are industry representatives, 1 is a patient advocate, and the remaining 27 membership openings are for the at-large standing MEDCAC membership.
All nominations must be accompanied by curricula vitae. Nomination packages should be sent to Maria Ellis at the address listed in the
• Clinical medicine including subspecialties
• Administrative medicine
• Public health
• Biological and physical sciences
• Epidemiology and biostatistics
• Clinical trial design
• Health care data management and analysis
• Patient advocacy
• Health care economics
• Medical ethics
• Other relevant professions
We are looking particularly for experts in a number of fields. These include cancer screening, genetic testing, clinical epidemiology, psychopharmacology, screening and diagnostic testing analysis, and vascular surgery. We also need experts in biostatistics in clinical settings, dementia treatment, minority health, observational research design, stroke epidemiology, and women's health.
The nomination letter must include a statement that the nominee is willing to serve as a member of the MEDCAC and appears to have no conflict of interest that would preclude membership. We are requesting that all curricula vitae include the following:
• Date of birth
• Place of birth
• Social security number
• Title and current position
• Professional affiliation
• Home and business address
• Telephone and fax numbers
• Email address
• List of areas of expertise
In the nomination letter, we are requesting that nominees specify
Members are invited to serve for overlapping 2-year terms. A member may continue to serve after the expiration of the member's term until a successor is named. Any interested person may nominate one or more qualified persons. Self-nominations are also accepted. Individuals interested in the representative positions must include a letter of support from the organization or interest group they would represent.
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 required to publish notice in the
Comments must be received by October 4, 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:
1.
2.
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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POs are required to comply with all PACE program requirements. The growth of these PACE organizations forced CMS to develop an audit strategy to ensure we continue to obtain meaningful audit results. As a result, CMS' audit strategy reflected a move to a more targeted, data-driven and outcomes-based audit approach. We focused on high-risk areas that have the greatest potential for participant harm.
CMS has developed an audit protocol and will post it to the CMS Web site each year for use by POs to prepare for their audit. The data collected for audit is detailed in this protocol and the exact fields are located in the record layouts, at the end of the protocol. In addition, a questionnaire will be distributed as part of our audit. This questionnaire is also included in this package.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Cellular, Tissue, and Gene Therapies Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA's regulatory issues. At least one portion of the meeting will be closed to the public.
The meeting will be held on September 7, 2016, from 1 p.m. to 4 p.m.
FDA White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002. Answers to commonly asked questions including information regarding special accommodations due to a disability, visitor parking, and transportation may be accessed at:
Janie Kim or Denise Royster, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Silver Spring, MD 20993-0002, 301-796-9016 or 240-402-8158,
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its Web site prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's Web site after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that the
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Janie Kim at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice of public workshop.
The Food and Drug Administration (FDA), in collaboration with the University of Maryland Center of Excellence in Regulatory Science and Innovation, is announcing a public workshop titled, “Pediatric Master Protocols”. The objective of the workshop is to discuss regulatory and scientific concerns related to pediatric master protocols and clinical trial design considerations for these protocols. In addition, applications of pediatric master protocols to specific pediatric therapeutic areas will be presented.
The public workshop will be held on September 23, 2016, from 8:30 a.m. to 4:30 p.m.
The public workshop will be held at FDA's White Oak Campus, 10903 New Hampshire Ave., Building 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002. Entrance for the public meeting participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to
Audrey Thomas, Office of Regulatory Science and Innovation, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4220, Silver Spring, MD 20993-0002, 301-796-3520,
The purpose of this public workshop is to provide an opportunity for relevant stakeholders including: Clinicians and scientists from FDA and other government Agencies, academia, non-profit organizations, and industry to discuss use of pediatric master protocols for development of medical products for children. Specifically, the workshop will present the current status of pediatric protocol development in the United States, considerations for pediatric protocol development internationally, and development of international consortia in this area. Clinical trial design considerations and the preliminary steps needed for development of pediatric master protocols, including the role of in vitro diagnostic tests, will also be discussed. Finally, examples of pediatric master protocol development for medical products with no, partial, and full extrapolation of data from adults to children will be presented. The workshop will include two panel sessions for interaction and discussion among the speakers and attendees.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the National Mammography Quality Assurance Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA's regulatory
The meeting will be held Thursday, September 15, 2016, from 8:30 a.m. to 4:30 p.m.
Hilton Washington, DC North/Gaithersburg, Salons A, B, C and D, 620 Perry Pkwy., Gaithersburg, MD 20877. The hotel's telephone number is 301-977-8900. Answers to commonly asked questions including information regarding special accommodations due to a disability, visitor parking, and transportation may be accessed at:
S.J. Anderson, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1643, Silver Spring, MD 20993,
• Compliance Analysis. This presentation will be focused on Mammography Quality Standards Act (MQSA) current compliance trends, such as how most compliance cases originate. Input from the committee on any trends seen in the analysis, why the trends may be occurring, and possible actions will be sought.
• Inspection Enhancement Project. This presentation will describe a proposal to use the inspection program to enhance image quality. FDA is seeking committee input on anticipated facility questions related to the proposal.
• The approved alternative standard American College of Radiology Full Field Digital Mammography Quality Control Manual. The manual's contents will be explained and FDA will ask the committee's advice on facility roll-out strategies.
• Issues related to breast density. A presentation of current issues followed by a committee discussion on how these issues might effect a possible MQSA requirement for reporting breast density.
• Future challenges for MQSA, such as the role of synthesized 2D images. FDA is seeking committee input on this challenge as well as what future challenges MQSA might encounter.
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its Web site prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's Web site after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that the Agency is not responsible for providing access to electrical outlets.
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Artair Mallett at 301 796-9638 at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Health Resources and Services Administration, HHS.
Notice.
In compliance with section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Health Resources and Services Administration (HRSA) has submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period.
Comments on this ICR should be received no later than September 6, 2016.
Submit your comments, including the ICR title, to the desk officer for HRSA, either by email to
To request a copy of the clearance requests submitted to OMB for review, email the HRSA Information Collection Clearance Officer at
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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
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.
The National Institutes of Health (NIH) is requesting public comment on a proposal to amend Section IV and Section V of the NIH Guidelines for Human Stem Cell Research and on the proposed scope of certain human-animal chimera research that will be considered internally by an NIH steering committee to provide programmatic input to the director of the relevant NIH Institute(s) or Center(s) or equivalent NIH officials responsible for funding decisions.
Written comments must be received by the NIH on or before September 6, 2016 in order to be considered.
Public comments may be entered at:
On July 7, 2009, the NIH issued the NIH Guidelines for Human Stem Cell Research (“Guidelines”) 74 FR 32170 (July 7, 2009) to implement Executive Order 13505 (March 9, 2009), as it pertains to NIH-funded stem cell research, to establish policy and procedures under which the NIH will fund such research, and help ensure that NIH-funded research in this area is ethically responsible, scientifically worthy, and conducted in accordance with applicable law.
Since the Guidelines were issued in 2009, growing knowledge and advancement of stem cell biology has created new research opportunities. Some scientists are exploring strategies for growing human tissue and organs in animals through the introduction of human pluripotent cells into early stage embryos of non-human vertebrate animals. These experimental designs raise questions regarding where the human cells might go in the developing animal and how they might function, such as whether the human cells might contribute to the central nervous system and affect the cognition of the animal.
While considering these issues, on September 23, 2015, the NIH issued a funding moratorium (
The workshop illustrated that while there are significant challenges to creating chimeric models, there is clear interest and potential in producing animal models with human tissues or organs for studying human development, disease pathology, and eventually organ transplantation. In the interest of moving the field forward while preserving the NIH's opportunity to provide continuing assessment and oversight of this emerging area of research, the NIH has decided to establish a steering committee to provide programmatic input to the director of the relevant NIH Institute(s) or Center(s) (or equivalent NIH official responsible for funding decisions) on certain human-animal chimera research proposals. The committee will be composed of federal employees. The committee is expected to consider and offer the director of the relevant NIH Institute(s) or Center(s) (or equivalent NIH official responsible for funding decisions) programmatic input on factors, such as, (1) the characteristics of the human cells to be introduced (including potency and any modifications of those cells); (2) characteristics of the recipient animal (
The NIH also proposes to revise the Guidelines to expand the existing prohibition on introducing human pluripotent stem cells into blastocyst stage nonhuman primate embryos to include pre-blastocyst stage nonhuman primate embryos; and to expand the prohibition on research involving the breeding of animals where the introduction of hESCs or human induced pluripotent stem cells may contribute to the germ line to include any human cells that may result in the formation of human gametes.
Therefore, NIH is requesting public comment on:
(1) The following proposed changes to the Guidelines.
Sections IV and V of the Guidelines currently state:
IV. Research Using hESCs and/or Human Induced Pluripotent Stem Cells That, Although the Cells May Come From Eligible Sources, Is Nevertheless Ineligible for NIH Funding
This section governs research using hESCs and human induced pluripotent stem cells,
A. Research in which hESCs (even if derived from embryos donated in accordance with these Guidelines) or human induced pluripotent stem cells are introduced into non-human primate blastocysts.
B. Research involving the breeding of animals where the introduction of hESCs (even if derived from embryos donated in accordance with these Guidelines) or human induced pluripotent stem cells may contribute to the germ line.
V. Other Research Not Eligible for NIH Funding
A. NIH funding of the derivation of stem cells from human embryos is prohibited by the annual appropriations ban on funding of human embryo research (Section 509, Omnibus Appropriations Act, 2009, Pub. L. 111-8, 3/11/09), otherwise known as the Dickey Amendment.
B. Research using hESCs derived from other sources, including somatic cell nuclear transfer, parthenogenesis, and/or IVF embryos created for research purposes, is not eligible for NIH funding.
The NIH is proposing to amend the Guidelines as follows:
IV. Research Not Eligible for NIH Funding:
A. Research in which human pluripotent stem cells are introduced into non-human primate embryos up through the end of the blastocyst stage, is not eligible for funding.
B. Research involving the breeding of animals where the introduction of human cells may contribute to the germ line, is not eligible for funding.
C. NIH funding of the derivation of stem cells from human embryos is prohibited by the annual appropriations limitations on the funding of human embryo research (see
D. Research using hESCs derived from other sources, including somatic cell nuclear transfer, parthenogenesis, and/or IVF embryos created for research purposes, is not eligible for NIH funding.
(2) The NIH is also requesting public comment on the proposed scope of research (
a. Human pluripotent cells are introduced into non-human vertebrate embryos, up through the end of the gastrulation stage, or
b. human cells are introduced into post-gastrulation non-human mammals (excluding rodents), such that there could be either a substantial contribution or a substantial functional
While the NIH seeks public comment on the proposed changes to the Guidelines, and on the proposed scope for an NIH steering committee's consideration of certain research, NOT-OD-15-158 will remain in effect.
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.
Coast Guard, DHS.
Notice of availability and request for comments.
The Coast Guard announces the availability of an interim risk based resource allocation methodology for inspections of certain Outer Continental Shelf (OCS) units in the Eighth Coast Guard District (D8) area of responsibility (AOR). This interim methodology will be implemented for a five-month trial period beginning August 1, 2016. After the trial period, the methodology will be finalized within D8 and submitted to Coast Guard Headquarters (CG-CVC) for consideration at the national level.
Comments and related material must be received by the Coast Guard on or before September 6, 2016.
You may submit comments identified by docket number USCG-2016-0640 or view documents mentioned in this notice as being available in the docket using the Federal eRulemaking Portal at
For information about this document call or email Steve Sutton, Coast Guard; telephone 202-671-2151, email
This interim risk based resource allocation methodology is intended to improve implementation of the requirements contained in 33 CFR 140.101(c), 143.120(c), and 143.210(a) by employing interagency consultation and by establishing increased focus on the industrial mission and regulatory compliance and casualty data. It builds upon the risk based matrix created for foreign Mobile Offshore Drilling Units (MODU), which was published in the
On June 8, 2016, the Coast Guard conducted outreach to the offshore Operators' Committee at its annual general meeting in Houston, TX. The presentation, presentation script, and transcript of questions and answers from this outreach are available on the docket where indicated under
We encourage you to submit comments (or related material) on the interim risk based resource allocation methodology for inspection of OCS units in the D8 AOR. We will consider all submissions and may adjust our action based on your comments, although we do not anticipate a written response to comments. If you submit a comment, please include the docket number for this notice, 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
This notice is issued under authority of 5 U.S.C. 552(a).
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day notice and request for comments; Extension of an existing collection of information.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security 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: Passenger List/Crew List (Form I-418). CBP is proposing that this information collection be extended with no change to the burden hours or to the information collected. This document is published to obtain comments from the public and affected agencies.
Written comments should be received on or before September 6, 2016 to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email (
This proposed information collection was previously published in the
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 September 6, 2016.
Submit written comments on the proposed information collection
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 proposed information collection previously published in the
Department of Homeland Security.
Notice of public forum and request for public comment.
This Notice announces a fourth public meeting for the Information Sharing and Analysis Organization (ISAO) Standards Organization (SO) on August 31 and September 1, 2016 in Tysons, VA. Additionally, this notice announces a second request for public comment on draft products produced by the ISAO SO. This is the second iteration of draft products that will be used in the development of voluntary standards for Information Sharing and Analysis Organizations (ISAOs) as they relate to E.O. 13691. These drafts have been updated, revised and consolidated from the first drafts released in May 2016.
The ISAO SO Public Forum will be held on August 31 and September 1, 2016 in Tysons, VA. The comment period for the second iteration of the SO draft voluntary standards for ISAOs will be open until Friday, August 5, 2016. Comments will continue to be accepted after this date, but may not be reflected until later iterations of draft standards documents.
If you have questions concerning the draft voluntary standards documents, please contact the ISAO Standards Organization at
On February 13, 2015, President Obama signed E.O. 13691 intended to enable and facilitate “private companies, nonprofit organizations, and executive departments and agencies . . . to share information related to cybersecurity risks and incidents and collaborate to respond in as close to real time as possible.”
In accordance with E.O. 13691, DHS has entered into a cooperative agreement with a non-governmental ISAO SO led by the University of Texas at San Antonio with support from the Logistics Management Institute (LMI) and the Retail Cyber Intelligence Sharing Center (R-CISC). The ISAO SO is working with existing information sharing organizations, owners and operators of critical infrastructure, relevant agencies, and other public and private sector stakeholders to identify a common set of voluntary standards or guidelines for the creation and functioning of ISAOs.
As part of this collaborative, transparent, and industry-driven process, the ISAO SO has established six working groups to assist in the development of voluntary standards. As part of the standards development process, the ISAO SO hosts public forums. This notice is to provide further information regarding the August 31 and September 1, 2016 public forum in Tysons, VA.
Additionally, this notice is to request comment on the Standards Organization's draft products. These drafts consolidate previous separate documents, comments and newly developed material. Your participation in this comment process is highly encouraged to ensure all equities are being met. To join a working group or to find out how else you can best participate, please visit
To view the agenda and further details on the corresponding August 31 and September 1, 2016 in person meeting in Tysons, VA, please visit
The second draft documents can be found and comments submitted directly to the ISAO SO at
You may also submit written comments to the docket using one of the following methods:
(1)
(2)
(3)
To avoid duplication, please use only one of these four methods. All comments must either be submitted to the online docket on or before August 5, 2016, or reach the Docket Management Facility by that date.
Comments may be submitted directly to the ISAO SO using the method described above after August 5, 2016. However, these comments may not be reflected until later iterations of draft standards documents.
Executive Order 13691 can be found at:
For additional information about the ISAO SO, draft products, and how you can best participate in the standards development process, please go to
6 U.S.C. 131-134; 6 CFR 29; E.O.13691.
Fish and Wildlife Service, Interior.
Notice of receipt of applications for permit.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species, marine mammals, or both. With some exceptions, the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA) prohibit activities with listed species unless Federal authorization is acquired that allows such activities.
We must receive comments or requests for documents on or before September 6, 2016. We must receive requests for marine mammal permit public hearings, in writing, at the address shown in the
•
•
When submitting comments, please indicate the name of the applicant and the PRT# you are commenting on. We will post all comments on
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2281 (fax);
Send your request for copies of applications or comments and materials concerning any of the applications to the contact listed under
Please make your requests or comments as specific as possible. Please confine your comments to issues for which we seek comments in this notice, and explain the basis for your comments. Include sufficient information with your comments to allow us to authenticate any scientific or commercial data you include.
The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) Those that include citations to, and analyses of, the applicable laws and regulations. We will not consider or include in our administrative record comments we receive after the close of the comment period (see
Comments, including names and street addresses of respondents, will be available for public review at the street address listed under
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The applicant requests a permit to import biological samples from wild kakapo (
The following applicants each request a permit to import the sport-hunted trophy of one male bontebok (
The applicant requests a permit to import blood and tissue samples collected from wild polar bears in Manitoba, Canada, for purposes of scientific research. The goal of this study is to create an improved reference genome for polar bears (
The applicant requests a permit for Level B Harassment of northern sea otters (
Concurrent with publishing this notice in the
Bureau of Indian Affairs, Interior.
Notice of proposed rate adjustments.
The Bureau of Indian Affairs (BIA) owns or has an interest in irrigation projects located on or associated with various Indian reservations throughout the United States. We are required to establish irrigation assessment rates to recover the costs to administer, operate, maintain, and rehabilitate these projects. We request your comments on the proposed rate adjustments.
Interested parties may submit comments on the proposed rate adjustments on or before
All comments on the proposed rate adjustments must be in writing and addressed to: Yulan Jin, Chief, Division of Water and Power, Office of Trust Services, Mail Stop 4637-MIB, 1849 C Street NW., Washington, DC 20240, Telephone (202) 219-0941.
For details about a particular irrigation project, please use the tables in
The first table in this notice provides contact information for individuals who can give further information about the irrigation projects covered by this notice. The second table provides the current 2015 irrigation assessment rates, the proposed rates for Calendar Year (CY) 2016, and proposed rates for subsequent years where these rates are available.
In this notice:
This notice affects you if you own or lease land within the assessable acreage of one of our irrigation projects or if you have a carriage agreement with one of our irrigation projects.
You can contact the appropriate office(s) stated in the tables for the irrigation project that serves you, or you can use the Internet site for the Government Printing Office at
We are publishing this notice to inform you that we propose to adjust our irrigation assessment rates. This notice is published in accordance with the BIA's regulations governing its operation and maintenance of irrigation projects, found at 25 CFR part 171. This regulation provides for the establishment and publication of the proposed rates for annual irrigation assessments as well as related information about our irrigation projects.
Our authority to issue this notice is vested in the Secretary of the Interior by 5 U.S.C. 301 and the Act of August 14, 1914 (38 Stat. 583; 25 U.S.C. 385). The Secretary has in turn delegated this authority to the Assistant Secretary—Indian Affairs under Part 209, Chapter 8.1A, of the Department of the Interior's Departmental Manual.
We will put the rate adjustments into effect for the CY 2016 and subsequent years where applicable.
We calculate annual irrigation assessment rates in accordance with 25 CFR part 171.500 by estimating the annual costs of operation and maintenance at each of our irrigation projects and then dividing by the total assessable acres for that particular irrigation project. The result of this calculation for each project is stated in the rate table in this notice.
Consistent with 25 CFR part 171.500, these expenses include the following:
(a) Salary and benefits for the project engineer/manager and project employees under the project engineer/manager's management or control;
(b) Materials and supplies;
(c) Vehicle and equipment repairs;
(d) Equipment costs, including lease fees;
(e) Depreciation;
(f) Acquisition costs;
(g) Maintenance of a reserve fund available for contingencies or emergency costs needed for the reliable operation of the irrigation facility infrastructure;
(h) Maintenance of a vehicle and heavy equipment replacement fund;
(i) Systematic rehabilitation and replacement of project facilities;
(j) Carriage Agreements for the transfer of project water through irrigation facilities owned by others.
(j) Any water storage fees for non-BIA-owned reservoirs, as applicable,
(j) Contingencies for unknown costs and omitted budget items; and
(k) Other expenses we determine necessary to properly perform the activities and functions characteristic of an irrigation project.
We will mail or hand-deliver your bill notifying you (a) the amount you owe to the United States and (b) when such amount is due. If we mail your bill, we will consider it as being delivered no later than 5 business days after the day we mail it. You should pay your bill by the due date stated on the bill.
All responsible parties are required to provide the following information to the billing office associated with the irrigation project where you own or lease land within the project's assessable acreage or to the billing office associated with the irrigation project with which you have a carriage agreement:
(1) The full legal name of person or entity responsible for paying the bill;
(2) An adequate and correct address for mailing or hand delivering our bill; and
(3) The taxpayer identification number or Social Security number of the person or entity responsible for paying the bill.
Public Law 104-134, the Debt Collection Improvement Act of 1996, requires that we collect the taxpayer identification number or Social Security number before billing a responsible party and as a condition to servicing the account.
If you are late paying your bill because of your failure to furnish the required information listed above, you will be assessed interest and penalties as provided below, and your failure to provide the required information will not provide grounds for you to appeal your bill or any penalties assessed.
We can refuse to provide you irrigation service.
Yes. 25 CFR 171.545(a) states: “We will not provide you irrigation service until: (1) Your bill is paid; or (2) You make arrangement for payment pursuant to § 171.550 of this part.” If we do not receive your payment before the close of business on the 30th day after the due date stated on your bill, we will send you a past due notice. This past due notice will have additional information concerning your rights. We will consider your past due notice as delivered no later than 5 business days after the day we mail it. We follow the procedures provided in 31 CFR 901.2, “Demand for Payment,” when demanding payment of your past due bill.
Yes. We will assess you interest on the amount owed, using the rate of interest established annually by the Secretary of the United States Treasury (Treasury) to calculate what you will be assessed. You will not be assessed this charge until your bill is past due. However, if you allow your bill to become past due, interest will accrue from the original due date, not the past due date. Also, you will be charged an administrative fee of $12.50 for each time we try to collect your past due bill. If your bill becomes more than 90 days past due, you will be assessed a penalty charge of 6 percent per year, which will accrue from the date your bill initially became past due. Pursuant to 31 CFR 901.9, “Interest, penalties and administrative costs,” as a Federal agency, we are required to charge interest, penalties, and administrative costs in accordance with 31 U.S.C. 3717.
If you do not pay your bill or make payment arrangements to which we agree, we are required to send your past due bill to the Treasury for further action. Under the provisions of 31 CFR 901.1, “Aggressive agency collection activity,” Federal agencies should consider referring debts that are less than 180 days delinquent, and we must send any unpaid annual irrigation assessment bill to Treasury no later than 180 days after the original due date of the bill.
The following tables are the regional and project/agency contacts for our irrigation facilities.
The rate table below contains the current rates for all irrigation projects where we recover costs of administering, operating, maintaining, and rehabilitating them. The table also contains the proposed rates for the CY 2016 and subsequent years where applicable. An asterisk immediately following the rate category notes the irrigation projects where rates are proposed for adjustment.
The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this notice under the Department's consultation policy and under the criteria of Executive Order 13175 and have determined there to be substantial direct effects on federally recognized Tribes because the irrigation projects are located on or associated with Indian reservations. To fulfill its consultation responsibility to Tribes and Tribal organizations, BIA communicates, coordinates, and consults on a continuing basis with these entities on issues of water delivery, water availability, and costs of administration, operation, maintenance, and rehabilitation of projects that concern them. This is accomplished at the individual irrigation project by project, agency, and regional representatives, as appropriate, in accordance with local protocol and procedures. This notice is one component of our overall coordination and consultation process to provide notice to, and request comments from, these entities when we adjust irrigation assessment rates.
The proposed rate adjustments are not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.
These proposed rate adjustments are not a significant regulatory action and do not need to be reviewed by the Office of Management and Budget under Executive Order 12866.
These proposed rate adjustments are not a rule for the purposes of the Regulatory Flexibility Act because they establish “a rule of particular applicability relating to rates.” 5 U.S.C. 601(2).
These proposed rate adjustments do not impose an unfunded mandate on State, local, or tribal governments in the aggregate, or on the private sector, of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
These proposed rate adjustments do not effect a taking of private property or otherwise have “takings” implications under Executive Order 12630. The proposed rate adjustments do not deprive the public, state, or local governments of rights or property.
Under the criteria in section 1 of Executive Order 13132, these proposed rate adjustments do not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement because they will not affect the States, the relationship between the national government and the States, or the distribution of power and responsibilities among various levels of government. A federalism summary impact statement is not required.
This notice complies with the requirements of Executive Order 12988. Specifically, in issuing this notice, the Department has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988.
These proposed rate adjustments do not affect the collections of information which have been approved by the Office of Information and Regulatory Affairs, Office of Management and Budget, under the Paperwork Reduction Act of 1995. The OMB Control Number is 1076-0141 and expires June 30, 2019.
The Department has determined that these proposed rate adjustments do not constitute a major Federal action significantly affecting the quality of the human environment and that no detailed statement is required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370(d)).
Bureau of Land Management, Interior.
Notice.
In compliance with the National Environmental Policy Act of 1969, as amended (NEPA), the Bureau of Land Management (BLM) Colorado River Valley Field Office (CRVFO), located in Silt, Colorado, prepared a Final Environmental Impact Statement (EIS) that analyzes the environmental impacts of previous decisions to issue 65 leases on lands within the White River National Forest (WRNF) from 1995 to 2012.
The BLM will not issue a final decision on the proposal for a minimum of 30 days after the date that the Environmental Protection Agency publishes its Notice of Availability in the
Copies of the Previously Issued Oil and Gas Leases in the WRNF Final EIS are available for public inspection at the CRVFO, 2300 River Frontage Road, Silt, CO 81652. Interested persons may also review the Final EIS on the project Web site at
Greg Larson, Project Manager, at the address above, by telephone at 970-876-9000, or by email at
The BLM developed this EIS to address a NEPA deficiency identified by the Interior Board of Land Appeals (IBLA) related to the issuance of oil and gas leases on WRNF lands from 1995 to 2004. In 2007, the IBLA ruled that before including WRNF parcels in an oil and gas lease sale, the BLM must either formally adopt the NEPA analysis completed by the U.S. Forest Service (USFS) or conduct a NEPA analysis of its own (
While the BLM obtained USFS consent before offering and subsequently issuing these 65 leases, it did not adopt the USFS' NEPA analysis or prepare its own analysis. As a result, the BLM determined that the issuance of the leases in question was not in compliance with applicable NEPA requirements, rendering the leases voidable. The BLM therefore determined that additional actions were necessary to either reaffirm, modify, or cancel those leases. As part of its determination of what additional action needs to be taken, the BLM determined that the WRNF NEPA analysis relevant to the 65 previously issued leases was no longer adequate due to changes in laws, regulations, policies and conditions since the earlier EIS was finalized in 1993. As a result, the BLM prepared this EIS, which analyzes the previous decisions to lease WRNF lands for oil and gas development.
Based on the analysis in the EIS, the BLM will determine whether these 65 leases should be cancelled, reaffirmed, or modified with additional or different terms. Distinct from this effort, the USFS has also been updating its 1993 Oil and Gas Leasing EIS to address future oil and gas leasing availability on the WRNF. The USFS released the Final EIS and Draft Record of Decision in December 2014. The Final USFS Record of Decision was signed in December 2015. The USFS EIS and ROD are forward-looking and do not directly affect the 65 previously issued leases; however, the information generated as part of that process was relevant to the BLM's analysis. As part of its process, the BLM has incorporated as much of the new USFS NEPA analysis of future oil and gas leasing on WRNF lands as possible into the BLM's analysis of the existing leases.
The BLM considered six alternatives in the Final EIS, including the
For purposes of the Final EIS, the BLM identified a combination of Alternatives 2 and 4 as its Preferred Alternative. Under this alternative, the BLM would cancel in their entirety 25 leases that are not producing or committed to a unit or communitization agreement, and that overlap with the area identified as closed to future leasing by the USFS's Final Record of Decision (USFS 2015f). It would apply Alternative 4 stipulations (
The BLM developed this Preferred Alternative to address public comments and concerns submitted in response to the Draft EIS, while acknowledging recent decisions by the USFS governing future oil and gas leasing on the WRNF. The Preferred Alternative also recognizes the adverse economic impacts to local governments and technical challenges for the BLM associated with any decision to cancel producing or committed leases.
The Draft EIS was released on November 20, 2015 (80 FR 72733), for a 49-day public comment period. During that period, the BLM held three public meetings in communities near the project area: Glenwood Springs, DeBeque and Carbondale, Colorado. The BLM received 60,515 comments during the formal comment period. The BLM worked with cooperating agencies (including the Environmental Protection Agency; USFS; the Colorado Department of Natural Resources, including Colorado Parks and Wildlife; Garfield, Mesa, Pitkin and Rio Blanco counties; the Cities of Glenwood Springs and Rifle, and the Towns of Carbondale, New Castle, Parachute and Silt) to prepare the Final EIS. The BLM also consulted with the U.S. Fish and Wildlife Service (Service) informally and through a Biological Assessment; the Service issued a consultation memorandum on May 19, 2016, concurring with the BLM effects determinations of “may affect, but is not likely to adversely affect” for Ute ladies'-tresses orchid, Colorado hookless cactus and its critical habitat, Western yellow-billed cuckoo, Green-lineage cutthroat trout, Colorado pikeminnow and its critical habitat, Razorback sucker and its critical habitat, Humpback chub and its critical habitat, Bonytail and its critical habitat, and Canada lynx. In addition, the BLM notified the Colorado State Historic Preservation Office (SHPO) via an informational letter that pursuant to the 2014 Protocol agreement between the BLM Colorado and the SHPO, this undertaking does not exceed any of the review thresholds that would require SHPO concurrence, and that there will be no adverse effect to historic properties. Finally, the BLM began tribal consultation for the project in April 2014 when the field manager sent a scoping letter via certified mail to the Ute Indian Tribe (Uintah and Ouray Reservation), Ute Mountain Ute Tribe, and Southern Ute Indian Tribe. Consultation and outreach continued through April 22, 2016, when the BLM sent the tribes a letter that identified the Preferred Alternative and summarized cultural resource records within the area of potential effect (including potential Traditional Cultural Properties). The letter also offered the opportunity for comments or clarifications. The BLM will continue to offer opportunities for the tribes to identify properties of possible traditional religious and cultural importance that may be affected by the alternatives and to express their concerns throughout the project as stipulated under EO 13175, November 6, 2000.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
40 CFR 1506.6, 40 CFR 1506.10
Bureau of Reclamation, Interior.
Notice.
The Bureau of Reclamation and the City of San Diego will prepare a joint Environmental Impact Report/Environmental Impact Statement to evaluate the effects of the North City Project, the first phase of the Pure Water San Diego Program (Pure Water Program). The Pure Water Program is a water and wastewater facilities plan to produce potable water from recycled water.
Interested parties are invited to comment on the scope of the environmental analysis and the proposed alternatives. Two public meetings are scheduled.
Please submit written comments on or before September 6, 2016.
Public meeting dates:
1. August 23, 2016, 6 p.m. to 7:30 p.m., Scripps Miramar Ranch Public Library.
2. August 25, 2016, 6:30 p.m. to 8 p.m., City of San Diego Public Utilities Department.
Send written comments to Doug McPherson, Southern California Area Office, Bureau of Reclamation, 27708 Jefferson Avenue, Suite 202, Temecula, CA 92590; or email to
Public meeting locations:
1. Scripps Miramar Ranch Public Library, 10301 Scripps Lake Drive, San Diego, CA.
2. City of San Diego Public Utilities Department, 9192 Topaz Way, San Diego, CA.
Doug McPherson, Southern California Area Office general telephone number 951-695-5310; or email
This notice is provided pursuant to the National Environmental Policy Act (NEPA) (42 U.S.C. 4332(2)(c)), and Department of the Interior regulations for implementation of NEPA (43 CFR part 46).
The proposed project will expand the existing North City Water Reclamation Plant and construct an adjacent Advanced Water Purification Facility with a purified water pipeline to Miramar Reservoir. A project alternative would install a longer pipeline to deliver product water to the larger San Vicente reservoir.
Other project components include: A new pump station and forcemain to deliver additional wastewater to the North City Water Reclamation Plant, a brine discharge pipeline, and upgrades to the existing Metropolitan Biosolids Center to accommodate additional
A new electrical transmission line is proposed, connecting the North City Water Reclamation Plant to the future cogeneration facility at the Metropolitan Biosolids Center to deliver power for North City Project components. The electrical transmission line would cross Marine Corps Air Station Miramar and will require approval by the United States Marine Corps.
On average, eighty-five percent (85%) of the City's water supply is imported from the Colorado River and northern California. This reliance on imported water causes San Diego to be vulnerable to supply shortages and price increases.
With few local water supply options, the City has explored potable and non-potable reuse options of treated wastewater. In 2011, the City started operating a one million gallon per day (MGD) demonstration scale advanced water purification facility at the North City Water Reclamation Plant site and confirmed that the purified water complied with all federal and state drinking water standards.
The Pure Water Program will ultimately produce 83 MGD of locally-controlled water, recycling a valuable and limited resource that is currently discharged to the Pacific ocean. The program will be implemented in phases over a 20-year period, grouped by geographical area: North City, Central Area and South Bay.
The North City Project will produce 30 MGD of purified water and is scheduled to be operational in 2021. The Central Area and/or South Bay projects are scheduled to be completed by December 31, 2035 and will produce a combined total up to 53 MGD.
The Pure Water Program will make San Diego more water independent while providing increased protection of the ocean environment. The City made a commitment to begin implementing the Pure Water Program in their application to renew the Clean Water Act § 301(h) modified ocean discharge permit for the Point Loma Wastewater Treatment Plant (NPDES permit no. CA0107409).
Federal assistance is authorized by the Reclamation Wastewater and Groundwater Study and Facilities Act of 1992 (Title XVI of Pub. L. 102-575). Section 1612, San Diego Area Water Reclamation Program, directs the Secretary of the Interior, in cooperation with the city of San Diego, to participate in the planning, design, and construction of demonstration and permanent facilities to reclaim and reuse water in the San Diego metropolitan service area. This authority is delegated to the Bureau of Reclamation. The Federal share of the costs of the facilities shall not exceed 25 per cent of the total. Federal Funds for the operation or maintenance of the project are not authorized.
The City is filing a Notice of Preparation pursuant to the California Environmental Quality Act, and will hold two public scoping meetings. To avoid duplication with State and local procedures, we plan to use the scoping process initiated by the City. The Notice of Preparation, Notice of Scoping Meetings, and a proposed Scope of Work are available at
The site proposed for the Advanced Water Purification Facility contains vernal pool habitat supporting endangered species. The City is preparing a Vernal Pool Habitat Conservation Plan to comply with the Endangered Species Act.
Pipeline alignments and/or drinking water service areas may include areas of low income and minority populations. Environmental justice issues are not anticipated, but will be evaluated. No known Indian Trust Assets are associated with the proposed action.
Written comments are requested to help identify alternatives and issues that should be analyzed. Federal, State and local agencies, tribes, and the general public are invited to participate in the environmental review process.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Office of Surface Mining Reclamation and Enforcement (OSMRE) is announcing its intention to request renewed approval for the collection of information for Permit Applications—Minimum Requirements for Legal, Financial, Compliance, and Related Information. The information collection request has been forwarded to the Office of Management and Budget (OMB) for review and approval. The information collection request describes the nature of the information collection and the expected burden and cost.
OMB has up to 60 days to approve or disapprove the information collection but may respond after 30 days. Therefore, the public should submit comments to OMB by September 6, 2016, in order to be assured of consideration.
Comments may be submitted to the Office of Information and Regulatory Affairs, Office of Management and Budget, Department of the Interior Desk Officer, via email at
To receive a copy of the information collection request contact John Trelease at (202) 208-2783, or electronically at
OMB regulations at 5 CFR 1320, which implement provisions of the Paperwork
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this collection of information is displayed in 30 CFR 778.8 (1029-0117).
As required under 5 CFR 1320.8(d), a
Send comments on the agency need for the collection of information to perform its mission; the accuracy of our burden estimates; ways to enhance the quality, utility and clarity of the information collection; and ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information, to the offices listed in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
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 September 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 Jason Lynch, United States Bomb Data Center, 3750 Corporal Road, Redstone Arsenal, AL 35898, at email:
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,
Overview of this information collection:
1.
2.
3.
4.
5.
6.
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.
Criminal Division, Department of Justice.
Notice.
The notice is effective August 5, 2016.
The United States Victims of State Sponsored Terrorism Fund, Department of Justice (DOJ), Criminal Division, submitted a non-substantive change request to an approved collection to the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995.
The Special Master, United States Victims of State Sponsored Terrorism Fund, or the Chief, Program Management and Training Unit, Asset Forfeiture and Money Laundering Section, Criminal Division, Department of Justice, 950 Pennsylvania Avenue NW, Washington, DC 20530-0001, telephone (202) 353-2046.
The Justice for United States Victims of State Sponsored Terrorism Act (Act), part of the Consolidated Appropriations Act of 2016, established the U.S. Victims of State Sponsored Terrorism Fund (Fund), overseen by a Special Master, to provide compensation to certain eligible individuals who were injured in acts of state sponsored terrorism.
On July 7, 2016, the Special Master submitted to OMB an emergency information collection request for the U.S. Victims of State Sponsored Terrorism Application Form in accordance with the Paperwork Reduction Act of 1995. On July 14, 2016, the Fund published its Notice in the
Part V of the Fund's Application Form, titled NOTICE TO INDIVIDUALS OF FILING OF CLAIM, specifically references a notice of filing claim for use by those applicants filing claims on behalf of deceased individuals and states that “[t]he `Additional Forms' page of the Fund Web site contains the notice [the Personal Representative] must provide to the required individuals.” This notice of filing claim is required under part VII.2.a of the Fund's Notice published in the
At present, the Fund is preparing the 60-day notice of information collection request to OMB in accordance with the Paperwork Reduction Act of 1995. The notice will allow 60 days for public comment preceding submission of the collection to OMB. The notice of filing claim will be included as part of that information collection request to OMB.
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.
On August 1, 2016, the Department of Justice lodged a proposed Consent Judgment with the United States District Court for the Eastern District of New York in the lawsuit entitled
The proposed consent judgment will resolve the United States' claims under Section 9006 of the Resource Recovery and Conservation Act, as amended, on behalf of the U.S. Environmental Protection Agency, against the following defendants: Rachelann Yetim, Black Realty, Inc., Fast Gasoline Station, Inc., TAG Gasoline, Inc., NGRV Realty Co., Inc., and Venus Bukey Realty, Inc. (the “Rachelann Defendants”). The United States alleges that the Rachelann Defendants violated the regulations set forth at 40 CFR part 280, governing underground storage tanks (“USTs”), at three facilities—automobile fueling stations with USTs—that the Rachelann Defendants have owned and/or operated at the following locations:
The consent judgment requires the Rachelann Defendants to pay a civil penalty of $60,000, which was calculated after conducting an ability-to-pay analysis. The consent judgment also provides for injunctive relief, which will consist of maintaining compliance with the UST regulations and submission of reports demonstrating such compliance, to be implemented over the next three years at the Rachelann Defendants' facilities.
The publication of this notice opens a period for public comment on the proposed Consent Judgment. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the proposed Consent Judgment may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $9.00 (25 cents per page reproduction cost) payable to the United States Treasury.
On August 1, 2016, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Eastern District of Missouri in
The Consent Decree settles claims brought by the United States and the State of Missouri for violations of the Clean Air Act, federal regulations promulgated thereunder, and various state regulations and permits at Defendant's cement manufacturing facility located in Cape Girardeau, Missouri. Under the Consent Decree, Defendant will undertake measures to correct the alleged violations, pay a civil penalty of $60,000 to the United States and State of Missouri, and perform a project to mitigate excess emissions associated with the violations.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined and downloaded at this Justice Department Web site:
We will provide a paper copy of the Consent Decree upon written request and payment of reproduction costs. Please mail your request and payment to: Consent Decree Library, U.S. DOJ—ENRD, P.O. Box 7611, Washington, DC 20044-7611.
Please enclose a check or money order for $12.5 (25 cents per page reproduction cost) payable to the United States Treasury.
Notice.
The Department of Labor (DOL), Employment and Training Administration, is soliciting comments concerning a proposed extension for the authority to conduct the information collection request (ICR) titled, “Benefits Appeals Report.” This comment request is part of continuing Departmental efforts to reduce paperwork and respondent burden in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
Consideration will be given to all written comments received by October 4, 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 by contacting Stephanie Garcia by telephone at (202) 693-3207 (
Submit written comments about, or request a copy of, this ICR by mail or courier to the U.S. Department of Labor, Employment and Training Administration, Room S-4524, 200 Constitution Avenue NW., Washington, DC 20210; or by email to
44 U.S.C. 3506(c)(2)(A).
The DOL, as part of continuing efforts to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies an opportunity to comment on proposed and/or continuing collections of information before submitting them to the OMB for final approval. This program helps to ensure requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements can be properly assessed.
The ETA-5130, Benefit Appeals Report, contains information on the number of unemployment insurance appeals and the resultant decisions classified by program, appeals level, cases filed and disposed of (workflow), and decisions by level, appellant, and issue. The data on this report are used by the Department of Labor to monitor the benefit appeals process in the State Workforce Agencies (SWAs) and to develop any needed plans for remedial action. The data are also needed for workload forecasts and to determine administrative funding. If this information were not available, developing problems might not be discovered early enough to allow for timely solutions and avoidance of time consuming and costly corrective action.
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. See 5 CFR 1320.5(a) and 1320.6.
Interested parties are encouraged to provide comments to the contact shown in the
Submitted comments will also be a matter of public record for this ICR and posted on the Internet, without redaction. The DOL encourages commenters not to include personally identifiable information, confidential business data, or other sensitive statements/information in any comments.
The DOL is particularly interested in comments that:
* 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;
* 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 automated collection techniques or other forms of information technology.
Occupational Safety and Health Administration (OSHA), Labor.
Request for nominations to serve on FACOSH.
The Assistant Secretary of Labor for Occupational Safety and Health invites interested individuals to submit nominations for membership on FACOSH.
You must submit (postmark, send, transmit, deliver) nominations by October 31, 2016.
You may submit nominations and supporting materials using one of the following methods:
OSHA will post submissions, including any personal information provided, without change in the FACOSH docket and they may be available online at
The Assistant Secretary of OSHA invites interested individuals to submit nominations for membership on FACOSH.
• Three labor representatives; and
• Three management representatives.
FACOSH members serve at the pleasure of the Secretary and may be appointed to successive terms. FACOSH meets at least twice a year.
The Department of Labor is committed to equal opportunity in the workplace and seeks broad-based and diverse FACOSH membership. Any federal agency, labor organization representing federal workers, or individual(s) may nominate one or more qualified persons for membership on FACOSH. Interested individuals also are invited and encouraged to submit statements in support of a nominee(s).
1. The nominee's name, contact information and current employment;
2. Category of membership (management or labor) that the nominee is qualified to represent;
3. The nominee's resume or curriculum vitae, including prior membership on FACOSH and other relevant organizations, associations and committees;
4. A summary of the nominee's background, experience and qualifications that address the nominee's suitability to serve on FACOSH;
5. Articles or other documents the nominee has authored, if any, that indicate the nominee's knowledge, experience and expertise in occupational safety and health, particularly as it pertains to the federal workforce; and
6. A statement that the nominee is aware of the nomination, is willing to regularly attend and participate in FACOSH meetings, and has no apparent conflicts of interest that would preclude membership on FACOSH.
that include the nominee's level of responsibility for occupational safety and health matters involving the federal workforce; experience and competence in occupational safety and health; and willingness and ability to regularly and fully participate in FACOSH meetings. Federal agency management nominees who serve as their agency's Designated Agency Safety and Health Official (DASHO), or have an equivalent level of responsibility within their respective federal agencies, are preferred as management members. Labor nominees who have responsibilities for federal employee occupational safety and health matters within their respective labor organizations are preferred as labor members.
Information received through the nomination process, along with other relevant sources of information, will assist the Secretary in making appointments to FACOSH. In selecting FACOSH members, the Secretary will consider individuals nominated in response to this
OSHA will consider any nomination submitted in response to this notice for the vacancies that occur on January 1, 2017. In addition, OSHA will consider the nominations for any vacancy that may occur during 2017, provided the information the nominee submitted continues to remain current and accurate. OSHA believes that “rolling over” nominations for future consideration will make it easier for interested individuals to submit nominations and be considered for membership on FACOSH. This process also will provide OSHA with a broad base of nominations for ensuring that FACOSH membership is fairly balanced, which the Federal Advisory Committee Act requires (5 U.S.C. App.2, Section (5)(b)(2); 41 CFR 102-3.30(c)). OSHA will continue to request nominations as vacancies occur, but nominees whose information is current and accurate will not need to resubmit a nomination.
Because of security-related procedures, the use of regular mail may cause a significant delay in the receipt of nominations. For information about security procedures concerning the submission of materials by mail, hand, express delivery, messenger or courier service, please contact the OSHA Docket Office (see
All submissions in response to this
Electronic copies of this
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice pursuant to 5 U.S.C. 7902; 5 U.S.C. App. 2; 29 U.S.C. 668; Executive Order 12196 (45 FR 12629 (2/27/1980)), as amended; 41 CFR part 102-3; and Secretary of Labor's Order No. 1-2012 (77 FR 3912).
In notice document 2016-18135, appearing on pages 50564-50565 in the Issue of Monday, August 1, 2016, make the following correction:
On page 50564, in the third column, under the heading
National Endowment for the Arts, National Foundation on the Arts and Humanities.
Notice of meetings.
Pursuant to the Federal Advisory Committee Act, as amended, notice is hereby given that two meetings of the Arts Advisory Panel to the National Council on the Arts will be held by teleconference.
All meetings are Eastern time and ending times are approximate:
National Endowment for the Arts, Constitution Center, 400 7th St. SW., Washington, DC 20506.
Further information with reference to these meetings can be obtained from Ms. Kathy Plowitz-Worden, Office of Guidelines & Panel Operations, National Endowment for the Arts, Washington, DC 20506;
The closed portions of meetings are for the purpose of Panel review, discussion, evaluation, and recommendations on financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including information given in confidence to the agency. In accordance with the determination of the Chairman of July 5, 2016, these sessions will be closed to the public pursuant to subsection (c)(6) of section 552b of title 5, United States Code.
In accordance with the Federal Advisory Committee Act (Pub., L. 92-463, as amended), the National Science Foundation announces the following meeting:
Office of Nuclear Energy, Department of Energy.
Extension of comment period.
On July 19, 2016, the U.S. Department of Energy (DOE) published a request for information (RFI) seeking comment on certain issues related to DOE's preparation for a potential new Secretarial Determination covering continued transfers of uranium for cleanup services at the Portsmouth Gaseous Diffusion Plant and for down-blending of highly-enriched uranium to low-enriched uranium. The RFI established an August 18, 2016 deadline for the submission of written comments. DOE is extending the comment period to September 19, 2016.
DOE will accept comments, data, and information responding to this RFI submitted on or before September 19, 2016.
Interested persons may submit comments by any of the following methods.
1.
2.
3.
Ms. Cheryl Moss Herman, U.S. Department of Energy, Office of Nuclear Energy, Mailstop NE-52, B-409, 19901 Germantown Rd., Germantown, MD 20874-1290. Phone: (301) 903-1788. Email:
On July 19, 2016, the U.S. Department of Energy (DOE) published a request for information (RFI) in the
Nuclear Regulatory Commission.
Export license application; correction.
The U.S. Nuclear Regulatory Commission (NRC) is correcting a notice that was published in the
The correction is effective August 5, 2016.
Please refer to Docket ID NRC-2016-0144 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:
•
•
•
Andrea Ferkile, Office of International Programs,
In the FR on July 13, 2016, in FR Doc. 2016-16557, on page 45311, in the first column, second row, of the table entitled, “NRC Export License Application—Description of Material,” correct “May 18, 2016” to read “July 07, 2016” and correct “June 03, 2016” to read “July 11, 2016.”
For the Nuclear Regulatory Commission.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Nasdaq proposes a proposed rule change with respect to the Eaton Vance Floating-Rate & High Income NextShares (the “Fund”), a series of Eaton Vance NextShares Trust II (the “Trust”).
The proposed rule change is being filed to reflect a proposed revision to the Fund's name and modify its proposed investments (which are set forth in an order previously granted by the Commission).
The text of the proposed rule change is available 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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The shares of the Fund will be offered by the Trust. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on Form N-1A (“Registration Statement”) with the Commission.
The Commission previously approved the listing and trading on the Exchange of the shares of the Fund under Nasdaq Rule 5745, which governs the listing and trading of NextShares
In this proposed rule change, the Exchange proposes to change the Fund's name and modify its proposed investments.
Beyond the changes described above, there are no changes to any other information included in the Prior Release, except as made in the Amended Release; and all other facts presented and representations made in the Prior Release remain true and in effect. The Trust confirms that the Fund will continue to comply with all initial listing requirements under Nasdaq Rule 5745.
The Exchange believes that the proposal is consistent with section 6(b) of the Act, in general, and section 6(b)(5) of the Act, in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and in general, to protect investors and the public interest. The Fund will continue to comply with all the initial and continued listing requirements under Nasdaq Rule 5735.
The Exchange believes that the proposed rule change to change the Fund's name and to modify its proposed investments does not alter any of the arguments contained in the Prior Release in support of the original approval order that permitted the listing and trading of shares of the Fund and all other representations made in the Prior Release remain unchanged. The Exchange believes this proposed rule change is consistent with the Exchange's efforts to protect investors and the public interest through the disclosure of updated and correct information regarding the Fund.
For the above reasons, Nasdaq believes the proposed rule change is consistent with the requirements of section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. In fact, the Exchange believes that the introduction of the Fund will promote competition by making available to investors an actively managed investment strategy in a structure that offers the cost and tax efficiencies and shareholder protections of ETFs, while removing the requirement for daily portfolio holdings disclosure to ensure a tight relationship between market trading prices and NAV.
Moreover, the Exchange believes that the proposed method of trading in
These developments could significantly enhance competition to the benefit of the markets and investors.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act
The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange argues that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed changes to the Fund are consistent with the Exchange arguments and Commission findings made in the Prior Release for the listing and trading of NextShares on the Exchange. In the context of the unique pricing and trading mechanisms of NextShares, the Commission believes that waiver of the 30-day operative delay with respect to these proposed changes to the Fund is consistent with the protection of investors and the public interest and hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 (“Act”),
The Exchange proposes to amend the BOX Rules regarding Participants and associated persons who are or become subject to a statutory disqualification. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at
In its filing with the Commission, the self-regulatory organization included
The purpose of the proposed rule change is to amend Rule 2040 (Restrictions) to add language which provides the Exchange with the discretion to determine whether to permit a person to become an Options Participant or an associated person of a Participant or continue as a Participant or in association with a Participant on the Exchange.
Currently, Rule 2040 restricts any persons from becoming an Options Participant or continuing as an Options Participant where (1) such person is other than a natural person and is not a registered broker or dealer, (2) such person is a natural person who is not either a registered broker or dealer or associated with a registered broker or dealer, (3) such person is subject to a statutory disqualification,
The Exchange notes that the proposed rule changes below are substantially similar to the Rules of the International Securities Exchange (“ISE”).
The Exchange then proposes to amend BOX Rule 2040(a)(3). Specifically, the Exchange proposes to add a reference to Section 3(a)(39) of the Exchange Act for the definition of statutory disqualification within BOX Rule 2040(a)(3). The Exchange also proposes to delete the language that allows a person to become a Participant or continue as a Participant where, pursuant to Rules 19d-1, 19d-2, 19d-3 and 19h-1 of the Act, the Commission has issued an order providing relief from such a disqualification and permitting such a person to become a Participant. The Exchange believes that this language is obsolete.
The Exchange then proposes to add three more situations with regard to whether a person may become a Participant or continue as a Participant in any capacity on the Exchange. The additional restrictions are (1) when such person fails to meet any of the qualification requirements for becoming a Participant or associated with a Participant after approval thereof; (2) such person fails to meet any condition placed by the Exchange on such Participant or association with a Participant; and (3) such person violates any agreement with the Exchange. The Exchange proposes these additions in order to allow the Exchange more discretion in its determination as to whether a person may become or continue as a Participant or in association with a Participant.
The Exchange also proposes to add language with regard to a Participant or associated person that becomes subject to a statutory disqualification under the Exchange Act. The proposed rule would allow a Participant or associated person who becomes subject to a statutory disqualification and who wants to continue as a Participant of the Exchange or in association with a Participant, to submit a request to the Exchange seeking to continue as a Participant or in association with a Participant notwithstanding the statutory disqualification.
The Exchange also proposes to add language which allows Participants and associated persons whose request to become a Participant is denied or conditioned, or any person whose association with a Participant is denied or conditioned pursuant to the restrictions codified in Rule 2040(a), and any Participant or person associated with a Participant who is not permitted to continue as a Participant or be an associate with a Participant or to which association is conditioned to appeal the Exchange's decision under Rule 1300 (Review of Certain Exchange Actions) of the Rules.
Lastly, the Exchange proposes to add Interpretive Material which allows the Exchange to waive the provisions of Rule 2040 when a proceeding is pending before another self-regulatory organization (“SRO”) or similar association to determine whether to permit a Participant or associated person to become or continue being Participant or associated person notwithstanding a statutory disqualification. The Exchange notes that this proposed rule change is substantially similar to the comparable Rules of the Chicago Board Options Exchange (“CBOE”).
The Exchange believes that the proposal is consistent with the requirements of section 6(b) of the Act,
The Exchange believes that the proposed rule changes are consistent with the requirements above. Specifically, the Exchange believes the proposed changes will better enable the Exchange to use its discretion in determining whether a person may become or continue as a Participant or associated person. Because of the discretionary language and additional restrictions, the Exchange may consider additional circumstances when determining whether a person may become or continue as a Participant or associated person on the Exchange.
The Exchange believes that Proposed Rule 2040(c) regarding any person or Participant's ability to appeal a denied
The Exchange also believes the proposed rule change regarding the waiver of the provisions of Rule 2040 will better enable the Exchange to focus Exchange resources on other matters while another SRO or similar association is determining whether to permit a Participant or associated person to become or continue being a Participant or associated person on the exchange.
Lastly, the Exchange believes that amending the language in BOX Rule 2040(a)(3) is appropriate, as the added language which defers to the Exchange Act for a particular definition, will add clarity to the rules. Further, the Exchange believes is it reasonable to remove obsolete language in BOX Rule 2040(a)(3) because the Exchange is eliminating any potential for confusion by simplifying the Exchange Rules, ensuring that Participants, regulators, and the public can more easily navigate the Exchange's Rulebook.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has neither solicited nor received comments on the proposed rule change.
(a) This proposed rule change is filed pursuant to paragraph (A) of section 19(b)(3) of the Exchange Act
(b) This proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
At any time within 60 days of the filing of the 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.
All submissions should refer to File Number SR-BOX-2016-26 and should be submitted on or before August 26, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
In notice document 2016-17908 appearing on pages 50041-50042 in the issue of July 29, 2016, make the following correction:
On page 50041, in the first column, the File No. in the heading is corrected to read as set forth above.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
CBOE is filing a proposal to adopt revisions to the content outline and selection specifications for the General Securities Sales Supervisor (Series 9/10) examination program.
The revised content outline is attached.
The text of the proposed rule change is available on the Exchange's Web site (
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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Section 6(c)(3) of the Act
CBOE Rule 9.2, in relevant part, states, “No TPH organization shall be approved to transact options business with the public until those persons associated with it who are designated as Options Principals have been approved by and registered with the Exchange. Persons engaged in the supervision of options sales practices or a person to whom the designated general partner or executive officer (pursuant to Rule 9.8) or another Registered Options Principal delegates the authority to supervise options sales practices shall be designated as Options Principals.”
CBOE Rule 9.2, Interpretation and Policy .01 further states: “Individuals engaged in the supervision of options sales practices and designated as Options Principals are required to qualify as an Options Principal by passing the Registered Options Principals Examination (Series 4) or the Sales Supervision Examination (Series 9/10).”
In consultation with a committee of industry representatives, including representatives from CBOE, FINRA recently undertook a review of the Series 9/10 examination program. As a result of this review, FINRA filed revisions to the content outline to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a General Securities Sales Supervisor. FINRA also made changes to the format of the content outline.
CBOE is proposing to adopt the revised Series 9/10 content outline, as revised by FINRA. FINRA revised the content outline to reflect changes to the laws, rules and regulations covered by the examination. The revised content outline is now divided into two parts with eight major job functions that are performed by a General Securities Sales Supervisor. The functions and
FINRA also adjusted the number of examination questions assigned to each major job function to ensure that the overall examination better reflects the key tasks performed by a General Securities Sales Supervisor. The questions on the revised Series 9/10 examination will place greater emphasis on key tasks such as supervision of registered persons, sales practices and compliance. CBOE is proposing to adopt these revisions related to the Series 9/10 examination questions.
Finally, CBOE is proposing to adopt the changes made by FINRA to the Series 9/10 selection specifications and question bank.
The revised Series 9/10 content outline is available on FINRA's Web site, at
CBOE is filing the proposed rule change for immediate effectiveness. CBOE will announce the proposed rule change in a
CBOE believes that the proposed revisions to the Series 9/10 examination program are consistent with the provisions of Section 6(b)(5) of the Act,
CBOE does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The updated examination aligns with the functions and associated tasks currently performed by a General Securities Sales Supervisor and tests knowledge of the most current laws, rules, regulations and skills relevant to those functions and associated tasks. As such, the proposed revisions would make the examination more efficient and effective.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
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 Brent J. Fields, 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”),
The Exchange filed a proposal to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's 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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to modify the fee schedule applicable to the Exchange's options platform (“EDGX Options”) to adopt an ORF in the amount of $0.0002 per contract side. The per-contract ORF will be assessed by the Exchange to each Member and non-Member for all options transactions cleared by OCC in the “customer” range, regardless of the exchange on which the transaction occurs. The ORF will be collected indirectly from Members and non-Members through their clearing firms by OCC on behalf of the Exchange. The ORF will be collected indirectly from Members and non-Members through their clearing firms by OCC on behalf of EDGX Options.
The Exchange believes it is appropriate to charge the ORF to transactions by Members and non-Members that clear as customer at the OCC, irrespective of where the transactions takes place. Many of the Exchange's surveillance programs for customer trading activity require the Exchange to look at activity across all options markets, such as surveillances for position limit violations, manipulation, insider trading, front-running and contrary exercise advice violations/expiring exercise declarations. Accordingly, there is a strong nexus between the ORF and the Exchange's regulatory activities with respect to its Members', as well as non-Members', customer trading activity. These activities span across multiple exchanges.
In addition to its own surveillance programs, the Exchange works with other SROs and exchanges on intermarket surveillance related issues. Through its participation in the Intermarket Surveillance Group (“ISG”),
The Exchange proposes to assess ORF monthly based on information received from the OCC regarding transactions that cleared in the customer range. Notably, the Exchange believes that this will help to alleviate confusion or even potential double-billing of customer transactions. In particular, by billing all customer transactions on a monthly basis the Exchange will be able to capture transactions that may have been executed on the Exchange that were submitted for clearing by a Member but then “flipped” to the account of a non-Member. Thus, the Exchange believes that charging the ORF to Members and non-Members across all markets will avoid having non-Members clear their trades through non-Members in order to avoid the fee and to thereby avoid paying for their fair share for regulation. If the ORF did not apply to activity across markets then a Member or non-Member would send their orders to the least cost, least regulated exchange. In addition, applying the fee to all Members' and non-Members' activity across all market will avoid options participants from terminating their membership status on or not becoming a Members of certain exchanges simply to avoid being assessed ORF.
As discussed above, the ORF is designed to recover a material portion of the costs to the Exchange of the supervision and regulation of Members' and non-Member's customer options business, including performing routine surveillances and investigations, as well as policy, rulemaking, interpretive and enforcement activities. The Exchange believes that revenue generated from the ORF, when combined with all of the Exchange's other regulatory fees and fines, will cover a material portion, but not all, of the Exchange's regulatory costs.
The Exchange will monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. The Exchange expects to monitor its regulatory costs and revenues at a minimum on a semi-annual basis. If the Exchange determines regulatory revenues exceed or are insufficient to cover a material portion of its regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the Commission. The Exchange will notify Members and non-Members of adjustments to the ORF at least 30 calendar days prior to the effective date of the change.
The Exchange notes that there is established precedent for an SRO charging a fee across markets, namely, FINRAs Trading Activity Fee
The Exchange proposes to implement the ORF on August 1, 2016.
The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of section 6 of the Act.
The Exchange believes the ORF is equitable and not unfairly discriminatory because it would be objectively allocated to Members and non-Members in that it would be charged to all Members and non-Members on all their transactions that clear as customer transactions at the OCC. Moreover, the Exchange believes the ORF ensures fairness by assessing fees to those Members and non-Members that are directly based on the amount of customer options business they conduct. Regulating customer trading activity is much more labor intensive and requires greater expenditure of human and technical resources than regulating non-customer trading activity, which tends to be more automated and less labor-intensive. As a result, the costs associated with administering the customer component of the Exchange's overall regulatory program are materially higher than the costs associated with administering the non-customer component (
The Exchange believes applying the ORF to transactions executed or cleared by non-Members is equitable and not unfairly discriminatory because it should avoid having transactions cleared through non-Members in order to avoid the fee and to thereby avoid paying for their fair share for regulation.
The Exchange also believes it is reasonable and appropriate for the Exchange to charge the ORF for options transactions by a non-Member regardless of the exchange on which the transactions occur. The Exchange has a statutory obligation to enforce compliance by Members and their associated persons under the Act and the rules of the Exchange and cannot effectively surveil for manipulative conduct by market participants (including non-Members) trading on the Exchange without looking at and evaluating activity across all options markets. Many of the Exchange's market surveillance programs require the Exchange to look at and evaluate activity across all options markets, such as surveillance for position limit violations, manipulation, front-running and contrary exercise advice violations/expiring exercise declarations.
The ORF is designed to recover a material portion of the costs of supervising and regulating Members' and non-Members' customer options business including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. The Exchange will monitor, on at least a semi-annual basis the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. If the Exchange determines regulatory revenues exceed or are insufficient to cover a material portion of its regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the Commission. The Exchange will notify Members and non-Members of adjustments to the ORF via regulatory circular.
The Exchange has designed the ORF to generate revenues that, when combined with all of the Exchange's other regulatory fees, will be less than or equal to the Exchange's regulatory costs, which is consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business side. In this regard, the Exchange believes that the initial level of the fee is reasonable.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The ORF is not intended to have any impact on competition. Rather, it is designed to
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
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”),
The Exchange filed a proposal to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's 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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to modify the fee schedule applicable to the Exchange's options platform (“BZX Options”) to amend the rate of its ORF as well as to expand its application to non-Members. Currently, the Exchange
Currently, the per-contract ORF is assessed by the Exchange to each Member for all options transactions executed and cleared, or simply cleared, by the Member, that are cleared by OCC in the “customer” range, regardless of the exchange on which the transaction occurs. The ORF is collected indirectly from Members through their clearing firms by OCC on behalf of the Exchange. The ORF is also charged for transactions that are not executed by a Member but are ultimately cleared by a Member. Thus, in the case where a non-Member executes a transaction and a Member clears the transaction, the ORF is assessed to the Member who clears the transaction. Similarly, in the case where a Member executes a transaction and another Member clears the transaction, the ORF is assessed to the Member who clears the transaction.
The Exchange now proposes to expand the application of ORF to options transactions executed or cleared by non-Members in the “customer” range. As proposed, the ORF will be assessed by BZX Options to each Member
The Exchange believes it is appropriate to charge the ORF to transactions by non-Members that clear as customer at the OCC, irrespective of where the transactions takes place. Many of the Exchange's surveillance programs for customer trading activity require the Exchange to look at activity across all options markets, such as surveillances for position limit violations, manipulation, insider trading, front-running and contrary exercise advice violations/expiring exercise declarations. Accordingly, there is a strong nexus between the ORF and the Exchange's regulatory activities with respect to its Members', as well as non-Members', customer trading activity. These activities span across multiple exchanges.
In addition to its own surveillance programs, the Exchange works with other SROs and exchanges on intermarket surveillance related issues. Through its participation in the Intermarket Surveillance Group (“ISG”),
The Exchange proposes to assess ORF monthly based on information received from the OCC regarding transactions that cleared in the customer range. Notably, the Exchange believes that this will help to alleviate confusion or even potential double-billing of customer transactions. In particular, by billing all customer transactions on a monthly basis the Exchange will be able to capture transactions that may have been executed on the Exchange that were submitted for clearing by a Member but then “flipped” to the account of a non-Member. Thus, the Exchange believes that charging the ORF to Members and non-Members across all markets will avoid having non-Members clear their trades through non-Members in order to avoid the fee and to thereby avoid paying for their fair share for regulation. If the ORF did not apply to activity across markets then a non-Member would send their orders to the least cost, least regulated exchange. In addition, applying the fee to all Members' and non-Members' activity across all market will avoid options participants from terminating their membership status on or not becoming a Members of certain exchanges simply to avoid being assessed ORF.
As discussed above, the ORF is designed to recover a material portion of the costs to the Exchange of the supervision and regulation of Members' and non-Member's customer options business, including performing routine surveillances and investigations, as well as policy, rulemaking, interpretive and enforcement activities. The Exchange believes that revenue generated from the ORF, when combined with all of the Exchange's other regulatory fees and fines, will continue to cover a material portion, but not all, of the Exchange's regulatory costs.
The Exchange will continue to monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. The Exchange expects to monitor its regulatory costs and revenues at a minimum on a semi-annual basis. If the Exchange determines regulatory revenues exceed or are insufficient to cover a material portion of its regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the Commission. The Exchange will continue to notify Members and non-Members of adjustments to the ORF at least 30 calendar days prior to the effective date of the change.
The Exchange proposes to implement changes to the ORF on August 1, 2016.
The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of section 6 of the Act.
The Exchange believes the decreased ORF is equitable and not unfairly discriminatory because it would be objectively allocated to Members and non-Members in that it would be charged to all Members and non-Members on all their transactions that
The Exchange believes the expanding the decreased ORF to transactions executed or cleared by non-Members is equitable and not unfairly discriminatory because it should avoid having transactions cleared through non-Members in order to avoid the fee and to thereby avoid paying for their fair share for regulation.
The Exchange also believes it is reasonable and appropriate for the Exchange to charge the ORF for options transactions by a non-Member regardless of the exchange on which the transactions occur. The Exchange has a statutory obligation to enforce compliance by Members and their associated persons under the Act and the rules of the Exchange and cannot effectively surveil for manipulative conduct by market participants (including non-Members) trading on the Exchange without looking at and evaluating activity across all options markets. Many of the Exchange's market surveillance programs require the Exchange to look at and evaluate activity across all options markets, such as surveillance for position limit violations, manipulation, front-running and contrary exercise advice violations/expiring exercise declarations.
The Exchange has designed the ORF to generate revenues that, when combined with all of the Exchange's other regulatory fees, will be less than or equal to the Exchange's regulatory costs, which is consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business side. In this regard, the Exchange believes that the decreased level of the fee and its expansion to non-Members is reasonable and appropriate.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The ORF is not intended to have any impact on competition. Rather, it is designed to enable the Exchange to recover a material portion of the Exchange's cost related to its regulatory activities. The decreased ORF is also comparable to, and in most instances less than, ORF fees charged by other options exchanges. The expansion of ORF to non-Members is also not designed to have an impact on competition as the Exchange believes based on conversations from market participants that it is consistent with the practice by other exchanges in applying ORF to non-Member transactions, despite rule text to the contrary.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
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.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
Or you may submit your comments online through
I. The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than October 4, 2016. Individuals can obtain copies of the collection instruments by writing to the above email address.
1. Application for Child's Insurance Benefits—20 CFR 404.350-404.368, 404.603, & 416.350—0960-0010. Title II of the Social Security Act (Act) provides for the payment of monthly benefits to children of an insured retired, disabled, or deceased worker. Section 202(d) of the Act discloses the conditions and requirements the applicant must meet when filing an application. SSA uses the information on Form SSA-4-BK to determine entitlement for children of living and deceased workers to monthly Social Security payments. Respondents are guardians completing the form on behalf of the children of living or deceased workers, or the children of living or deceased workers.
2. Private Printing and Modification of Prescribed Application and Other Forms—20 CFR 422.527—0960-0663. 20 CFR 422.527 of the Code of Federal Regulations requires a person, institution, or organization (third-party entities) to obtain approval from SSA prior to reproducing, duplicating, or privately printing any application or other form the agency owns. To obtain SSA's approval, entities must make their requests in writing using their company letterhead, providing the required information set forth in the regulation. SSA uses the information to: (1) Ensure requests comply with the law and regulations, and (2) process requests from third-party entities who want to reproduce, duplicate, or privately print any SSA application or other SSA form. SSA employees review the requests and provide approval via email or mail to the third-party entities. The respondents are third-party entities who submit a request to SSA to reproduce, duplicate, or privately print an SSA-owned form.
3. Protection and Advocacy for Beneficiaries of Social Security (PABSS)—20 CFR 435.51-435.52—0960-0768. The PABSS projects are part of Social Security's strategy to increase the number of Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) recipients who return to work and achieve financial independence and self-sufficiency as the result of receiving support, representation, advocacy, or other services. PABSS provides information and advice about obtaining vocational rehabilitation and employment services,
II. SSA submitted the information collection below to OMB for clearance. Your comments regarding the information collection would be most useful if OMB and SSA receive them 30 days from the date of this publication. To be sure we consider your comments, we must receive them no later than September 6, 2016. Individuals can obtain copies of the OMB clearance package by writing to
Application for Supplemental Security Income—20 CFR 416.207 and 416.305-416.335, Subpart C—0960-0229. The SSI program provides aged, blind, and disabled individuals who have little or no income, with funds for food, clothing, and shelter. Individuals complete Form SSA-8000-BK to apply for SSI. SSA uses the information from Form SSA-8000-BK and its electronic intranet counterpart, Modernized Supplemental Security Income Claims System (MSSICS), to determine: (1) Whether SSI claimants meet all statutory and regulatory eligibility requirements; and (2) SSI payment amounts. The respondents are applicants for SSI or their representative payees.
Acting under the authority of and in accordance with section 1(b) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13268 of July 2, 2002, and Executive Order 13284 of January 23, 2003, I hereby determine that the individual known as Jamaat-ul-Ahrar, also known as JuA, also known as Jamaatul Ahrar, also known as Jamaatul-Ahrar, also known as Jamat-ul-Ahrar, also known as Aafia Siddique Brigade, also known as Jamaat-e-Ahrar, also known as Jamatul Ahrar, also known as Tehreek-i-Taliban Jamaat-Ul-Ahrar, also known as Tehrik-e-Taliban Pakistan Jamaat-e-Ahrar, also known as Jamaat-ul-Ahrar TTP, also known as TTP-JA, also known as TTP-JuA committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.
Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order.
This notice shall be published in the
Based upon a review of the Administrative Record assembled pursuant to Section 219(a)(4)(C) of the
This determination shall be published in the
Acting under the authority of and in accordance with section 1(b) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13268 of July 2, 2002, and Executive Order 13284 of January 23, 2003, I hereby determine that the individual known as Mohamed Abrini, also known as Mohammed Abrini, also known as Mohammad Abrini committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.
Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order.
This notice shall be published in the
The Department of State will conduct an open meeting at 9:00 a.m. on Monday, August 22, 2016, in room 7P15-01 of the Douglas A. Munro Coast Guard Headquarters Building at St. Elizabeth's, 2703 Martin Luther King Jr. Avenue SE., Washington, DC 20593. The primary purpose of the meeting is to prepare for the third session of the International Maritime Organization's (IMO) Sub-Committee on Carriage of Cargoes and Containers (CCC 3) to be held at the IMO Headquarters, United Kingdom, on September 5-9, 2016.
The agenda items to be considered include:
Members of the public may attend this meeting up to the seating capacity of the room. Upon request to the meeting coordinator, members of the public may also participate via teleconference. To facilitate the building security process, and to request reasonable accommodation, those who plan to attend should contact the meeting coordinator, Ms. Amy Parker, by email at
Additional information regarding this and other IMO public meetings may be found at:
Surface Transportation Board.
Notice and Request for Comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995, (PRA), the Surface Transportation Board (STB or Board) gives notice that it is requesting from the Office of Management and Budget (OMB) approval of an extension for the information collections required under rail or water carrier equipment liens (recordations), under water carrier tariffs, and under rail agricultural contract summaries. The information collections are described in more detail below. The Board previously published a notice about this collection in the
Comments on this information collection should be submitted by September 6, 2016.
Written comments should be identified as “Paperwork Reduction Act Comments, Surface Transportation Board: Recordations, Water Carrier Tariffs, and Agricultural Contract Summaries.” These comments should be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Chandana L. Achanta, Surface Transportation Board Desk Officer, by email at
For further information regarding this collection, contact Michael Higgins, Deputy Director, Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0284 or at
Comments are requested concerning: (1) The accuracy of the Board's burden estimates; (2) ways to enhance the quality, utility, and clarity of the information collected; (3) 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 when appropriate; and (4) whether the collection of information is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility. Submitted comments will be summarized and included in the Board's request for OMB approval.
Under the PRA, a Federal agency conducting or sponsoring a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Section 3507(b) of the PRA requires, concurrent with an agency's submitting a collection to OMB for approval, a 30-day notice and comment period through publication in the
Tennessee Valley Authority.
Record of Decision.
This notice is provided in accordance with the Council on
TVA has decided that the environmental and other factors identified in part I for screening and evaluating closure alternatives on a site-specific basis are appropriate for use in its future decision-making processes involving the proposed closure of CCR impoundments. It also has decided to implement the preferred closure alternatives identified for each of the site-specific evaluations in part II. The Notice of Availability (NOA) of the Final Ash Impoundment Closure EIS, Part I Programmatic NEPA Review and Part II Site Specific NEPA Reviews was published in the
Ashley Farless, 1101 Market Street BR 4A, Chattanooga, TN 37402, 423.751.2361,
TVA is a corporate agency of the United States that provides electricity for business customers and local power distributors serving more than 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its power system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.
TVA has coal-fired plants and CCR impoundments in Alabama, Kentucky, and Tennessee. CCRs are byproducts produced from burning coal and include fly ash, bottom ash, boiler slag and flue gas desulfurization materials. CCRs are not hazardous, but they contain small amounts of chemical substances such as arsenic, chromium and cobalt. TVA has monitored ecological conditions adjacent to its plants and conducted toxicity testing of CCR wastewater from its plants for years. None of the data show adverse impacts to human health or the environment from CCR-related contamination.
During 2015, TVA produced nearly 4 million tons of CCR with approximately 2.1 million tons being synthetic gypsum,1.1 million tons being fly ash, 0.4 million tons of bottom ash and 0.3 million tons of boiler slag. Approximately 34 percent of CCRs produced was used or marketed, and the remaining CCRs are currently stored in landfills and impoundments at or near coal-fired plant sites. TVA CCR impoundments vary in size from less than 10 acres to nearly 400 acres. All of TVA's CCR facilities operate under permits issued by the States in which they are located.
TVA has committed to closing its wet CCR impoundments and converting wet CCR management processes to dry processes. These actions are undertaken on a project-by-project basis, subject to technical feasibility, availability of resources and environmental review.
In April 2015, the U.S. Environmental Protection Agency (EPA) established national criteria and schedules for the management and closure of CCR facilities. EPA purposefully structured its CCR Rule to encourage utilities to accelerate the closure of CCR impoundments because of the decrease in groundwater contamination risk and increased structural stability that results from eliminating the hydraulic pressure of ponded water.
On April 18, 2016, after release of the Draft EIS, EPA asked the D.C. Circuit Court of Appeals to remand and vacate the accelerated closure incentive in a partial settlement of litigation challenging the CCR Rule. This does not affect EPA's technical determination that accelerated closure will significantly reduce structural failure and groundwater contamination risks. Because of this pending regulatory change, TVA decided not to use the April 2018 incentive closure date as a significant factor in its consideration of the reasonableness of a closure alternative. Instead, TVA took into account the 5-year timeframe that EPA set for completing impoundment closures [40 Code of Federal Regulations (CFR) 257.102(f)]. However, early closure is environmentally preferable to closure later and this still remains an important consideration in TVA's analyses.
The purpose of this action is to support the implementation of TVA's goal of eliminating all wet CCR storage at its coal plants by closing CCR impoundments across the TVA system in a safe and effective manner, and to assist TVA in complying with EPA's CCR Rule.
The EIS addressed closure alternatives that have reasonable prospects of providing a solution to the disposal of CCR. EPA's rule establishes two primary closure methods: (1) Closure-in-Place and (2) Closure-by-Removal. EPA observed that most facilities would be closed in place because of the difficulty and cost of Closure-by-Removal. It determined that either closure method would be equally protective of human health and the environment if completed properly. Accordingly, TVA developed three alternatives to the proposed action:
The EIS analyzes, to the extent practicable, the impacts resulting from each of these closure alternatives and the effectiveness of best management practices and mitigation measures in reducing potential impacts.
Under the No Action Alternative, TVA would not close any of the CCR impoundments at its coal-fired power plants. This alternative is included because applicable regulations require consideration of a No Action Alternative in order to provide a baseline for potential changes to environmental resources. However, the No Action Alternative is inconsistent with TVA's goal to convert all of its wet CCR systems to dry systems, the general direction of EPA's CCR Rule and other actions required by state regulatory programs related to CCR management.
Closure-in-Place involves dewatering the impoundment, stabilizing the CCR in place and installing a cover system. The cover system over the compacted CCR prevents precipitation and storm water runoff from reaching the CCR. Doing this reduces hydraulic pressure and thereby reduces risks of structural instability and groundwater contamination. TVA concluded that it would take less than five years to close an impoundment in place, depending on its size, the distance to the cover system borrow area, and the condition of the road network between the borrow location and impoundment being closed.
Closure-by-Removal involves dewatering the impoundment and
The EIS includes baseline information for understanding the potential environmental and socioeconomic impacts associated with the closure alternatives considered by TVA. TVA carefully considered 21 resource areas related to the human and natural environments and the impacts on these resources associated with each closure alternative.
Both CCR impoundment closure alternatives involve several common actions that are anticipated to result in environmental impacts. These include temporary construction-related impacts (
For Closure-in-Place, TVA's analyses confirm EPA's determination that dewatering and capping impoundments would reduce the potential risks of groundwater contamination and structural instability because the hydraulic pressure would be reduced. Compared to Closure-by-Removal, this alternative would have significantly less risks to workforce health and safety and those risks related to off-site transportation of CCR (crashes, derailments, road damage and other transportation-related effects). It also is less costly than Closure-by-Removal.
Closure-by-Removal would result in a greater reduction in potential groundwater contamination risk than Closure-in-Place over the long term because CCR material would be excavated and moved to a permitted landfill. However, this alternative would result in notably greater impacts associated with other environmental factors and would increase the potential for impacts on worker-related and transportation-related health and safety. In addition, Closure-by-Removal can raise environmental justice concerns associated with the transportation and disposal of CCR material in off-site locations.
Under both closure alternatives, actions to avoid, minimize or mitigate losses of resources, values or associated uses would be included.
Recognizing the potential pathways for risk exposure related to existing CCR impoundments, TVA identified a number of factors that are important in the screening and evaluation of project alternatives. These include: The volume of CCR materials, schedule/duration of closure activities, mode and duration of transportation movements, the potential for health and environmental risks, effects on wetlands, effects on adjacent environmental resources and cost.
At a programmatic level, TVA determined that Closure-in-Place would have fewer overall adverse environmental impacts than Closure-by-Removal and generally would be environmentally preferable.
TVA identified 10 CCR impoundments at six of its plants that could quickly initiate and complete the closure process within the five-year time period identified in the CCR Rule. These are impoundments at its Allen, Bull Run, Kingston and John Sevier plants in Tennessee and at its Widows Creek and Colbert plants in Alabama. TVA conducted a site-specific NEPA review for each of these facilities that tiers off of the programmatic level review in part I of the Final EIS.
TVA used the screening and evaluation factors discussed above to determine which closure alternatives should be considered in greater detail in its site-specific analyses. Based on these factors, Alternative B was retained for analysis at all sites. Alternative C was retained for the closures proposed at the Allen Fossil Plant and John Sevier Fossil Plant. Alternative C was determined not to be reasonable at the other locations.
TVA has identified Alternative B, Closure-in-Place, as the environmentally preferred alternative in each site-specific review. It would achieve the purpose and need of the project to close the impoundments in a reasonable period while enhancing the protection of human health and the environment and avoid the adverse environmental impacts associated with Alternative C.
TVA has decided to use the screening and evaluation factors identified in Part I of the EIS to help frame its evaluation of future proposals to close other CCR impoundments at its coal-fired power plants. Conclusions reached from the programmatic analysis of each closure alternative should be applicable to any CCR impoundment within the TVA system regardless of the location. The evaluation of future closure activities at a specific location would tier from the analysis presented in the programmatic EIS and therefore implementation of part I will facilitate the closure of CCR impoundments in an environmentally appropriate manner. Using measures to avoid, minimize and mitigate the potential impacts associated with individual CCR impoundment closures will further help to protect human health and the environment.
In addition, TVA chose the preferred closure method—Alternative B—identified in the site-specific analyses in part II of the EIS for the proposed closure of the 10 impoundments. The impact analyses for each impoundment concluded that Closure-in-Place would meet the purpose for closing impoundments and enhance the protection of human health and environment. Compared to Closure-by-Removal, Closure-in-Place would have significantly fewer environmental and social impacts, could be completed more quickly, and would be substantially less costly.
In its June 21, 2016 letter summarizing its review of the FEIS, EPA rated the FEIS “LO” (lack of objection) and said: “Overall, EPA concurs with the TVA's preferred alternative to close identified facilities in place according to the CCR Rule.”
On August 27, 2015, TVA published a Notice of Intent (NOI) in the
The Draft Environmental Impact Statement (Draft EIS) was released to the public on December 30, 2015, and a Notice of Availability (NOA) of the Draft EIS was published in the
TVA accepted comments submitted through an electronic comment form on the EIS Web site, by post and email. During the comment period, TVA held 10 public meetings to discuss the Draft EIS and proposed site-specific closures with interested members of the public and to accept comments on it. TVA published notices of the public meetings in local and/or regional newspapers as well as provided information on TVA's Web site.
Additionally, TVA briefed customers, business leaders and local, state and federal officials on the EIS in one-on-one meetings, a webinar and conference calls. TVA created a five minute video that was shown at meetings and posted on the web.
TVA received approximately 70 comment submissions which included letters, emails, petition-style submissions, comment forms, and submissions through the project Web site. The comment submissions were signed by more than 650 individuals.
Approximately 583 individuals and groups submitted comments as part of organized campaigns. These comments were received as part of emails, form letters and submissions consisting of the text and a list of names and addresses of those who supported the comments. TVA provided responses to these comments.
Two organized commenting campaigns were submitted by:
In addition, the Southern Environmental Law Center (SELC) and nine other environmental advocacy groups submitted an 89-page letter with hundreds of pages of attachments commenting on the Draft EIS. This letter was also carefully reviewed and responded to by TVA.
The most frequently mentioned topics included the public involvement process, the action purpose and need, range of closure alternatives, identification of the preferred alternative, need to comply with other federal and state requirements, need for full public disclosure, beneficial use of CCR and a range of environmental resource issues such as, potential impacts on groundwater, surface water, transportation, wildlife, floodplains, wetlands, air quality, socioeconomics and environmental justice, land use, safety and waste management.
TVA also provided information about the Draft EIS and its preliminary conclusions to a formal session of its Regional Energy Resource Council on January 20-21, 2016. This council is chartered under the Federal Advisory Committee Act and provides advice to TVA on energy resource activities. Council members represent a diverse group of stakeholders, including TVA customers, state governments, environmental advocacy groups and educational institutions. After discussion of the Draft EIS and TVA's analyses, the only additional action that the Council recommended that TVA take was to conduct a robust monitoring program at its CCR facilities.
The NOA for the Final EIS was published in the
Only 11 commenters responded. Most of the comments consisted of brief statements. Four commenters had concerns about impacts from CCRs. TVA responded to similar concerns from commenters on the draft EIS. One commenter simply informed us that it was permitted to construct a municipal solid waste landfill in Tennessee near a rail line that would be able to accept coal ash, but construction had not yet commenced. Another commenter endorsed Closure-in-Place. The Commonwealth of Kentucky and the U.S. Army Corps of Engineers observed that their approvals may be needed for some closure activities in the future. The Department of the Interior supports TVA's plans to transition to dry ash storage and concluded that TVA had responded to all of its comments in the final EIS.
The two remaining commenters were the SELC with a coalition of other environmental advocacy groups and the EPA. SELC's comments largely repeated its earlier comments. They continue to argue that TVA needs to conduct additional studies before making closure decisions. Notably, no other federal, state, or local agency or government criticized the FEIS or objected to the identification of Closure-in-Place as TVA's preferred approach to closing the 10 CCR facilities that are evaluated in part II of the FEIS. As discussed above, EPA rated the FEIS “LO” and concurred with TVA's identification of Closure-in-Place as its preferred alternative in the site-specific reviews in part II.
The reduction of environmental impacts was an important goal in TVA's process for identifying CCR impoundment closure methods. Mitigation measures, actions taken to reduce adverse impacts associated with proposed actions, include:
• Implementation of fugitive dust control systems;
• Erosion and sediment best management practices (BMPs) (
• Other construction BMPs to minimize and restore areas disturbed during construction such as revegetation with native species;
• Implementation of supplemental groundwater mitigative measures that could include monitoring, assessment, or corrective action programs as required by the CCR Rule and state requirements.
Additional measures identified in Part II, the Site Specific NEPA review include:
• Evaluate the use of a temporary traffic signal to minimize traffic impacts during the transport of borrow material to the Bull Run Fossil Plant.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
This notice announces a request for comments on the draft FAA Order 5500.1B, Passenger Facility Charge. When finalized, this Order will replace Order 5500.1, Passenger Facility Charge, issued on August 9, 2001. This revised Order clarifies and updates statutory and regulatory requirements, including those affected by changes to the PFC statute from multiple FAA reauthorizations.
Comments must be received on or before September 30, 2016.
An electronic copy of draft FAA Order 5500.1B, and comment form, is available after August 4, 2016, through the Internet at the FAA Airports Web site at
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For more information on the notice and comment process, see the
Joe Hebert, Manager, Financial Analysis and Passenger Facility Charge Branch, APP-510, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591, telephone (202) 267-8375; facsimile (202) 267-5302, email
You can get an electronic copy of this notice and the Draft PFC Order 5500.1B by visiting the FAA's Airports Web page at
The Passenger Facility Charge Program (PFC) is an airport capital funding program, established by the Airport Safety and Capacity Expansion Act of 1990 as amended, 49 U.S.C. 40117
The primary audience for this order is all FAA employees with Passenger Facility Charge (PFC) responsibilities. The secondary audience includes Public Agencies and Air Carriers involved with collecting, using, and reporting PFC revenues. This Order, once finalized, is intended to replace the above referenced 2001 PFC Order with updated information that reflects current legislation, regulation, and policy. The Office of Airports reorganized and revised this Order to clarify what is required by law and policy and to incorporate PFC Updates 35-02 (dated October 5, 2001) though 69-12 (dated September 14, 2012).
Since 2001, there have been substantial changes to the laws, regulation, and policies relating to PFCs.
To incorporate these changes and provide the most useful and current program guidance to agency employees, the Office of Airport Planning and Programming, Financial Assistance Division has drafted an updated version to revise the Order to maximize its clarity. This update is a fundamental rewrite of FAA Order 5500.1, the current version of the PFC Order. The update clarifies the different responsibilities of the FAA Office of Airports staff and those of public agencies applying to collect and use PFCs. The update also clarifies the responsibilities of air carriers collecting, handling, and remitting PFCs to public agencies. This updated version of the Order includes the requirements for all PFC funded projects and can be used as a ready-reference for project-specific requirements.
While the FAA generally does not request public comment on internal orders, the agency is offering this opportunity for public comment in recognition of the interest of multiple stakeholders of the aviation industry in PFCs. The agency will consider all comments received by the closing date of the comment period in finalizing this Order. Comments received after that date may be considered if consideration will not delay agency action on the Order.
Comments should be submitted on the Draft PFC Order 5500.1B Comment Form, which is available for downloading at
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning TD 8770, Certain Transfers of Stock or Securities by U.S. Persons to Foreign Corporations and Related Reporting Requirements; and TD 8662, Stock Transfer Rules.
Written comments should be received on or before October 4, 2016 to be assured of consideration.
Direct all written comments to Tuawana Pinkston, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Martha R. Brinson, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Special Projects Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Tuesday, September 6, 2016.
Kim Vinci at 1-888-912-1227 or 916-974-5086.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Special Projects Committee will be held Tuesday, September 6, 2016, at 1:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Kim Vinci. For more information please contact: Kim Vinci at 1-888-912-1227 or 916-974-5086, TAP Office, 4330 Watt Ave, Sacramento, CA 95821, or contact us at the Web site:
The agenda will include a discussion on various special topics with IRS processes.
Internal Revenue Service (IRS) Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, September 15, 2016.
Antoinette Ross at 1-888-912-1227 or (202) 317-4110.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be held Thursday, September 15, 2016, at 2:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Antoinette Ross. For more information please contact: Antoinette Ross at 1-888-912-1227 or (202) 317-4110, or write TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing various issues related to Taxpayer Communications and public input is welcome.
Internal Revenue Service (IRS), Treasury.
Notice of meeting; correction.
In the
The meeting will be held Wednesday, August 24, 2016.
Linda Rivera at 1-888-912-1227 or (202) 317-3337.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Toll Free Project Committee will be held Wednesday, August 24, 2016, at 2:30 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Linda Rivera. For more information please contact: Ms. Rivera at 1-888-912-1227 or (202) 317-3337, or write TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing Toll-free issues and public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Joint Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, September 28, 2016.
Kim Vinci at 1-888-912-1227 or 916-974-5086.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Joint Committee will be held Wednesday, September 28, 2016, at 1:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. For more information please contact: Kim Vinci at 1-888-912-1227 or 916-974-5086, TAP Office, 4330 Watt Ave, Sacramento, CA 95821, or contact us at the Web site:
The agenda will include various committee issues for submission to the IRS and other TAP related topics. Public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, September 8, 2016.
Donna Powers at 1-888-912-1227 or (954) 423-7977.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee will be held Thursday, September 8, 2016, at 1:00 p.m.. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Donna Powers. For more information please contact: Donna Powers at 1-888-912-1227 or (954) 423-7977 or write: TAP Office, 1000 S. Pine Island Road, Plantation, FL 33324 or contact us at the Web site:
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Amortization of Reforestation Expenditures.
Written comments should be received on or before October 4, 2016 to be assured of consideration.
Direct all written comments to Joseph Durbala, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the regulation should be directed to Kerry Dennis at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
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 OMB control number. 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.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
The Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee will conduct an open meeting and will solicit public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, September 14, 2016.
Otis Simpson at 1-888-912-1227 or 202-317-3332.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee will be held Wednesday, September 14, 2016, at 2:00 p.m. Eastern Time. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Otis Simpson. For more information please contact: Otis Simpson at 1-888-912-1227 or 202-317-3332, TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing various issues related to the Taxpayer Assistance Centers and public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, September 14, 2016.
Linda Rivera at 1-888-912-1227 or (202) 317-3337.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee will be held Wednesday, September 14, 2016, at 2:30 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Linda Rivera. For more information please contact: Ms. Rivera at 1-888-912-1227 or (202) 317-3337, or write TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing Toll-free issues and public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, September 28, 2016.
Theresa Singleton at 1-888-912-1227 or 202-317-3329.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee will be held Wednesday, September 28, 2016, at 12:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Theresa Singleton. For more information please contact: Theresa Singleton at 1-888-912-1227 or 202-317-3329, TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The agenda will include a discussion on various letters, and other issues related to written communications
In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury is publishing a current list of countries
On the basis of the best information currently available to the Department of the Treasury, the following countries require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986).
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule updates the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2017. In addition, it specifies a potentially preventable readmission measure for the Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP), and implements requirements for that program, including performance standards, a scoring methodology, and a review and correction process for performance information to be made public, aimed at implementing value-based purchasing for SNFs. Additionally, this final rule includes additional polices and measures in the Skilled Nursing Facility Quality Reporting Program (SNF QRP). This final rule also responds to comments on the SNF Payment Models Research (PMR) project.
These regulations are effective on October 1, 2016.
Penny Gershman, (410) 786-6643, for information related to SNF PPS clinical issues.
John Kane, (410) 786-0557, for information related to the development of the payment rates and case-mix indexes.
Kia Sidbury, (410) 786-7816, for information related to the wage index.
Bill Ullman, (410) 786-5667, for information related to level of care determinations, consolidated billing, and general information.
Stephanie Frilling, (410) 786-4507, for information related to skilled nursing facility value-based purchasing.
Charlayne Van, (410) 786-8659, for information related to skilled nursing facility quality reporting.
As discussed in the FY 2017 SNF PPS proposed rule (81 FR 24230), tables setting forth the Wage Index for Urban Areas Based on CBSA Labor Market Areas and the Wage Index Based on CBSA Labor Market Areas for Rural Areas are no longer published in the
Readers who experience any problems accessing any of these online SNF PPS wage index tables should contact Kia Sidbury at (410) 786-7816.
To assist readers in referencing sections contained in this document, we are providing the following Table of Contents.
In addition, because of the many terms to which we refer by acronym in this final rule, we are listing these abbreviations and their corresponding terms in alphabetical order below:
This final rule updates the SNF prospective payment rates for FY 2017 as required under section 1888(e)(4)(E) of the Social Security Act (the Act). It also responds to section 1888(e)(4)(H) of the Act, which requires the Secretary to provide for publication in the
In accordance with sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5) of the Act, the federal rates in this final rule reflect an update to the rates that we published in the SNF PPS final rule for FY 2016 (80 FR 46390), which reflects the SNF market basket index, as adjusted by the multifactor productivity (MFP) adjustment, for FY 2017. We are also finalizing various requirements for the SNF VBP Program, including a potentially preventable readmission measure, performance standards, and a scoring methodology, among other policies. In addition, we are adopting and implementing four new quality and resource use measures for the SNF QRP and new SNF review and correction procedures for performance data that are to be publicly reported as we continue to implement this program and meet the requirements of the IMPACT Act.
As amended by section 4432 of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33, enacted on August 5, 1997), section 1888(e) of the Act provides for the implementation of a PPS for SNFs. This methodology uses prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services defined in section 1888(e)(2)(A) of the Act. The SNF PPS is effective for cost reporting periods beginning on or after July 1, 1998, and covers all costs of furnishing covered SNF services (routine, ancillary, and capital-related costs) other than costs associated with approved educational activities and bad debts. Under section 1888(e)(2)(A)(i) of the Act, covered SNF services include post-hospital extended care services for which benefits are provided under Part A, as well as those items and services (other than a small number of excluded services, such as physician services) for which payment may otherwise be made under Part B and which are furnished to Medicare beneficiaries who are residents in a SNF during a covered Part A stay. A comprehensive discussion of these provisions appears in the May 12, 1998 interim final rule (63 FR 26252). In addition, a detailed discussion of the legislative history of the SNF PPS is available online at
Section 215(a) of PAMA added section 1888(g) to the Act requiring the Secretary to specify an all-cause all-condition hospital readmission measure and a resource use measure, an all-condition risk-adjusted potentially preventable hospital readmission measure, for the SNF setting. Additionally, section 215(b) of PAMA added section 1888(h) to the Act requiring the Secretary to implement a VBP program for SNFs. Finally, section 2(a) of the IMPACT Act added section 1899B to the Act that, among other things, requires SNFs to report standardized data for measures in specified quality and resource use domains. In addition, the IMPACT Act added section 1888(e)(6) to the Act, which requires the Secretary to implement a quality reporting program for SNFs, which includes a requirement that SNFs report certain data to receive their full payment under the SNF PPS.
Under sections 1888(e)(1)(A) and 1888(e)(11) of the Act, the SNF PPS included an initial, three-phase transition that blended a facility-specific rate (reflecting the individual facility's historical cost experience) with the federal case-mix adjusted rate. The transition extended through the facility's first 3 cost reporting periods under the PPS, up to and including the one that began in FY 2001. Thus, the SNF PPS is no longer operating under the transition, as all facilities have been paid at the full federal rate effective with cost reporting periods beginning in FY 2002. As we now base payments for SNFs entirely on the adjusted federal per diem rates, we no longer include adjustment factors under the transition related to facility-specific rates for the upcoming FY.
Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates to be updated annually. The most recent annual update occurred in a final rule that set forth updates to the SNF PPS payment rates for FY 2016 (80 FR 46390, August 4, 2015).
Section 1888(e)(4)(H) of the Act specifies that we provide for publication annually in the
• The unadjusted federal per diem rates to be applied to days of covered SNF services furnished during the upcoming FY.
• The case-mix classification system to be applied for these services during the upcoming FY.
• The factors to be applied in making the area wage adjustment for these services.
Along with other revisions discussed later in this preamble, this final rule would provide the required annual updates to the per diem payment rates for SNFs for FY 2017.
In response to the publication of the FY 2017 SNF PPS proposed rule, we received 95 public comments from individuals, providers, corporations, government agencies, private citizens, trade associations, and major organizations. The following are brief summaries of each proposed provision, a summary of the public comments that we received related to that proposal, and our responses to the comments.
In addition to the comments we received on specific proposals contained within the proposed rule (which we address later in this final rule), commenters also submitted the following, more general, observations on the SNF PPS and SNF care generally. A discussion of these comments, along with our responses, appears below.
Under section 1888(e)(4) of the Act, the SNF PPS uses per diem federal payment rates based on mean SNF costs in a base year (FY 1995) updated for inflation to the first effective period of the PPS. We developed the federal payment rates using allowable costs from hospital-based and freestanding SNF cost reports for reporting periods beginning in FY 1995. The data used in developing the federal rates also incorporated a Part B add-on, which is an estimate of the amounts that, prior to the SNF PPS, would have been payable under Part B for covered SNF services furnished to individuals during the course of a covered Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to the first effective year of the PPS (the 15-month period beginning July 1, 1998) using a SNF market basket index, and then standardized for geographic variations in wages and for the costs of facility differences in case mix. In compiling the database used to compute the federal payment rates, we excluded those providers that received new provider exemptions from the routine cost limits, as well as costs related to payments for exceptions to the routine cost limits. Using the formula that the BBA prescribed, we set the federal rates at a level equal to the weighted mean of freestanding costs plus 50 percent of the difference between the freestanding mean and weighted mean of all SNF costs (hospital-based and freestanding) combined. We computed and applied separately the payment rates for facilities located in urban and rural areas, and adjusted the portion of the federal rate attributable to wage-related costs by a wage index to reflect geographic variations in wages.
Section 1888(e)(5)(A) of the Act requires us to establish a SNF market basket index that reflects changes over time in the prices of an appropriate mix of goods and services included in covered SNF services. Accordingly, we have developed a SNF market basket index that encompasses the most commonly used cost categories for SNF routine services, ancillary services, and capital-related expenses. We use the SNF market basket index, adjusted in the manner described below, to update the federal rates on an annual basis. In the SNF PPS final rule for FY 2014 (78 FR 47939 through 47946), we revised and rebased the market basket, which included updating the base year from FY 2004 to FY 2010.
For the FY 2017 proposed rule, the FY 2010-based SNF market basket growth rate was estimated to be 2.6 percent, which was based on the IHS Global Insight Inc. (IGI) first quarter 2016 forecast, with historical data through fourth quarter 2015. However, as discussed in the FY 2017 SNF PPS proposed rule (81 FR 24234), we proposed that if more recent data become available (for example, a more recent estimate of the FY 2010 based SNF market basket and/or MFP adjustment), we would use such data, if appropriate, to determine the FY 2017 SNF market basket percentage change, labor-related share relative importance, forecast error adjustment, and MFP adjustment in this final rule. Since that time, we have received an updated FY
Section 1888(e)(5)(B) of the Act defines the SNF market basket percentage as the percentage change in the SNF market basket index from the midpoint of the previous FY to the midpoint of the current FY. For the federal rates set forth in this final rule, we use the percentage change in the SNF market basket index to compute the update factor for FY 2017. This is based on the IGI second quarter 2016 forecast (with historical data through the first quarter 2016) of the FY 2017 percentage increase in the FY 2010-based SNF market basket index for routine, ancillary, and capital-related expenses, which is used to compute the update factor in this final rule. As discussed in sections III.B.2.c. and III.B.2.d. of this final rule, this market basket percentage change is reduced by the applicable forecast error correction (as described in § 413.337(d)(2)) and by the MFP adjustment as required by section 1888(e)(5)(B)(ii) of the Act. Finally, as discussed in section II.B. of this final rule, we no longer compute update factors to adjust a facility-specific portion of the SNF PPS rates, because the initial three-phase transition period from facility-specific to full federal rates that started with cost reporting periods beginning in July 1998 has expired.
As discussed in the June 10, 2003 supplemental proposed rule (68 FR 34768) and finalized in the August 4, 2003, final rule (68 FR 46057 through 46059), § 413.337(d)(2) provides for an adjustment to account for market basket forecast error. The initial adjustment for market basket forecast error applied to the update of the FY 2003 rate for FY 2004, and took into account the cumulative forecast error for the period from FY 2000 through FY 2002, resulting in an increase of 3.26 percent to the FY 2004 update. Subsequent adjustments in succeeding FYs take into account the forecast error from the most recently available FY for which there are final data, and apply the difference between the forecasted and actual change in the market basket when the difference exceeds a specified threshold. We originally used a 0.25 percentage point threshold for this purpose; however, for the reasons specified in the FY 2008 SNF PPS final rule (72 FR 43425, August 3, 2007), we adopted a 0.5 percentage point threshold effective for FY 2008 and subsequent FYs. As we stated in the final rule for FY 2004 that first issued the market basket forecast error adjustment (68 FR 46058, August 4, 2003), the adjustment will reflect both upward and downward adjustments, as appropriate.
For FY 2015 (the most recently available FY for which there is final data), the estimated increase in the market basket index was 2.5 percentage points, while the actual increase for FY 2015 was 2.3 percentage points, resulting in the actual increase being 0.2 percentage point lower than the estimated increase. Accordingly, as the difference between the estimated and actual amount of change in the market basket index does not exceed the 0.5 percentage point threshold, the FY 2017 market basket percentage change of 2.7 percent will be not adjusted to account for the forecast error. Table 1 shows the forecasted and actual market basket amounts for FY 2015.
Section 3401(b) of the Affordable Care Act requires that, in FY 2012 (and in subsequent FYs), the market basket percentage under the SNF payment system as described in section 1888(e)(5)(B)(i) of the Act is to be reduced annually by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act, added by section 3401(a) of the Affordable Care Act, sets forth the definition of this productivity adjustment. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (as projected by the Secretary for the 10-year period ending with the applicable FY, year, cost-reporting period, or other annual period) (the MFP adjustment). The Bureau of Labor Statistics (BLS) is the agency that publishes the official measure of private nonfarm business MFP. We refer readers to the BLS Web site at
MFP is derived by subtracting the contribution of labor and capital inputs growth from output growth. The projections of the components of MFP are currently produced by IGI, a nationally recognized economic forecasting firm with which CMS contracts to forecast the components of the market baskets and MFP. To generate a forecast of MFP, IGI replicates the MFP measure calculated by the BLS, using a series of proxy variables derived from IGI's U.S. macroeconomic models. For a discussion of the MFP projection methodology, we refer readers to the FY 2012 SNF PPS final rule (76 FR 48527 through 48529) and the FY 2016 SNF PPS final rule (80 FR 46395). A complete description of the MFP projection methodology is available on our Web site at
Per section 1888(e)(5)(A) of the Act, the Secretary shall establish a SNF market basket index that reflects changes over time in the prices of an appropriate mix of goods and services included in covered SNF services. Section 1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the Affordable Care Act, requires that for FY 2012 and each subsequent FY, after determining the market basket percentage described in section 1888(e)(5)(B)(i) of the Act, the Secretary shall reduce such percentage by the
For the FY 2017 update, the MFP adjustment is calculated as the 10-year moving average of changes in MFP for the period ending September 30, 2017. In the FY 2017 SNF PPS proposed rule, this adjustment was calculated to be 0.5 percent. However, as discussed in the FY 2017 SNF PPS proposed rule (81 FR 24234), we proposed that if more recent data become available (for example, a more recent estimate of the FY 2010-based SNF market basket and/or MFP adjustment), we would use such data, if appropriate, to determine, among other things, the FY 2017 SNF market basket percentage change and the MFP adjustment in this final rule. Therefore, based on IGI's most recent second quarter 2016 forecast (with historical data through first quarter 2016), the MFP adjustment for FY 2017 is 0.3 percent. Consistent with section 1888(e)(5)(B)(i) of the Act and § 413.337(d)(2) of the regulations, the market basket percentage for FY 2017 for the SNF PPS is based on IGI's second quarter 2016 forecast of the SNF market basket update, which is estimated to be 2.7 percent, as adjusted by any applicable forecast error adjustment (as discussed above, in this final rule, we are not applying a forecast error adjustment to the SNF market basket update). In accordance with section 1888(e)(5)(B)(ii) of the Act (as added by section 3401(b) of the Affordable Care Act) and § 413.337(d)(3), this market basket percentage is then reduced by the MFP adjustment (the 10-year moving average of changes in MFP for the period ending September 30, 2017) of 0.3 percent, which is calculated as described above and based on IGI's second quarter 2016 forecast. The resulting MFP-adjusted SNF market basket update is equal to 2.4 percent, or 2.7 percent less 0.3 percentage point.
Sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5)(i) of the Act require that the update factor used to establish the FY 2017 unadjusted federal rates be at a level equal to the market basket index percentage change. Accordingly, we determined the total growth from the average market basket level for the period of October 1, 2015 through September 30, 2016 to the average market basket level for the period of October 1, 2016 through September 30, 2017. This process yields a percentage change in the market basket of 2.7 percent.
As further explained in section III.B.2.c. of this final rule, as applicable, we adjust the market basket percentage change by the forecast error from the most recently available FY for which there is final data and apply this adjustment whenever the difference between the forecasted and actual percentage change in the market basket exceeds a 0.5 percentage point threshold. Since the difference between the forecasted FY 2015 SNF market basket percentage change and the actual FY 2015 SNF market basket percentage change (FY 2015 is the most recently available FY for which there is historical data) did not exceed the 0.5 percentage point threshold, the FY 2017 market basket percentage change of 2.7 percent will not be adjusted by the forecast error correction.
For FY 2017, section 1888(e)(5)(B)(ii) of the Act requires us to reduce the market basket percentage change by the MFP adjustment (the 10-year moving average of changes in MFP for the period ending September 30, 2017) of 0.3 percent, as described in section III.B.2.d. of this final rule. The resulting net SNF market basket update would equal 2.4 percent, or 2.7 percent less the 0.3 percentage point MFP adjustment. A discussion of the general comments that we received on the market basket update factor for FY 2017, and our responses to those comments, appears below.
Additionally, as further discussed in section III.B.4., we also discovered an error in the calculation of the proposed FY 2017 wage index budget neutrality factor, which also impacted the calculation of the proposed FY 2017 unadjusted federal per diem rates set forth in the proposed rule (81 FR 24234) (as well as the impact analysis provided in Table 19 of the FY 2017 SNF PPS proposed rule (81 FR 24278), as further discussed in section VI.A.4. of this final rule).
We appreciate the commenter bringing this error to our attention. The corrected final FY 2017 SNF PPS unadjusted federal per diem rates are set forth below in Tables 2 and 3. We further note that, as described previously in this section, the FY 2017 market basket update factor and MFP adjustment were both updated in advance of the final rule. As such, the FY 2017 unadjusted federal per diem rates provided in Tables 2 and 3 reflect the updated FY 2017 market basket increase factor and MFP adjustment, as well as the corrected FY 2016 unadjusted federal per diem rates and corrected wage index budget neutrality factor which serve as the foundation for calculating the FY 2017 unadjusted federal per diem rates.
Accordingly, for the reasons specified in this final rule and in the FY 2017 SNF PPS proposed rule (81 FR 24230), we are applying the FY 2017 market basket factor, as adjusted by the MFP adjustment as described above, in our determination of the FY 2017 unadjusted federal per diem rates. We used the SNF market basket, adjusted as described previously, to adjust each per diem component of the federal rates forward to reflect the change in the average prices for FY 2017 from average prices for FY 2016. We further adjusted the rates by a wage index budget neutrality factor, described later in this section. Tables 2 and 3 reflect the updated components of the unadjusted federal rates for FY 2017, prior to adjustment for case-mix. As discussed previously in this section, the unadjusted federal per diem rates provided below reflect the updated FY 2017 market basket update factor, as adjusted by the updated MFP adjustment, and the corrections to the FY 2016 unadjusted federal per diem rates and the FY 2017 wage index budget neutrality factor described previously.
Under section 1888(e)(4)(G)(i) of the Act, the federal rate also incorporates an adjustment to account for facility case-mix, using a classification system that accounts for the relative resource utilization of different patient types. The statute specifies that the adjustment is to reflect both a resident classification system that the Secretary establishes to account for the relative resource use of different patient types, as well as resident assessment data and other data that the Secretary considers appropriate. In the interim final rule with comment period that initially implemented the SNF PPS (63 FR 26252, May 12, 1998), we developed the RUG-III case-mix classification system, which tied the amount of payment to resident resource
We note that case-mix classification is based, in part, on the beneficiary's need for skilled nursing care and therapy services. The case-mix classification system uses clinical data from the MDS to assign a case-mix group to each patient that is then used to calculate a per diem payment under the SNF PPS. As discussed in section IV.A. of the FY 2017 SNF PPS proposed rule (81 FR 24241 through 24242), the clinical orientation of the case-mix classification system supports the SNF PPS's use of an administrative presumption that considers a beneficiary's initial case-mix classification to assist in making certain SNF level of care determinations. Further, because the MDS is used as a basis for payment, as well as a clinical assessment, we have provided extensive training on proper coding and the time frames for MDS completion in our Resident Assessment Instrument (RAI) Manual. For an MDS to be considered valid for use in determining payment, the MDS assessment must be completed in compliance with the instructions in the RAI Manual in effect at the time the assessment is completed. For payment and quality monitoring purposes, the RAI Manual consists of both the Manual instructions and the interpretive guidance and policy clarifications posted on the appropriate MDS Web site at
In addition, we note that section 511 of the MMA, amended section 1888(e)(12) of the Act, to provide for a temporary increase of 128 percent in the PPS per diem payment for any SNF residents with Acquired Immune Deficiency Syndrome (AIDS), effective with services furnished on or after October 1, 2004. This special add-on for SNF residents with AIDS was to remain in effect until the Secretary certifies that there is an appropriate adjustment in the case mix to compensate for the increased costs associated with such residents. The add-on for SNF residents with AIDS is also discussed in Program Transmittal #160 (Change Request #3291), issued on April 30, 2004, which is available online at
Under section 1888(e)(4)(H) of the Act, each update of the payment rates must include the case-mix classification methodology applicable for the upcoming FY. The payment rates set forth in this final rule reflect the use of the RUG-IV case-mix classification system from October 1, 2016, through September 30, 2017. We list the case-mix adjusted RUG-IV payment rates, provided separately for urban and rural SNFs, in Tables 4 and 5 with corresponding case-mix values. We use the revised OMB delineations adopted in the FY 2015 SNF PPS final rule (79 FR 45632, 45634) to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to the facility. Tables 4 and 5 do not reflect the add-on for SNF residents with AIDS enacted by section 511 of the MMA, which we apply only after making all other adjustments (such as wage index and case-mix). We would note that the case mix adjusted rates provided below are based on the FY 2017 unadjusted federal per diem rates provided in Tables 2 and 3 of this section, which reflect the updated FY 2017 SNF market basket update factor and updated MFP adjustment, as well as corrections to the errors associated with the unadjusted federal per diem rates published in the FY 2017 SNF PPS proposed rule (81 FR 24234) described previously in this section.
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the federal rates to account for differences in area wage levels, using a wage index that the Secretary determines appropriate. Since the inception of the SNF PPS, we have used hospital inpatient wage data in developing a wage index to be applied to SNFs. We proposed to continue this practice for FY 2017, as we continue to believe that in the absence of SNF-specific wage data, using the hospital inpatient wage index data is appropriate and reasonable for the SNF PPS. As explained in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not use the hospital area wage index's occupational mix adjustment, as this adjustment serves specifically to define the occupational categories more clearly in a hospital setting; moreover, the collection of the occupational wage data also excludes any wage data related to SNFs. Therefore, we believe that using the updated wage data exclusive of the occupational mix adjustment continues to be appropriate for SNF payments. For FY 2017, the updated wage data are for
We note that section 315 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554, enacted on December 21, 2000) authorized us to establish a geographic reclassification procedure that is specific to SNFs, but only after collecting the data necessary to establish a SNF wage index that is based on wage data from nursing homes. However, to date, this has proven to be unfeasible due to the volatility of existing SNF wage data and the significant amount of resources that would be required to improve the quality of that data.
In addition, we proposed to continue to use the same methodology discussed in the SNF PPS final rule for FY 2008 (72 FR 43423) to address those geographic areas in which there are no hospitals, and thus, no hospital wage index data on which to base the calculation of the FY 2017 SNF PPS wage index. For rural geographic areas that do not have hospitals, and therefore, lack hospital wage data on which to base an area wage adjustment, we would use the average wage index from all contiguous Core-Based Statistical Areas (CBSAs) as a reasonable proxy. For FY 2017, there are no rural geographic areas that do not have hospitals, and thus, this methodology would not be applied. For rural Puerto Rico, we would not apply this methodology due to the distinct economic circumstances that exist there (for example, due to the close proximity to one another of almost all of Puerto Rico's various urban and non-urban areas, this methodology would produce a wage index for rural Puerto Rico that is higher than that in half of its urban areas); instead, we would continue to use the most recent wage index previously available for that area. For urban areas without specific hospital wage index data, we would use the average wage indexes of all of the urban areas within the state to serve as a reasonable proxy for the wage index of that urban CBSA. For FY 2017, the only urban area without wage index data available is CBSA 25980, Hinesville-Fort Stewart, GA. The wage index applicable to FY 2017 is set forth in Tables A and B available on the CMS Web site at
Once calculated, we would apply the wage index adjustment to the labor-related portion of the federal rate. Each year, we calculate a revised labor-related share, based on the relative importance of labor-related cost categories (that is, those cost categories that are labor-intensive and vary with the local labor market) in the input price index. In the SNF PPS final rule for FY 2014 (78 FR 47944 through 47946), we finalized a proposal to revise the labor-related share to reflect the relative importance of the FY 2010-based SNF market basket cost weights for the following cost categories: Wages and salaries; employee benefits; the labor-related portion of nonmedical professional fees; administrative and facilities support services; all other: Labor-related services; and a proportion of capital-related expenses.
We calculate the labor-related relative importance from the SNF market basket, and it approximates the labor-related portion of the total costs, after taking into account historical and projected price changes between the base year and FY 2017. The price proxies that move the different cost categories in the market basket do not necessarily change at the same rate, and the relative importance captures these changes. Accordingly, the relative importance figure more closely reflects the cost share weights for FY 2017 than the base year weights from the SNF market basket.
We calculate the labor-related relative importance for FY 2017 in four steps. First, we compute the FY 2017 price index level for the total market basket and each cost category of the market basket. Second, we calculate a ratio for each cost category by dividing the FY 2017 price index level for that cost category by the total market basket price index level. Third, we determine the FY 2017 relative importance for each cost category by multiplying this ratio by the base year (FY 2010) weight. Finally, we add the FY 2017 relative importance for each of the labor-related cost categories (wages and salaries, employee benefits, the labor-related portion of non-medical professional fees, administrative and facilities support services, all other: Labor-related services, and a portion of capital-related expenses) to produce the FY 2017 labor-related relative importance. Table 6 summarizes the updated labor-related share for FY 2017, compared to the labor-related share that was used for the FY 2016 SNF PPS final rule. In the FY 2017 SNF PPS proposed rule, the labor-related share for FY 2017 was proposed to be 68.9 percent. However, as discussed in the FY 2017 SNF PPS proposed rule (81 FR 24234), we proposed that if more recent data become available, we would use such data, if appropriate, to determine, among other things, the FY 2017 SNF labor related share. Therefore, based on IGI's most recent second quarter 2016 forecast (with historical data through first quarter 2016), the labor-related share for FY 2017 is 68.8 percent.
We invited public comments on these proposals. A discussion of the comments we received on these proposals, as well as a discussion of the general comments we received on the wage index adjustment, and our responses to those comments, appears below.
Accordingly, after considering the comments received and for the reasons discussed previously in this section and in the FY 2017 SNF PPS proposed rule (81 FR 24237 through 24241), we are finalizing the FY 2017 wage index adjustment and related policies as proposed in the FY 2017 SNF PPS proposed rule. For FY 2017, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2012 and before October 1, 2013 (FY 2013 cost report data). Table 6 summarizes the updated labor-related share for FY 2017, compared to the labor-related share that was used in the FY 2016 SNF PPS final rule.
Tables 7 and 8 show the RUG-IV case-mix adjusted federal rates by labor-related and non-labor-related components.
Section 1888(e)(4)(G)(ii) of the Act also requires that we apply this wage index in a manner that does not result in aggregate payments under the SNF PPS that are greater or less than would otherwise be made if the wage adjustment had not been made. For FY 2017 (federal rates effective October 1, 2016), we will apply an adjustment to fulfill the budget neutrality requirement. We meet this requirement by multiplying each of the components of the unadjusted federal rates by a budget neutrality factor equal to the ratio of the weighted average wage adjustment factor for FY 2016 to the weighted average wage adjustment factor for FY 2017. For this calculation, we use the same FY 2015 claims utilization data for both the numerator and denominator of this ratio. We define the wage adjustment factor used in this calculation as the labor share of the rate component multiplied by the wage index plus the non-labor share of the rate component. The budget neutrality factor stated in the FY 2017 SNF PPS proposed rule was 1.0000. However, we discovered that in calculating the FY 2017 proposed wage index budget neutrality factor, we inadvertently failed to update the wage index data used in the calculation with the most recently available FY 2017 data. This resulted in a budget neutrality factor of 1.000, whereas, using the most recently available wage index data at the time of the proposed rule, the proposed factor should have been 0.9997. Moreover, because the wage index data used were incorrect and because the wage index is the primary source of variation in the impacts calculated in the regulatory impact analysis, the error which caused the incorrect calculation of the wage index budget neutrality factor in the proposed rule also affected the wage index impacts in Table 19 of the FY 2017 SNF PPS proposed rule (Projected Impact to the SNF PPS for FY 2017) (81 FR 24278). These impacts are discussed further in section V.A.4. of this final rule. We have recalculated the wage index budget neutrality factor for FY 2017 utilizing updated wage index data, and the final budget neutrality factor for FY 2017 is 1.0000.
In the SNF PPS final rule for FY 2006 (70 FR 45026, August 4, 2005), we adopted the changes discussed in the OMB Bulletin No. 03-04 (June 6, 2003), available online at
In adopting the CBSA geographic designations, we provided for a 1-year transition in FY 2006 with a blended wage index for all providers. For FY 2006, the wage index for each provider consisted of a blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent of the FY 2006 CBSA-based wage index (both using FY 2002 hospital data). We referred to the blended wage index as the FY 2006 SNF PPS transition wage index. As discussed in the SNF PPS final rule for FY 2006 (70 FR 45041), since the expiration of this 1-year transition on September 30, 2006, we have used the full CBSA-based wage index values.
Generally, OMB issues major revisions to statistical areas every 10 years, based on the results of the decennial census. In the FY 2015 SNF PPS final rule (79 FR 45644 through 45646), we finalized changes to the SNF PPS wage index based on the newest OMB delineations, as described in OMB Bulletin No. 13-01, beginning in FY 2015, including a 1-year transition with a blended wage index for FY 2015. OMB Bulletin No. 13-01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico based on the 2010 Census, and provided guidance on the use of the delineations of these statistical areas using standards published in the June 28, 2010
Using the hypothetical SNF XYZ described below, Table 9 shows the adjustments made to the federal per diem rates to compute the provider's actual per diem PPS payment. We derive the Labor and Non-labor columns from Table 7. The wage index used in this example is based on the final wage index, which may be found in Table A as referenced previously in this section. As illustrated in Table 9, SNF XYZ's total PPS payment would equal $46,861.86.
The establishment of the SNF PPS did not change Medicare's fundamental requirements for SNF coverage. However, because the case-mix classification is based, in part, on the beneficiary's need for skilled nursing care and therapy, we have attempted, where possible, to coordinate claims review procedures with the existing resident assessment process and case-mix classification system discussed in section III.B.3. of this final rule. This approach includes an administrative presumption that utilizes a beneficiary's initial classification in one of the upper 52 RUGs of the 66-group RUG-IV case-mix classification system to assist in making certain SNF level of care determinations.
In accordance with section 1888(e)(4)(H)(ii) of the Act and the regulations at § 413.345, we include in each update of the federal payment rates in the
A beneficiary assigned to any of the lower 14 RUG-IV groups is not automatically classified as either meeting or not meeting the definition, but instead receives an individual level of care determination using the existing administrative criteria. This presumption recognizes the strong likelihood that beneficiaries assigned to one of the upper 52 RUG-IV groups during the immediate post-hospital period require a covered level of care, which would be less likely for those beneficiaries assigned to one of the lower 14 RUG-IV groups.
In the July 30, 1999 final rule (64 FR 41670), we indicated that we would announce any changes to the guidelines for Medicare level of care determinations related to modifications in the case-mix classification structure. In this final rule, we continue to designate the upper 52 RUG-IV groups for purposes of this administrative presumption, consisting of all groups encompassed by the following RUG-IV categories:
• Rehabilitation plus Extensive Services.
• Ultra High Rehabilitation.
• Very High Rehabilitation.
• High Rehabilitation.
• Medium Rehabilitation.
• Low Rehabilitation.
• Extensive Services.
• Special Care High.
• Special Care Low.
• Clinically Complex.
However, we note that this administrative presumption policy does not supersede the SNF's responsibility to ensure that its decisions relating to level of care are appropriate and timely, including a review to confirm that the services prompting the beneficiary's assignment to one of the upper 52 RUG-IV groups (which, in turn, serves to trigger the administrative presumption) are themselves medically necessary. As we explained in the FY 2000 SNF PPS final rule (64 FR 41667), the administrative presumption:
. . . is itself rebuttable in those individual cases in which the services actually received by the resident do not meet the basic statutory criterion of being reasonable and necessary to diagnose or treat a beneficiary's condition (according to section 1862(a)(1) of the Act). Accordingly, the presumption would not apply, for example, in those situations in which a resident's assignment to one of the upper . . . groups is itself based on the receipt of services that are subsequently determined to be not reasonable and necessary.
Moreover, we want to stress the importance of careful monitoring for changes in each patient's condition to determine the continuing need for Part A SNF benefits after the ARD of the 5-day assessment.
Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by section 4432(b) of the BBA) require a SNF to submit consolidated Medicare bills to its Medicare Administrative Contractor for almost all of the services that its residents receive during the course of a covered Part A stay. In addition, section 1862(a)(18) of the Act places the responsibility with the SNF for billing Medicare for physical therapy, occupational therapy, and speech-language pathology services that the resident receives during a noncovered stay. Section 1888(e)(2)(A) of the Act excludes a small list of services from the consolidated billing provision (primarily those services furnished by physicians and certain other types of practitioners), which remain separately billable under Part B when furnished to a SNF's Part A resident. These excluded service categories are discussed in greater detail in section V.B.2. of the May 12, 1998 interim final rule (63 FR 26295 through 26297).
A detailed discussion of the legislative history of the consolidated billing provision is available on the SNF PPS Web site at
As explained in the FY 2001 proposed rule (65 FR 19232), the amendments enacted in section 103 of the BBRA not only identified for exclusion from this provision a number of particular service codes within four specified categories (that is, chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices), but also gave the Secretary the authority to designate additional, individual services for exclusion within each of the specified service categories. In the proposed rule for FY 2001, we also noted that the BBRA Conference report (H.R. Rep. No. 106-479 at 854 (1999) (Conf. Rep.)) characterizes the individual services that this legislation targets for exclusion as high-cost, low probability events that could have devastating financial impacts because their costs far exceed the payment SNFs receive under the PPS. According to the conferees, section 103(a) of the BBRA is an attempt to exclude from the PPS certain services and costly items that are provided infrequently in SNFs. By contrast, we noted that the Congress declined to designate for exclusion any of the remaining services within those four categories (thus, leaving all of those services subject to SNF consolidated billing), because they are relatively inexpensive and are furnished routinely in SNFs.
As we further explained in the final rule for FY 2001 (65 FR 46790), and according to our longstanding policy, any additional service codes that we might designate for exclusion under our discretionary authority must meet the same statutory criteria used in identifying the original codes excluded from consolidated billing under section 103(a) of the BBRA: They must fall within one of the four service categories specified in the BBRA; and they also must meet the same standards of high cost and low probability in the SNF setting, as discussed in the BBRA Conference report. Accordingly, we characterized this statutory authority to identify additional service codes for exclusion as essentially affording the flexibility to revise the list of excluded codes in response to changes of major significance that may occur over time (for example, the development of new medical technologies or other advances in the state of medical practice) (65 FR 46791). In the FY 2017 SNF PPS proposed rule (81 FR 24242), we specifically invited public comments identifying HCPCS codes in any of these four service categories (chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices) representing recent medical advances that might meet our criteria for exclusion from SNF consolidated billing. We stated that we may consider excluding a particular service if it meets our criteria for exclusion as specified above. We also asked that commenters identify in their comments the specific HCPCS code that is associated with the service in question, as well as their rationale for requesting that the identified HCPCS code(s) be excluded.
Commenters submitted the following comments related to the proposed rule's discussion of the consolidated billing aspects of the SNF PPS. A discussion of these comments, along with our responses, appears below.
. . . is an attempt to exclude from the PPS certain services and costly items that are provided
Accordingly, we decline to exclude all high-cost oral chemotherapy drugs as a class from consolidated billing, because any such drugs that are capable of being “administered routinely in SNFs” are not reasonably characterized as “requiring special staff expertise to administer.” We note that in the SNF PPS final rules for FYs 2009 (73 FR 46436, August 8, 2008) and 2010 (74 FR 40353, August 11, 2009), we declined to exclude certain oral medications suggested by commenters for the same reason. In addition, the BBRA Conference Report language (H. Conf. Rep. No. 106-479 at 854) further indicates that the term “high-cost” in this context would not serve to encompass a routinely-used chemotherapy drug merely because its cost somewhat exceeds the typical range of drug costs encountered in this setting; rather, this provision is directed specifically at those uncommon chemotherapy drugs that are so exceptionally expensive as to “. . . have
With reference to orthotics, in the FY 2016 SNF PPS final rule (80 FR 46407, August 4, 2015), we explained that while the law does specify customized prosthetic devices as one of the exclusion categories, this is a separate and distinct category from orthotics and does not encompass orthotics. Moreover, as already noted in this and previous final rules, the statutory authority to designate additional services for exclusion applies
Section 1883 of the Act permits certain small, rural hospitals to enter into a Medicare swing-bed agreement, under which the hospital can use its beds to provide either acute- or SNF-level care, as needed. For critical access hospitals (CAHs), Part A pays on a reasonable cost basis for SNF-level services furnished under a swing-bed agreement. However, in accordance with section 1888(e)(7) of the Act, these services furnished by non-CAH rural hospitals are paid under the SNF PPS, effective with cost reporting periods beginning on or after July 1, 2002. As explained in the FY 2002 final rule (66 FR 39562), this effective date is consistent with the statutory provision to integrate swing-bed rural hospitals into the SNF PPS by the end of the transition period, June 30, 2002.
Accordingly, all non-CAH swing-bed rural hospitals have now come under the SNF PPS. Therefore, all rates and wage indexes outlined in earlier sections of this proposed rule for the SNF PPS also apply to all non-CAH swing-bed rural hospitals. A complete discussion of assessment schedules, the MDS, and the transmission software (RAVEN-SB for Swing Beds) appears in the FY 2002 final rule (66 FR 39562) and in the FY 2010 final rule (74 FR 40288). As finalized in the FY 2010 SNF PPS final rule (74 FR 40356 through 40357), effective October 1, 2010, non-CAH swing-bed rural hospitals are required to complete an MDS 3.0 swing-bed assessment which is limited to the required demographic, payment, and quality items. The latest changes in the MDS for swing-bed rural hospitals appear on the SNF PPS Web site at
Section 215 of the Protecting Access to Medicare Act of 2014 (PAMA) authorizes the SNF VBP Program by adding sections 1888(g) and (h) to the Act. These sections provide structure for the development of the SNF VBP Program, including, among other things, the requirement of only two measures—an all-cause, all-condition hospital readmission measure, which is to be replaced as soon as practicable by an all-condition risk-adjusted potentially preventable hospital readmission measure—and confidential and public reporting requirements for the SNF VBP Program. We began development of the SNF VBP Program in the FY 2016 SNF PPS final rule with, among other things, the adoption of an all-cause, all-condition hospital readmission measure, as required under section 1888(g)(1) of the Act. We will continue the process in this final rule with our adoption of an all-condition risk-adjusted potentially preventable hospital readmission measure for SNFs, which the Secretary is required to specify no later than October 1, 2016 under section 1888(g)(2) of the Act. The Act requires that the SNF VBP apply to payments for services furnished on or after October 1, 2018. The SNF VBP Program applies to freestanding SNFs, SNFs affiliated with acute care facilities, and all non-CAH swing-bed rural hospitals. We believe the implementation of the SNF VBP Program is an important step toward transforming how care is paid for, moving increasingly toward rewarding better value, outcomes, and innovations instead of merely volume.
For additional background information on the SNF VBP Program, including an overview of the SNF VBP Report to Congress and a summary of the Program's statutory requirements, we refer readers to the FY 2016 SNF PPS final rule (80 FR 46409 through 46410).
We received a number of general comments on the Program.
We will consider major care innovations as they arise in clinical literature and in care delivery and will work with SNFs and stakeholders in order to encourage their proliferation.
We thank the commenters for this feedback.
Per the requirement at section 1888(g)(1) of the Act, in the FY 2016 SNF PPS final rule (80 FR 46419), we finalized our proposal to specify the SNF 30-Day All-Cause Readmission Measure (SNFRM) (NQF #2510) as the SNF all-cause, all-condition hospital readmission measure for the SNF VBP Program. The SNFRM assesses the risk-standardized rate of all-cause, all-condition, unplanned inpatient hospital readmissions of Medicare fee-for-service (FFS) SNF patients within 30 days of discharge from an admission to an inpatient prospective payment system (IPPS) hospital, CAH, or psychiatric hospital. The measure is claims-based, requiring no additional data collection or submission burden for SNFs. For additional details on the SNFRM, including our responses to public comments, we refer readers to the FY 2016 SNF PPS final rule (80 FR 46411 through 46419).
We received one comment on the SNFRM.
We proposed to specify the SNF 30-Day Potentially Preventable Readmission Measure (SNFPPR) as the SNF all-condition risk-adjusted potentially preventable hospital readmission measure to meet the requirements of section 1888(g)(2) of the Act. This proposed measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for SNF patients within 30 days of discharge from a prior admission to an IPPS hospital, CAH, or psychiatric hospital. Hospital readmissions include readmissions to a short-stay acute-care hospital or CAH, with a diagnosis considered to be unplanned and potentially preventable. This proposed measure is claims-based, requiring no additional data collection or submission burden for SNFs.
Hospital readmissions among the Medicare population, including beneficiaries that utilize post-acute care, are common, costly, and often preventable.
We have addressed the high rates of hospital readmissions in the acute care setting, as well as in PAC by developing the SNF 30-Day All-Cause Readmission Measure (NQF #2510), as well as similar measures for other PAC providers (NQF #2502 for IRFs and NQF #2512 for LTCHs).
Several general methods and algorithms have been developed to assess potentially avoidable or preventable hospitalizations and readmissions for the Medicare population. These include the Agency for Healthcare Research and Quality's (AHRQ) Prevention Quality Indicators, approaches developed by MedPAC, and proprietary approaches, such as the 3M
Based on the evidence discussed above and to meet PAMA requirements, we proposed to specify this measure, entitled, SNF 30-Day Potentially Preventable Readmission Measure (SNFPPR), for the SNF VBP Program. The SNFPPR measure was developed by CMS to harmonize with the NQF-endorsed SNF 30-Day All-Cause Readmission Measure (NQF #2510)
The SNFPPR measure estimates the risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries that occur within 30 days of discharge from the prior proximal hospitalization. This is a departure from readmission measures in other PAC settings, such as the two measures being adopted in the Inpatient Rehabilitation Facility (IRF) Quality Reporting Program, one of which assesses readmissions that take place during the IRF stay and the other that assesses readmissions within 30 days following discharge from the IRF. The SNFPPR measure is distinct because section 1888(h)(2) of the Act requires that only a single quality measure be implemented in the SNF VBP program at one time. A purely within-stay measure (that is, a measure that assesses readmission rates only when those readmissions occurred during a SNF stay) would perversely incentivize the premature discharge of residents from SNFs to avoid penalty. Conversely, limiting the measure to readmissions that occur within 30-days post-discharge from the SNF would not capture readmissions that occur during the SNF stay. In order to qualify for this measure, the SNF admission must take place within 1 day of discharge from a prior proximal hospital stay. The prior proximal hospital stay is defined as an inpatient admission to an acute care hospital (including IPPS, CAH, or a psychiatric hospital). Because the measure denominator is based on SNF admissions, a single Medicare beneficiary could be included in the measure multiple times within a given year. Readmissions counted in this measure are identified by examining Medicare FFS claims data for readmissions to either acute care hospitals (IPPS or CAH) that occur within 30 days of discharge from the prior proximal hospitalization, regardless of whether the readmission occurs during the SNF stay or takes
This SNFPPR measure focuses on readmissions that are potentially preventable and also unplanned. Similar to the SNF 30-Day All-Cause Readmission Measure (SNFRM) (NQF #2510), this measure uses the CMS Planned Readmission Algorithm to define planned readmissions. In addition to the CMS Planned Readmission Algorithm, this measure incorporates procedures that are considered planned in post-acute care settings, as identified in consultation with TEPs. Full details on the planned readmissions criteria used, including the additional procedures considered planned for post-acute care, can be found in the Measure Specifications (available at
This measure assesses potentially preventable readmission rates while accounting for patient or resident demographics, principal diagnosis in the prior hospital stay, comorbidities, and other patient factors. The model also estimates a facility-specific effect, common to patients or residents treated in each facility. This measure is calculated for each SNF based on the ratio of the predicted number of risk-adjusted, unplanned, potentially preventable hospital readmissions that occurred within 30 days of discharge from the prior proximal hospitalization, including the estimated facility effect, to the estimated predicted number of risk-adjusted, unplanned hospital readmissions for the same individuals receiving care at the average SNF. A ratio above 1.0 indicates a higher than expected readmission rate (worse), while a ratio below 1.0 indicates a lower than expected readmission rate (better). This ratio is referred to as the standardized risk ratio or SRR. The SRR is then multiplied by the overall national raw rate of potentially preventable readmissions for all SNF stays. The resulting rate is the risk-standardized readmission rate (RSRR) of potentially preventable readmissions. The full methodology is detailed in the Measure Specifications (available at
Eligible SNF stays in the measure are assessed until: (1) The 30-day period ends; or (2) the patient is readmitted to an acute care hospital (IPPS or CAH). If the readmission is classified as unplanned and potentially preventable, it is counted as a readmission in the measure calculation. If the readmission is planned or not preventable, the readmission is not counted in the measure rate.
Readmission rates are risk-adjusted for case-mix characteristics. The risk adjustment modeling estimates the effects of patient/resident characteristics, comorbidities, and select health care variables on the probability of readmission. More specifically, the risk-adjustment model for SNFs accounts for sociodemographic characteristics (age, sex, original reason for entitlement), principal diagnosis during the prior proximal hospital stay, body system specific surgical indicators, comorbidities, length of stay during the resident's prior proximal hospital stay, intensive care utilization, end-stage renal disease status, and number of prior acute care hospitalizations in the preceding 365 days. This measure is calculated using one full calendar year of data. The full measure specifications and results of the reliability testing can be found in the Measure Specifications (available at
Our measure development contractor convened a TEP, which provided input on the technical specifications of this measure, including the development of an approach to define potentially preventable hospital readmissions for a number of PAC settings, including SNFs. Details from the TEP meetings, including TEP members' ratings of conditions proposed as being potentially preventable, are available in the TEP Summary Report available on the CMS Web site at
In addition to our TEP and public comment feedback, we also considered input from the Measures Application Partnership (MAP) on the SNFPPR. The MAP is composed of multi-stakeholder groups convened by the NQF. The MAP provides input on the measures we are considering for implementation in certain quality reporting and pay-for-performance programs. In general, the MAP has noted the need for care
The MAP encouraged continued development of the measure in the SNF VBP Program to meet the mandate of PAMA. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP's recommendations for this measure is available at
We invited public comment on our proposal to adopt this measure, the SNF 30-Day Potentially Preventable Readmission Measure (SNFPPR). The comments we received on this topic, with their responses, appear below.
We believe that the proposed risk adjustment methodology appropriately adjusts for SNFs' patient mix when calculating readmissions, particularly because the measure's risk adjustments were developed to harmonize with the Hospital Wide Readmission (HWR) measure (NQF #1789), and the SNFRM. We describe the risk adjustment variables in more detail in the draft SNF PPR technical report, which is available on our Web site at
With respect to emergency room visits, we note while such visits can certainly be negative outcomes for patients, they are not readmissions within the definitions we have adopted for measures of readmissions. We agree with commenters that mortality is also an important clinical outcome, but in other settings where we assess both readmission and mortality rates, the two types of measures seem to correlate,
Readmissions may be considered potentially preventable even if they may not appear to be clinically related to the patient's original reason for SNF admission. There is substantial evidence that the conditions included in the definition are preventable with sufficient medical monitoring and appropriate patient treatment during the SNF stay or adequately planned, explained, and implemented post-discharge instructions, including effective care coordination ensuring appropriate follow-up care after SNF discharge. Furthermore, this measure is based on Medicare claims data and it may not always be feasible to determine whether a subsequent readmission is or is not clinically related to the reason why the patient was admitted to the SNF.
With respect to socioeconomic or sociodemographic adjustment, we note that the NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. This trial entails temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are encouraged to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model. Several measures developed by CMS have been brought to NQF since the beginning of the trial. We, consistent with NQF's guidance to measure developers, have tested sociodemographic factors in the measures' risk models and made recommendations about whether or not to include these factors in the endorsed measure. We intend to continue engaging in the NQF process as we consider the appropriateness of adjusting for sociodemographic factors in our outcome measures.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related recommendations and consider how they apply to our quality programs at such time as they are available.
The readmission window used for the SNF measure proposed for the SNF QRP to meet the IMPACT Act requirements was developed to align with other post-acute care readmission measures. The focus of this post-PAC discharge readmission window is on assessing potentially preventable hospital readmissions during the 30 days after discharge. We believe that assessing PPRs during each of these readmission windows provides valuable information for their respective programs.
The 30-day readmission window used in both the SNFRM (NQF #2510) and the proposed SNFPPR was developed to harmonize with measures used in the hospital setting, including the NQF-endorsed Hospital-Wide Risk-Adjusted All-Cause Unplanned Readmission Measure (NQF #1789). This readmission window was also vetted by technical expert panels. We appreciate the suggestion to consider a 90-day readmission window; however, we believe it would be difficult to ensure that potentially preventable hospital readmissions occurring up to 90 days after prior hospital discharge are attributable to the SNF care received. As we noted previously in this section, the advantage of this window is that it assesses readmissions both during the SNF stay and post-SNF discharge for most SNF patients, depending on the SNF length of stay. For these measures, the focus is on transitions to the SNF from the prior proximal hospital stay, and we believe the alignment to be appropriate since the SNF VBP Program's statute specifically directs us to adopt measures of hospital readmissions.
We intend to conduct ongoing evaluation and monitoring to assess for potential unintended consequences associated with the implementation of this measure. We will report results of our monitoring for potential unintended consequences—including the potential of SNFs to push needed care just past the 30-day window—in future SNF PPS rules.
We agree with the comment that functional and cognitive status are potentially important predictors of readmission outcomes. We intend to evaluate the feasibility of including functional and cognitive status in the future, including using standardized assessment data required by the IMPACT Act when they become available. We refer readers to our reply above on the topic of socioeconomic or sociodemographic adjustment.
This issue also impacts a relatively small number of SNF stays; previous analyses showed that 6 percent of SNF stays had an intervening PAC stay (IRF, LTCH, or another SNF) or go home from their prior proximal hospitalization and are later admitted to a SNF within the 30-day readmission window. Combined, these analyses provide justification for excluding SNF admissions with intervening IRF or LTCH admissions, or with multiple SNF stays, by showing these exclusions will not have a substantial effect on the SNFPPR. Additionally, concerns about attribution, given the mix of providers these patients have received services from during the risk period, states for the appropriateness of excluding these patients. Lastly, patients with multiple PAC stays do not cluster in a small group of facilities, so no facilities are disproportionately impacted by these exclusions. We will continue to monitor, among other unintended consequences of introducing this measure, whether patients are being shifted to other PAC providers or being sent home before arriving at SNFs.
The 30-day window reflects a transitional time period wherein the acute care hospital and skilled nursing facility are responsible for coordinating the care of a patient moving from one setting to another and is consistent with readmission measures used in other value-based purchasing programs, such as the ESRD Quality Incentive Program and the Hospital Readmission Reduction Program, as well as readmission measures used in a number of quality reporting programs that apply to post-acute care providers. Furthermore, our analysis of readmission rates showed no patterns indicating that using a shorter or longer period would produce very different comparative results, though the overall rates would change. In addition, the NQF Standing Committee generally agreed that 30 days post-hospital discharge is an accepted standard for measuring readmissions. Longer windows may be subject to greater “noise” in the readmission rate. The measure as specified has the potential for this unintended consequence of delaying hospital care beyond the 30-day readmission window, but this is a danger that would be associated with any selected day threshold. In addition, we will continue to analyze whether there are changes in the number of days to hospital readmission over time in order to assess whether a change to the readmissions window is needed for this measure in the future.
After consideration of the public comments that we received, we are finalizing our proposal to adopt the SNF 30-Day Potentially Preventable Readmission Measure (SNFPPR) for the SNF VBP Program.
Section 1888(h)(2)(B) of the Act requires the Secretary to apply the all-condition risk-adjusted potentially preventable hospital readmission measure specified under paragraph (g)(2) instead of the measure specified under paragraph (g)(1) as soon as practicable. We will apply the measure specified under paragraph (g)(1) beginning in performance year CY 2017 for payment year FY 2019, and we will apply it until such a time as the measure specified under paragraph (g)(2) replaces the measure specified under paragraph (g)(1). We intend to propose the timing for the change to the paragraph (g)(2) measure in future rulemaking. We sought comment on when we should propose this change for the SNF VBP Program. The comments we received on this topic, with their responses, appear below.
As noted previously in this section, we also intend to submit the SNFPPR to the NQF for consideration of endorsement as soon as possible.
Sections 1888(h)(3)(A) of the Act requires the Secretary to establish performance standards for the SNF VBP Program. Under paragraph (3)(B) of section 1888(h) of the Act, the
In the FY 2016 SNF PPS final rule (80 FR 46419 through 46422), we summarized public comments we received on possible approaches to calculating performance standards under the SNF VBP Program. We specifically sought comment on the approaches that we have adopted for other Medicare VBP programs such as the Hospital VBP Program (Hospital VBP Program), the Hospital-Acquired Conditions Reduction Program (HAC Reduction Program), the Hospital Readmissions Reduction Program (HRRP), and the End-Stage Renal Disease Quality Incentive Program (ESRD QIP). We also sought comment on the best possible approach to measuring improvement, particularly given the SNF VBP Program's limitation to one measure for each program year.
We believe that an essential goal of the SNF VBP program is to provide incentives for all SNFs to improve the quality of care that they furnish to their residents. In determining what level of SNF performance would be appropriate to select as the performance standard for the quality measures specified under the SNF VBP program, we focused on selecting levels that would challenge SNFs to improve continuously or to maintain high levels of performance. To achieve this aim, we analyzed SNFRM data and examined how different achievement performance standards would impact SNFs' scores under the proposed scoring methodology described further below. As more data becomes available, we will continue to assess the appropriateness of these performance standards for the SNF VBP program and, if necessary, propose to refine these standards' definitions and calculation methodologies to better incentivize the provision of high-quality care.
Beginning with the FY 2019 SNF VBP program, we proposed to define the achievement performance standard (which we will refer to as the “achievement threshold”) for quality measures specified under the SNF VBP program as the 25th percentile of national SNF performance on the quality measure during the applicable baseline period. We believe this achievement threshold definition represents an achievable standard of excellence and will reward SNFs appropriately for their performance on the quality measures specified for the SNF VBP program. We further believe this achievement threshold definition will provide strong incentives for SNFs to improve their performance on the measures specified for the SNF VBP Program continuously and will result in a wide range of SNF measure scores that can be used in public reporting.
We further proposed to define the “benchmark” for quality measures specified under the SNF VBP program as the mean of the top decile of SNF performance on the quality measure during the applicable baseline period. We believe this definition represents demonstrably high but achievable standards of excellence; in other words, the benchmark will reflect observed scores for the group of highest-performing SNFs on a given measure. This proposed benchmark policy aligns with that used by the Hospital VBP Program. As stated in the FY 2016 SNF PPS final rule (80 FR 46419 through 46420), we believe the Hospital VBP Program's performance standards methodology is a well-understood methodology under which health care providers and suppliers can be rewarded both for providing high-quality care and for improving their performance over time. We therefore believe it is appropriate to align with the Hospital VBP Program in setting benchmarks for the SNF VBP Program.
We also proposed that SNFs would receive points along an achievement range, which is the scale between the achievement threshold and the benchmark. Under this proposal, SNFs would receive achievement points if they meet or exceed the achievement threshold for the specified measure, and could increase their achievement score based on higher levels of performance. (We described the proposed scoring methodology, including how we proposed to award points for both achievement and improvement, in the scoring methodology section of the proposed rule). This proposed achievement range policy aligns with that used by the Hospital VBP Program. We refer readers to the FY 2016 SNF PPS final rule (80 FR 46419 through 46420) for a discussion of the rationale behind aligning SNF VBP Program policies with the Hospital VBP Program. As stated in that rule, we believe that the Hospital VBP Program's performance standards methodology is well-understood and would allow us to reward SNFs both for providing high-quality care and for improving their performance over time. We stated our intent to publish the final performance standards using complete data from CY 2015 in the FY 2017 SNF PPS final rule, and we have updated the numerical values in Table.
The comments we received on this topic, with their responses, appear below.
We also sought comment on whether we should consider adopting either the 50th or 15th percentiles of national SNFs' performance on the quality measure during the applicable baseline period. We sought comment on data or other analysis that we should consider regarding the impact on SNFs' financial viability and service delivery to beneficiaries at either the higher or lower alternative standard. For example, while the 50th percentile would represent a more challenging threshold for care quality improvement, that standard would align with the Hospital VBP Program and would likely result in higher value-based incentive payments to top-performing SNFs than other definitions, though the actual distribution of value-based incentive payments would depend on all SNFs' performance and on the statutory rules governing their distribution. Such a standard would likely result in lower value-based incentive payments to lower-performing SNFs, which could create substantial payment disparities among participating SNFs. Conversely, the 15th percentile would likely result in higher value-based incentive payments for lower-performing SNFs than other thresholds, with the corresponding result of lower value-based incentive-payments for top-performing SNFs compared to other thresholds. The comments we received
We are required by statute to implement the 2 percent withhold from Medicare payments for SNFs. We intend to monitor the Program's effects on the impact of care by SNFs. However, as explained more fully above, we do not believe we can allow SNFs more time than we have proposed in order to understand how to minimize payment penalties.
Beginning with the FY 2019 SNF VBP program, we proposed to define the improvement performance standard (which we will refer to as the “improvement threshold”) for quality measures specified under the SNF VBP program as each specific SNF's performance on the specified measure during the applicable baseline period. As discussed further below, we will measure SNFs' performance during both the proposed performance and baseline periods, and we will award improvement points by comparing SNFs' performance to the improvement threshold. We believe this improvement performance standard ensures that SNFs will be adequately incentivized to improve continuously their performance on the quality measures specified under the SNF VBP Program, and we believe it appropriately balances our view that we should both reward SNFs for high performance and encourage improved performance over time.
We invited public comment on this proposal. The comments we received on this topic, with their responses, appear below.
We thank commenters for the suggestion that we should adopt a policy to drop measures or change them when performance reaches a uniformly high level. In other contexts, we have described this as a “topped-out” measures policy. We have not considered adopting such a policy for the SNF VBP Program to date, but we will consider whether or not to do so in future rulemaking.
Section 1888(h)(3)(C) of the Act requires the Secretary to establish and announce the performance standards for a given SNF VBP program year not later than 60 days prior to the beginning of the performance period for the FY involved. Based on the proposed performance period of CY 2017 for the FY 2019 SNF VBP Program, we believe that we must establish and announce performance standards for the FY 2019 Program not later than November 1, 2016. We intend to establish and announce performance standards for the Program in the annual SNF PPS rule, which is effective on October 1 of each year.
However, finalizing numerical values of these performance standards is often logistically difficult because it requires the collection and analysis of large amounts of quality measure data in a short period of time. For example, the data file for a full year of SNF claims data is typically completed around May of the following year. To calculate a numerical value for a performance standard, we must perform multiple levels of analyses on the data to ensure that all appropriate SNFs and patients are included in measure calculations; perform the measure calculations themselves; and then use those calculations to determine the numerical value for the performance standards. If any individual step of this process is delayed, it may preclude us from publishing finalized numerical values for the finalized performance standards in the applicable SNF PPS final rule, which is typically displayed publicly by August 1 of each year.
To retain the flexibility needed to ensure that numerical values published for the finalized performance standards are accurate, we proposed to publish these numerical values no later than 60 days prior to the beginning of the performance period but, if necessary, outside of notice-and-comment rulemaking. As noted, we intend to publish numerical values for those performance standards in the final rule when practicable. However, in instances in which we cannot complete the necessary analyses in time to include them in the SNF PPS final rule, we proposed to publish the numerical values for the performance standards on the QualityNet Web site used by SNFs to receive VBP information as soon as practicable but in no event later than the statutorily required 60 days prior to the beginning of the performance period for the fiscal year involved. In this instance, we would notify SNFs and the public of the publication of the performance standards using a listserv email and posting on the QualityNet News portion of the Web site.
We welcomed public comment on this proposal. The comments we received on this topic, with their responses, appear below.
After consideration of the public comments that we received, we are finalizing our performance standards policies as proposed. Specifically, we are finalizing our definition of the achievement performance standard, which we refer to as the “achievement threshold,” for quality measures specified under the SNF VBP Program as the 25th percentile of national SNF performance on the quality measure during the applicable baseline period. We are finalizing our proposal to define the “benchmark” for quality measures specified under the SNF VBP Program as the mean of the top decile of SNF performance on the applicable quality measure during the applicable baseline period. We are also finalizing our proposals that SNFs would receive points along an achievement range, which is the scale between the achievement threshold and the benchmark.
We are also finalizing our proposal to define the improvement performance standard (which we refer to as the “improvement threshold”) for quality measures specified under the SNF VBP Program as each specific SNF's performance on the specified measure during the applicable baseline period.
We are also finalizing our proposal to publish the numerical values of the achievement threshold and the benchmark no later than 60 days prior to the beginning of the performance period, but if necessary, outside of notice-and-comment rulemaking.
The final values for the achievement threshold and the benchmark for the FY 2019 Program are displayed below in Table 10. For clarity, and as discussed further above, we have inverted the SNFRM rate so that a higher rate represents better performance.
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46422) for discussion of the considerations that we intend to take into account when specifying a performance period under the SNF VBP Program. We also explained our view that the SNF VBP Program necessitates adoption of a baseline period, similar to those adopted under the Hospital VBP Program and ESRD QIP, which we would use to establish performance standards and measure improvement.
We received public comments on this topic, and we refer readers to the FY 2016 SNF PPS final rule for a summary of those comments and our responses. We considered those comments when developing our performance and baseline period proposals for this proposed rule.
In considering various performance periods that could apply for the FY 2019 SNF VBP Program, we recognized that we must balance the length of the performance period used to collect quality measure data and the amount of data needed to calculate reliable, valid
We strive to link performance furnished by SNFs as closely as possible to the payment year to ensure clear connections between quality measurement and value-based payment. We also strive to measure performance using a sufficiently reliable population of patients that broadly represent the total care provided by SNFs. As such, we anticipate that our annual performance period end date must provide sufficient time for SNFs to submit claims for the patients included in our measure population. Based on past experience with claims processing in other quality reporting and value-based purchasing programs, this time lag between care delivered to patients who are included in readmission measures and application of a payment consequence linked to reporting or performance on those measures has historically been close to 1 year. We also recognize that other factors contribute to the delay between data collection and payment impacts, including: The processing time needed to calculate measure rates using multiple sources of claims needed for statistical modeling; time for determining achievement and improvement scores; time for providers to review their measure rates and included patients; and processing time needed to determine whether a payment adjustment needs to be made to a provider's reimbursement rate under the applicable PPS based on its performance. Further, our preference is to adopt at least a 12-month period as the performance period, consistent with our view that using a full year's performance period provides sufficient levels of data accuracy and reliability for scoring SNF performance on the SNFRM and SNFPPR. We also believe that adopting a 12-month period for the performance period supports the direction provided of section 1888(g)(3) of the Act that the quality measures specified under the SNF VBP Program shall be designed to achieve a high level of reliability and validity. Specifically, we believe using a full year of claims data better ensures that the variation found among SNF performance on the measures is due to real differences between SNFs, and not within-facility variation due to issues such as seasonality. Additionally, we believe that adopting 12-month performance and baseline periods enables us to measure SNFs' performance on the specified measures in sequence, which we believe is necessary in order to measure SNFs on both achievement and improvement, as required by section 1888(h)(3)(B) of the Act.
Finally, we also considered the time necessary to calculate SNF-specific performance on the SNFRM after the conclusion of the performance period and to develop and provide SNF VBP scoring reports, including the requirement under section 1888(h)(7) of the Act that we inform each SNF of the adjustments to the SNF's payments as a result of the program not later than 60 days prior to the FY involved. Based on the requirements and concerns discussed above, we believe a 12-month time period is the only operationally feasible performance period for the SNF VBP Program.
We invited public comments on this proposal, and we respond to them in the next section.
As we have done in the Hospital VBP Program and the ESRD QIP, we proposed to adopt a baseline period for use in the SNF VBP Program.
We proposed to adopt calendar year 2015 claims (January 1, 2015 through December 31, 2015) as the baseline period for the FY 2019 SNF VBP Program and to use that baseline period as the basis for calculating performance standards. We stated that, as with the performance period, we will allow for a 90-day claims run out following the last date of discharge (December 31, 2015) before incorporating the 2015 claims in our database into the measure calculation.
We welcomed public comment on this proposal. The comments we received on this topic, as well as the comments that we received on the proposed performance period, with their responses, appear below.
However, while we appreciate the commenters' intent to ensure as broad participation as possible in the Program, we do not believe that a separate performance period for low-volume SNFs is feasible. Under section 1888(h)(3)(C) of the Act, we are required to establish and announce performance standards for a fiscal year not later than 60 days prior to the beginning of the performance period for that fiscal year. We do not believe we would comply with that requirement by establishing a longer performance period for certain SNFs. In addition, because we would not know which SNFs would have had fewer than 25 stays in their measure denominator until after the performance period concluded, it would be impossible for us to have provided the appropriate notice to those SNFs as required under section 1888(h)(3)(C) of
After consideration of the public comments that we received, we are finalizing our proposals to adopt CY 2015 as the baseline period for the FY 2019 SNF VBP Program, and CY 2017 as the performance period for the same Program year.
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46422 through 46425) for a discussion of other Medicare VBP scoring methodologies, including the methodologies used by the Hospital VBP Program and HAC Reduction Program. We also discussed policy considerations related to the Hospital Readmission Reduction Program and the ESRD QIP in the performance standards section of that final rule (80 FR 46420 through 46421). We also discussed the potential application of an exchange function (80 FR 46424 through 46425) to translate SNF performance scores into value-based incentive payments under the SNF VBP Program.
We considered those issues, as well as comments we received on these issues, when developing our performance scoring policy below.
Section 1888(h)(4)(A) of the Act requires the Secretary develop a methodology for assessing the total performance of each SNF based on the performance standards established under section 1888(h)(3) of the Act for the measure applied under section 1888(h)(2) of the Act. Section 1888(h)(3)(B) of the Act further requires that these performance standards include levels of achievement and improvement and that, in calculating a facility's SNF performance score, the Secretary use the higher of either improvement or achievement.
After carefully reviewing and evaluating a number of scoring methodologies for the SNF VBP Program, we proposed to adopt a scoring model for the SNF VBP Program similar conceptually to that used by the Hospital VBP Program and the ESRD QIP, with certain modifications to allow us to better differentiate between SNFs' performance on the quality measures specified under the SNF VBP Program.
We believe using wider scales of 0 to 100 points and 0 to 90 points instead of the 0 to 10 and 0 to 9 scales used in the Hospital VBP Program and ESRD QIP will allow us to calculate more granular performance scores for individual SNFs and provide greater differentiation between facilities' performance. We further believe that setting the achievement threshold for the SNF VBP Program at the 25th percentile of national SNF performance on the quality measure during the baseline period is preferable to the Hospital VBP Program's achievement threshold of the 50th percentile of national facility performance for this Program because it accounts for the statutory requirement that the SNF VBP Program include only one quality measure at a time. Unlike the Hospital VBP Program, which contains many measures across multiple domains, the SNF VBP Program is limited by statute to a single quality measure at a time. As a result, a hospital participating in the Hospital VBP Program could perform below the 50th percentile of national performance on one or more measures without experiencing a dramatic drop in its Total Performance Score because the hospital's performance on other measures would contribute to its total performance score. By contrast, if the SNF VBP Program used an achievement threshold of the 50th percentile of national SNF performance, approximately one-half of all SNFs nationwide would automatically receive 0 achievement points assuming no national improvement trends between baseline and performance periods. While these SNFs could still receive improvement points, we believe it is preferable to set a lower achievement threshold that would award the majority of SNFs at least some achievement points, thereby enabling us to differentiate performance among the lower-performing half of SNFs and enabling SNFs to continually increase their achievement score based on higher levels of performance. As stated above, as more data becomes available, we will continue to assess the appropriateness of this achievement threshold for the SNF VBP program and, if necessary, propose to refine these standards' definitions and calculation methodologies to better incentivize the provision of high-quality care.
For these reasons, we proposed to adopt the following scoring methodology beginning with the FY 2019 SNF VBP Program.
Because the SNF VBP Program uses only one measure to incentivize and assess facility performance and improvement, we believe it is important to ensure that SNFs and the public are able to understand these measure scores easily. SNFRM rates represent the percentage of qualifying patients at a facility that were readmitted within the risk window for the measure. As a result, lower SNFRM rates indicate lower rates of readmission, and are therefore an indicator of higher quality care. For example, a SNFRM rate of 0.14159 means that approximately 14.2 percent of qualifying patients discharged from that SNF were readmitted during the risk window.
We understand that the use of a “lower is better” rate could cause confusion among SNFs and the public. Therefore, we proposed to calculate scores under the Program by first inverting SNFRM rates using the following calculation:
We proposed that a SNF would earn an achievement score of 0 to 100 points based on where its performance on the specified measure fell relative to the achievement threshold (which we proposed above to define for the quality measures specified under the SNF VBP program as the 25th percentile of SNF performance on the quality measure during the applicable baseline period) and the benchmark (which we proposed to define as the mean of the top decile of SNF performance on the measure during the baseline period). As with the Hospital VBP Program, we proposed to award points to SNFs based on their performance as follows:
• If a SNF's SNFRM inverted rate was equal to or greater than the benchmark, the SNF would receive 100 points for achievement;
• If a SNF's SNFRM inverted rate was less than the achievement threshold (that is, the lower bound of the achievement range), the SNF would receive 0 points for achievement.
• If a SNF's SNFRM inverted rate was equal to or greater than the achievement threshold, but less than the benchmark, we would award between 0 and 100 points to the SNF according to the following formula:
The SNF achievement score would therefore range between 0 and 100 points, with a higher achievement score indicating higher performance.
We proposed that a SNF would earn an improvement score of 0 to 90 points based on how much its performance on the specified measure during the performance period improved from its performance on the measure during the baseline period. Under this proposal, a unique improvement range would be established for each SNF that defines the distance between the SNF's baseline period score and the national benchmark for the measure (which we propose to define as the mean of the top decile of SNF performance on the measure during the baseline period). We would then calculate a SNF improvement score for each SNF depending on its performance period score:
• If the SNF's performance period score was equal to or lower than its improvement threshold, the SNF would receive 0 points for improvement.
• If the SNF's performance period score was equal to or higher than the benchmark, the SNF would receive 90 points for improvement.
• If the SNF's performance period score was greater than its improvement threshold, but less than the benchmark, we would award between 0 and 90 points for improvement according to the following formula:
Consistent with sections 1888(h)(3)(B) and 1888(h)(4)(A) of the Act, we proposed to use the higher of a SNF's achievement and improvement scores to serve as the SNF's performance score for a given year of the SNF VBP Program. The resulting SNF performance score would be used as the basis for ranking SNF performance on the quality measures specified under the SNF VBP Program and establishing the value-based incentive payment percentage for each SNF for a given FY.
In the proposed rule, we provided two examples to illustrate the proposed scoring methodology for the FY 2019 SNF VBP Program using hypothetical SNFs A, B, and C. The benchmark calculated for the SNFRM for all of these hypotheticals is 0.83915 (the mean of the top decile of SNF performance on the SNFRM in 2014), and the achievement threshold is 0.79551 (the 25th percentile of national SNF performance on the SNFRM in 2014). We noted that, as discussed previously, our proposal for scoring SNF performance on the SNFRM inverts the measure rates so that a higher rate represents better performance.
Figure AA shows the scoring for SNF A. SNF A's SNFRM rate of 0.15025 means that approximately 15 percent of qualifying patients discharged from SNF A were readmitted during the 30-day risk window. Under the proposed SNFRM scoring methodology, SNF A's SNFRM inverted rate would be calculated as follows:
As a result of this calculation, Facility A's SNFRM inverted rate would be 0.84975 on the SNFRM for the performance period. This result indicates that approximately 85 percent of SNF A's qualifying patients were
Figure BB shows the scoring for SNF B. As can be seen below, SNF B's performance on the SNFRM went from 0.21244, for a SNFRM inverted rate of 0.78756 (below the achievement threshold) in the baseline period to 0.18322, for a SNFRM inverted rate of 0.81668 (above the achievement threshold) in the performance period. Applying the achievement scoring methodology proposed above, SNF B would earn [49] achievement points for this measure, calculated as follows:
However, because SNF B's performance during the performance period is greater than its performance during the baseline period, but below the benchmark, we would calculate an improvement score as well. According to the improvement scale, based on SNF B's improved SNFRM inverted rate from 0.78756 to 0.81668, SNF B would receive 51 improvement points, calculated as follows:
In Figure CC, SNF C's performance on the SNFRM drops from 0.19487, for a SNFRM inverted rate of 0.80513, in the baseline period to 0.21148, for a SNFRM inverted rate 0.78852, in the performance period (a decline of 0.01661). Because this SNF's performance during the performance period is lower than the achievement
The comments we received on this topic, with their responses, appear below.
After consideration of the public comments that we received, we are finalizing the scoring methodology for the SNF VBP Program as proposed.
Paragraphs (5), (6), (7), and (8) of section 1888(h) of the Act outline several requirements for value-based incentive payments under the SNF VBP Program. Section 1888(h)(5)(A) of the Act requires that the Secretary increase the adjusted Federal per diem rate for skilled nursing facilities by the value-based incentive payment amount determined under section 1888(h)(5)(B) of the Act. That amount is to be determined by the product of the adjusted federal per diem rate and the value-based incentive payment percentage specified under section 1888(h)(5)(C) of the Act for each SNF for a FY.
Section 1888(h)(5)(C) of the Act requires that the value-based incentive payment percentage be based on the SNF performance score and must be appropriately distributed so that the highest-ranked SNFs receive the highest payments, the lowest-ranked SNFs receive the lowest payments, and that the payment rate for services furnished by SNFs in the lowest 40 percent of the rankings be less than would otherwise apply. Finally, the total amount of value-based incentive payments must be greater than or equal to 50 percent, but not greater than 70 percent, of the total amount of the reductions to payments for the FY specified under section 1888(h)(6) of the Act, as estimated by the Secretary. As discussed further below, we will propose to adopt in future rulemaking an exchange function to ensure that the total amount of value-based incentive payments made under the program each year meets those criteria.
Section 1888(h)(7) of the Act requires the Secretary, not later than 60 days prior to the fiscal year involved, to inform each SNF of the adjustments to its Medicare payments for services furnished by the SNF during the FY. Section 1888(h)(8) of the Act requires that the value-based incentive payment and payment reduction only apply for the FY involved, and not be taken into account in making payments to a SNF in a subsequent year.
We received a number of comments on incentive payments that will be made under the Program.
As we discussed in the FY 2016 SNF PPS final rule (80 FR 46424 through 46425), we use a linear exchange function to translate a hospital's Total Performance Score under the Hospital VBP Program into the percentage multiplier to be applied to each Medicare discharge claim submitted by the hospital during the applicable FY. We intend to adopt a similar methodology to translate SNF performance scores into value-based incentive payment percentages under the SNF VBP Program. When considering that methodology, we sought public comments on the appropriate form and slope of the exchange function to determine how best to reward high performance and encourage SNFs to improve the quality of care provided to Medicare beneficiaries. As illustrated in Figure DD, we considered the following four mathematical exchange function options: Straight line (linear); concave curve (cube root function); convex curve (cube function); and S-shape (logistic function).
We received numerous public comments on the FY 2016 SNF PPS proposed rule, and we sought further public comments to inform our policies on this topic. We requested additional public comments on the specific form of the exchange function that we should propose in the future, including any additional forms beyond the four examples that we have illustrated above, and any considerations we should take into account when selecting an exchange function form that would best support quality improvement in SNFs.
Additionally, we will determine the precise slope of the exchange function after the performance period has concluded, because the distribution of SNFs' performance scores will form the basis for value-based incentive payments under the program. However, two additional considerations will affect the exchange function's slope. As required in section 1888(h)(5)(C)(ii)(II)(cc) of the Act, SNFs in the lowest 40 percent of the ranking determined under paragraph (4)(B) must receive a payment that is less than the payment rate for such services that would otherwise apply. Additionally, as described in this section, section 1888(h)(5)(C)(ii)(III) of the Act requires that the total amount of value-based incentive payments under the Program be greater than or equal to 50 percent, but not greater than 70 percent, of the total amount of reductions to SNFs' payments for the FY, as estimated by the Secretary. We intend to ensure that both of these requirements, as well as all other statutory requirements under the Program, are fulfilled when we specify the exchange function's slope.
We invited public comments on this topic. The comments we received on this topic, with their responses, appear below.
Section 1888(g)(5) of the Act requires that we provide quarterly confidential feedback reports to SNFs on their performance on the measures specified under sections 1888(g)(1) and (2) of the Act. Section 1888(g)(5) of the Act also requires that we begin providing those reports on October 1, 2016.
In order to meet the statutory deadline, we are developing the feedback reports, operational systems, and implementation guidance related to those reports. We intend to provide these reports to SNFs via the QIES system CASPER files currently used by SNFs to report quality performance.
We invited public comments on the appropriateness of the QIES system, and any considerations we should take into account when designing and providing
Section 1888(g)(6) of the Act requires the Secretary to establish procedures to make public performance information on the measures specified under paragraphs (1) and (2) of such section. The procedures must ensure that a SNF has the opportunity to review and submit corrections to the information that will be made public for the facility prior to its being made public. This public reporting is also required by statute to begin no later than October 1, 2017. Additionally, section 1888(h)(9) of the Act requires the Secretary to make available to the public information regarding SNFs' performance under the SNF VBP Program, specifically including each SNF's performance score and the ranking of SNFs for each fiscal year.
Accordingly, we proposed to adopt a two-phase review and correction process for (1) SNFs' measure data that will be made public under section 1888(g)(6) of the Act, which will consist of each SNFs' performance on the measures specified under sections 1888(g)(1) and (2) of the Act, and (2) SNFs' performance information that will be made public under section 1888(h)(9) of the Act.
We view the quarterly confidential feedback reports described previously in this section, as one possible means to provide SNFs an opportunity to review and provide corrections to their performance information. However, collecting SNF measure data and calculating measure performance scores takes a number of months following the end of a measurement period. Because it is not feasible to provide SNFs with an updated measure rate for each quarterly report or engage in review and corrections on a quarterly basis, we proposed to use one of the four reports each year to provide SNFs an opportunity to review their data slated for public reporting. In this specific quarterly report, we intend to provide SNFs: (1) A count of readmissions; (2) the number of eligible stays at the SNF; (3) the SNF's risk-standardized readmissions ratio; and (4) the national SNF measure performance rate. In addition, we intend to provide the patient-level information used in calculating the measure rate. However, we sought comment on what patient-level information would be most useful to SNFs and how we should make this information available if requested. We intend to address the topic of what specific information will be provided if requested in this specific quarterly report in future rulemaking, where we intend to propose a process for SNFs' requests for patient-level data. We intend to notify SNFs of this report's release via listserv email and posting on the QualityNet News portion of the Web site.
Therefore, we proposed to fulfill the statutory requirement that SNFs have an opportunity to review and correct information that is to be made public under section 1888(g)(6) of the Act by providing SNFs with an annual confidential feedback report that we intend to provide via the QIES system CASPER files. We further proposed that SNFs must, if they believe the report's contents to be in error, submit a correction request to
• SNF's CMS Certification Number (CCN).
• SNF Name.
• The correction requested and the SNF's basis for requesting the correction. More specifically, the SNF must identify the error for which it is requesting correction, and explain its reason for requesting the correction. The SNF must also submit documentation or other evidence, if available, supporting the request. Additionally, any requests made during phase one of the proposed process will be limited to the quality measure information at issue.
We further proposed that SNFs must make any correction requests within 30 days of posting the feedback report via the QIES system CASPER files, not counting the posting date itself. For example, if we provide reports on October 1, 2017, SNFs must review those reports and submit any correction requests by October 31, 2017. We will not consider any requests for correction to quality measure data that are received after the close of the first phase of the proposed review and correction process. As discussed further in this section, any corrections sought during phase two of
We will review all timely phase one correction requests that we receive and will provide responses to SNFs that have requested corrections as soon as practicable.
As required by section 1888(h)(7) of the Act, we intend to inform each SNF of its payment adjustments as a result of the SNF VBP Program not later than 60 days prior to the fiscal year involved. For the FY 2019 SNF VBP Program, we intend to notify SNFs of those payment adjustments via a SNF performance score report not later than 60 days prior to October 1, 2018. We intend to address the specific contents of that report in future rulemaking.
In that report, however, we also intend to provide SNFs with their SNF performance scores and ranking. By doing so, we intend to use the performance score report's provision to SNFs as the beginning of the second phase of the proposed review and correction process. By completing phase one, SNFs will have an opportunity to verify that their quality measure data are fully accurate and complete and as a result, phase two will be limited only to corrections to the SNF performance score's calculation and the SNF's ranking. Any requests to correct quality measure data that are received during phase two will be denied.
We intend to set out specific requirements for phase two of the proposed review and correction process in future rulemaking. To inform those proposals, we sought comments on what information would be most useful for us to provide to SNFs to facilitate their review of their SNF performance scores and ranking. As with the phase one process, we intend to adopt a 30-day time period for phase two review and corrections, beginning with the date on which we provide SNF performance score reports.
We invited public comments on this proposed two-phase review and correction process. The comments we received on this topic, with their responses, appear below.
However, the feedback reports that we must provide to SNFs under the requirements at section 1888(g)(5) of the Act are specifically required to remain confidential. We do not believe that we have the authority to share those confidential feedback reports with other organizations than SNFs themselves. We note that SNFs are free to share their feedback reports with other organizations at their discretion.
We would like to clarify the distinction between the two phases of the proposed review and correction process. As we discussed in the proposed rule (81 FR 24255), the first phase is intended to allow SNFs to review and correct patient-level information that we used to calculate the measure rates. The second phase is intended to allow SNFs to review and correct only their performance scores and the ranking, not their measure rates. Although the two phases are separate, they will, taken together, provide SNFs with an opportunity to correct both the measure rates that are used to generate their performance scores and ranking, as well as their actual performance scores and ranking. We do not believe that we should conflate the two, or allow corrections to quality measure data (that is, phase one requests) during the phase two process, because the two phases are aimed at two separate purposes. We believe it to be necessary to finalize the claims data that SNFs will be able to correct in phase one so that those data may form the basis for performance calculations that SNFs will be able to review in phase two.
After consideration of the public comments that we received, we are finalizing the two-phase review and correction process as proposed, with the exception stated above that we will accept corrections to SNFs' quarterly confidential feedback reports during a calendar year until the following March 31.
Section 1888(h)(9)(A) of the Act requires that we make available to the public on the
We intend to address this topic in future rulemaking. However, we invited public comments on the best means by which to display the SNF-specific and aggregate performance information for public consumption. The comments we received on this topic, with their responses, appear below.
Section 1888(h)(4)(B) of the Act requires ranking the SNF performance scores determined under paragraph (A) of such section from low to high. Additionally, and as discussed in this section, we are required to publish the ranking of SNF performance scores for a FY on
To meet these requirements, we proposed to order SNF performance scores from low to high and publish those rankings on both the
We invited public comments on the most appropriate format and Web site for the ranking's publication. The comments we received on this topic, with their responses, appear below.
We will address this topic further in future rulemaking. We note that, because we will compute FY 2019 SNF performance scores after the completion of the performance period (finalized above as CY 2017), we will not publish the ranking or other SNF-specific performance information for the FY 2019 Program until at least the summer of CY 2018.
We seek to promote higher quality and more efficient health care for Medicare beneficiaries, and our efforts are furthered by QRPs coupled with public reporting of that information.
The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) added section 1899B to the Act that imposed new data reporting requirements for certain PAC providers, including SNFs, and required that the Secretary implement a SNF quality reporting program (SNF QRP). Section 1888(e)(6)(B)(i)(II) of the Act requires that each SNF submit, for FYs beginning on or after the specified application date (as defined in section 1899B(a)(2)(E) of the Act), data on quality measures specified under section 1899B(c)(1) of the Act and data on resource use and other measures specified under section 1899B(d)(1) of the Act in a manner and within the time frames specified by the Secretary. In addition, section 1888(e)(6)(B)(i)(III) of the Act requires, for FYs beginning on or after October 1, 2018, that each SNF submit standardized patient assessment data required under section 1899B(b)(1) of the Act in a manner and within the time frames specified by the Secretary. Section 1888(e)(6)(A)(i) of the Act requires that, for FYs beginning with FY 2018, if a SNF does not submit data, as applicable, on quality and resource use and other measures in accordance with section 1888(e)(6)(B)(i)(II) of the Act and on standardized patient assessment in accordance with section 1888(e)(6)(B)(i)(III) of the Act for such FY, the Secretary must reduce the
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46427 through 46429) for information on the requirements of the IMPACT Act
In the FY 2016 SNF PPS final rule, we finalized the general timeline and sequencing of activities under the SNF QRP. Please refer to the FY 2016 SNF PPS final rule (80 FR 46427 through 46429) for more information on these topics.
In addition, in implementing the SNF QRP and IMPACT Act requirements in the FY 2016 SNF PPS final rule, we established our approach for identifying cross-setting measures and processes for the adoption of measures including the application and purpose of the Measure Application Partnership (MAP) and the notice and comment rulemaking process. For more information on these topics, please refer to the FY 2016 SNF PPS final rule (80 FR 46427 through 46429).
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46429 through 46431) for a detailed discussion of the considerations we apply in measure selection for the SNF QRP, such as alignment with the CMS Quality Strategy,
In the FY 2017 SNF PPS proposed rule, we proposed to adopt for the SNF QRP one measure that we are specifying under section 1899B(c)(1)(C) of the Act to meet the Medication Reconciliation domain: (1) Drug Regimen Review Conducted with Follow-Up for Identified Issues—Post-Acute Care Skilled Nursing Facility Quality Reporting Program. Further, we proposed to adopt for the SNF QRP three measures to meet the resource use and other measure domains identified in section 1899B(d)(1) of the Act: (1) Medicare Spending per Beneficiary—Post-Acute Care Skilled Nursing Facility Quality Reporting Program; (2) Discharge to Community—Post Acute Care Skilled Nursing Facility Quality Reporting Program; and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facility Quality Reporting Program.
In our development and specification of measures, we employ a transparent process in which we seek input from stakeholders and national experts and engage in a process that allows for pre-rulemaking input on each measure, as required by section 1890A of the Act.
To meet this requirement, we provided the following opportunities for stakeholder input. Our measure development contractor convened technical expert panels (TEPs) that included stakeholder experts and patient representatives on July 29, 2015 for the Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, on August 25, 2015, September 25, 2015, and October 5, 2015 for the Discharge to Community—PAC SNF QRP, on August 12 and 13, 2015 and October 14, 2015 for the Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP, and on October 29 and 30, 2015 for the Medicare Spending per Beneficiary measures. In addition, we released draft quality measure specifications for public comment on the Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP from September 18, 2015 to October 6, 2015, for the Discharge to Community—PAC SNF QRP from November 9, 2015 to December 8, 2015, for the Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP from November 2, 2015 to December 1, 2015, and for the Medicare Spending per Beneficiary measures from January 13, 2016 to February 5, 2016. Further, we implemented a public mailbox,
Additionally, we sought public input from the MAP PAC, Long-Term Care Workgroup during the annual in-person meeting held December 14 and 15, 2015. The final MAP report is available at
The MAP reviewed each measure that we proposed in the proposed rule for use in the SNF QRP. For more information on the MAP, we refer readers to the FY 2016 SNF PPS final rule (80 FR 46430 through 46431). Further, for more information on the MAP's recommendations, we refer readers to the MAP 2015-2016 Considerations for Implementing Measures in Federal Programs public report at
We received a number of general comments on our measure selection process.
Since the MAP recommendation of “encourage continued development” for the proposed measures during the December 2015 NQF-convened PAC LTC MAP meeting, we have further refined the measure specifications based on additional validity and reliability testing. Our efforts included: A pilot test in 12 post-acute care settings, including SNFs, to determine the feasibility of assessment items for use in calculation of the Drug Regimen Review Conducted with Follow-Up for Identified Issues measure and further development of risk-adjusted models for the Discharge to Community, Medicare Spending per Beneficiary and Potentially Preventable Readmissions measures. Additional information regarding testing that was performed since the MAP Meeting, TEP meetings, and public comment periods is further described below in our responses to comments on individual proposed measures.
For these reasons, we believe that the measures have been fully and robustly developed, and believe they are appropriate for implementation and should not be delayed.
However, there are nuances among the four PAC provider types which must be taken into account in order to address issues such as patient acuity and medical complexity. As a result, we have risk-adjusted measures and included provider-specific refinements. For example, for the Discharge to Community measure, risk adjustment for ventilator use is included in LTCH and SNF settings, but not IRF settings. We investigated the need for risk adjustment for ventilator use in IRFs, but found that less than 0.01 percent of the IRF population had ventilator use in the IRF. Given the low frequency of ventilator use in IRFs, any associated estimates would not be reliable; thus, ventilator use is not included as a risk adjuster in the IRF setting measure. We believe that the measures proposed for the SNF QRP will inform beneficiaries on the differences in quality rather than differences in measure construction because we have taken into account the factors necessary to ensure meaningful comparability within the SNF providers and as able, across the post-acute providers.
We intend to continue to monitor the reliability and validity of the SNF QRP measures, including whether the measures are reliable and valid for cross-setting purposes.
In the FY 2016 SNF PPS final rule (80 FR 46431 through 46432), we finalized our policy for measure removal and also finalized that when we adopt a measure for the SNF QRP for a payment determination, this measure will be automatically retained in the SNF QRP for all subsequent payment determinations unless we propose to remove, suspend, or replace the measure. We did not propose any new policies related to measure retention or removal in the FY 2017 SNF PPS proposed rule. For further information on how measures are considered for removal, suspension, or replacement, please refer to the FY 2016 SNF PPS final rule (80 FR 46431 through 46432).
In the FY 2016 SNF PPS final rule (80 FR 46432), we finalized our policy pertaining to the process for adoption of non-substantive and substantive changes to SNF QRP measures. We did not propose to make any changes to this policy.
The SNF QRP quality measures for the FY 2018 payment determinations and subsequent years are presented in Table 11. Measure specifications for the previously adopted measures adapted from non-SNF settings are available at
For the FY 2018 payment determination and subsequent years, in addition to the quality measures identified in Table 11 that we are retaining under our policy described in section V.B.3., we proposed to adopt three new measures for the SNF QRP. These three measures were developed to meet the requirements of the IMPACT Act. They are: (1) Medicare Spending per Beneficiary—PAC SNF QRP; (2) Discharge to Community—PAC SNF QRP; and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP. Through the use of standardized quality measures and standardized data, the intent of the Act, among other obligations, is to enable interoperability and access to longitudinal information for such providers to facilitate coordinated care, improved outcomes, and overall quality comparisons. The measures are described in more detail below.
For the risk adjustment of the resource use and other measures, we understand the important role that sociodemographic status plays in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2-years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We invited public comment on how socioeconomic and demographic factors should be used in risk adjustment for the resource use and other measures. The comments we received on this topic, with their responses, appear below.
A few commenters, including MedPAC, did not support risk-adjustment of measures by SES or SDS status. One commenter did not support risk-adjustment because it can hide disparities and create different standards of care for SNFs based on the demographics in the facility. MedPAC stated that risk adjustment can hide disparities in care and suggested that risk-adjustment reduces pressure on providers to improve quality of care for low-income Medicare beneficiaries. Instead, MedPAC supported peer provider group comparisons with providers of similar low-income beneficiary populations. Another commenter stated that SDS factors should not be included in measures that assess the resident outcome during a SNF stay, but should only be considered for measures evaluating care after the SNF discharge.
We also received suggestions pertaining to the incorporation of socioeconomic factors as risk-adjustors for the measures, including in those measures that pertain to after the resident was discharged from the SNF, additional testing and/or NQF endorsement prior to implementation of these measures, and comments that pertain to potential consequences associated with such risk adjustors and alternative approaches to grouping comparative data. We wish to reiterate that as previously discussed, NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. This trial entails temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are encouraged to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model. Several measures developed by CMS have been brought to NQF since the beginning of the trial. CMS, in compliance with NQF's guidance, has tested sociodemographic factors in the measures' risk models and made recommendations about whether or not to include these factors in the endorsed measure. We intend to continue engaging in the NQF process as we consider the appropriateness of adjusting for sociodemographic factors in our outcome measures.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We proposed an MSPB-PAC SNF QRP measure for inclusion in the SNF QRP for the FY 2018 payment determination and subsequent years. Section 1899B(d)(1)(A) of the Act requires the Secretary to specify resource use measures, including total estimated Medicare spending per beneficiary, on which PAC providers consisting of SNFs, Inpatient Rehabilitation Facilities (IRFs), Long-Term Care Hospitals (LTCHs), and Home Health Agencies (HHAs) are required to submit necessary data specified by the Secretary.
Rising Medicare expenditures for post-acute care as well as wide variation in spending for these services underlines the importance of measuring resource use for providers rendering these services. Between 2001 and 2013, Medicare PAC spending grew at an annual rate of 6.1 percent and doubled to $59.4 billion, while payments to inpatient hospitals grew at an annual rate of 1.7 percent over this same period.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use measures for PAC settings. As such, we proposed this MSPB-PAC SNF QRP measure under the Secretary's authority to specify non—NQF-endorsed measures under section 1899B(e)(2)(B) of the Act. Given the current lack of resource use measures for PAC settings, our MSPB-PAC SNF QRP measure would provide valuable information to SNF providers on their relative Medicare spending in delivering services to approximately 1.7 million Medicare beneficiaries.
The MSPB-PAC SNF QRP episode-based measure would provide actionable and transparent information to support SNF providers' efforts to promote care coordination and deliver high quality care at a lower cost to Medicare. The MSPB-PAC SNF QRP measure holds SNF providers accountable for the Medicare payments within an “episode of care” (episode), which includes the period during which a patient is directly under the SNF's care, as well as a defined period after the end of the SNF treatment, which may be reflective of and influenced by the services furnished by the SNF. MSPB-PAC SNF QRP episodes, constructed according to the methodology described below, have high levels of Medicare spending with substantial variation. In FY 2014, Medicare FFS beneficiaries experienced 1,534,773 MSPB-PAC SNF QRP episodes. The mean payment-standardized, risk-adjusted episode spending for these episodes is $26,279. There is substantial variation in the Medicare payments for these MSPB-PAC SNF QRP episodes—ranging from approximately $6,090 at the 5th percentile to approximately $60,050 at the 95th percentile. This variation is partially driven by variation in payments occurring after SNF treatment.
Evaluating Medicare payments during an episode creates a continuum of accountability between providers that should improve post-treatment care planning and coordination. While some stakeholders throughout the measure development process supported the MSPB-PAC measures and felt that measuring Medicare spending was critical for improving efficiency, others believed that resource use measures did not reflect quality of care in that they do not take into account patient outcomes or experience beyond those observable in claims data. However, SNFs involved in the provision of high-quality PAC care as well as appropriate discharge planning and post-discharge care coordination would be expected to perform well on this measure since beneficiaries would likely experience fewer costly adverse events (for example, avoidable hospitalizations, infections, and emergency room usage). Further, it is important that the cost of care be explicitly measured so that, in conjunction with other quality measures, we can publicly report which SNFs provide high quality care at lower cost.
We developed a MSPB-PAC measure for each of the four PAC settings. We proposed an LTCH-specific MSPB-PAC measure in the FY 2017 IPPS/LTCH proposed rule (81 FR 25216 through 25220), an IRF-specific MSBP-PAC measure in the FY 2017 IRF proposed rule (81 FR 24197 through 24201), a SNF-specific MSPB-PAC measure in the FY 2017 SNF proposed rule (81 FR 24258 through 24262), and a HHA-specific MSBP-PAC measure in the CY
The MSPB-PAC measures mirror the general construction of the inpatient prospective payment system (IPPS) hospital MSPB measure, which was adopted for the Hospital IQR Program beginning with the FY 2014 program, and was implemented in the Hospital VBP Program beginning with the FY 2015 program. The measure was endorsed by the NQF on December 6, 2013 (NQF #2158).
MSPB-PAC episodes may begin within 30 days of discharge from an inpatient hospital as part of a patient's trajectory from an acute to a PAC setting. A SNF stay beginning within 30 days of discharge from an inpatient hospital would therefore be included once in the hospital's MSPB measure, and once in the SNF provider's MSPB-PAC measure. Aligning the hospital MSPB and MSPB-PAC measures in this way creates continuous accountability and aligns incentives to improve care planning and coordination across inpatient and PAC settings.
We sought and considered the input of stakeholders throughout the measure development process for the MSPB-PAC measures. We convened a TEP consisting of 12 panelists with combined expertise in all of the PAC settings on October 29 and 30, 2015 in Baltimore, Maryland. A follow-up email survey was sent to TEP members on November 18, 2015 to which seven responses were received by December 8, 2015. The MSPB-PAC TEP Summary Report is available at
Since the MAP's review and recommendation of continued development, CMS continued to refine risk adjustment models and conduct measure testing for the IMPACT Act measures consistent with the MAP's recommendations. The IMPACT Act measures are consistent with the information submitted to the MAP and support the scientific acceptability of these measures for use in quality reporting programs.
In addition, a public comment period, accompanied by draft measures specifications, was open from January 13 to 27, 2016 and extended to February 5. A total of 45 comments on the MSPB-PAC measures were received during this 3.5 week period. The comments received also covered each of the MAP's concerns as outlined in their Final Recommendations.
To calculate the MSPB-PAC SNF QRP measure for each SNF provider, we first
The comments we received on this topic, with their responses, appear below.
Each of the measures assess Medicare Part A and Part B spending during the episode window which begins upon admission to the provider's care and ends 30 days after the end of the treatment period. The service-level exclusions are harmonized across settings. The definition of the numerator and denominator is the same across settings. However, specifications differ between settings when necessary to ensure that the measures accurately reflect patient care and align with each setting's payment system. For example, Medicare pays LTCHs and IRFs a stay-level payment based on the assigned MS-LTC-DRG and CMG, respectively, while SNFs are paid a daily rate based on the RUG level, and HHA providers are reimbursed based on a fixed 60-day period for standard home health claims. While the definition of the episode window is consistent across settings and is based on the period of time that a beneficiary is under a given provider's care, the duration of the treatment period varies to reflect how providers are reimbursed under the PPS that applies to each setting. The length of the post-treatment period is consistent between settings. There are also differences in the services covered under the PPS that applies to each setting: For example, durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) claims are covered LTCH, IRF, and SNF services but are not covered HHA services. This affects the way certain first-day service exclusions are defined for each measure.
We recognize that beneficiaries may receive similar services as part of their overall treatment plan in different PAC settings, but believe that there are some important differences in beneficiaries' care profiles that are difficult to capture in a single measure that compares resource use across settings.
Also, the risk adjustment models for the MSPB-PAC measures share the same covariates to the greatest extent possible to account for patient case mix. However, the measures also incorporate additional setting-specific information where available to increase the predictive power of the risk adjustment models. For example, the MSPB-PAC LTCH QRP risk adjustment model uses MS-LTC-DRGs and Major Diagnostic Categories (MDCs) and the MSPB-PAC IRF QRP model includes Rehabilitation Impairment Categories (RICs). The HH and SNF settings do not have analogous variables that directly reflect a patient's clinical profile.
We will continue to work towards a more uniform measure across settings as we gain experience with these measures, and we plan to conduct further research and analyses about comparability of resource use measures across settings for clinically similar patients, different treatment periods and windows, risk adjustment, service exclusions, and other factors.
An MSPB-PAC SNF QRP episode begins at the episode trigger, which is defined as the patient's admission to a SNF. The admitting facility is the attributed provider, for whom the MSPB-PAC SNF QRP measure is calculated. The episode window is the time period during which Medicare FFS Part A and Part B services are counted towards the MSPB-PAC SNF QRP episode. Because Medicare FFS claims are already reported to the Medicare program for payment purposes, SNF providers would not be required to report any additional data to CMS for calculation of this measure. Thus, there would be no additional data collection burden from the implementation of this measure.
The episode window is comprised of a treatment period and an associated services period. The treatment period begins at the trigger (that is, on the day of admission to the SNF) and ends on the day of discharge from that SNF. Readmissions to the same facility occurring within 7 or fewer days do not trigger a new episode, and instead are included in the treatment period of the original episode. When two sequential stays at the same SNF occur within 7 or fewer days of one another, the treatment period ends on the day of discharge for the latest SNF stay. The treatment period includes those services that are provided directly or reasonably managed by the SNF provider that are directly related to the beneficiary's care plan. The associated services period is the time during which Medicare Part A and Part B services (with certain exclusions) are counted towards the episode. The associated services period begins at the episode trigger and ends 30 days after the end of the treatment period. The distinction between the treatment period and the associated services period is important because clinical exclusions of services may differ for each period. Certain services are excluded from the MSPB-PAC SNF QRP episodes because they are clinically unrelated to SNF care, and/or because SNF providers may have limited influence over certain Medicare services delivered by other providers during the episode window. These limited service-level exclusions are not counted towards a given SNF provider's Medicare spending to ensure that beneficiaries with certain conditions and complex care needs receive the necessary care. Certain services that are determined to be outside of the control of a SNF provider include planned hospital admissions, management of certain preexisting chronic conditions (for example, dialysis for end-stage renal disease (ESRD), and enzyme treatments for genetic conditions), treatment for preexisting cancers, organ transplants, and preventive screenings (for example, colonoscopy and mammograms). Exclusion of such services from the MSPB-PAC SNF QRP episode ensures that facilities do not have disincentives to treat patients with certain conditions or complex care needs.
An MSPB-PAC episode may begin during the associated services period of an MSPB-PAC SNF QRP episode in the 30 days post-treatment. One possible scenario occurs where a SNF provider discharges a beneficiary who is then admitted to an IRF within 30 days. The IRF claim would be included once as an associated service for the attributed provider of the first MSPB-PAC SNF QRP episode and once as a treatment service for the attributed provider of the second MSPB-PAC IRF QRP episode. As in the case of overlap between hospital and PAC episodes discussed earlier, this overlap is necessary to ensure continuous accountability between providers throughout a beneficiary's trajectory of care, as both providers share incentives to deliver high quality care at a lower cost to Medicare. Even within the SNF setting, one MSPB-PAC SNF QRP episode may begin in the associated services period of another MSPB-PAC SNF QRP episode in the 30 days post-treatment. The second SNF claim would be included once as an associated service for the attributed SNF provider of the first MSPB-PAC SNF QRP episode and once as a treatment service for the attributed SNF provider of the second MSPB-PAC SNF QRP episode. Again, this ensures that SNF providers have the same incentives throughout both MSPB-PAC SNF QRP episodes to deliver quality care and engage in patient-focused care planning and coordination. If the second MSPB-PAC SNF QRP episode were excluded from the second SNF provider's MSPB-PAC SNF QRP measure, that provider would not share the same incentives as the first SNF provider of first MSPB-PAC SNF QRP episode. The MSPB-PAC SNF QRP measure was designed to benchmark the resource use of each attributed provider against what its spending is expected to be as predicted through risk adjustment. As discussed further in this section, the measure takes the ratio of observed spending to expected spending for each episode and then takes the average of those ratios across all of the attributed provider's episodes. The measure is not a simple sum of all costs across a provider's episodes, thus mitigating concerns about double counting.
The comments we received on this topic, with their responses, appear below.
Medicare payments for Part A and Part B claims for services included in MSPB-PAC SNF QRP episodes, defined according to the methodology above, are used to calculate the MSPB-PAC SNF QRP measure. Measure calculation involves determination of the episode exclusions, the approach for standardizing payments for geographic payment differences, the methodology
In addition to service-level exclusions that remove some payments from individual episodes, we exclude certain episodes in their entirety from the MSPB-PAC SNF QRP measure to ensure that the MSPB-PAC SNF QRP measure accurately reflects resource use and facilitates fair and meaningful comparisons between SNF providers. The episode-level exclusions are as follows:
• Any episode that is triggered by a SNF claim outside the 50 states, DC, Puerto Rico, and U.S. Territories.
• Any episode where the claim(s) constituting the attributed SNF provider's treatment have a standard allowed amount of zero or where the standard allowed amount cannot be calculated.
• Any episode in which a beneficiary is not enrolled in Medicare FFS for the entirety of a 90-day lookback period (that is, a 90-day period prior to the episode trigger) plus episode window (including where the beneficiary dies), or is enrolled in Part C for any part of the lookback period plus episode window.
• Any episode in which a beneficiary has a primary payer other than Medicare for any part of the 90-day lookback period plus episode window.
• Any episode where the claim(s) constituting the attributed SNF provider's treatment include at least one related condition code indicating that it is not a prospective payment system bill.
The comments we received on this topic, with their responses, appear below.
Section 1899B(d)(2)(C) of the Act requires that the MSPB-PAC measures are adjusted for the factors described under section 1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appropriate. Medicare payments included in the MSPB-PAC SNF QRP measure are payment standardized and risk-adjusted. Payment standardization removes sources of payment variation not directly related to clinical decisions and facilitates comparisons of resource use across geographic areas. We proposed to use the same payment standardization methodology that was used in the NQF-endorsed hospital MSPB measure. This methodology removes geographic payment differences, such as wage index and geographic practice cost index (GPCI), incentive payment adjustments, and other add-on payments that support broader Medicare program goals including indirect graduate medical education (IME) and hospitals serving a disproportionate share of uninsured patients (DSH).
Risk adjustment uses patient claims history to account for case-mix variation and other factors that affect resource use but are beyond the influence of the attributed SNF provider. To assist with risk adjustment, we create mutually exclusive and exhaustive clinical case mix categories using the most recent institutional claim in the 60 days prior to the start of the MSPB-PAC SNF QRP episode. The beneficiaries in these clinical case mix categories have a greater degree of clinical similarity than the overall SNF patient population, and allow us to more accurately estimate Medicare spending. Our MSPB-PAC SNF QRP measure, adapted for the SNF setting from the NQF-endorsed hospital MSPB measure uses a regression framework with a 90-day hierarchical condition category (HCC) lookback period and covariates including the clinical case mix categories, HCC indicators, age brackets, indicators for originally disabled, ESRD enrollment, and long-term care status, and selected interactions of these covariates where sample size and predictive ability make them appropriate. We sought and considered public comment regarding the treatment of hospice services occurring within the MSPB-PAC SNF QRP episode window. Given the comments received, we proposed to include the Medicare spending for hospice services but risk adjust for them, such that MSPB-PAC SNF QRP episodes with hospice services are compared to a benchmark reflecting other MSPB-PAC SNF QRP episodes with hospice services. We believe this strikes a balance between the measure's intent of evaluating Medicare spending and ensuring that providers do not have incentives against the appropriate use of hospice services in a patient-centered continuum of care.
We understand the important role that sociodemographic factors, beyond age, play in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We will monitor the impact of sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2 years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as required by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
While we conducted analyses on the impact of age by sex on the performance of the MSPB-PAC SNF QRP risk-adjustment model, we did not propose to adjust the MSPB-PAC SNF QRP measure for socioeconomic factors. As this MSPB-PAC SNF QRP measure would be submitted for NQF endorsement, we prefer to await the results of this trial and study before deciding whether to risk adjust for socioeconomic factors. We will monitor the results of the trial, studies, and recommendations. We invited public comment on how socioeconomic and demographic factors should be used in risk adjustment for the MSPB-PAC SNF QRP measure. The comments we received on this topic, with their responses, appear below.
We recognize the importance of accounting for beneficiaries' functional and cognitive status in the calculation of predicted episode spending. We considered the potential use of functional status information in the risk adjustment models for the MSPB-PAC measures. However, we decided to not include this information derived from current setting-specific assessment instruments given the move towards standardized data as mandated by the IMPACT Act. We will revisit the inclusion of functional status in these measures' risk adjustment models in the future when the standardized functional status data mandated by the IMPACT Act-mandated become available. Once they are available, we will take a gradual and systematic approach in evaluating how they might be incorporated. We intend to implement any changes if appropriate based on testing.
The MPSB-PAC SNF QRP measure is a payment-standardized, risk-adjusted ratio that compares a given SNF provider's Medicare spending against the Medicare spending of other SNF providers within a performance period. Similar to the hospital MSPB measure, the ratio allows for ease of comparison over time as it obviates the need to adjust for inflation or policy changes.
The MSPB-PAC SNF QRP measure is calculated as the ratio of the MSPB-PAC Amount for each SNF provider divided by the episode-weighted median MSPB-PAC Amount across all SNF providers. To calculate the MSPB-PAC Amount for each SNF provider, one calculates the average of the ratio of the standardized episode spending over the expected episode spending (as predicted in risk adjustment), and then multiplies this quantity by the average episode spending level across all SNF providers nationally. The denominator for a SNF provider's MSPB-PAC SNF QRP measure is the episode-weighted national median of the MSPB-PAC Amounts across all SNF providers. An MSPB-PAC SNF QRP measure of less than 1 indicates that a given SNF provider's resource use is less than that of the national median SNF provider during a performance period. Mathematically, this is represented in equation (A) below:
The comments we received on this topic, with their responses, appear below.
The MSPB-PAC SNF QRP resource use measure is an administrative claims-based measure. It uses Medicare Part A and Part B claims from FFS beneficiaries and Medicare eligibility files.
The measure cohort includes Medicare FFS beneficiaries with a SNF treatment period ending during the data collection period.
We intend to provide initial confidential feedback to providers, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2016. We intend to publicly report this measure using claims data from discharges in CY 2017.
We proposed to use a minimum of 20 episodes for reporting and inclusion in the SNF QRP. For the reliability calculation, as described in the measure specifications, a link for which has been provided above, we used data from FY 2014. The reliability results support the 20 episode case minimum, and 100 percent of SNF providers had moderate or high reliability (above 0.4).
The comments we received on this topic, with their responses, appear below.
In summary, after consideration of the public comments we received, we are finalizing the specifications of the MSPB-PAC SNF QRP resource use measure, as proposed. A link for the measure specifications has been provided above.
Specifically, we are finalizing the definition of an MSPB-PAC SNF QRP episode, beginning from episode trigger. An episode window comprises a treatment period beginning at the trigger and ending upon discharge, and an associated services period beginning at the trigger and ending 30 days after the end of the treatment period. Readmissions to the same SNF within 7 or fewer days do not trigger a new episode and are instead included in the treatment period of the first episode.
We exclude certain services that are clinically unrelated to SNF care and/or because SNF providers may have limited influence over certain Medicare services delivered by other providers during the episode window. We also exclude certain episodes in their entirety from the MSPB-PAC SNF QRP measure, such as where a beneficiary is not enrolled in Medicare FFS for the entirety of the lookback period plus episode window.
We finalize the inclusion of Medicare payments for Part A and Part B claims for services included in the MSPB-PAC SNF QRP episodes to calculate the MSPB-PAC SNF QRP measure.
We are finalizing our proposal to risk adjust using covariates including age brackets, HCC indicators, prior inpatient stay length, ICU stay length, clinical case mix categories, and indicators for originally disabled, ESRD enrollment, long-term care status, and hospice claim in episode window. The measure also adjusts for geographic payment differences such as wage index and GPCI, and adjusts for Medicare payment differences resulting from IME and DSH.
We calculate the individual providers' MSPB-PAC Amount which is inclusive of MSPB-PAC SNF QRP observed episode spending over the expected episode spending as predicted through risk adjustment. Individual SNF providers' scores are calculated as their individual MSPB-PAC Amount divided by the median MSPB-PAC amount across all SNFs.
Sections 1899B(d)(1)(B) and 1899B(a)(2)(E)(ii) of the Act require the Secretary to specify a measure to address the domain of discharge to community by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We proposed to adopt the measure, Discharge to Community—PAC SNF QRP, for the SNF QRP for the FY 2018 payment determination and subsequent years as a Medicare FFS claims-based measure to meet this requirement.
This measure assesses successful discharge to the community from a SNF setting, with successful discharge to the community including no unplanned rehospitalizations and no death in the 31 days following discharge from the SNF. Specifically, this measure reports a SNF's risk-standardized rate of Medicare FFS residents who are discharged to the community following a SNF stay, and do not have an unplanned readmission to an acute care hospital or LTCH in the 31 days following discharge to community, and who remain alive during the 31 days following discharge to community. The term “community”, for this measure, is defined as home or self care, with or without home health services, based on Patient Discharge Status Codes 01, 06, 81, and 86 on the Medicare FFS claim.
Discharge to a community setting is an important health care outcome for
In addition to being an important outcome from a resident and family perspective, patients and residents discharged to community settings, on average, incur lower costs over the recovery episode, compared with those discharged to institutional settings.
Analyses conducted for ASPE on PAC episodes, using a 5 percent sample of 2006 Medicare claims, revealed that relatively high average, unadjusted Medicare payments are associated with discharge to institutional settings from IRFs, SNFs, LTCHs or HHAs, as compared with payments associated with discharge to community settings.
Measuring and comparing facility-level discharge to community rates is expected to help differentiate among facilities with varying performance in this important domain, and to help avoid disparities in care across resident groups. Variation in discharge to community rates has been reported within and across post-acute settings; across a variety of facility-level characteristics, such as geographic location (for example, regional location, urban or rural location), ownership (for example, for-profit or nonprofit), and freestanding or hospital-based units; and across patient-level characteristics, such as race and gender.
Discharge to community is an actionable health care outcome, as targeted interventions have been shown to successfully increase discharge to community rates in a variety of post-acute settings.
A TEP convened by our measure development contractor was strongly supportive of the importance of measuring discharge to community outcomes, and implementing the measure, Discharge to Community—PAC SNF QRP in the SNF QRP. The panel provided input on the technical specifications of this measure, including the feasibility of implementing the measure, as well as the overall measure reliability and validity. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at
We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 9, 2015, through December 8, 2015. Several stakeholders and organizations, including the MedPAC, among others, supported this measure for implementation. The public comment summary report for the measure is available on the CMS Web site at
The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this Discharge to Community—PAC SNF QRP measure in the SNF QRP. The MAP encouraged continued development of the measure to meet the mandate of the IMPACT Act. The MAP supported the alignment of this measure across PAC settings, using standardized claims data. More information about the MAP's recommendations for this measure is available at
Since the MAP's review and recommendation of continued development, we have continued to refine risk-adjustment models and conduct measure testing for this measure, as recommended by the MAP. This measure is consistent with the information submitted to the MAP, and the original MAP submission and our continued refinements support its scientific acceptability for use in quality reporting programs. As discussed with the MAP, we fully anticipate that additional analyses will continue as we submit this measure to the ongoing measure maintenance process.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use or other measures for post-acute care focused on discharge to community. In addition, we are unaware of any other post-acute care measures for discharge to community that have been endorsed or adopted by other consensus organizations. Therefore, we proposed the measure, Discharge to Community—PAC SNF QRP, under the Secretary's authority to specify non—NQF-endorsed measures under section 1899B(e)(2)(B) of the Act.
We proposed to use data from the Medicare FFS claims and Medicare eligibility files to calculate this measure. We proposed to use data from the “Patient Discharge Status Code” on Medicare FFS claims to determine whether a resident was discharged to a community setting for calculation of this measure. In all PAC settings, we tested the accuracy of determining discharge to a community setting using the “Patient Discharge Status Code” on the PAC claim by examining whether discharge to community coding based on PAC claim data agreed with discharge to community coding based on PAC assessment data. We found agreement between the two data sources in all PAC settings, ranging from 94.6 percent to 98.8 percent. Specifically, in the SNF setting, using 2013 data, we found 94.6 percent agreement in discharge to community codes when comparing discharge status codes on claims and the Discharge Status (A2100) on the Minimum Data Set (MDS) 3.0 discharge assessment, when the claims and MDS assessment had the same discharge date. We further examined the accuracy of the “Patient Discharge Status Code” on the PAC claim by assessing how frequently discharges to
Based on the evidence discussed above, we proposed to adopt the measure, Discharge to Community—PAC SNF QRP, for the SNF QRP for FY 2018 payment determination and subsequent years. This measure is calculated using 1 year of data. We proposed a minimum of 25 eligible stays in a given SNF for public reporting of the measure for that SNF. Since Medicare FFS claims data are already reported to the Medicare program for payment purposes, and Medicare eligibility files are also available, SNFs will not be required to report any additional data to CMS for calculation of this measure. The measure denominator is the risk-adjusted expected number of discharges to community. The measure numerator is the risk-adjusted estimate of the number of residents who are discharged to the community, do not have an unplanned readmission to an acute care hospital or LTCH in the 31-day post-discharge observation window, and who remain alive during the post-discharge observation window. The measure is risk-adjusted for variables such as age and sex, principal diagnosis, comorbidities, ventilator status, ESRD status, and dialysis, among other variables. For technical information about the proposed measure, including information about the measure calculation, risk adjustment, and denominator exclusions, we referred readers to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 SNF QRP Proposed Rule available at
We stated in the proposed rule that we intend to provide initial confidential feedback to SNFs, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2016. We intend to publicly report this measure using claims data from discharges in CY 2017. We plan to submit this measure to the NQF for consideration for endorsement.
We invited public comment on our proposal to adopt the measure, Discharge to Community—PAC SNF QRP, for the SNF QRP. The comments we received on this topic, with our responses, appear below.
We also note that Title II of the ADA regulations requires public entities to administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities (28 CFR 35.130(d)). The preamble discussion of the “integration regulation” explains that “the most integrated setting” is one that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible. Integrated settings are those that provide individuals with disabilities opportunities to live, work, and receive services in the greater community, like individuals without disabilities (28 CFR part 35, app. A (2010) (addressing § 35.130)).
In response to the commenters' concerns that SNFs may be unfairly advantaged by this measure as compared with other PAC providers, we would like to note that, in our measure development samples, the national discharge to community rate for SNFs was 47.26 percent, while this rate for IRFs was considerably higher (69.51 percent). Further, using an MDS-claims linked longitudinal file, we found that, of SNF stays that had a pre-hospitalization non-PPS MDS assessment suggesting prior nursing facility residence, two-thirds had a discharge status code of 30 (still patient), and approximately 18 percent had a discharge status code of 02 (acute hospital); less than 5 percent of these patients had a discharge status code of 01 (discharge to home or self care).
Because the discharge to community measure is a measure of discharge destination from the PAC setting, we have chosen to use the PAC-reported discharge destination (from the Medicare FFS claims) to determine whether a patient/resident was discharged to the community (based on discharge status codes 01, 06, 81, 86). We assessed the reliability of the claims discharge status code by examining agreement between discharge status on claims and assessment instruments for the same stay in all four PAC settings. We found between 94 and 99 percent agreement in coding of community discharges on matched claims and assessments in each of the PAC settings. We also assessed how frequently discharges to acute care, as indicated on the PAC claim, were confirmed by follow-up acute care claims, and found that 88 percent to 91 percent of IRF, LTCH, and SNF claims indicating acute care discharge were followed by an acute care claim on the day of, or day after, PAC discharge. We believe that these data support the use of the “Patient Discharge Status Code” from the PAC claim for determining discharge to a community setting for this measure.
The use of the claims discharge status code to identify discharges to the community was discussed at length with the TEP convened by our measure development contractor. TEP members did not express significant concerns regarding the accuracy of the claims discharge status code in coding community discharges, nor about our use of the discharge status code for defining this quality measure. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at
Details on the risk adjustment methodology and measure calculation algorithm for the discharge to community measure are available in the Measure Specifications for Measures Adopted in the FY 2017 SNF QRP Final Rule, posted on the CMS SNF QRP Web page at
Our goal is to develop measures that are meaningful to patients and consumers, and assist them in making informed choices when selecting post-acute providers. Since the goal of PAC for most patients and family members is to be discharged to the community and remain in the community, from a patient/consumer perspective, it is important to assess whether a patient remained in the community after discharge and to separately report discharge to community rates. In addition to assessing the success of community discharges, the inclusion of post-discharge readmission and death outcomes is intended to avoid the potential unintended consequence of inappropriate discharges to the community.
Analysis on our measure development sample has shown that, of SNF patients discharged to the community, approximately 15 percent had an unplanned readmission in the post-discharge observation window. The mean number of days from SNF discharge to readmission was 12.2 with a standard deviation of 9.7; 25 percent of readmissions occurred within 3 days of SNF discharge, and 50 percent within 10 days. Ignoring these post-discharge readmissions occurring soon after discharge to community would fail to reflect our intent with this measure.
In response to commenters' concerns about the exclusion of hospice patients/residents, we would like to note that we that we reached the decision to exclude patients/residents discharged to hospice after discussion with our TEP members and hospice clinical experts, comparison of post-discharge death rates for hospice and non-hospice patients/residents, and comparison of discharge planning and goals of care for hospice and non-hospice patients/residents. We concluded that it would be conceptually confusing to include in the discharge to community outcome both patients/residents who are successfully rehabilitated to live in the community for whom death is an undesirable outcome, and patients/residents who are terminally ill, and wish to die in the comfort of their home. The rationale for the added exclusion of patients/residents with a post-discharge hospice benefit aligns with the rationale for exclusion of discharges to hospice.
Many other commenters suggested that we include functional status in the risk adjustment for the discharge to community measure. Commenters noted that the literature demonstrates evidence that higher functional and cognitive status are strong predictors of individuals' ability to live independently, whereas lower functional status was a strong predictor of requiring long-term nursing home placement. Another commenter noted that functional status is associated with increased risk of 30-day all-cause hospital readmissions, and since readmissions and discharge to community are closely related, functional status risk adjustment is also important for this measure. One commenter suggested that the SNF and LTCH measures include risk adjustment that is similar to the risk adjustment for Case-Mix Groups (CMGs) in the IRF setting and Activities of Daily Living in the HHA setting. One commenter interpreted the measure proposal as stating that we will not adjust the quality measures, including the discharge to community measure, to account for functional status of beneficiaries until such data are collected under the IMPACT Act.
For details on measure specifications, modeling, and calculations, we refer readers to the Measure Specifications for Measures Adopted in the FY 2017 SNF QRP Final Rule, posted on the CMS SNF QRP Web page at
As with all our measures, we will monitor for unintended consequences as part of measure monitoring and evaluation to ensure that measures do not reduce quality of care or access for patients, result in disparities for certain patient sub-groups, or adversely affect healthcare spending.
Sections 1899B(a)(2)(E)(ii) and 1899B(d)(1)(C) of the Act require the Secretary to specify measures to address the domain of all-condition risk-adjusted potentially preventable hospital readmission rates by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We proposed the measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP as a Medicare FFS claims-based measure to meet this requirement for the FY 2018 payment determination and subsequent years.
The measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries in the 30 days post-SNF discharge. The SNF admission must have occurred within up to 30 days of discharge from a prior proximal hospital stay which is defined as an inpatient admission to an acute care hospital (including IPPS, CAH, or a psychiatric hospital). Hospital readmissions include readmissions to a short-stay acute care hospitals or an LTCH, with a diagnosis considered to be unplanned and potentially preventable. This measure is claims-based, requiring no additional data collection or submission burden for SNFs. Because the measure denominator is based on SNF admissions, each Medicare beneficiary may be included in the measure multiple times within the measurement period. Readmissions counted in this measure are identified by examining Medicare FFS claims data for readmissions to either acute care hospitals (IPPS or CAH) or LTCHs that occur during a 30-day window beginning two days after SNF discharge. This measure is conceptualized uniformly across the PAC settings, in terms of the measure definition, the approach to risk adjustment, and the measure calculation. Our approach for defining potentially preventable hospital readmissions is described in more detail below.
Hospital readmissions among the Medicare population, including beneficiaries that utilize PAC, are common, costly, and often preventable.
We have addressed the high rates of hospital readmissions in the acute care setting, as well as in PAC. For example, we developed the following measure: Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) (NQF #2510), as well as similar measures for other PAC providers (NQF #2502 for IRFs and NQF #2512 for LTCHs).
Several general methods and algorithms have been developed to assess potentially avoidable or preventable hospitalizations and readmissions for the Medicare population. These include the Agency for Healthcare Research and Quality's (AHRQ's) Prevention Quality Indicators, approaches developed by MedPAC, and proprietary approaches, such as the 3M
• Inadequate management of chronic conditions;
• Inadequate management of infections; and
• Inadequate management of other unplanned events.
Additional details regarding the definition for potentially preventable readmissions are available in the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 SNF QRP Proposed Rule, available at
This measure focuses on readmissions that are potentially preventable and also unplanned. Similar to the SNF 30-Day All-Cause Readmission Measure (NQF #2510), this measure uses the current version of the CMS Planned Readmission Algorithm as the main component for identifying planned readmissions. A complete description of the CMS Planned Readmission Algorithm, which includes lists of planned diagnoses and procedures, can be found on the CMS Web site at
This measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facility Quality Reporting Program, assesses potentially preventable readmission rates while accounting for patient demographics, principal diagnosis in the prior hospital stay, comorbidities, and other patient factors. While estimating the predictive power of patient characteristics, the model also estimates a facility-specific effect, common to patients treated in each facility. This measure is calculated for each SNF based on the ratio of the predicted number of risk-adjusted, unplanned, potentially preventable hospital readmissions that occur within 30 days after a SNF discharge, including the estimated facility effect, to the estimated predicted number of risk-adjusted, unplanned inpatient hospital readmissions for the same patients treated at the average SNF. A ratio above 1.0 indicates a higher than expected readmission rate (worse) while a ratio below 1.0 indicates a lower than expected readmission rate (better). This ratio is referred to as the standardized risk ratio (SRR). The SRR is then multiplied by the overall national raw rate of potentially preventable readmissions for all SNF stays. The resulting rate is the risk-standardized readmission rate (RSRR) of potentially preventable readmissions.
An eligible SNF stay is followed until: (1) The 30-day post-discharge period ends; or (2) the patient is readmitted to an acute care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned and potentially preventable, it is counted as a readmission in the measure calculation. If the readmission is planned, the readmission is not counted in the measure rate.
This measure is risk adjusted. The risk adjustment modeling estimates the effects of patient characteristics, comorbidities, and select health care variables on the probability of readmission. More specifically, the risk-adjustment model for SNFs accounts for demographic characteristics (age, sex, original reason for Medicare entitlement), principal diagnosis during the prior proximal hospital stay, body system specific surgical indicators, comorbidities, length of stay during the patient's prior proximal hospital stay, intensive care unit (ICU) utilization, end-stage renal disease status, and number of acute care hospitalizations in the preceding 365 days.
This measure is calculated using 1 calendar year of FFS claims data, to ensure the statistical reliability of this measure for facilities. In addition, we proposed a minimum of 25 eligible stays for public reporting of the measure.
A TEP convened by our measure development contractor provided recommendations on the technical specifications of this measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members' ratings of conditions proposed as being potentially preventable, are available in the TEP Summary Report available on the CMS Web site at
The MAP encouraged continued development of the measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP's recommendations for this measure is available at
We reviewed the NQF's consensus endorsed measures and were unable to identify any NQF endorsed measures focused on potentially preventable
We plan to submit the measure to the NQF for consideration of endorsement. We stated in the proposed rule that we intended to provide initial confidential feedback to SNFs, prior to public reporting of this measure, based on 1 calendar year of claims data from discharges in CY 2016. We also stated that we intended to publicly report this measure using claims data from CY 2017.
We invited public comment on our proposal to adopt the measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP. We received several comments, which are summarized with our responses below.
Another commenter supported the proposed risk-adjustment methodology commenting that it will provide a valid assessment of quality of care in
We discuss above the similarities and differences between the PPR and discharge to community measure. Although there are conceptual similarities between the measures, we believe that each measure provides important information for quality improvement purposes and will enable SNFs to target different aspects of care provided.
We acknowledge that increasing the minimum denominator size for public reporting of this measure may increase the reliability of the measure, but doing so would prevent a substantial number of facilities from reporting this measure.
Another commenter expressed concern about the accuracy of claims-based data, but supported the effort to limit the data collection burden placed on providers.
With respect to the use of claims data to calculate this measure, multiple studies have been conducted to examine the validity of using Medicare hospital claims to calculate several NQF endorsed quality measures for public reporting.
We proposed to adopt one new quality measure to meet the requirements of the IMPACT Act for the FY 2020 payment determination and subsequent years. The measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, addresses the IMPACT Act quality domain of Medication Reconciliation.
Sections 1899B (a)(2)(E)(i)(III) and 1899B(c)(1)(C) of the Act require the Secretary to specify a quality measure to address the domain of medication reconciliation by October 1, 2018 for IRFs, LTCHs and SNFs; and by January 1, 2017 for HHAs. We proposed to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PPAC SNF QRP, for the SNF QRP as a resident-assessment based, cross-setting quality measure to meet the IMPACT Act requirements with data collection beginning October 1, 2018 for the FY 2020 payment determinations and subsequent years.
This measure assesses whether PAC providers were responsive to potential or actual clinically significant medication issue(s) when such issues were identified. Specifically, the proposed quality measure reports the percentage of resident stays in which a drug regimen review was conducted at the time of admission and timely follow-up with a physician occurred each time potential clinically significant medication issues were identified throughout that stay. For this proposed quality measure, a drug regimen review is defined as the review of all medications or drugs the patient is taking to identify any potential clinically significant medication issues. This proposed quality measure utilizes both the processes of medication reconciliation and a drug regimen review, in the event an actual or potential medication issue occurred. The measure informs whether the PAC facility identified and addressed each clinically significant medication issue and if the facility responded or addressed the medication issue in a timely manner. Of note, drug regimen review in PAC settings is generally considered to include medication reconciliation and review of the patient's drug regimen to identify potential clinically significant medication issues.
Medication reconciliation is a process of reviewing an individual's complete and current medication list. Medication reconciliation is a recognized process for reducing the occurrence of medication discrepancies that may lead to Adverse Drug Events (ADEs).
The performance of timely medication reconciliation is valuable to the process of drug regimen review. Preventing and responding to ADEs is of critical importance as ADEs account for significant increases in health services utilization and costs
Medication errors include the duplication of medications, delivery of an incorrect drug, inappropriate drug omissions, or errors in the dosage, route, frequency, and duration of medications. Medication errors are one of the most common types of medical errors and can occur at any point in the process of ordering and delivering a medication. Medication errors have the potential to
There is strong evidence that medication discrepancies occur during transfers from acute care facilities to post-acute care facilities. Discrepancies occur when there is conflicting information documented in the medical records. Almost one-third of medication discrepancies have the potential to cause patient harm.
Medication reconciliation has been identified as an area for improvement during transfer from the acute care facility to the receiving post-acute care facility. Post-acute care facilities report gaps in medication information between the acute care hospital and the receiving post-acute care setting when performing medication reconciliation.
A TEP convened by our measure development contractor provided input on the technical specifications of this proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, including components of reliability, validity and the feasibility of implementing the measure across PAC settings. The TEP supported the measure's implementation across PAC settings and was supportive of our plans to standardize this measure for cross-setting development. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Video Web site at
We solicited stakeholder feedback on the development of this measure by means of a public comment period held from September 18 through October 6, 2015. Through public comments submitted by several stakeholders and organizations, we received support for implementation of this measure. The public comment summary report for the measure is available on the CMS Public Comment Web site at
The NQF-convened MAP met on December 14 and 15, 2015 and provided input on the use of this proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP. The MAP encouraged continued development of the proposed quality measure to meet the mandate added by the IMPACT Act. The MAP agreed with the measure gaps identified by us including medication reconciliation, and stressed that medication reconciliation be present as an ongoing process. More information about the MAPs recommendations for this measure is available at
Since the MAP's review and recommendation of continued development, we have continued to refine this measure consistent with the MAP's recommendations. The measure is consistent with the information submitted to the MAP and support its scientific acceptability for use in quality reporting programs. Therefore, we proposed this measure for implementation in the SNF QRP as required by the IMPACT Act.
We reviewed the NQF's endorsed measures and identified one NQF-endorsed cross-setting quality measure related to medication reconciliation, which applies to the SNF, LTCH, IRF, and HHA settings of care: Care for Older Adults (COA) (NQF #0553). The quality measure, Care for Older Adults (COA) (NQF #0553) assesses the percentage of adults 66 years and older who had a medication review. The Care for Older Adults (COA) (NQF #0553) measure requires at least one medication review conducted by a prescribing practitioner or clinical pharmacist during the measurement year and the presence of a medication list in the medical record. This is in contrast to the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, which reports the percentage of resident stays in which a drug regimen review was conducted at the time of admission and that timely follow-up with a physician occurred each time one or more potential clinically significant medication issues were identified throughout that stay.
After careful review of both quality measures, we decided to propose the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP for the following reasons:
• The IMPACT Act requires the implementation of quality measures using patient assessment data that are standardized and interoperable across PAC settings. The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, employs three standardized resident-assessment data elements for each of the four PAC settings so that data are standardized, interoperable, and comparable; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not contain data elements that are standardized across all four PAC settings.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, requires the identification of potential clinically significant medication issues at the beginning, during and at the end of the resident's stay to capture data on each resident's complete PAC stay; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure only requires annual documentation in the form of a medication list in the medical record of the target population.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, includes identification of the potential clinically significant medication issues and communication with the physician (or physician designee), as well as resolution of the issue(s) within a rapid timeframe (by midnight of the next calendar day); whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not include any follow-up or timeframe in which the follow-up would need to occur.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, does not have age exclusions; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure limits the measure's population to patients aged 66 and older.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, will be reported to SNFs quarterly to facilitate internal quality monitoring and quality improvement in areas such as resident safety, care coordination and resident satisfaction; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure would not enable quarterly quality updates, and thus data comparisons within and across PAC providers would be difficult due to the limited data and scope of the data collected.
Therefore, based on the evidence discussed above, we proposed to adopt the quality measure entitled, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, for the SNF QRP for FY 2020 payment determination and subsequent years. We plan to submit the quality measure to the NQF for consideration for endorsement.
The calculation of the proposed quality measure would be based on the data collection of three standardized items to be included in the MDS. The collection of data by means of the standardized items would be obtained at admission and discharge. For more information about the data submission required for this measure, please see section V.B.9. of the FY 2017 SNF PPS proposed rule (81 FR 24270 through 24273).
The standardized items used to calculate this proposed quality measure do not duplicate existing items currently used for data collection within the MDS. The measure denominator is the number of resident stays with a discharge or expired assessment during the reporting period. The measure numerator is the number of stays in the denominator where the medical record contains documentation of a drug regimen review conducted at: (1) Admission; and (2) discharge with a look back through the entire resident stay, with all potential clinically significant medication issues identified during the course of care and followed-up with a physician or physician designee by midnight of the next calendar day. This measure is not risk adjusted. For technical information about this measure including information about the measure calculation and discussion pertaining to the standardized items used to calculate this measure, refer to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 SNF QRP Proposed Rule available at
Data for the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, would be collected using the MDS with submission through the Quality Improvement Evaluation System (QIES) Assessment Submission and Processing (ASAP) system.
We invited public comment on our proposal to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP, for the SNF QRP. The comments we received on this topic, with their responses, appear below.
As noted above, we plan to conduct further testing on this measure once we have started collecting data from the PAC settings. Analysis of this data will allow us to evaluate whether the measure satisfies NQF endorsement criteria (for example, measure performance). Once we have completed this additional measure performance testing, we plan to submit the measure to NQF for endorsement.
Several commenters conveyed concern that the time frame of the measure (for example, following up by midnight of the next calendar day) will create challenges for rural SNFs without an in-house pharmacy or physicians, and that the measure will increase operational and financial challenges for long-term care providers. A few commenters asked us to consider reforms to mitigate the burden for providers located in rural areas. Another commenter conveyed that additional questions on the MDS would result in additional staff cost and effort. One commenter noted that many SNFs have not implemented electronic medical records, which will increase the burden associated with collecting this information. One commenter recommended that we work with stakeholders to develop a policy that aligns with the resident's best interest and accounts for the complex post-acute care setting.
We appreciate the commenter's comment and interest in future quality measure development, including measures related to sending a medication list at discharge and adding a medication management measure. As a requirement of this measure and as with common clinical practice, PAC facilities are expected to document information pertaining to the process of drug regimen review, which includes medication reconciliation, in the resident's discharge medical record. However, we will take the commenters recommendations into consideration as we continue to develop additional quality measures under the domain of Medication Reconciliation.
We invited comment on the importance, relevance, appropriateness, and applicability for each of the quality measures in Table 13 for future years in
Several commenters suggested the development of function measures addressing cognition. One commenter remarked on the limited number of items in the MDS related to communication, cognition, and swallowing and noted that these three domains stand as major obstacles to validly determine the status, needs, and outcomes of individuals with neurological disorders. The commenter encouraged us to adopt a specific screening tool, the Montreal Cognitive Assessment (MoCA), or similar screening tools and assessment tools (that is, CARE-C) to best meet the needs of Medicare beneficiaries and the intent of the IMPACT Act.
Another commenter recommended that we consider community-based measures of function, examining patient outcomes after they are discharged from a PAC setting. One commenter encouraged the development of an outcome measure to meet the IMPACT Act domain of functional status, suggesting the NH Compare measure, Percent of Residents Whose Need for Help with Activities of Daily Living has Increased (Long Stay).
In the FY 2016 SNF PPS final rule (80 FR 46455), we established the requirements associated with the timing of data submission, beginning with the submission of data required for the FY 2018 payment determination, for new SNFs. We finalized that a new SNF would be required to begin reporting data on any quality measures finalized for that program year by no later than the first day of the calendar quarter subsequent to 30 days after the date on its CMS Certification Number (CCN) notification letter. For example, for the FY 2018 payment determinations, if a SNF received its CCN on August 28, 2016, and 30 days are added (August 28 + 30 days = September 27), the SNF would be required to submit data for residents who are admitted beginning on October 1, 2016. We did not propose any new policies related to the participation and timing for new SNFs.
In the FY 2016 SNF PPS final rule (80 FR 46457), for the FY 2018 payment determination, we finalized that SNFs submit data on the three finalized quality measures for residents who are admitted to the SNF on and after October 1, 2016, and discharged from the SNF up to and including December 31, 2016, using the data submission method and schedule that we proposed in this section. We also finalized that we would collect that single quarter of data for FY 2018 to remain consistent with the usual October release schedule for the MDS, to give SNFs a sufficient amount of time to update their systems so that they can comply with the new data reporting requirements, and to give CMS a sufficient amount of time to determine compliance for the FY 2018 program. The proposed use of one quarter of data for the initial year of quality reporting is consistent with the approach we used to implement a number of other QRPs, including the LTCH, IRF, and Hospice QRPs.
We also finalized that, following the close of the reporting quarter, October 1, 2016, through December 31, 2016, for the FY 2018 payment determination, SNFs would have an additional 5.5 months to correct and/or submit their quality data and we finalized that the final deadline for submitting data for the FY 2018 payment determination would be May 15, 2017 (80 FR 46457). The statement that SNFs would have an additional 5.5 months was incorrect in that the time between the close of the quarter on December 31, 2016 and May 15, 2017 is 4.5 months, not 5.5 months. Therefore, we proposed that SNFs will have 4.5 months, from January 1, 2017 through May 15, 2017, following the data submission period of October 1, 2016 through December 31, 2016, in which to complete their data submissions and make corrections to their data where necessary.
We invited public comments on our proposal to correct the time frame for SNFs to correct and/or submit their quality data used for the FY 2018 payment determination to consist of 4.5 months rather than the 5.5 months stated in the FY 2016 SNF PPS final rule (80 FR 46457). We received no comments on this proposed correction.
In the FY 2016 SNF PPS final rule (80 FR 46457), we finalized that, for the FY 2019 payment determination, we would collect data from the 2nd through 4th quarters of FY 2017 (that is, data for residents who are admitted from January 1st and discharged up to and including September 30th) to determine whether a SNF has met its quality reporting requirements for that FY. In the FY 2016 SNF PPS final rule we also finalized that beginning with the FY 2020 payment determination, we would move to a full year of fiscal year (FY) data collection. We intend to propose the FY 2019 payment determination quality reporting data submission deadlines in future rulemaking.
In the FY 2016 SNF PPS final rule (80 FR 46457), we also finalized that we would collect FY 2018 data in a manner that would remain consistent with the usual October release schedule for the MDS. However, to align with the data reporting cycles in other quality reporting programs, in contrast to fiscal year data collection that we finalized last year, we are now proposing to move to calendar year (CY) reporting following the initial reporting of data from October 1, 2016, through December 31, 2016, as finalized in the FY 2016 SNF PPS final rule (80 FR 46457), for the FY 2018 payment determination.
More specifically, we proposed to follow a CY schedule for measure and data submission requirements that includes quarterly deadlines following each quarter of data submission, beginning with data reporting for the FY 2019 payment determinations. Each quarterly deadline will occur approximately 4.5 months after the end of a given calendar quarter as outlined below in Table 15. This timeframe will give SNFs enough time to submit corrections to the assessment data, as discussed below. Thus, if finalized, the FY 2019 payment determination would be based on 12 calendar months of data reporting beginning on January 1, 2017, and ending on December 31, 2017 (that is, data from January 1, 2017, up to and including December 31, 2017.) This approach would enable CMS to move to a full 12 months of data reporting immediately following the first 3 months of reporting (October 1, 2016 through December 31, 2016 for the FY 2018 payment determination) rather than an interim year which uses only 9 months of data, and a subsequent 12 months of FY data reporting following the initial reporting for the FY 2018 payment determination.
Our proposal to implement, for the FY 2019 payment determination and all subsequent years for assessment-based data submitted via the MDS, calendar year, quarterly data collection periods followed by data submission deadlines is consistent with the approach taken by the LTCH QRP and the IRF QRP, which are based on CY data and for which each data collection quarterly period is followed by a 4.5 month time frame that allows for the continued submission and correction of data until a deadline has been reached for that quarter of data. At that point, the data submitted becomes a frozen “snapshot” of data for both public reporting purposes and for the purposes of determining compliance in meeting the data reporting thresholds.
We invited public comments on our proposal to adopt calendar year data collection time frames, following the initial 3-month reporting period from October 1, 2016, to December 31, 2016, for all measures finalized for adoption
Further, we proposed that beginning with FY 2019 payment determination, assessment-based measures finalized for adoption into the SNF QRP will follow a CY schedule of data reporting, quarterly review and correction periods, and data submission deadlines as provided in Tables 15 and 16 for all subsequent payment determination years unless otherwise specified:
We invited public comments on the proposed data collection period and data submission deadlines for all assessment-based measures finalized for adoption into the SNF QRP beginning with the FY 2019 payment determination, specifically, on our use of CY reporting with data submission deadlines following a period of approximately 4.5 months after each quarterly data collection period to enable the correction of such data, as outlined in Table 16. We received no additional comments on this proposed general schedule.
The Medicare Spending per Beneficiary—PAC SNF QRP, Discharge to Community—PAC SNF QRP, and Potentially Preventable Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP measures are Medicare FFS claims-based measures. Because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, no additional information collection will be required from SNFs. As discussed in section V.B.6. of the FY 2017 SNF PPS proposed rule (81 FR 24257 through 24267), for the Medicare Spending per Beneficiary—PAC SNF QRP Measure, the Discharge to Community—PAC SNF QRP measure and the Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP, we proposed to use 1 year of claims data beginning with CY 2016 claims data to inform confidential feedback reports for SNFs, and CY 2017 claims data for public reporting.
We invited public comments on this proposal. We did not receive any comments specifically related to this proposal.
We proposed that SNFs would submit data on the Drug Regimen Review measure by completing data elements to be included in the MDS and then submitting the MDS to CMS through the Quality Improvement and Evaluation System (QIES), Assessment Submission and Processing System (ASAP) system beginning October 1, 2018. For more information on SNF QRP reporting through the QIES ASAP system, refer to the “Related Links” section at the bottom of
We invited public comments on our proposed SNF QRP data collection requirements for the Drug Regimen Review measure for the FY 2020 payment determination and subsequent years. We did not receive any comments related to this topic.
For the FY 2020 payment determination, we proposed that SNFs submit data on the proposed assessment-based quality measure for residents who are admitted to the SNF on and after October 1, 2018, and discharged from SNF Part A covered stays (that is, both residents discharged from Part A covered stays and physically discharged) up to and including December 31, 2018, using the data submission schedule that we proposed in this section.
We proposed to collect a single quarter of data for the FY 2020 payment determination to remain consistent with the usual October release schedule for the MDS, to give SNFs a sufficient amount of time to update their systems so that they can comply with the new data reporting requirements, and to give CMS a sufficient amount of time to determine compliance for the FY 2020 program. The proposed use of one quarter of data for the initial year of assessment data reporting in the SNF QRP is consistent with the approach we used previously for the SNF QRP and in other QRPs, including the LTCH, IRF, and Hospice QRPs in which we have finalized the use of fewer than 12 months of data.
We also proposed that following the close of the reporting quarter, October 1, 2018, through December 31, 2018, for the FY 2020 payment determination, SNFs would have an additional 4.5 months to correct and/or submit their quality data and that the final deadline for submitting data for the FY 2020 payment determination would be May 15, 2019. We further proposed that for the FY 2021 payment determination and subsequent years, we will collect data using the CY reporting cycle as previously proposed in section V.B.9.c. of the FY 2017 SNF PPS proposed rule (81 FR 24271 through 24272).
We invited public comment on the proposed new SNF QRP assessment-based quality measure data collection period and data submission deadline affecting the FY 2020 payment determination. We did not receive comments related to this topic.
For this measure, we also proposed to follow a CY schedule for measure and data submission requirements that includes quarterly deadlines following each quarter of data submission, beginning with data reporting for the FY 2021 payment determinations. As previously discussed, each quarterly deadline will occur approximately 4.5 months after the end of a given calendar quarter as outlined in Table 18. Thus, if finalized, the FY 2021 payment determination would be based on 12 calendar months of data reporting beginning January 1, 2019, and ending December 31, 2019. Table 18 provides the data submission and collection method, data collection period and data submission timelines for the assessment-based quality measure affecting the FY 2021 payment determination and subsequent years.
We invited public comment on the SNF QRP assessment-based quality measure data collection period and data submission deadline affecting the FY 2021 payment determination and subsequent years for the new assessment-based measure. We did not receive comments related to this topic.
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46458) for our finalized policies regarding data completion thresholds for the FY 2018 payment determination and subsequent years. We finalized that, beginning with the FY 2018 payment determination, SNFs must report all of the data necessary to calculate the proposed quality measures on at least 80 percent of the MDS assessments that they submit. We also finalized that, for the FY 2018 SNF QRP, any SNF that does not meet the proposed requirement that 80 percent of all MDS assessments submitted contain 100 percent of all data items necessary to calculate the SNF QRP measures would be subject to a reduction of 2 percentage points to its FY 2018 market basket percentage. We finalized that a SNF has reported all of the data necessary to calculate the measures if the data actually can be used for purposes of calculating the quality measures, as opposed to, for example, the use of a dash [-], to indicate that the SNF was unable to perform a pressure ulcer assessment. We wish to clarify that the provision we
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46458 through 46459) for a summary of our approach to the development of data validation process for the SNF QRP. At this time, we are continuing to explore data validation methodology that will limit the amount of burden and cost to SNFs, while allowing us to establish estimations of the accuracy of SNF QRP data. We did not propose any further details pertaining to the data validation process for the SNF QRP, but we plan to do so in future rulemaking cycles. While we did not solicit comments specifically regarding data validation requirements for the SNF QRP, we received several comments related to this topic.
We refer readers to the FY 2016 SNF PPS final rule (80 FR 46459 through 46460) for our finalized policies regarding submission exception and extension requirements for the FY 2018 payment determination and subsequent years. We did not propose any changes to these policies.
We refer the reader to the FY 2016 SNF PPS final rule (80 FR 46460 through 46461) for a summary of our finalized reconsideration and appeals procedures for the SNF QRP for FY 2018 payment determination and subsequent years. We did not propose any changes to these procedures.
Section 1899B(g) of the Act requires the Secretary to establish procedures for public reporting of SNFs' performance, including the performance of individual SNFs, on quality measures specified under paragraph (c)(1) and resource use and other measures specified under paragraph (d)(1) of the Act (collectively, IMPACT Act measures) beginning not later than 2 years after the applicable specified application date under section 1899B(a)(2)(E) of the Act. Under section 1899B(g)(2) of the Act, the procedures must ensure, including through a process consistent with the process applied under section 1886(b)(3)(B)(viii)(VII) of the Act, which refers to public display and review requirements in the Hospital Inpatient Quality Reporting Program (HIQR), that each SNF has the opportunity to review and submit corrections to its data and information that are to be made public prior to the information being made public. In future rulemaking, we intend to propose a policy to publicly display performance information for individual SNFs on IMPACT Act measures, as required under the Act.
We proposed in the FY 2017 SNF PPS proposed rule to implement procedures that would allow individual SNFs to review and correct their data and information on IMPACT Act measures that are to be made public before those measure data are made public.
For assessment-based measures, we proposed a process by which we would provide each SNF with a confidential feedback report that would allow the SNF to review its performance on such measures and, during a review and correction period, to review and correct the data the SNF submitted to CMS via the CMS Quality Improvement and Evaluation System (QIES) Assessment Submission and Processing (ASAP) system for each such measure. In addition, during the review and correction period, the SNF would be able to request correction of any errors in the assessment-based measure rate calculations.
We proposed that these confidential feedback reports would be available to each SNF using the Certification and Survey Provider Enhanced Reporting (CASPER) System. We refer to these reports as the SNF Quality Measure (QM) Reports. We proposed to provide monthly updates to the data contained in these reports that pertain to assessment-based data, as the data become available. We proposed to provide the reports so that providers would be able to view their data and information at both the facility- and resident-level for quality measures. The CASPER facility-level QM Reports may contain information such as the numerator, denominator, facility rate, and national rate. The CASPER patient-level QM Reports may contain individual patient information which will provide information related to which patients were included in the quality measures to identify any potential errors. In addition, we would make other reports available in the CASPER System, such as MDS data submission reports and provider validation reports, which would disclose SNFs' data submission status, providing details on all items submitted for a selected assessment and the status of records submitted. Additional information regarding the content and availability of these confidential feedback reports would be provided on an ongoing basis at
As proposed in section III.D.2.i.ii. of the FY 2017 SNF PPS Proposed Rule (81 FR 24270), SNFs would have approximately 4.5 months after the reporting quarter to correct any errors that appear on the CASPER-generated QM reports pertaining to their assessment-based data used to calculate the assessment-based measures. During the time of data submission for a given quarterly reporting period and up until the quarterly submission deadline, SNFs could review and perform corrections to errors in the assessment data used to calculate the measures and could request correction of measure calculations. However, once the quarterly submission deadline occurs, the data is “frozen” and calculated for public reporting; providers can no longer submit any corrections. We would encourage SNFs to submit timely assessment data during a given quarterly reporting period and review their data and information early during the review and correction period so that they can identify errors and resubmit data before the data submission deadline.
As noted in this section, the data would be populated into the confidential feedback reports, and we intend to update the reports monthly with all data that have been submitted and are available. We believe that a proposed data submission and review period, consisting of the reporting quarter plus approximately 4.5 months, is sufficient time for SNFs to submit, review and, where necessary, correct their data and information. These proposed time frames and deadlines for review and correction of assessment-based measures and data satisfy the statutory requirement that SNFs be provided the opportunity to review and correct their data and information that is to be made public and are consistent with the informal process hospitals follow in the Hospital Inpatient Quality Reporting (IQR) Program.
We proposed that, in addition to the data collection/submission quarterly reporting periods that are followed by data review and correction periods and submission deadlines, we would give SNFs a 30-day preview period prior to public display during which SNFs may preview the performance information on their measures that will be made public. We proposed to provide a preview report also using the CASPER System with which SNFs are familiar. The CASPER preview reports would inform providers of their performance on each measure which will be publicly reported. The CASPER preview reports for the reporting quarter will be available after the 4.5-month review and correction period and its data submission deadline, and the reports are refreshed on a quarterly basis for those measures publicly reported quarterly and annually for those measures publicly reported annually. We proposed to give SNFs 30 days to review this information, beginning from the date on which they can access the preview report. Corrections to the underlying data would not be permitted during this time; however, SNFs may contest incorrect measure calculations during the 30-day preview period. We proposed that if CMS determines that the measure, as it is displayed in the preview report, contains a calculation error, CMS could suppress the data on the public reporting Web site, recalculate the measure and publish it at the time of the next scheduled public display date. This process would be consistent with that followed in the Hospital IQR Program. If finalized, we intend to utilize a subregulatory mechanism, such as our SNF QRP Web site, to explain the process for how and when providers may ask for a correction to their measure calculations.
We invited public comment on these proposals. The comments we received on this topic, with their responses, appear below.
In addition to assessment-based measures, we have also proposed claims-based measures for the SNF QRP. Section 1899B(g)(2) of the Act requires prepublication provider review and correction procedures that are consistent with those followed in the Hospital IQR Program. For claims-based measures used in the Hospital IQR Program, we provide hospitals 30 days to preview their claims-based measures and data in a preview report containing aggregate hospital-level data. We proposed to adopt a similar process for the SNF QRP.
Prior to the public display of our claims-based measures, in alignment with the Hospital IQR, HAC and Hospital VBP Programs, we proposed to make available through the CASPER system a confidential preview report that will contain information pertaining to claims-based measure rate calculations, for example, facility and national rates. Such data and
The proposed claims-based measures—Medicare Spending per Beneficiary—PAC SNF QRP Measure; Discharge to Community—PAC SNF QRP and Potentially Preventable 30 Day Post-Discharge Readmission Measure for SNF QRP—use Medicare administrative data from hospitalizations for Medicare FFS beneficiaries. Public reporting of data will be based on one CY of data. We proposed to create data extracts using claims data for these claims based measures, at least 90 days after the last discharge date in the applicable period (12 calendar months preceding), which we will use for the calculations. For example, if the last discharge date in the applicable period for a measure is December 31, 2017, for data collection January 1, 2017, through December 31, 2017, we would create the data extract on approximately March 31, 2018, at the earliest, and use that data to calculate the claims-based measures for that applicable period. Since SNFs would not be able to submit corrections to the underlying claims snapshot or add claims (for those measures that use SNF claims) to this data set at the conclusion of the at least 90-day period following the last date of discharge used in the applicable period, at that time we would consider SNF claims data to be complete for purposes of calculating the claims-based measures.
We proposed that beginning with data that will be publicly displayed in 2018, claims-based measures will be calculated using claims data with at least a 90 day run off period after the last discharge date in the applicable period, at which time we would create a data extract or snapshot of the available claims data to use for the measure calculations. This timeframe allows us to balance the need to provide timely program information to SNFs with the need to calculate the claims-based measures using as complete a data set as possible. As noted, under this proposed procedure, during the 30-day preview period, SNFs would not be able to submit corrections to the underlying claims data or add new claims to the data extract. This is for two reasons. First, for certain measures, the claims data used to calculate the measure is derived not from the SNF's claims, but from the claims of another provider. For example, the measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP uses claims data submitted by the hospital to which the patient was readmitted. The claims are not those of the SNF and, therefore, the SNF could not make corrections to them. Second, even where the claims used to calculate the measures are those of the SNF, it would not be not possible to correct the data after it is extracted for the measures calculation. This is because it is necessary to take a static “snapshot” of the claims to perform the necessary measure calculations.
We seek to have as complete a data set as possible. We recognize that the proposed at least 90-day “run-out” period when we would take the data extract to calculate the claims-based measures is less than the Medicare program's current timely claims filing policy, under which providers have up to one year from the date of discharge to submit claims. We considered a number of factors in determining that the proposed at least 90-day run-out period is appropriate to calculate the claims-based measures. After the data extract is created, it takes several months to incorporate other data needed for the calculations (particularly in the case of risk-adjusted or episode-based measures). We then need to generate and check the calculations. Because several months lead time is necessary after acquiring the data to generate the claims-based calculations, if we were to delay our data extraction point to 12 months after the last date of the last discharge in the applicable period, we would not be able to deliver the calculations to SNFs sooner than 18 to 24 months after the last discharge. We believe this would create an unacceptably long delay, both for SNFs and for us to deliver timely calculations to SNFs for quality improvement.
We invited public comment on these proposals. The comments we received on this topic, with their responses, appear below.
Section 1899B(f) of the Act requires the Secretary to provide confidential
We intend to provide detailed procedures to SNFs on how to obtain their confidential feedback CASPER reports on the SNF QRP Web site at
We sought public comment on this proposal to satisfy the requirement to provide confidential feedback reports to SNFs. The comments we received on this topic, with their responses, appear below.
In the FY 2017 SNF PPS proposed rule (81 FR 24275 through 24276), we provided an update on the progress we have made in the SNF Payment Models Research project. Specifically, we discussed the two prior Technical Expert Panels (TEPs) hosted by Acumen, LLC, the contractor conducting this research. On June 15, 2016, during the comment period associated with the FY 2017 SNF PPS proposed rule, Acumen hosted a third TEP which brought together many of the concepts and developments from the prior TEPs and analysis. We received a great deal of support from TEP panelists, as well as some excellent feedback on ways to improve the research going forward. As noted in the FY 2017 SNF PPS proposed rule, materials associated with these TEPs are available on the CMS Web site at
In the FY 2017 SNF PPS proposed rule, we requested comments on the SNF PMR project. The comments we received on this topic, with responses, appear below.
We appreciate all of the comments received on this topic and look forward to providing additional details on the CMS Web site and in future rulemaking. We invite the public to provide comments outside of the rulemaking process by contacting us at
Section III.D.2.f. of this preamble sets out three claims-based measures that we are adopting for the SNF QRP beginning with the FY 2018 payment year: (1) Medicare Spending per Beneficiary—PAC SNF QRP; (2) Discharge to Community—PAC SNF QRP; and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP. Because they are claims-based, the measures can be calculated using data that are already reported to the Medicare program for payment purposes. Consequently, we believe there will be no additional burden on SNFs in connection with the the reporting of data needed to calculate these measures.
We did not receive any public comments on this topic in response to the FY 2017 SNF PPS proposed rule.
For the FY 2020 payment determination and subsequent years, we are adopting for the SNF QRP an assessment-based measure entitled Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC SNF QRP. The data for this measure will be collected and reported using the MDS (version effective October 1, 2018). While the reporting of data on quality measures is an information collection, we believe that the burden associated with modifications to the MDS fall under the PRA exception (provided in section 1899B(m) of the IMPACT Act of 2014) because they are required to achieve the standardization of patient assessment data. The requirement and burden will, however, be submitted to OMB for review and approval when the modifications to the MDS or other applicable PAC assessment instruments have achieved standardization and are no longer exempt from the requirements under section 1899B(m).
We estimate the additional elements for the new assessment measure will take 7.5 minutes of nursing/clinical staff time to report data on admission and 2.5 minutes of nursing/clinical staff time to report data on discharge, for a total of 10 minutes. We estimate that the additional MDS-RAI items will be completed by Registered Nurses (RN) for approximately 75 percent of the time required and Pharmacists for approximately 25 percent of the time required. Individual providers determine the staffing resources necessary. We estimate 2,101,370 discharges from 16,484 SNFs annually, with an additional burden of 10 minutes. This would equate to 350,228 total hours or 21.25 hours per SNF. We believe this work will be completed by RNs (75 percent) and Pharmacists (25 percent). We obtained mean hourly wages for these staff from the U.S. Bureau of Labor Statistics' (BLS) May 2015 National Occupational Employment and Wage Estimates (
We received the following comment in response to the FY 2017 SNF PPS proposed rule.
As described in further detail in section III.D.1.b. of this final rule, we are adopting the SNFPPR measure for the SNF VBP Program. Like the SNFRM (NQF #2510), which was adopted for the SNF VBP Program in the FY 2016 SNF PPS final rule (80 FR 46419), the SNFPPR measure is also claims-based. Because claims-based measures are calculated based on claims that are already submitted to the Medicare program for payment purposes, there is no additional burden associated with
We did not receive any public comments on this topic in response to the FY 2017 SNF PPS proposed rule.
Comments on any of the aforementioned collection of information claims must be received by the OMB desk officer by August 29, 2016.
To be assured consideration, comments and recommendations must be received via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer,
We have examined the impacts of this final 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 (UMRA, 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated an economically significant rule, under section 3(f)(1) of Executive Order 12866. Accordingly, we have prepared a regulatory impact analysis (RIA) as further discussed below, and the rule has been reviewed by OMB.
This final rule updates the SNF prospective payment rates for FY 2017 as required under section 1888(e)(4)(E) of the Act. It also responds to section 1888(e)(4)(H) of the Act, which requires the Secretary to provide for publication in the
This final rule sets forth updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2016 (80 FR 46390). Based on the above, we estimate that the aggregate impact would be an increase of $920 million in payments to SNFs, resulting from the SNF market basket update to the payment rates, as adjusted by the MFP adjustment. The impact analysis of this final rule represents the projected effects of the changes in the SNF PPS from FY 2016 to FY 2017. Although the best data available are utilized, there is no attempt to predict behavioral responses to these changes or to make adjustments for future changes in such variables as days or case-mix.
Certain events may occur to limit the scope or accuracy of our impact analysis, as this analysis is future-oriented and, thus, very susceptible to forecasting errors due to certain events that may occur within the assessed impact time period. Some examples of possible events may include newly-legislated general Medicare program funding changes by the Congress or changes specifically related to SNFs. In addition, changes to the Medicare program may continue to be made as a result of previously-enacted legislation or new statutory provisions. Although these changes may not be specific to the SNF PPS, the nature of the Medicare program is such that the changes may interact and, thus, the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon SNFs.
In accordance with sections 1888(e)(4)(E) and 1888(e)(5) of the Act, we update the FY 2016 payment rates by a factor equal to the market basket percentage change adjusted by the MFP adjustment to determine the payment rates for FY 2017. As discussed previously, for FY 2012 and each subsequent FY, as required by section 1888(e)(5)(B) of the Act, as amended by section 3401(b) of the Affordable Care Act, the market basket percentage is reduced by the MFP adjustment. The special AIDS add-on established by section 511 of the MMA remains in effect until such date as the Secretary certifies that there is an appropriate adjustment in the case mix. We have not provided a separate impact analysis for the MMA provision. Our latest estimates indicate that there are fewer than 4,800 beneficiaries who qualify for the add-on payment for residents with AIDS. The impact to Medicare is included in the total column of Table 19. In updating the SNF PPS rates for FY 2017, we made a number of standard annual revisions and clarifications mentioned elsewhere in this final rule (for example, the update to the wage and market basket indexes used for adjusting the federal rates).
The annual update set forth in this final rule applies to SNF PPS payments in FY 2017. Accordingly, the analysis that follows only describes the impact of this single year. In accordance with the requirements of the Act, we will publish a notice or rule for each subsequent FY that will provide for an update to the SNF PPS payment rates and include an associated impact analysis.
The FY 2017 SNF PPS payment impacts appear in Table 19. Using the most recently available data, in this case FY 2015, we apply the current FY 2016 wage index and labor-related share value to the number of payment days to simulate FY 2016 payments. Then, using the same FY 2015 data, we apply the FY 2017 wage index and labor-related share value to simulate FY 2017 payments. We tabulate the resulting payments according to the classifications in Table 19 (for example, facility type, geographic region, facility ownership), and compare the simulated FY 2016 payments to the simulated FY 2017 payments to determine the overall impact. In Section III.B.2 and III.B.4 of this final rule, we discussed an error in calculating the FY 2017 wage index budget neutrality factor in the FY 2017 SNF PPS proposed rule and how this error affected the impact table in the FY 2017 SNF PPS proposed rule (81 FR 24278). Specifically, we stated that in calculating the proposed wage index budget neutrality factor, we inadvertently neglected to update the wage index data used in the calculation with the most recently available FY 2017 data. As we discussed in section III.B.2. and III.B.4. of this final rule, this same error (the use of non-updated wage index data) which resulted in an incorrect calculation of the proposed wage index budget neutrality factor also resulted in inaccurate wage index impacts in Table 19 of the FY 2017 SNF PPS proposed rule. We have corrected this error, and Table 19 of this final rule includes corrected impact values based
• The first column shows the breakdown of all SNFs by urban or rural status, hospital-based or freestanding status, census region, and ownership.
• The first row of figures describes the estimated effects of the various changes on all facilities. The next six rows show the effects on facilities split by hospital-based, freestanding, urban, and rural categories. The next nineteen rows show the effects on facilities by urban versus rural status by census region. The last three rows show the effects on facilities by ownership (that is, government, profit, and non-profit status).
• The second column shows the number of facilities in the impact database.
• The third column shows the effect of the annual update to the wage index. This represents the effect of using the most recent wage data available. The total impact of this change is zero percent; however, there are distributional effects of the change.
• The fourth column shows the effect of all of the changes on the FY 2017 payments. The update of 2.4 percent (consisting of the market basket increase of 2.7 percentage points, reduced by the 0.3 percentage point MFP adjustment) is constant for all providers and, though not shown individually, is included in the total column. It is projected that aggregate payments will increase by 2.4 percent, assuming facilities do not change their care delivery and billing practices in response.
As illustrated in Table 19, the combined effects of all of the changes vary by specific types of providers and by location. For example, due to changes finalized in this rule, providers in the urban Outlying region would experience a 1.7 percent increase in FY 2017 total payments.
As described in this section, we estimate that the aggregate impact for FY 2017 under the SNF PPS would be an increase of $920 million in payments to SNFs, resulting from the SNF market basket update to the payment rates, as adjusted by the MFP adjustment.
Section 1888(e) of the Act establishes the SNF PPS for the payment of Medicare SNF services for cost reporting periods beginning on or after July 1, 1998. This section of the statute prescribes a detailed formula for calculating payment rates under the SNF PPS and does not provide for the use of any alternative methodology. It specifies that the base year cost data to be used for computing the SNF PPS payment rates must be from FY 1995 (October 1, 1994, through September 30, 1995). In accordance with the statute, we also incorporated a number of elements into the SNF PPS (for example, case-mix classification methodology, a market basket index, a wage index, and the urban and rural distinction used in the development or adjustment of the federal rates). Further, section 1888(e)(4)(H) of the Act specifically requires us to disseminate the payment rates for each new FY through the
As required by OMB Circular A-4 (available online at
This final rule sets forth updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2016 (80 FR 46390). Based on the above, we estimate the overall estimated payments for SNFs in FY 2017 are projected to increase by $920 million, or 2.4 percent, compared with those in FY 2016. We estimate that in FY 2017 under RUG-IV, SNFs in urban and rural areas would experience, on average, a 2.4 and 2.7 percent increase, respectively, in estimated payments compared with FY 2016. Providers in the rural Mountain region would experience the largest estimated increase in payments of approximately 3.2 percent. Providers in the urban New England region would experience the smallest estimated increase in payments of 1.6 percent.
The requirements set forth for the SNF VBP and SNF QRP Program in this final rule would not impact SNFs in FY 2017; therefore, we are not including a regulatory impact analysis for the SNF VBP and SNF QRP Program in this final rule.
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, small entities include small businesses, non-profit organizations, and small governmental jurisdictions. Most SNFs and most other providers and suppliers are small entities, either by reason of their non-profit status or by having revenues of $27.5 million or less in any 1 year. We utilized the revenues of individual SNF providers (from recent Medicare Cost Reports) to classify a small business, and not the revenue of a larger firm with which they may be affiliated. As a result, we estimate approximately 91 percent of SNFs are considered small businesses according to the Small Business Administration's latest size standards (NAICS 623110), with total revenues of $27.5 million or less in any 1 year. (For details, see the Small Business Administration's Web site at
This final rule sets forth updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2016 (80 FR 46390). Based on the above, we estimate that the aggregate impact would be an increase of $920 million in payments to SNFs, resulting from the SNF market basket update to the payment rates, as adjusted by the MFP adjustment. While it is projected in Table 19 that most providers would experience a net increase in payments, we note that some individual providers within the same region or group may experience different impacts on payments than others due to the distributional impact of the FY 2017 wage indexes and the degree of Medicare utilization.
Guidance issued by the Department of Health and Human Services on the proper assessment of the impact on small entities in rulemakings utilizes a cost or revenue impact of 3 to 5 percent as a significance threshold under the RFA. According to MedPAC, Medicare covers approximately 12 percent of total patient days in freestanding facilities and 21 percent of facility revenue (Report to the Congress: Medicare Payment Policy, March 2016, available at
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule 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 of an MSA and has fewer than 100 beds. This final rule would affect small rural hospitals that (1) furnish SNF services under a swing-bed agreement or (2) have a hospital-based SNF. We anticipate that the impact on small rural hospitals would be similar to the impact on SNF providers overall. Moreover, as noted in previous SNF PPS final rules (most recently the one for FY 2016 (80 FR 46476)), the category of small rural hospitals would be included within the analysis of the impact of this final rule on small entities in general. As indicated in Table 19, the effect on facilities is projected to be an aggregate positive impact of 2.4 percent. As the overall impact on the industry as a whole is less than the 3 to 5 percent threshold discussed above, the Secretary has determined that this final rule would not have a significant impact on a substantial number of small rural hospitals.
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 2016, that threshold is approximately $146 million. This final rule does not include any mandate on state, local, or tribal governments in the aggregate, or by the private sector, of $146 million.
Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. This final rule would have no substantial direct effect on state and local governments, preempt state law, or otherwise have federalism implications.
This final rule is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801
In accordance with the provisions of Executive Order 12866, this final rule was reviewed by the Office of Management and Budget.
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule will update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2017 as required by the statute. As required by section 1886(j)(5) of the Act, this rule includes the classification and weighting factors for the IRF prospective payment system's (IRF PPS's) case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2017. This final rule also revises and updates quality measures and reporting requirements under the IRF quality reporting program (QRP).
Gwendolyn Johnson, (410) 786-6954, for general information. Catie Kraemer, (410) 786-0179, for information about the wage index. Christine Grose, (410) 786-1362, for information about the quality reporting program. Kadie Derby, (410) 786-0468, or Susanne Seagrave, (410) 786-0044, for information about the payment policies and payment rates.
The IRF PPS Addenda along with other supporting documents and tables referenced in this final rule are available through the Internet on the CMS Web site at
This final rule updates the prospective payment rates for IRFs for FY 2017 (that is, for discharges occurring on or after October 1, 2016, and on or before September 30, 2017) as required under section 1886(j)(3)(C) of the Social Security Act (the Act). As required by section 1886(j)(5) of the Act, this rule includes the classification and weighting factors for the IRF PPS's case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2017. This final rule also finalizes revisions and updates to the quality measures and reporting requirements under the IRF QRP.
In this final rule, we use the methods described in the FY 2016 IRF PPS final rule (80 FR 47036) to update the federal prospective payment rates for FY 2017 using updated FY 2015 IRF claims and the most recent available IRF cost report data, which is FY 2014 IRF cost report data. We are also finalizing revisions and updates to the quality measures and reporting requirements under the IRF QRP.
To assist readers in referencing sections contained in this document, we are providing the following Table of Contents.
Because of the many terms to which we refer by acronym, abbreviation, or short form in this final rule, we are listing the acronyms, abbreviation, and short forms used and their corresponding terms in alphabetical order.
Section 1886(j) of the Act provides for the implementation of a per-discharge prospective payment system (PPS) for inpatient rehabilitation hospitals and inpatient rehabilitation units of a hospital (collectively, hereinafter referred to as IRFs). Payments under the IRF PPS encompass inpatient operating and capital costs of furnishing covered rehabilitation services (that is, routine, ancillary, and capital costs), but not direct graduate medical education costs, costs of approved nursing and allied health education activities, bad debts, and other services or items outside the scope of the IRF PPS. Although a complete discussion of the IRF PPS provisions appears in the original FY 2002 IRF PPS final rule (66 FR 41316) and the FY 2006 IRF PPS final rule (70 FR 47880), we are providing below a general description of the IRF PPS for FYs 2002 through 2016.
Under the IRF PPS from FY 2002 through FY 2005 the federal prospective payment rates were computed across 100 distinct case-mix groups (CMGs), as described in the FY 2002 IRF PPS final rule (66 FR 41316). We constructed 95 CMGs using rehabilitation impairment categories (RICs), functional status (both motor and cognitive), and age (in some cases, cognitive status and age may not be a factor in defining a CMG). In addition, we constructed five special CMGs to account for very short stays and for patients who expire in the IRF.
For each of the CMGs, we developed relative weighting factors to account for a patient's clinical characteristics and expected resource needs. Thus, the weighting factors accounted for the relative difference in resource use across all CMGs. Within each CMG, we created tiers based on the estimated effects that certain comorbidities would have on resource use.
We established the federal PPS rates using a standardized payment conversion factor (formerly referred to
We applied the relative weighting factors to the standard payment conversion factor to compute the unadjusted federal prospective payment rates under the IRF PPS from FYs 2002 through 2005. Within the structure of the payment system, we then made adjustments to account for interrupted stays, transfers, short stays, and deaths. Finally, we applied the applicable adjustments to account for geographic variations in wages (wage index), the percentage of low-income patients, location in a rural area (if applicable), and outlier payments (if applicable) to the IRFs' unadjusted federal prospective payment rates.
For cost reporting periods that began on or after January 1, 2002, and before October 1, 2002, we determined the final prospective payment amounts using the transition methodology prescribed in section 1886(j)(1) of the Act. Under this provision, IRFs transitioning into the PPS were paid a blend of the federal IRF PPS rate and the payment that the IRFs would have received had the IRF PPS not been implemented. This provision also allowed IRFs to elect to bypass this blended payment and immediately be paid 100 percent of the federal IRF PPS rate. The transition methodology expired as of cost reporting periods beginning on or after October 1, 2002 (FY 2003), and payments for all IRFs now consist of 100 percent of the federal IRF PPS rate.
We established a CMS Web site as a primary information resource for the IRF PPS which is available at
Section 1886(j) of the Act confers broad statutory authority upon the Secretary to propose refinements to the IRF PPS. In the FY 2006 IRF PPS final rule (70 FR 47880) and in correcting amendments to the FY 2006 IRF PPS final rule (70 FR 57166) that we published on September 30, 2005, we finalized a number of refinements to the IRF PPS case-mix classification system (the CMGs and the corresponding relative weights) and the case-level and facility-level adjustments. These refinements included the adoption of the Office of Management and Budget's (OMB) Core-Based Statistical Area (CBSA) market definitions, modifications to the CMGs, tier comorbidities, and CMG relative weights, implementation of a new teaching status adjustment for IRFs, revision and rebasing of the market basket index used to update IRF payments, and updates to the rural, low-income percentage (LIP), and high-cost outlier adjustments. Beginning with the FY 2006 IRF PPS final rule (70 FR 47908 through 47917), the market basket index used to update IRF payments was a market basket reflecting the operating and capital cost structures for freestanding IRFs, freestanding inpatient psychiatric facilities (IPFs), and long-term care hospitals (LTCHs) (hereinafter referred to as the rehabilitation, psychiatric, and long-term care (RPL) market basket). Any reference to the FY 2006 IRF PPS final rule in this final rule also includes the provisions effective in the correcting amendments. For a detailed discussion of the final key policy changes for FY 2006, please refer to the FY 2006 IRF PPS final rule (70 FR 47880 and 70 FR 57166).
In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined the IRF PPS case-mix classification system (the CMG relative weights) and the case-level adjustments, to ensure that IRF PPS payments would continue to reflect as accurately as possible the costs of care. For a detailed discussion of the FY 2007 policy revisions, please refer to the FY 2007 IRF PPS final rule (71 FR 48354).
In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the federal prospective payment rates and the outlier threshold, revised the IRF wage index policy, and clarified how we determine high-cost outlier payments for transfer cases. For more information on the policy changes implemented for FY 2008, please refer to the FY 2008 IRF PPS final rule (72 FR 44284), in which we published the final FY 2008 IRF federal prospective payment rates. After publication of the FY 2008 IRF PPS final rule (72 FR 44284), section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110-173, enacted on December 29, 2007) (MMSEA), amended section 1886(j)(3)(C) of the Act to apply a zero percent increase factor for FYs 2008 and 2009, effective for IRF discharges occurring on or after April 1, 2008. Section 1886(j)(3)(C) of the Act required the Secretary to develop an increase factor to update the IRF federal prospective payment rates for each FY. Based on the legislative change to the increase factor, we revised the FY 2008 federal prospective payment rates for IRF discharges occurring on or after April 1, 2008. Thus, the final FY 2008 IRF federal prospective payment rates that were published in the FY 2008 IRF PPS final rule (72 FR 44284) were effective for discharges occurring on or after October 1, 2007, and on or before March 31, 2008; and the revised FY 2008 IRF federal prospective payment rates were effective for discharges occurring on or after April 1, 2008, and on or before September 30, 2008. The revised FY 2008 federal prospective payment rates are available on the CMS Web site at
In the FY 2009 IRF PPS final rule (73 FR 46370), we updated the CMG relative weights, the average length of stay values, and the outlier threshold; clarified IRF wage index policies regarding the treatment of “New England deemed” counties and multi-campus hospitals; and revised the regulation text in response to section 115 of the MMSEA to set the IRF compliance percentage at 60 percent (the “60 percent rule”) and continue the practice of including comorbidities in the calculation of compliance percentages. We also applied a zero percent market basket increase factor for FY 2009 in accordance with section 115 of the MMSEA. For more information on the policy changes implemented for FY 2009, please refer to the FY 2009 IRF PPS final rule (73 FR 46370), in which we published the final FY 2009 IRF federal prospective payment rates.
In the FY 2010 IRF PPS final rule (74 FR 39762) and in correcting amendments to the FY 2010 IRF PPS final rule (74 FR 50712) that we published on October 1, 2009, we updated the federal prospective payment rates, the CMG relative weights, the average length of stay values, the rural, LIP, teaching status adjustment factors, and the outlier threshold; implemented new IRF coverage requirements for determining whether an IRF claim is reasonable and necessary; and revised the regulation text to require IRFs to submit patient assessments on Medicare Advantage (MA) (formerly called Medicare Part C) patients for use in the 60 percent rule calculations. Any reference to the FY 2010 IRF PPS final rule in this final rule also includes the provisions effective in the correcting amendments. For more information on the policy changes implemented for FY 2010, please refer
After publication of the FY 2010 IRF PPS final rule (74 FR 39762), section 3401(d) of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010), as amended by section 10319 of the same Act and by section 1105 of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010) (collectively, hereinafter referred to as “The Affordable Care Act”), amended section 1886(j)(3)(C) of the Act and added section 1886(j)(3)(D) of the Act. Section 1886(j)(3)(C) of the Act requires the Secretary to estimate a multifactor productivity adjustment to the market basket increase factor, and to apply other adjustments as defined by the Act. The productivity adjustment applies to FYs from 2012 forward. The other adjustments apply to FYs 2010 to 2019.
Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act defined the adjustments that were to be applied to the market basket increase factors in FYs 2010 and 2011. Under these provisions, the Secretary was required to reduce the market basket increase factor in FY 2010 by a 0.25 percentage point adjustment. Notwithstanding this provision, in accordance with section 3401(p) of the Affordable Care Act, the adjusted FY 2010 rate was only to be applied to discharges occurring on or after April 1, 2010. Based on the self-implementing legislative changes to section 1886(j)(3) of the Act, we adjusted the FY 2010 federal prospective payment rates as required, and applied these rates to IRF discharges occurring on or after April 1, 2010, and on or before September 30, 2010. Thus, the final FY 2010 IRF federal prospective payment rates that were published in the FY 2010 IRF PPS final rule (74 FR 39762) were used for discharges occurring on or after October 1, 2009, and on or before March 31, 2010, and the adjusted FY 2010 IRF federal prospective payment rates applied to discharges occurring on or after April 1, 2010, and on or before September 30, 2010. The adjusted FY 2010 federal prospective payment rates are available on the CMS Web site at
In addition, sections 1886(j)(3)(C) and (D) of the Act also affected the FY 2010 IRF outlier threshold amount because they required an adjustment to the FY 2010 RPL market basket increase factor, which changed the standard payment conversion factor for FY 2010. Specifically, the original FY 2010 IRF outlier threshold amount was determined based on the original estimated FY 2010 RPL market basket increase factor of 2.5 percent and the standard payment conversion factor of $13,661. However, as adjusted, the IRF prospective payments are based on the adjusted RPL market basket increase factor of 2.25 percent and the revised standard payment conversion factor of $13,627. To maintain estimated outlier payments for FY 2010 equal to the established standard of 3 percent of total estimated IRF PPS payments for FY 2010, we revised the IRF outlier threshold amount for FY 2010 for discharges occurring on or after April 1, 2010, and on or before September 30, 2010. The revised IRF outlier threshold amount for FY 2010 was $10,721.
Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act also required the Secretary to reduce the market basket increase factor in FY 2011 by a 0.25 percentage point adjustment. The FY 2011 IRF PPS notice (75 FR 42836) and the correcting amendments to the FY 2011 IRF PPS notice (75 FR 70013) described the required adjustments to the FY 2011 and FY 2010 IRF PPS federal prospective payment rates and outlier threshold amount for IRF discharges occurring on or after April 1, 2010, and on or before September 30, 2011. It also updated the FY 2011 federal prospective payment rates, the CMG relative weights, and the average length of stay values. Any reference to the FY 2011 IRF PPS notice in this final rule also includes the provisions effective in the correcting amendments. For more information on the FY 2010 and FY 2011 adjustments or the updates for FY 2011, please refer to the FY 2011 IRF PPS notice (75 FR 42836 and 75 FR 70013).
In the FY 2012 IRF PPS final rule (76 FR 47836), we updated the IRF federal prospective payment rates, rebased and revised the RPL market basket, and established a new quality reporting program for IRFs in accordance with section 1886(j)(7) of the Act. We also revised regulation text for the purpose of updating and providing greater clarity. For more information on the policy changes implemented for FY 2012, please refer to the FY 2012 IRF PPS final rule (76 FR 47836), in which we published the final FY 2012 IRF federal prospective payment rates.
The FY 2013 IRF PPS notice (77 FR 44618) described the required adjustments to the FY 2013 federal prospective payment rates and outlier threshold amount for IRF discharges occurring on or after October 1, 2012, and on or before September 30, 2013. It also updated the FY 2013 federal prospective payment rates, the CMG relative weights, and the average length of stay values. For more information on the updates for FY 2013, please refer to the FY 2013 IRF PPS notice (77 FR 44618).
In the FY 2014 IRF PPS final rule (78 FR 47860), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also updated the facility-level adjustment factors using an enhanced estimation methodology, revised the list of diagnosis codes that count toward an IRF's 60 percent rule compliance calculation to determine “presumptive compliance,” revised sections of the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), revised requirements for acute care hospitals that have IRF units, clarified the IRF regulation text regarding limitation of review, updated references to previously changed sections in the regulations text, and revised and updated quality measures and reporting requirements under the IRF quality reporting program. For more information on the policy changes implemented for FY 2014, please refer to the FY 2014 IRF PPS final rule (78 FR 47860), in which we published the final FY 2014 IRF federal prospective payment rates.
In the FY 2015 IRF PPS final rule (79 FR 45872), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also further revised the list of diagnosis codes that count toward an IRF's 60 percent rule compliance calculation to determine “presumptive compliance,” revised sections of the IRF-PAI, and revised and updated quality measures and reporting requirements under the IRF quality reporting program. For more information on the policy changes implemented for FY 2015, please refer to the FY 2015 IRF PPS final rule (79 FR 45872) and the FY 2015 IRF PPS correction notice (79 FR 59121).
In the FY 2016 IRF PPS final rule (80 FR 47036), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also adopted an IRF-specific market basket that reflects the cost structures of only IRF providers, a blended one-year transition wage index based on the adoption of new OMB area delineations, a 3-year phase-out of the rural adjustment for certain IRFs due to the new OMB area delineations, and revisions and updates to the IRF QRP. For more information on the policy changes implemented for
The Affordable Care Act included several provisions that affect the IRF PPS in FYs 2012 and beyond. In addition to what was previously discussed, section 3401(d) of the Affordable Care Act also added section 1886(j)(3)(C)(ii)(I) (providing for a “productivity adjustment” for fiscal year 2012 and each subsequent fiscal year). The productivity adjustment for FY 2017 is discussed in section VI.B. of this final rule. Section 3401(d) of the Affordable Care Act requires an additional 0.75 percentage point adjustment to the IRF increase factor for each of FYs 2017, 2018, and 2019. The applicable adjustment for FY 2017 is discussed in section VI.B. of this final rule. Section 1886(j)(3)(C)(ii)(II) of the Act notes that the application of these adjustments to the market basket update may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Section 3004(b) of the Affordable Care Act also addressed the IRF PPS program. It reassigned the previously designated section 1886(j)(7) of the Act to section 1886(j)(8) and inserted a new section 1886(j)(7), which contains requirements for the Secretary to establish a quality reporting program for IRFs. Under that program, data must be submitted in a form and manner and at a time specified by the Secretary. Beginning in FY 2014, section 1886(j)(7)(A)(i) of the Act requires the application of a 2 percentage point reduction of the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements. Application of the 2 percentage point reduction may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Reporting-based reductions to the market basket increase factor will not be cumulative; they will only apply for the FY involved.
Under section 1886(j)(7)(D)(i) and (ii) of the Act, the Secretary is generally required to select quality measures for the IRF quality reporting program from those that have been endorsed by the consensus-based entity which holds a performance measurement contract under section 1890(a) of the Act. This contract is currently held by the National Quality Forum (NQF). So long as due consideration is given to measures that have been endorsed or adopted by a consensus-based organization, section 1886(j)(7)(D)(ii) of the Act authorizes the Secretary to select non-endorsed measures for specified areas or medical topics when there are no feasible or practical endorsed measure(s).
Section 1886(j)(7)(E) of the Act requires the Secretary to establish procedures for making the IRF PPS quality reporting data available to the public. In so doing, the Secretary must ensure that IRFs have the opportunity to review any such data prior to its release to the public.
As described in the FY 2002 IRF PPS final rule, upon the admission and discharge of a Medicare Part A Fee-for-Service (FFS) patient, the IRF is required to complete the appropriate sections of a patient assessment instrument (PAI), designated as the IRF-PAI. In addition, beginning with IRF discharges occurring on or after October 1, 2009, the IRF is also required to complete the appropriate sections of the IRF-PAI upon the admission and discharge of each Medicare Advantage (MA) (formerly called Medicare Part C) patient, as described in the FY 2010 IRF PPS final rule. All required data must be electronically encoded into the IRF-PAI software product. Generally, the software product includes patient classification programming called the Grouper software. The Grouper software uses specific IRF-PAI data elements to classify (or group) patients into distinct CMGs and account for the existence of any relevant comorbidities.
The Grouper software produces a 5-character CMG number. The first character is an alphabetic character that indicates the comorbidity tier. The last 4 characters are numeric characters that represent the distinct CMG number. Free downloads of the Inpatient Rehabilitation Validation and Entry (IRVEN) software product, including the Grouper software, are available on the CMS Web site at
Once a Medicare FFS Part A patient is discharged, the IRF submits a Medicare claim as a Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191, enacted on August 21, 1996) (HIPAA) compliant electronic claim or, if the Administrative Simplification Compliance Act of 2002 (Pub. L. 107-105, enacted on December 27, 2002) (ASCA) permits, a paper claim (a UB-04 or a CMS-1450 as appropriate) using the five-character CMG number and sends it to the appropriate Medicare Administrative Contractor (MAC). In addition, once a Medicare Advantage patient is discharged, in accordance with the Medicare Claims Processing Manual, chapter 3, section 20.3 (Pub. 100-04), hospitals (including IRFs) must submit an informational-only bill (Type of Bill (TOB) 111), which includes Condition Code 04 to their MAC. This will ensure that the Medicare Advantage days are included in the hospital's Supplemental Security Income (SSI) ratio (used in calculating the IRF low-income percentage adjustment) for fiscal year 2007 and beyond. Claims submitted to Medicare must comply with both ASCA and HIPAA.
Section 3 of the ASCA amends section 1862(a) of the Act by adding paragraph (22), which requires the Medicare program, subject to section 1862(h) of the Act, to deny payment under Part A or Part B for any expenses for items or services “for which a claim is submitted other than in an electronic form specified by the Secretary.” Section 1862(h) of the Act, in turn, provides that the Secretary shall waive such denial in situations in which there is no method available for the submission of claims in an electronic form or the entity submitting the claim is a small provider. In addition, the Secretary also has the authority to waive such denial “in such unusual cases as the Secretary finds appropriate.” For more information, see the “Medicare Program; Electronic Submission of Medicare Claims” final rule (70 FR 71008). Our instructions for the limited number of Medicare claims submitted on paper are available at
Section 3 of the ASCA operates in the context of the administrative simplification provisions of HIPAA, which include, among others, the requirements for transaction standards and code sets codified in 45 CFR, parts 160 and 162, subparts A and I through R (generally known as the Transactions Rule). The Transactions Rule requires covered entities, including covered health care providers, to conduct covered electronic transactions according to the applicable transaction standards. (See the CMS program claim memoranda at
The MAC processes the claim through its software system. This software system includes pricing programming called the “Pricer” software. The Pricer
The Department of Health & Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of health information technology and to promote nationwide health information exchange to improve health care. As discussed in the August 2013 Statement “Principles and Strategies for Accelerating Health Information Exchange” (available at
The Office of the National Coordinator for Health Information Technology (ONC) has released a document entitled “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap” (available at
The Roadmap identifies four critical pathways that health IT stakeholders should focus on now in order to create a foundation for long-term success: (1) Improve technical standards and implementation guidance for priority data domains and associated elements; (2) rapidly shift and align federal, state, and commercial payment policies from FFS to value-based models to stimulate the demand for interoperability; (3) clarify and align federal and state privacy and security requirements that enable interoperability; and (4) align and promote the use of consistent policies and business practices that support interoperability, in coordination with stakeholders. In addition, ONC has released the final version of the 2016 Interoperability Standards Advisory (available at
We encourage stakeholders to utilize health information exchange and certified health IT to effectively and efficiently help providers improve internal care delivery practices, engage patients in their care, support management of care across the continuum, enable the reporting of electronically specified clinical quality measures (eCQMs), and improve efficiencies and reduce unnecessary costs. As adoption of certified health IT increases and interoperability standards continue to mature, HHS will seek to reinforce standards through relevant policies and programs. We received one comment on health information exchange, which is summarized below.
In the FY 2017 IRF PPS proposed rule (81 FR 24178), we proposed to update the IRF federal prospective payment rates for FY 2017 and to revise and update quality measures and reporting requirements under the IRF QRP.
The proposed updates to the IRF federal prospective payment rates for FY 2017 were as follows:
• Update the FY 2017 IRF PPS relative weights and average length of stay values using the most current and complete Medicare claims and cost report data in a budget-neutral manner, as discussed in section III of the FY 2017 IRF PPS proposed rule (81 FR 24178, 24184 through 24187).
• Describe the continued use of FY 2014 facility-level adjustment factors as discussed in section IV of the FY 2017 IRF PPS proposed rule (81 FR 24178 at 24187).
• Update the FY 2017 IRF PPS payment rates by the proposed market basket increase factor, based upon the most current data available, with a 0.75 percentage point reduction as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act and a proposed productivity adjustment required by section 1886(j)(3)(C)(ii)(I) of the Act, as described in section V of the FY 2017 IRF PPS proposed rule (81 FR 24178, 24187 through 24189).
• Update the FY 2017 IRF PPS payment rates by the FY 2017 wage index and the labor-related share in a budget-neutral manner, as discussed in section V of the FY 2017 IRF PPS proposed rule (81 FR 24178, 24189 through 24190).
• Describe the calculation of the IRF standard payment conversion factor for FY 2017, as discussed in section V of the FY 2017 IRF PPS proposed rule (81 FR 24178, 24190 through 24192).
• Update the outlier threshold amount for FY 2017, as discussed in section VI of the FY 2017 IRF PPS proposed rule (81 FR 24178, at 24193).
• Update the cost-to-charge ratio (CCR) ceiling and urban/rural average CCRs for FY 2017, as discussed in section VI of the FY 2017 IRF PPS proposed rule (81 FR 24178, 24193 through 24194).
• Describe proposed revisions and updates to quality measures and reporting requirements under the quality reporting program for IRFs in accordance with section 1886(j)(7) of the Act, as discussed in section VII of the FY 2017 IRF PPS proposed rule (81 FR 24194 through 24220).
We received 61 timely responses from the public, many of which contained multiple comments on the FY 2017 IRF PPS proposed rule (81 FR 24178). We received comments from various trade associations, inpatient rehabilitation facilities, individual physicians, therapists, clinicians, health care industry organizations, and health care consulting firms. The following sections, arranged by subject area, include a summary of the public comments that we received, and our responses.
As specified in § 412.620(b)(1), we calculate a relative weight for each CMG that is proportional to the resources needed by an average inpatient rehabilitation case in that CMG. For example, cases in a CMG with a relative weight of 2, on average, will cost twice as much as cases in a CMG with a relative weight of 1. Relative weights account for the variance in cost per discharge due to the variance in resource utilization among the payment groups, and their use helps to ensure that IRF PPS payments support beneficiary access to care, as well as provider efficiency.
In the FY 2017 IRF PPS proposed rule (81 FR 24178, 24184 through 24187), we proposed to update the CMG relative weights and average length of stay values for FY 2017. As required by statute, we always use the most recent available data to update the CMG relative weights and average lengths of stay. For FY 2017, we proposed to use the FY 2015 IRF claims and FY 2014 IRF cost report data. These data are the most current and complete data available at this time.
We note that, as we typically do, we updated our data between the FY 2017 IRF PPS proposed and final rules to ensure that we use the most recent available data in calculating IRF PPS payments. This updated data reflects a more complete set of claims for FY 2015 and additional cost report data for FY 2014.
In the FY 2017 IRF PPS proposed rule, we proposed to apply these data using the same methodologies that we have used to update the CMG relative weights and average length of stay values each fiscal year since we implemented an update to the methodology to use the more detailed CCR data from the cost reports of IRF subprovider units of primary acute care hospitals, instead of CCR data from the associated primary care hospitals, to calculate IRFs' average costs per case, as discussed in the FY 2009 IRF PPS final rule (73 FR 46372). In calculating the CMG relative weights, we use a hospital-specific relative value method to estimate operating (routine and ancillary services) and capital costs of IRFs. The process used to calculate the CMG relative weights for this final rule is as follows:
Consistent with the methodology that we have used to update the IRF classification system in each instance in the past, we proposed to update the CMG relative weights for FY 2017 in such a way that total estimated aggregate payments to IRFs for FY 2017 are the same with or without the changes (that is, in a budget-neutral manner) by applying a budget neutrality factor to the standard payment amount. To calculate the appropriate budget neutrality factor for use in updating the FY 2017 CMG relative weights, we use the following steps:
In section VI.E. of this final rule, we discuss the proposed use of the existing methodology to calculate the standard payment conversion factor for FY 2017.
In Table 1, “Relative Weights and Average Length of Stay Values for Case-Mix Groups,” we present the CMGs, the comorbidity tiers, the corresponding relative weights, and the average length of stay values for each CMG and tier for FY 2017. The average length of stay for each CMG is used to determine when an IRF discharge meets the definition of a short-stay transfer, which results in a per diem case level adjustment.
Generally, updates to the CMG relative weights result in some increases and some decreases to the CMG relative weight values. Table 2 shows how we estimate that the application of the revisions for FY 2017 would affect particular CMG relative weight values, which would affect the overall distribution of payments within CMGs and tiers. Note that, because we proposed to implement the CMG relative weight revisions in a budget-neutral manner (as previously described), total estimated aggregate payments to IRFs for FY 2017 would not be affected as a result of the proposed CMG relative weight revisions. However, the proposed revisions would affect the distribution of payments within CMGs and tiers.
As Table 2 shows, 99.7 percent of all IRF cases are in CMGs and tiers that would experience less than a 5 percent change (either increase or decrease) in the CMG relative weight value as a result of the revisions for FY 2017. The largest estimated increase in the CMG relative weight values that affects the largest number of IRF discharges would be a 0.7 percent change in the CMG relative weight value for CMG 0604—Neurological, with a motor score less than 25.85—in the “no comorbidity” tier. In the FY 2015 claims data, 8,572 IRF discharges (2.2 percent of all IRF discharges) were classified into this CMG and tier.
The largest decrease in a CMG relative weight value affecting the largest number of IRF cases would be a 1.4 percent decrease in the CMG relative weight for CMG 0110—Stroke, with a motor score less than 22.35 and age less than 84.5—in the “no comorbidity” tier. In the FY 2015 IRF claims data, this change would have affected 13,739 cases (3.5 percent of all IRF cases).
The proposed changes in the average length of stay values for FY 2017, compared with the FY 2016 average length of stay values, are small and do not show any particular trends in IRF length of stay patterns.
We received 3 comments on the proposed update to the CMG relative weights and average length of stay values for FY 2017, which are summarized below.
As we also discussed in the FY 2016 IRF PPS final rule (80 FR 47036, 47045), the methodology for calculating the average length of stay values is available for download from the IRF PPS Web site at
Section 1886(j)(3)(A)(v) of the Act confers broad authority upon the Secretary to adjust the per unit payment rate by such factors as the Secretary determines are necessary to properly reflect variations in necessary costs of treatment among rehabilitation facilities. Under this authority, we currently adjust the federal prospective payment amount associated with a CMG to account for facility-level characteristics such as an IRF's LIP, teaching status, and location in a rural area, if applicable, as described in § 412.624(e).
Based on the substantive changes to the facility-level adjustment factors that were adopted in the FY 2014 final rule (78 FR 47860, 47868 through 47872), in the FY 2015 final rule (79 FR 45872, 45882 through 45883), we froze the facility-level adjustment factors at the FY 2014 levels for FY 2015 and all subsequent years (unless and until we propose to update them again through future notice-and-comment rulemaking). For FY 2017, we will continue to hold the adjustment factors at the FY 2014 levels as we continue to monitor the most current IRF claims data available and continue to evaluate and monitor the effects of the FY 2014 changes.
Section 1886(j)(3)(C) of the Act requires the Secretary to establish an increase factor that reflects changes over time in the prices of an appropriate mix of goods and services included in the covered IRF services, which is referred to as a market basket index. According to section 1886(j)(3)(A)(i) of the Act, the increase factor shall be used to update the IRF federal prospective payment rates for each FY. Section 1886(j)(3)(C)(ii)(I) of the Act requires the application of a productivity adjustment, as described below. In addition, sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act require the application of a 0.75 percentage point reduction to the market basket increase factor for FY 2017. Thus, in the FY 2017 IRF PPS proposed rule (81 FR 24178, 24187 through 24188), we proposed to update the IRF PPS payments for FY 2017 by a market basket increase factor as required by section 1886(j)(3)(C) of the Act, with a productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act.
For FY 2015, IRF PPS payments were updated using the 2008-based RPL market basket. Beginning with the FY 2016 IRF PPS, we created and adopted a stand-alone IRF market basket, which was referred to as the 2012-based IRF market basket, reflecting the operating and capital cost structures for freestanding IRFs and hospital-based IRFs. The general structure of the 2012-based IRF market basket is similar to the 2008-based RPL market basket; however, we made several notable changes. In developing the 2012-based IRF market basket, we derived cost weights from Medicare cost report data for both freestanding and hospital-based IRFs (the 2008-based RPL market basket was based on freestanding data only), incorporated the 2007 Input-Output data from the Bureau of Economic Analysis (the 2008-based RPL market basket was based on the 2002 Input-Output data); used new price proxy blends for two cost categories (Fuel, Oil, and Gasoline and Medical Instruments); added one additional cost category (Installation, Maintenance, and Repair), which was previously included in the residual All Other Services: Labor-Related cost category of the 2008-based RPL market basket; and eliminated three cost categories (Apparel, Machinery & Equipment, and Postage). The FY 2016 IRF PPS final rule (80 FR 47046 through 47068) contains a complete discussion of the development of the 2012-based IRF market basket.
For FY 2017, we proposed to use the same methodology described in the FY 2016 IRF PPS final rule (80 FR 47066) to compute the FY 2017 market basket increase factor to update the IRF PPS base payment rate. Consistent with historical practice, we proposed to estimate the market basket update for the IRF PPS based on IHS Global Insight's forecast using the most recent available data. IHS Global Insight (IGI), Inc. is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the components of the market baskets and multifactor productivity (MFP).
Based on IGI's first quarter 2016 forecast with historical data through the fourth quarter of 2015, we proposed that the projected 2012-based IRF market basket increase factor for FY 2017 would be 2.7 percent. We also proposed that if more recent data were subsequently available (for example, a more recent estimate of the market basket update), we would use such data to determine the FY 2017 update in the final rule. Incorporating the most recent data available, based on IGI's second quarter 2016 forecast with historical data through the first quarter of 2016, the projected 2012-based IRF market basket increase factor for FY 2017 is 2.7 percent.
According to section 1886(j)(3)(C)(i) of the Act, the Secretary shall establish an increase factor based on an appropriate percentage increase in a market basket of goods and services. Section 1886(j)(3)(C)(ii) of the Act then requires that, after establishing the increase factor for a FY, the Secretary shall reduce such increase factor for FY 2012 and each subsequent FY, by the
Using IGI's first quarter 2016 forecast, the proposed MFP adjustment for FY 2017 (the 10-year moving average of MFP for the period ending FY 2017) was 0.5 percent. We proposed that if more recent data were subsequently available, we would use such data to determine the FY 2017 MFP adjustment in the final rule. Incorporating the most recent data available, based on IGI's second quarter 2016 forecast with historical data through the first quarter of 2016, the projected MFP adjustment for FY 2017 is 0.3 percent.
Thus, in accordance with section 1886(j)(3)(C) of the Act, we proposed to base the FY 2017 market basket update, which is used to determine the applicable percentage increase for the IRF payments, on the most recent estimate of the 2012-based IRF market basket. We proposed to then reduce this percentage increase by the most up-to-date estimate of the MFP adjustment for FY 2017. Following application of the MFP, we proposed to further reduce the applicable percentage increase by 0.75 percentage point, as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. Therefore, the estimate of the FY 2017 IRF update for the proposed rule was 1.45 percent (2.7 percent market basket update, less 0.5 percentage point MFP adjustment, less 0.75 percentage point legislative adjustment). Incorporating the most recent data, the current estimate of the FY 2017 IRF update is 1.65 percent (2.7 percent market basket update, less 0.3 percentage point MFP adjustment, less 0.75 percentage point legislative adjustment).
For FY 2017, the Medicare Payment Advisory Commission (MedPAC) recommends that a 0-percent update be applied to IRF PPS payment rates. As discussed, and in accordance with sections 1886(j)(3)(C) and 1886(j)(3)(D) of the Act, the Secretary proposed to update the IRF PPS payment rates for FY 2017 by an adjusted market basket increase factor of 1.45 percent, as section 1886(j)(3)(C) of the Act does not provide the Secretary with the authority to apply a different update factor to IRF PPS payment rates for FY 2017. As noted above, incorporating the most recent data, the current estimate of the FY 2017 IRF update is 1.65 percent.
We received 10 comments on the proposed market basket increase update and productivity adjustment, which are summarized below.
Section 1886(j)(6) of the Act specifies that the Secretary is to adjust the proportion (as estimated by the Secretary from time to time) of rehabilitation facilities' costs which are attributable to wages and wage-related costs of the prospective payment rates computed under section 1886(j)(3) for area differences in wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for such facilities. The labor-related share is determined by identifying the national average proportion of total costs that are related to, influenced by, or vary with the local labor market. We continue to classify a cost category as labor-related if the costs are labor-intensive and vary with the local labor market.
Based on our definition of the labor-related share and the cost categories in the 2012-based IRF market basket, we proposed to include in the labor-related share for FY 2017 the sum of the FY 2017 relative importance of Wages and Salaries, Employee Benefits, Professional Fees: Labor-Related, Administrative and Facilities Support Services, Installation, Maintenance, and Repair, All Other: Labor-related Services, and a portion of the Capital-Related cost weight from the 2012-based IRF market basket. For more details regarding the methodology for determining specific cost categories for inclusion in the 2012-based IRF labor-related share, see the FY 2016 IRF final rule (80 FR 47066 through 47068).
Using this method and the IHS Global Insight, Inc. first quarter 2016 forecast for the 2012-based IRF market basket, the proposed IRF labor-related share for FY 2017 was 71.0 percent. We proposed that if more recent data were subsequently available, we would use such data to determine the FY 2017 IRF labor-related share in the final rule.
Incorporating the most recent estimate of the 2012-based IRF market basket based on IGI's second quarter 2016 forecast with historical data through the first quarter of 2016, the sum of the relative importance for FY 2017 operating costs (Wages and Salaries, Employee Benefits, Professional Fees: Labor-related, Administrative and Facilities Support Services, Installation Maintenance & Repair Services, and All Other: Labor-related Services) using the 2012-based IRF market basket is 67.0 percent. We proposed that the portion of Capital-Related Costs that is influenced by the local labor market is estimated to be 46 percent. Incorporating the most recent estimate of the FY 2017 relative importance of Capital-Related costs from the 2012-based IRF market basket based on IGI's second quarter 2016 forecast with historical data through the first quarter of 2016, which is 8.4 percent, we take 46 percent of 8.4 percent to determine the labor-related share of Capital for FY 2017. As we proposed, we then add this amount (3.9 percent) to the sum of the relative importance for FY 2017 operating costs (67.0 percent) to determine the total labor-related share for FY 2017 of 70.9 percent.
Section 1886(j)(6) of the Act requires the Secretary to adjust the proportion of rehabilitation facilities' costs attributable to wages and wage-related costs (as estimated by the Secretary from time to time) by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for those facilities. The Secretary is required to update the IRF PPS wage index on the basis of information available to the Secretary on the wages and wage-related costs to furnish rehabilitation services. Any adjustment or updates made under section 1886(j)(6) of the Act for a FY are made in a budget-neutral manner.
For FY 2017, we proposed to maintain the policies and methodologies described in the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through 47075) related to the labor market area definitions and the wage index methodology for areas with wage data. Thus, we proposed to use the CBSA labor market area definitions and the FY 2016 pre-reclassification and pre-floor hospital wage index data. The current statistical areas which were implemented in FY 2016 are based on OMB standards published on February 28, 2013, in OMB Bulletin No. 13-01. For FY 2017, we are continuing to use the new OMB delineations that we adopted beginning with FY 2016. In accordance with section 1886(d)(3)(E) of the Act, the FY 2016 pre-reclassification and pre-floor hospital wage index is based on data submitted for hospital cost reporting periods beginning on or after October 1, 2011, and before October 1, 2012 (that is, FY 2012 cost report data).
The labor market designations made by the OMB include some geographic areas where there are no hospitals and, thus, no hospital wage index data on which to base the calculation of the IRF PPS wage index. We proposed to continue to use the same methodology discussed in the FY 2008 IRF PPS final rule (72 FR 44299) to address those geographic areas where there are no
We did not receive any comments on these proposals. Therefore, we are finalizing our proposal to use the CBSA labor market area definitions and the FY 2016 pre-reclassification and pre-floor hospital wage index data for areas with wage data. We are also finalizing our proposal to continue to use the same methodology discussed in the FY 2008 IRF PPS final rule (72 FR 44299) to address those geographic areas where there are no hospitals and, thus, no hospital wage index data.
The wage index used for the IRF PPS is calculated using the pre-reclassification and pre-floor acute care hospital wage index data and is assigned to the IRF on the basis of the labor market area in which the IRF is geographically located. IRF labor market areas are delineated based on the CBSAs established by the OMB. In the FY 2016 IRF PPS final rule (80 FR 47036, 47068), we established an IRF wage index based on FY 2011 acute care hospital wage data to adjust the FY 2016 IRF payment rates. We also adopted the revised CBSAs set forth by OMB. The current CBSA delineations (which were implemented for the IRF PPS beginning with FY 2016) are based on revised OMB delineations issued on February 28, 2013, in OMB Bulletin No. 13-01. OMB Bulletin No. 13-01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico, and provided guidance on the use of the delineations of these statistical areas based on new standards published on June 28, 2010, in the
In FY 2016, we applied a 1-year blended wage index for all IRF providers to mitigate the impact of the wage index change due to the implementation of the revised CBSA delineations. Under that policy, all IRF providers are receiving a blended wage index in FY 2016 using 50 percent of their FY 2016 wage index based on the revised OMB CBSA delineations and 50 percent of their FY 2016 wage index based on the OMB delineations used in FY 2015. For FY 2017, we proposed to maintain the policy established in FY 2016 IRF PPS final rule related to the blended one-year transition wage index (see 80 FR 47036, 47073 through 47074). Thus, the 1-year blended wage index that became effective on October 1, 2015, will expire on September 30, 2016.
We did not receive any comments on the proposal to maintain the policy established in FY 2016 IRF PPS final rule related to the blended one-year transition wage index.
For FY 2016, in addition to the blended wage index, we also adopted a 3-year budget neutral phase out of the rural adjustment for IRFs that were rural in FY 2015 and became urban in FY 2016 under the revised CBSA delineations. In FY 2016, IRFs that were designated as rural in FY 2015 and became designated as urban in FY 2016 received two-thirds of the 2015 rural adjustment of 14.9 percent. FY 2017 represents the second year of the 3-year phase out of the rural adjustment, in which these same IRFs will receive one-third of the 2015 rural adjustment of 14.9 percent, as finalized in the FY 2016 IRF PPS final rule (80 FR 47036, 47073 through 47074).
For FY 2017, the wage index will be based solely on the previously adopted revised CBSA delineations and their respective wage index (rather than on a blended wage index). Furthermore, we will continue the 3-year phase out of the rural adjustments for IRF providers that changed from rural to urban status that was finalized in the FY 2016 IFR PPS final rule (80 FR 47036, 47073 through 47074).
We received one comment on our proposal to continue the 3-year phase out of the rural adjustments for IRF providers that changed from rural to urban status and that was finalized in the FY 2016 IFR PPS final rule.
For a full discussion of our implementation of the new OMB labor market area delineations for the FY 2016 wage index, please refer to the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through 47076). While conducting analysis for the FY 2017 IRF PPS final rule, an additional IRF provider was identified as being eligible for the 3-year phase out of the rural adjustments for IRF providers that changed from rural to urban status. The original 19 providers were identified in FY 2014 claims data for the FY 2016 IRF PPS proposed and final rules. This newly eligible provider was new in FY 2015 and thus had no claims data in FY 2014. An analysis of the FY 2015 claims determined that this provider should have received two-thirds of the rural adjustment in FY 2016. This provider will be added to the group of providers receiving two-thirds of the rural adjustment in FY 2016 and one-third of the rural adjustment in FY 2017. For FY 2017, 20 IRFs that were designated as rural in FY 2015 and became designated as urban in FY 2016 will receive the FY 2017 wage index (based solely on the revised CBSA delineations) and one-third of the FY 2015 rural adjustment of 14.9 percent (80 FR 47036, 47073 through 47076). The wage index applicable to FY 2017
To calculate the wage-adjusted facility payment for the payment rates set forth in this final rule, we multiply the unadjusted federal payment rate for IRFs by the FY 2017 labor-related share based on the 2012-based IRF market basket (70.9 percent) to determine the labor-related portion of the standard payment amount. A full discussion of the calculation of the labor-related share is located in section VI.C of this final rule. We then multiply the labor-related portion by the applicable IRF wage index from the tables in the addendum to this final rule. These tables are available through the Internet on the CMS Web site at
Adjustments or updates to the IRF wage index made under section 1886(j)(6) of the Act must be made in a budget-neutral manner. We proposed to calculate a budget-neutral wage adjustment factor as established in the FY 2004 IRF PPS final rule (68 FR 45689), codified at § 412.624(e)(1), as described in the steps below. We proposed to use the listed steps to ensure that the FY 2017 IRF standard payment conversion factor reflects the update to the wage indexes (based on the FY 2012 hospital cost report data) and the labor-related share in a budget-neutral manner:
We discuss the calculation of the standard payment conversion factor for FY 2017 in section VI.E of this final rule.
We did not receive any specific comments on the proposal to calculate a budget-neutral wage adjustment factor.
We received 11 public comments on the proposed IRF wage adjustment for FY 2017, which are summarized below.
Additionally, while some commenters recommended that we adopt IPPS reclassification and/or floor policies, we note the MedPAC's June 2007 report to the Congress, titled “Report to Congress: Promoting Greater Efficiency in Medicare” (available at
With regard to issues mentioned about ensuring that the wage index minimizes fluctuations, matches the costs of labor in the market, and provides for a single wage index policy, we note that section 3137(b) of the Affordable Care Act required us to submit a report to the Congress by December 31, 2011 that includes a plan to reform the hospital wage index system. This report describes the concept of a Commuting Based Wage Index as a potential replacement to the current Medicare wage index methodology. While this report addresses the goals of broad based Medicare wage index reform, no consensus has been achieved regarding how best to implement a replacement system. These concerns will be taken into consideration while CMS continues to explore potential wage index reforms.
The report that we submitted is available online at
To calculate the standard payment conversion factor for FY 2017, as illustrated in Table 4, we begin by applying the adjusted market basket increase factor for FY 2017 that was adjusted in accordance with sections 1886(j)(3)(C) and (D) of the Act, to the standard payment conversion factor for FY 2016 ($15,478). Applying the 1.65 percent adjusted market basket increase for FY 2017 to the standard payment conversion factor for FY 2016 of $15,478 yields a standard payment amount of $15,733. Then, we apply the budget neutrality factor for the FY 2017 wage index and labor-related share of 0.9992, which results in a standard payment amount of $15,721. We next apply the budget neutrality factor for the revised CMG relative weights of 0.9992, which results in the standard payment conversion factor of $15,708 for FY 2017.
We did not receive comments specifically on the proposed FY 2017 standard payment conversion factor. We received comments on how the FY 2016 IRF QRP relates to the proposed FY 2017 standard payment conversion factor, which we have summarized in section IX. of this final rule.
After the application of the proposed CMG relative weights described in section IV of this final rule to the FY 2017 standard payment conversion factor ($15,708), the resulting unadjusted IRF prospective payment rates for FY 2017 are shown in Table 5.
Table 6 illustrates the methodology for adjusting the federal prospective payments (as described in sections VI.A. through VI.F. of this final rule). The following examples are based on two hypothetical Medicare beneficiaries, both classified into CMG 0110 (without comorbidities). The unadjusted federal prospective payment rate for CMG 0110 (without comorbidities) appears in Table 5.
To calculate each IRF's labor and non-labor portion of the federal prospective payment, we begin by taking the unadjusted federal prospective payment rate for CMG 0110 (without comorbidities) from Table 5. Then, we multiply the labor-related share for FY 2017 (70.9 percent) described in section VI.C. of this final rule by the unadjusted federal prospective payment rate. To determine the non-labor portion of the federal prospective payment rate, we subtract the labor portion of the federal payment from the unadjusted federal prospective payment.
To compute the wage-adjusted federal prospective payment, we multiply the labor portion of the federal payment by the appropriate wage index located in tables A and B. These tables are available on CMS Web site at
Adjusting the wage-adjusted federal payment by the facility-level adjustments involves several steps. First, we take the wage-adjusted federal prospective payment and multiply it by the appropriate rural and LIP adjustments (if applicable). Second, to determine the appropriate amount of additional payment for the teaching status adjustment (if applicable), we multiply the teaching status adjustment (0.0784, in this example) by the wage-adjusted and rural-adjusted amount (if applicable). Finally, we add the additional teaching status payments (if applicable) to the wage, rural, and LIP-adjusted federal prospective payment rates. Table 6 illustrates the components of the adjusted payment calculation.
Thus, the adjusted payment for Facility A would be $34,236.98 and the adjusted payment for Facility B would be $34,192.08.
Section 1886(j)(4) of the Act provides the Secretary with the authority to make payments in addition to the basic IRF prospective payments for cases incurring extraordinarily high costs. A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold. We calculate the adjusted outlier threshold by adding the IRF PPS payment for the case (that is, the CMG payment adjusted by all of the relevant facility-level adjustments) and the adjusted threshold amount (also adjusted by all of the relevant facility-level adjustments). Then, we calculate the estimated cost of a case by multiplying the IRF's overall CCR by the Medicare allowable covered charge. If the estimated cost of the case is higher than the adjusted outlier threshold, we make an outlier payment for the case equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold.
In the FY 2002 IRF PPS final rule (66 FR 41362 through 41363), we discussed our rationale for setting the outlier threshold amount for the IRF PPS so that estimated outlier payments would equal 3 percent of total estimated payments. For the 2002 IRF PPS final rule, we analyzed various outlier policies using 3, 4, and 5 percent of the total estimated payments, and we concluded that an outlier policy set at 3 percent of total estimated payments would optimize the extent to which we could reduce the financial risk to IRFs of caring for high-cost patients, while still providing for adequate payments for all other (non-high cost outlier) cases.
Subsequently, we updated the IRF outlier threshold amount in the FYs 2006 through 2016 IRF PPS final rules and the FY 2011 and FY 2013 notices (70 FR 47880, 71 FR 48354, 72 FR 44284, 73 FR 46370, 74 FR 39762, 75 FR 42836, 76 FR 47836, 76 FR 59256, and 77 FR 44618, 78 FR 47860, 79 FR 45872, 80 FR 47036, respectively) to maintain estimated outlier payments at 3 percent of total estimated payments. We also stated in the FY 2009 final rule (73 FR 46370 at 46385) that we would continue to analyze the estimated outlier payments for subsequent years and adjust the outlier threshold amount as appropriate to maintain the 3 percent target.
To update the IRF outlier threshold amount for FY 2017, we proposed to use FY 2015 claims data and the same methodology that we used to set the initial outlier threshold amount in the FY 2002 IRF PPS final rule (66 FR 41316 and 41362 through 41363), which is also the same methodology that we used to update the outlier threshold amounts for FYs 2006 through 2016. Based on an analysis of the preliminary data used for the proposed rule, we estimated that IRF outlier payments as a percentage of total estimated payments would be approximately 2.8 percent in FY 2016. Therefore, we proposed to update the outlier threshold amount from $8,658 for FY 2016 to $8,301 for FY 2017 to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2017.
We note that, as we typically do, we updated our data between the FY 2017 IRF PPS proposed and final rules to ensure that we use the most recent available data in calculating IRF PPS payments. This updated data includes a more complete set of claims for FY 2015. Based on our analysis using this updated data, we now estimate that IRF outlier payments as a percentage of total estimated payments are approximately 2.7 percent in FY 2016. Therefore, we will update the outlier threshold amount from $8,658 for FY 2016 to $7,984 for FY 2017 to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2017.
We received 7 public comments on the proposed update to the FY 2017 outlier threshold amount to maintain estimated outlier payments at approximately 3 percent of total estimated IRF payments, which are summarized below.
If outlier payments for a given year turn out to be greater than projected, we do not recoup money from hospitals; if outlier payments for a given year are lower than projected, we do not make an adjustment to account for the difference. Payments for a given discharge in a given fiscal year are generally intended to reflect or address the prospective average costs of that discharge in that year; that goal would be undermined if we adjusted IRF PPS payments to account for “underpayments” or “overpayments” in IRF outliers in previous years.
In accordance with the methodology stated in the FY 2004 IRF PPS final rule (68 FR 45674, 45692 through 45694), we proposed to apply a ceiling to IRFs' CCRs. Using the methodology described in that final rule, we proposed to update the national urban and rural CCRs for IRFs, as well as the national CCR ceiling for FY 2017, based on analysis of the most recent data that is available. We apply the national urban and rural CCRs in the following situations:
• New IRFs that have not yet submitted their first Medicare cost report.
• IRFs whose overall CCR is in excess of the national CCR ceiling for FY 2017, as discussed below.
• Other IRFs for which accurate data to calculate an overall CCR are not available.
Specifically, for FY 2017, we proposed to estimate a national average CCR of 0.562 for rural IRFs, which we calculated by taking an average of the CCRs for all rural IRFs using their most recently submitted cost report data. Similarly, we proposed to estimate a national average CCR of 0.435 for urban IRFs, which we calculated by taking an average of the CCRs for all urban IRFs using their most recently submitted cost report data. We apply weights to both of these averages using the IRFs' estimated costs, meaning that the CCRs of IRFs with higher total costs factor more heavily into the averages than the CCRs of IRFs with lower total costs. We used FY 2013 IRF cost report data for the proposed rule. (Please note that we erroneously stated in the proposed rule that we used FY 2014 cost report data.) For this final rule, we have used the most recent available cost report data (FY 2014). This includes all IRFs whose cost reporting periods begin on or after October 1, 2013, and before October 1, 2014. If, for any IRF, the FY 2014 cost report was missing or had an “as submitted” status, we used data from a previous fiscal year's (that is, FY 2004 through FY 2013) settled cost report for that IRF. We do not use cost report data from before FY 2004 for any IRF because changes in IRF utilization since FY 2004 resulting from the 60 percent rule and IRF medical review activities suggest that these older data do not adequately reflect the current cost of care. Using the updated FY 2014 cost report data for this final rule, we estimate a national average CCR of 0.522 for rural IRFs, and a national average CCR of 0.421 for urban IRFs.
In accordance with past practice, we proposed to set the national CCR ceiling at 3 standard deviations above the mean CCR. Using this method, we proposed a national CCR ceiling of 1.36 for FY 2017. This means that, if an individual IRF's CCR were to exceed this proposed ceiling of 1.36 for FY 2017, we would replace the IRF's CCR with the appropriate proposed national average CCR (either rural or urban, depending on the geographic location of the IRF). We calculated the proposed national CCR ceiling by:
Using the updated FY 2014 cost report data for this final rule, we estimate a national average CCR ceiling of 1.29, using this same methodology.
We did not receive any comments on the proposed update to the IRF CCR ceiling and the urban/rural averages for FY 2017.
We seek to promote higher quality and more efficient health care for Medicare beneficiaries, and our efforts are furthered by QRPs coupled with public reporting of that information. Section 3004(b) of the Affordable Care Act amended section 1886(j)(7) of the Act, requiring the Secretary to establish the IRF QRP. This program applies to freestanding IRFs, as well as IRF units affiliated with either acute care facilities or critical access hospitals (CAHs). Beginning with the FY 2014 payment determination and subsequent years, the Secretary is required to reduce any annual update to the standard federal rate for discharges occurring during such fiscal year by 2 percentage points for any IRF that does not comply with the requirements established by the Secretary. Section 1886(j)(7) of the Act requires that for the FY 2014 payment determination and subsequent years, each IRF submit data on quality measures specified by the Secretary in a form and manner, and at a time, specified by the Secretary. For more information on the statutory history of the IRF QRP, please refer to the FY 2015 IRF PPS final rule (79 FR 45908).
The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) imposed new data reporting requirements for certain PAC providers, including IRFs. For information on the statutory background of the IMPACT Act, please refer to the FY 2016 IRF PPS final rule (80 FR 47080 through 47083).
In the FY 2016 IRF PPS final rule, we reviewed general activities and finalized the general timeline and sequencing of such activities that will occur under the
For a detailed discussion of the considerations we use for the selection of IRF QRP quality measures, such as alignment with the CMS Quality Strategy,
In the IRF PPS FY 2017 proposed rule (81 FR 24178), we proposed to adopt for the IRF QRP one measure that we are specifying under section 1899B(c)(1) of the Act to meet the Medication Reconciliation domain, that is, Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post Acute Care Inpatient Rehabilitation Facility Quality Reporting Program. Further, we proposed to adopt for the IRF QRP three measures to meet the resource use and other measure domains identified in section 1899B(d)(1) of the Act. These measures include: (1) Total Estimated Medicare Spending per Beneficiary: Medicare Spending per Beneficiary-Post Acute Care Inpatient Rehabilitation Facility Quality Reporting Program; (2) Discharge to Community: Discharge to Community-Post Acute Care Inpatient Rehabilitation Facility Quality Reporting Program, and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for Inpatient Rehabilitation Facility Quality Reporting Program. We also proposed an additional measure, which is not required under the IMPACT Act: (4) Potentially Preventable Within Stay Readmission Measure for Inpatient Rehabilitation Facilities.
In our development and specification of measures, we employed a transparent process in which we seek input from stakeholders and national experts and engage in a process that allows for pre-rulemaking input on each measure, as required by section 1890A of the Act. To meet this requirement, we provided the following opportunities for stakeholder input: Our measure development contractor convened technical expert panels (TEPs) that included stakeholder experts and patient representatives on July 29, 2015, for the Drug Regimen Review Conducted with Follow-Up for Identified Issues measures; on August 25, 2015, September 25, 2015, and October 5, 2015, for the Discharge to Community measures; on August 12 and 13, 2015, and October 14, 2015, for the Potentially Preventable 30-Day Post-Discharge Readmission Measures and Potentially Preventable Within Stay Readmission Measure for IRFs; and on October 29 and 30, 2015, for the Medicare Spending per Beneficiary (MSPB) measures. In addition, we released draft quality measure specifications for public comment for the Drug Regimen Review Conducted with Follow-Up for Identified Issues measures from September 18, 2015, to October 6, 2015; for the Discharge to Community measures from November 9, 2015, to December 8, 2015; for the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRFs and Potentially Preventable Within Stay Readmission Measure for IRFs from November 2, 2015 to December 1, 2015; and for the MSPB measures from January 13, 2016 to February 5, 2016. We implemented a public mailbox,
Additionally, we sought public input from the NQF-convened MAP Post-Acute Care, Long-Term Care Workgroup during the annual in-person meeting held December 14 and 15, 2015. The MAP, composed of multi-stakeholder groups, is tasked to provide input on the selection of quality and efficiency measures described in section 1890(b)(7)(B) of the Act.
The MAP reviewed each IMPACT Act-related measure, as well as other quality measures proposed in this rule for use in the IRF QRP. For more information on the MAP's recommendations, please refer to the MAP 2016 Final Recommendations to HHS and CMS public report at
For measures that do not have NQF endorsement, or which are not fully supported by the MAP for use in the IRF QRP, we proposed for the IRF QRP for the purposes of satisfying the measure domains required under the IMPACT Act, measures that closely align with the national priorities identified in the National Quality Strategy (
Although we did not solicit feedback on General Considerations Used for Selection of Quality, Resource Use, and Other Measures for the IRF QRP, we received a number of comments, which are summarized with our responses below.
We also received several comments related to the proposed measures, the IMPACT Act, NQF endorsement, the NQF MAP review process, and the use of TEPs, which are addressed below.
Since the MAP recommendation of “encourage continued development” for the proposed measures during the December 2015 NQF-convened PAC LTC MAP meeting, further refinement of measure specifications and testing of measure validity and reliability have been performed. These efforts have included: A pilot test in 12 post-acute care settings, including IRFs, to determine the feasibility of assessment items for use in calculation of the Drug Regimen Review Conducted with Follow-Up for Identified Issues measure, and further development of the risk-adjusted models for the Discharge to Community, Medicare Spending per Beneficiary, Potentially Preventable Readmissions, and Potentially Preventable Within Stay Readmissions Measure for Inpatient Rehabilitation Facilities measures. Additional information regarding testing is further described in the specific measure sections. Additional information regarding testing that was performed since the MAP Meeting, TEP meetings, and public comment periods is further described below in our responses to comments on individual proposed measures.
For these reasons, we believe that the measures have been fully and robustly developed, and believe they are appropriate for implementation and should not be delayed.
MedPAC suggested that the measures use uniform definitions, specifications, and risk-adjustment methods, conveying that findings from their work on a unified PAC payment system suggest overlap or similar care provided for Medicare beneficiaries with similar needs across PAC settings. As a result of this work, MedPAC recommended that the IMPACT Act measures be standardized to facilitate quality comparison across PAC settings to inform Medicare beneficiary choice and provide an opportunity for CMS to evaluate the value of PAC services, noting that differences in rates should reflect differences in quality of care rather than differences in the way rates are constructed.
CMS, in collaboration with our measure contractors, developed the proposed measures with the intent to standardize the measure methodology so that we are able to detect variation among PAC providers in order to be able to assess differences in quality of care. For example, the proposed patient assessment-based quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, was developed across PAC settings with uniform definitions and specifications. This measure is not risk adjusted. The standardized development of this assessment-based measure follows the mandate of the IMPACT Act to develop standardized patient assessment-based measures for the four PAC settings (section 1899B(c)(1) of the Act). The resource use and other measures, Discharge to the Community-PAC IRF QRP and All-Condition Risk-Adjusted Potentially Preventable Hospital Readmissions Rates—PAC IRF QRP were developed to be uniform across the PAC settings in terms of their definitions, measure calculations, and risk-adjustment approach where applicable. However, there is variation in each measure primarily due to the data sources for each PAC setting. Further, the risk-adjustment approach for the resource use and other IMPACT Act measures is aligned, but is tailored to each measure based on measure testing results. Adjusting for relevant case-mix characteristics in each setting improves the validity and explanatory power of risk adjustment models, and helps ensure that any differences in measure performance reflect differences in the care provided rather than differences in patient case-mix. We employ this approach to measure development to enable appropriate cross-setting comparisons in PAC settings and to maximize measure reliability and validity. It should be noted that sections 1899B(c)(3)(B) and 1899B(d)(3)(B) of the Act require that quality measures and resource use and other measures be risk adjusted, as determined appropriate by the Secretary.
We intend to continue to monitor the reliability and validity of the IRF QRP measures, including whether the measures are reliable and valid for cross-setting purposes.
We direct readers to the Measure Specifications for Measures Adopted in the FY 2017 IRF QRP final rule are available at
We appreciate the comment requesting that we provide performance data on IRF QRP measures on a more frequent, such as quarterly, basis in order to promote quality improvement. We wish to note that the proposed claims-based measures are based on 2 consecutive years of data in order to ensure a sufficient sample size to reliably assess IRFs' performance. However, we will investigate the feasibility and usability of providing IRFs with information more frequently, such as unadjusted counts of PPRs and discharge data. We also appreciate the commenters' suggestions related to the implementation of dry run activities, such as confidential reports, for the purposes of identifying any technical issues prior to public reporting, as was successfully provided in the fall of 2015 for the All Cause Unplanned Readmission Measure for 30 Days Post Discharge from IRFs (NQF#2502). We wish to note that we intend to provide confidential feedback reports beginning in October, 2017, as described in section VIII.O of this final rule, and we believe that the reports could serve as an opportunity for providers to extend to us any technical issues they may discover. We note that, as described in section VIII.P of this final rule, we are unable at this time to provide patient-level information for the claims-based measure, for example, the readmission measures, because such data comes from a separate entity. Finally, we wish to note that we intend to continue refining specifications, and we will consider pilot testing in addition to the performance testing that we currently conduct.
In the CY 2013 Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS/ASC) Payment Systems and Quality Reporting Programs final rule (77 FR 68500 through 68507), we adopted a policy that allows any quality measure adopted for use in the IRF QRP to remain in effect until the measure was actively removed, suspended, or replaced, when we initially adopt a measure for the IRF QRP for a payment determination. For the purpose of streamlining the rulemaking process, when we initially adopt a measure for the IRF QRP for a payment determination, this measure will also be adopted for all subsequent years or until we remove, suspend, or replace the measure. For further information on how measures are considered for removal, suspension, or replacement, please refer to the CY 2013 OPPS/ASC final rule (77 FR 68500). We did not propose any changes to the policy for retaining IRF QRP measures adopted for previous payment determinations.
In the CY 2013 OPPS/ASC final rule (77 FR 68500 through 68507), we adopted a subregulatory process to incorporate NQF updates to IRF quality measure specifications that do not substantively change the nature of the measure. Substantive changes will be proposed and finalized through rulemaking. For further information on what constitutes a substantive versus a nonsubstantive change and the subregulatory process for nonsubstantive changes, please refer to the CY 2013 OPPS/ASC final rule (77 FR 68500). We did not propose any changes to the policy for adopting changes to IRF QRP measures.
A history of the IRF QRP quality measures adopted for the FY 2014 payment determinations and subsequent years is presented in Table 7. The year in which each quality measure was first adopted and implemented, and then subsequently re-proposed or revised, if applicable, is displayed. The initial and subsequent annual payment determination years are also shown in Table 7. For more information on a particular measure, please refer to the IRF PPS final rule and associated page numbers referenced in Table 7.
Although we did not solicit feedback, we received a number of comments about previously finalized measures for and currently used in the IRF QRP. These comments are summarized and addressed below.
With regard to the measure, Pressure Ulcers that are New or Worsened (Short-Stay) (NQF #0678), several commenters recommended that future updates to the measure include clinical guidance that is consistent with the most current evidence-based processes.
We received several comments about the NHSN Facility-Wide Inpatient Hospital-Onset
With regard to the measure, Application of Percent of Residents Experiencing One or More Falls with Major Injury (NQF #0674), one commenter had concerns that the nature of IRF treatment could lead to a frequency of falls higher than other settings. The commenter was concerned that including assisted falls in the definition of falls for this quality measure was inappropriate and confusing and recommended that CMS revisit the definition and include only falls with major injury.
The measure specifications for NQF#1717, by design, align with the NHSN LabID Event protocol, which was developed to require minimal investigation on the part of facilities and to provide a proxy measure of infection. Dates of admission and specimen collection are required and can easily be collected via electronic methods and identified as healthcare-associated (HO) or community-onset (CO). To require a facility to determine if a CDI LabID Event had been identified in another facility would call for manual review of medical records and potential communication with transferring facilities. In accordance with protocol guidelines, IRF-based events are categorized as “incident” (first non-duplicate event for the IRF) in addition to a CO/HO categorization. IRF facilities are analyzed independently of any other reporting facility, that is, are viewed as separate reporting facilities.
With regard to the measure, An Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674), we would like to clarify that the quality measure adopted for the IRF QRP includes only falls with a major injury, satisfying the IMPACT Act domain, Incidence of Major Falls. Thus, falls with no injury, such as those that may be considered near-falls, are not included in the measure.
Additionally, we received a number of comments specifically regarding quality measures that were finalized into the IRF QRP in the FY 2016 IRF PPS final rule.
Several commenters were concerned about the training, data submission specifications, and support CMS has provided for items being required on the IRF-PAI Version 1.4, effective October 1, 2016. Several commenters were concerned that the data were collected for research purposes. One commenter indicated there was a discrepancy between the IRF-PAI Training Manual and the data submission specifications. Many commenters had concerns about the need for further clarification about the patient's usual status, and another commenter requested clarification about the use of a dash to indicate that an item was not assessed.
We refer the readers to the FY 2016 final rule (80 FR 47100 through 47120) for discussion about the testing, including the rating scale, reliability, validity and sensitivity of the function items that were added to the IRF-PAI, as well as plans for ongoing evaluation of these items, and concerns related to FIM® item duplication. With regard to training and provider support, we agree with the importance of thorough and comprehensive training. Information about and materials from each IRF QRP training are posted on the IRF-QRP Training Web site at
For the FY 2018 payment determinations and subsequent years, in addition to the quality measures we are retaining under our policy described in section VIII.C. of this final rule, we proposed four new measures. Three of these measures were developed to meet the requirements of IMPACT Act. They are:
(1) MSPB-PAC IRF QRP,
(2) Discharge to Community-PAC IRF QRP, and
(3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP.
The fourth measure is: (4) Potentially Preventable Within Stay Readmission Measure for IRFs. The measures are described in more detail below.
For the risk-adjustment of the resource use and other measures, we understand the important role that sociodemographic status plays in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on providers' results for our measures.
The NQF is currently undertaking a two-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2 years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We received several comments on the impact of sociodemographic status on quality measures, resource use, and other measures, which are summarized with our responses below.
A few commenters, including MedPAC, did not support risk-adjustment of measures by socioeconomic status (SES) or SDS status. One commenter did not support risk-adjustment, stating that it can hide disparities and create different standards of care for IRFs based on the demographics in the facility. MedPAC reiterated that risk adjustment can hide disparities in care and suggested that risk-adjustment reduces pressure on providers to improve quality of care for low-income Medicare beneficiaries. Instead, MedPAC supported peer provider group comparisons with providers of similar low-income beneficiary populations. Another commenter stated that SDS factors should not be included in measures that examine the patient during an IRF stay, but should only be considered for measures evaluating care after the IRF discharge.
We also received suggestions pertaining to the incorporation of socioeconomic factors as risk-adjustors for the measures, including in those measures that pertain to after the patient was discharged from the IRF, additional testing and/or NQF endorsement prior to implementation of these measures, and comments that pertain to potential consequences associated with such risk adjustors and alternative approaches to grouping comparative data. We wish to reiterate that as previously discussed, NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. This trial entails temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are encouraged to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model. Several measures developed by CMS have been brought to NQF since the beginning of the trial. CMS, in compliance with NQF's guidance, has tested sociodemographic factors in the measures' risk models and made recommendations about whether or not to include these factors in the endorsed measure. We intend to continue engaging in the NQF process as we consider the appropriateness of adjusting for sociodemographic factors in our outcome measures.
Furthermore, the Office of the ASPE is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We proposed an MSPB-PAC IRF QRP measure for inclusion in the IRF QRP for the FY 2018 payment determination and subsequent years. Section 1899B(d)(1)(A) of the Act requires the Secretary to specify resource use measures, including total estimated MSPB, on which PAC providers consisting of Skilled Nursing Facilities (SNFs), IRFs, Long-Term Care Hospitals (LTCHs), and Home Health Agencies (HHAs) are required to submit necessary data specified by the Secretary.
Rising Medicare expenditures for post-acute care as well as wide variation in spending for these services underlines the importance of measuring resource use for providers rendering these services. Between 2001 and 2013, Medicare PAC spending grew at an annual rate of 6.1 percent and doubled to $59.4 billion, while payments to inpatient hospitals grew at an annual rate of 1.7 percent over this same period.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use measures for PAC settings. As such, we proposed this MSPB-PAC IRF QRP measure under the Secretary's authority
The MSPB-PAC IRF QRP episode-based measure will provide actionable and transparent information to support IRF providers' efforts to promote care coordination and deliver high quality care at a lower cost to Medicare. The MSPB-PAC IRF QRP measure holds IRF providers accountable for the Medicare payments within an “episode of care” (episode), which includes the period during which a patient is directly under the IRF's care, as well as a defined period after the end of the IRF treatment, which may be reflective of and influenced by the services furnished by the IRF. MSPB-PAC IRF QRP episodes, constructed according to the methodology described below, have high levels of Medicare spending with substantial variation. In FY 2013 and FY 2014, Medicare FFS beneficiaries experienced 613,089 MSPB-PAC IRF QRP episodes triggered by admission to an IRF. The mean payment-standardized, risk-adjusted episode spending for these episodes is $30,370. There is substantial variation in the Medicare payments for these MSPB-PAC IRF QRP episodes—ranging from approximately $15,059 at the 5th percentile to approximately $55,912 at the 95th percentile. This variation is partially driven by variation in payments occurring following IRF treatment.
Evaluating Medicare payments during an episode creates a continuum of accountability between providers that should improve post-treatment care planning and coordination. While some stakeholders throughout the measure development process supported the MSPB-PAC measures and believed that measuring Medicare spending was critical for improving efficiency, others believed that resource use measures did not reflect quality of care in that they do not take into account patient outcomes or experience beyond those observable in claims data. However, IRFs involved in the provision of high quality PAC care as well as appropriate discharge planning and post-discharge care coordination would be expected to perform well on this measure since beneficiaries would likely experience fewer costly adverse events (for example, avoidable hospitalizations, infections, and emergency room usage). Further, it is important that the cost of care be explicitly measured so that, in conjunction with other quality measures, we can publicly report which IRFs provide high quality care at lower cost.
We developed an MSPB-PAC measure for each of the four PAC settings. We proposed an LTCH-specific MSPB-PAC measure in the FY 2017 IPPS/LTCH proposed rule (81 FR 25216 through 25220), an IRF-specific MSBP-PAC measure in the FY 2017 IRF PPS proposed rule (81 FR 24197 through 24201), a SNF-specific MSPB-PAC measure in the FY 2017 SNF proposed rule (81 FR 24258 through 24262), and a HHA-specific MSBP-PAC measure in the CY 2017 HH proposed rule (81 FR 43760 through 43764). The four setting-specific MSPB-PAC measures are closely aligned in terms of episode construction and measure calculation. Each of the MSPB-PAC measures assess Medicare Part A and Part B spending during an episode, and the numerator and denominator are defined similarly for each of the MSPB-PAC measures. However, setting-specific measures allow us to account for differences between settings in payment policy, the types of data available, and the underlying health characteristics of beneficiaries. For example, we use the IRF setting-specific rehabilitation impairment categories (RICs) in the MSPB-PAC IRF QRP risk adjustment model, as detailed below.
The MSPB-PAC measures mirror the general construction of the inpatient prospective payment system (IPPS) hospital MSPB measure, which was adopted for the Hospital IQR Program beginning with the FY 2014 program, and was implemented in the Hospital VBP Program beginning with the FY 2015 program. The measure was endorsed by the NQF on December 6, 2013 (NQF #2158).
MSPB-PAC episodes may begin within 30 days of discharge from an inpatient hospital as part of a patient's trajectory from an acute to a PAC setting. An IRF stay beginning within 30 days of discharge from an inpatient hospital would therefore be included once in the hospital's MSPB measure, and once in the IRF provider's MSPB-PAC measure. Aligning the hospital MSPB and MSPB-PAC measures in this way creates continuous accountability and aligns incentives to improve care planning and coordination across inpatient and PAC settings.
We sought and considered the input of stakeholders throughout the measure development process for the MSPB-PAC measures. We convened a TEP consisting of 12 panelists with combined expertise in all of the PAC settings on October 29 and 30, 2015 in Baltimore, Maryland. A follow-up email survey was sent to TEP members on November 18, 2015 to which seven responses were received by December 8, 2015. The MSPB-PAC TEP Summary Report is available at
Since the MAP's review and recommendation of continued development, CMS continued to refine risk adjustment models and conduct measure testing for the IMPACT Act measures in compliance with the MAP's recommendations. The IMPACT Act measures are consistent with the information submitted to the MAP and support the scientific acceptability of these measures for use in quality reporting programs.
In addition, a public comment period, accompanied by draft measures specifications, was open from January 13 to 27, 2016 and extended to February 5. A total of 45 comments on the MSPB-PAC measures were received during this 3.5 week period. The comments received also covered each of the MAP's concerns as outlined in their Final Recommendations.
To calculate the MSPB-PAC IRF QRP measure for each IRF provider, we first defined the construction of the MSPB-PAC IRF QRP episode, including the length of the episode window as well as the services included in the episode. Next, we apply the methodology for the measure calculation. The specifications are discussed further in this section. More detailed specifications for the MSPB-PAC measures, including the MSPB-PAC IRF QRP measure, are available at
An MSPB-PAC IRF QRP episode begins at the episode trigger, which is defined as the patient's admission to an IRF. The admitting facility is the attributed provider, for whom the MSPB-PAC IRF QRP measure is calculated. The episode window is the time period during which Medicare FFS Part A and Part B services are counted towards the MSPB-PAC IRF QRP episode. Because Medicare FFS claims are already reported to the Medicare program for payment purposes, IRF providers would not be required to report any additional data to CMS for calculation of this measure. Thus, there would be no additional data collection burden from the implementation of this measure.
The episode window is comprised of a treatment period and an associated services period. The treatment period begins at the trigger (that is, on the day of admission to the IRF) and ends on the day of discharge from that IRF. Readmissions to the same facility occurring within 7 or fewer days do not trigger a new episode, and instead are included in the treatment period of the original episode. When two sequential stays at the same IRF occur within 7 or fewer days of one another, the treatment period ends on the day of discharge for the latest IRF stay. The treatment period includes those services that are provided directly or reasonably managed by the IRF provider that are directly related to the beneficiary's care plan. The associated services period is the time during which Medicare Part A and Part B services (with certain exclusions) are counted towards the episode. The associated services period begins at the episode trigger and ends 30 days after the end of the treatment period. The distinction between the treatment period and the associated services period is important because clinical exclusions of services may differ for each period. Certain services are excluded from the MSPB-PAC IRF QRP episodes because they are clinically unrelated to IRF care, and/or because IRF providers may have limited influence over certain Medicare services delivered by other providers during the episode window. These limited service-level exclusions are not counted towards a given IRF provider's Medicare spending to ensure that beneficiaries with certain conditions and complex care needs receive the necessary care. Certain services that are determined to be outside of the control of an IRF provider include planned hospital admissions, management of certain preexisting chronic conditions (for example, dialysis for end-stage renal disease (ESRD), and enzyme treatments for genetic conditions), treatment for preexisting cancers, organ transplants, and preventive screenings (for example, colonoscopy and mammograms). Exclusion of such services from the MSPB-PAC IRF QRP episode ensures that facilities do not have disincentives to treat patients with certain conditions or complex care needs.
An MSPB-PAC episode may begin during the associated services period of an MSPB-PAC IRF QRP episode in the 30 days post-treatment. One possible scenario occurs where an IRF provider discharges a beneficiary who is then admitted to an LTCH within 30 days. The LTCH claim will be included once as an associated service for the attributed provider of the first MSPB-PAC IRF QRP episode and once as a treatment service for the attributed
Medicare payments for Part A and Part B claims for services included in MSPB-PAC IRF QRP episodes, defined according to the methodology previously discussed, are used to calculate the MSPB-PAC IRF QRP measure. Measure calculation involves determination of the episode exclusions, the approach for standardizing payments for geographic payment differences, the methodology for risk adjustment of episode spending to account for differences in patient case mix, and the specifications for the measure numerator and denominator.
In addition to service-level exclusions that remove some payments from individual episodes, we exclude certain episodes in their entirety from the MSPB-PAC IRF QRP measure to ensure that the MSPB-PAC IRF QRP measure accurately reflects resource use and facilitates fair and meaningful comparisons between IRF providers. The episode-level exclusions are as follows:
• Any episode that is triggered by an IRF claim outside the 50 states, DC, Puerto Rico, and U.S. Territories.
• Any episode where the claim(s) constituting the attributed IRF provider's treatment have a standard allowed amount of zero or where the standard allowed amount cannot be calculated.
• Any episode in which a beneficiary is not enrolled in Medicare FFS for the entirety of a 90-day lookback period (that is, a 90-day period prior to the episode trigger) plus episode window (including where a beneficiary dies), or is enrolled in Part C for any part of the lookback period plus episode window.
• Any episode in which a beneficiary has a primary payer other than Medicare for any part of the 90-day lookback period plus episode window.
• Any episode where the claim(s) constituting the attributed IRF provider's treatment include at least one related condition code indicating that it is not a prospective payment system bill.
Section 1899B(d)(2)(C) of the Act requires that the MSPB-PAC measures are adjusted for the factors described under section 1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appropriate. Medicare payments included in the MSPB-PAC IRF QRP measure are payment-standardized and risk-adjusted. Payment standardization removes sources of payment variation not directly related to clinical decisions and facilitates comparisons of resource use across geographic areas. We proposed to use the same payment standardization methodology that was used in the NQF-endorsed hospital MSPB measure. This methodology removes geographic payment differences, such as wage index and geographic practice cost index (GPCI), incentive payment adjustments, and other add-on payments that support broader Medicare program goals including indirect graduate medical education (IME) and hospitals serving a disproportionate share of uninsured patients (DSH).
Risk adjustment uses patient claims history to account for case-mix variation and other factors that affect resource use but are beyond the influence of the attributed IRF provider. To assist with risk adjustment, we created mutually exclusive and exhaustive clinical case mix categories using the most recent institutional claim in the 60 days prior to the start of the MSPB-PAC IRF QRP episode. The beneficiaries in these clinical case mix categories have a greater degree of clinical similarity than the overall IRF patient population, and allow us to more accurately estimate Medicare spending. Our MSPB-PAC IRF QRP measure, adapted for the IRF setting from the NQF-endorsed hospital MSPB measure, uses a regression framework with a 90-day hierarchical condition category (HCC) lookback period and covariates including the clinical case mix categories, HCC indicators, age brackets, indicators for originally disabled, ESRD enrollment, and long-term care status, and selected interactions of these covariates where sample size and predictive ability make them appropriate. We sought and considered public comment regarding the treatment of hospice services occurring within the MSPB-PAC IRF QRP episode window. Given the comments received, we proposed to include the Medicare spending for hospice services but risk adjust for them, such that MSPB-PAC IRF QRP episodes with hospice services are compared to a benchmark reflecting other MSPB-PAC IRF QRP episodes with hospice services. We believe this strikes a balance between the measure's intent of evaluating Medicare spending and ensuring that providers do not have incentives against the appropriate use of hospice services in a patient-centered continuum of care.
We proposed to use RICs in response to commenters' concerns about the risk adjustment approach for the MSPB-PAC IRF QRP measure. Commenters suggested the use of case mix groups (CMGs); however, we believed that the use of RICs may be more appropriate given that the other covariates incorporated in the model partially account for factors in CMGs (for example, age and certain HCC indicators). RICs do not account for functional status as CMGs do, as the functional status information in CMGs is based on the IRF-PAI. Given the
We understand the important role that sociodemographic factors, beyond age, play in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We will monitor the impact of sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For 2 years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, ASPE is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as required under the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
While we conducted analyses on the impact of age by sex on the performance of the MSPB-PAC IRF QRP risk-adjustment model, we did not propose to adjust the MSPB-PAC IRF QRP measure for socioeconomic factors. As this MSPB-PAC IRF QRP measure would be submitted for NQF endorsement, we prefer to await the results of this trial and study before deciding whether to risk adjust for socioeconomic factors. We will monitor the results of the trial, studies, and recommendations. We invited public comment on how socioeconomic and demographic factors should be used in risk adjustment for the MSPB-PAC IRF QRP measure.
The MPSB-PAC IRF QRP measure is a payment-standardized, risk-adjusted ratio that compares a given IRF provider's Medicare spending against the Medicare spending of other IRF providers within a performance period. Similar to the hospital MSPB measure, the ratio allows for ease of comparison over time as it obviates the need to adjust for inflation or policy changes.
The MSPB-PAC IRF QRP measure is calculated as the ratio of the MSPB-PAC Amount for each IRF provider divided by the episode-weighted median MSPB-PAC Amount across all IRF providers. To calculate the MSPB-PAC Amount for each IRF provider, one calculates the average of the ratio of the standardized episode spending over the expected episode spending (as predicted in risk adjustment), and then multiplies this quantity by the average episode spending level across all IRF providers nationally. The denominator for an IRF provider's MSPB-PAC IRF QRP measure is the episode-weighted national median of the MSPB-PAC Amounts across all IRF providers. An MSPB-PAC IRF QRP measure of less than 1 indicates that a given IRF provider's Medicare spending is less than that of the national median IRF provider during a performance period. Mathematically, this is represented in equation (A) below:
The MSPB-PAC IRF QRP resource use measure is an administrative claims-based measure. It uses Medicare Part A and Part B claims from FFS beneficiaries and Medicare eligibility files.
The measure cohort includes Medicare FFS beneficiaries with an IRF treatment period ending during the data collection period.
We intend to provide initial confidential feedback to providers, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2015 and 2016. We intend to publicly report this measure using claims data from discharges in CY 2016 and 2017.
We proposed to use a minimum of 20 episodes for reporting and inclusion in the IRF QRP. For the reliability calculation, as described in the measure specifications for which a link has been provided above, we used 2 years of data (FY 2013 and FY 2014) to increase the statistical reliability of this measure. The reliability results support the 20 episode case minimum, and 99.74 percent of IRF providers had moderate or high reliability (above 0.4).
We invited public comment on our proposal to adopt the MSPB-PAC IRF QRP measure for the IRF QRP. The comments we received, with our responses, appear below.
Each of the measures assess Medicare Part A and Part B spending during the episode window which begins upon admission to the provider's care and ends 30 days after the end of the treatment period. The service-level exclusions are harmonized across settings. The definition of the numerator and denominator is the same across settings. However, specifications differ between settings when necessary to ensure that the measures accurately reflect patient care and align with each setting's payment system. For example, Medicare pays LTCHs and IRFs a stay-level payment based on the assigned MS-LTC-DRG and CMG, respectively, while SNFs are paid a daily rate based on the RUG level, and HHA providers are reimbursed based on a fixed 60-day period for standard home health claims. While the definition of the episode window is consistent across settings and is based on the period of time that a beneficiary is under a given provider's care, the duration of the treatment period varies to reflect how providers are reimbursed under the PPS that applies to each setting. The length of the post-treatment period is consistent between settings. There are also differences in services covered under the PPS that applies to each setting: For example, durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) claims are covered LTCH, IRF, and SNF services but are not covered HHA services. This affects the way certain first-day service exclusions are defined for each measure.
We recognize that beneficiaries may receive similar services as part of their overall treatment plan in different PAC settings, but believe that there are some important differences in beneficiaries' care profiles that are difficult to capture in a single measure that compares resource use across settings.
Also, the risk adjustment models for the MSPB-PAC measures share the same covariates to the greatest extent possible to account for patient case mix. However, the measures also incorporate additional setting-specific information where available to increase the predictive power of the risk adjustment models. For example, the MSPB-PAC LTCH QRP risk adjustment model uses MS-LTC-DRGs and Major Diagnostic Categories (MDCs) and the MSPB-PAC IRF QRP model includes Rehabilitation Impairment Categories (RICs). The HH and SNF settings do not have analogous variables that directly reflect a patient's clinical profile.
We will continue to work towards a more uniform measure across settings as we gain experience with these measures, and we plan to conduct further research and analyses about comparability of resource use measures across settings for clinically similar patients, different treatment periods and windows, risk adjustment, service exclusions, and other factors.
We recognize the importance of accounting for beneficiaries' functional and cognitive status in the calculation of predicted episode spending. We considered the potential use of functional status information in the risk adjustment models for the MSPB-PAC measures. However, we decided not to include this information derived from current setting-specific assessment instruments given the move towards standardized data as mandated by the IMPACT Act. We will revisit the inclusion of functional status in these measures' risk adjustment models in the future when the standardized functional status data mandated by the IMPACT Act become available. Once they are available, we will take a gradual and systematic approach in evaluating how they might be incorporated. We intend to implement any changes if appropriate based on testing.
In summary, after consideration of the public comments we received, we are finalizing the specifications of the MSPB-PAC IRF QRP resource use measure, as proposed. A Web site for the measure specifications has been provided above in this section.
Specifically, we are finalizing the definition of an MSPB-PAC IRF QRP episode, beginning from episode trigger. An episode window comprises a treatment period beginning at the trigger and ended upon discharge, and associated services period beginning at the trigger and ending 30 days after the end of the treatment period. Readmissions to the same IRF within 7 or fewer days do not trigger a new episode and are instead included in the treatment period of the first episode.
We exclude certain services that are clinically unrelated to IRF care and/or because IRF providers may have limited influence over certain Medicare services delivered by other providers during the episode window. We also exclude certain episodes in their entirety from the MSPB-PAC IRF QRP measure, such as where a beneficiary is not enrolled in Medicare FFS for the entirety of the lookback period plus episode window.
We finalize the inclusion of Medicare payments for Part A and Part B claims for services included in the MSPB-PAC IRF QRP episodes to calculate the MSPB-PAC IRF QRP measure.
We are finalizing our proposal to risk adjust using covariates including age brackets, HCC indicators, prior inpatient stay length, ICU stay length, clinical case mix categories, and indicators for originally disabled, ESRD enrollment, long-term care status, and hospice claim in episode window. The measure also adjusts for geographic payment differences such as wage index and GPCI, and adjust for Medicare payment differences resulting from IME and DSH.
We calculate the individual providers' MSPB-PAC Amount which is inclusive of MSPB-PAC IRF QRP observed episode spending over the expected episode spending as predicted through risk adjustment. Individual IRF providers' scores are calculated as their individual MSPB-PAC Amount divided by the median MSPB-PAC amount across all IRFs.
Sections 1899B(d)(1)(B) and 1899B(a)(2)(E)(ii) of the Act require the Secretary to specify a measure to address the domain of discharge to community by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We proposed to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP for the FY 2018 payment determination and subsequent years as a Medicare FFS claims-based measure to meet this requirement.
This measure assesses successful discharge to the community from an IRF setting, with successful discharge to the community including no unplanned rehospitalizations and no death in the 31 days following discharge from the IRF. Specifically, this measure reports an IRF's risk-standardized rate of Medicare FFS patients who are discharged to the community following an IRF stay, and do not have an unplanned readmission to an acute care hospital or LTCH in the 31 days following discharge to community, and who remain alive during the 31 days following discharge to community. The term “community”, for this measure, is defined as home or self care, with or without home health services, based on Patient Discharge Status Codes 01, 06, 81, and 86 on the Medicare FFS claim.
Discharge to a community setting is an important health care outcome for many patients for whom the overall goals of post-acute care include optimizing functional improvement, returning to a previous level of independence, and avoiding institutionalization. Returning to the community is also an important outcome for many patients who are not expected to make functional improvement during their IRF stay, and for patients who may be expected to decline functionally due to their medical condition. The discharge to community outcome offers a multi-dimensional view of preparation for community life, including the cognitive, physical, and psychosocial elements involved in a discharge to the community.
In addition to being an important outcome from a patient and family perspective, patients discharged to community settings, on average, incur lower costs over the recovery episode, compared with those discharged to institutional settings.
Analyses conducted for ASPE on PAC episodes, using a 5 percent sample of 2006 Medicare claims, revealed that relatively high average, unadjusted Medicare payments are associated with discharge to institutional settings from IRFs, SNFs, LTCHs or HHAs, as compared with payments associated with discharge to community settings.
Measuring and comparing facility-level discharge to community rates is expected to help differentiate among facilities with varying performance in this important domain, and to help avoid disparities in care across patient groups. Variation in discharge to community rates has been reported within and across post-acute settings; across a variety of facility-level characteristics, such as geographic location (for example, regional location, urban or rural location), ownership (for example, for-profit or nonprofit), and freestanding or hospital-based units; and across patient-level characteristics, such as race and gender.
Discharge to community is an actionable health care outcome, as targeted interventions have been shown to successfully increase discharge to community rates in a variety of post-acute settings.
A TEP convened by our measure development contractor was strongly supportive of the importance of measuring discharge to community outcomes, and implementing the measure, Discharge to Community-PAC IRF QRP in the IRF QRP. The panel provided input on the technical specifications of this measure, including the feasibility of implementing the measure, as well as the overall measure reliability and validity. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at
We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 9, 2015, through December 8, 2015. Several stakeholders and organizations, including the MedPAC, among others, supported this measure for implementation. The public comment summary report for the measure is available on our Web site at
The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this Discharge to Community-PAC IRF QRP measure in the IRF QRP. The MAP encouraged continued development of the measure to meet the mandate of the IMPACT Act. The MAP supported the alignment of this measure across PAC settings, using standardized claims data. More information about the MAP's recommendations for this measure is available at
Since the MAP's review and recommendation of continued development, we have continued to refine risk-adjustment models and conduct measure testing for this measure, as recommended by the MAP. This measure is consistent with the information submitted to the MAP, and the original MAP submission and our continued refinements support its scientific acceptability for use in quality reporting programs. As discussed with the MAP, we fully anticipate that additional analyses will continue as we submit this measure to the ongoing measure maintenance process.
We reviewed the NQF's consensus-endorsed measures and were unable to identify any NQF-endorsed resource use or other measures for post-acute care focused on discharge to community. In addition, we are unaware of any other post-acute care measures for discharge to community that have been endorsed or adopted by other consensus organizations. Therefore, we proposed the measure, Discharge to Community-PAC IRF QRP, under the Secretary's authority to specify non-NQF-endorsed measures under section 1899B(e)(2)(B) of the Act.
We proposed to use data from the Medicare FFS claims and Medicare eligibility files to calculate this measure. We proposed to use data from the “Patient Discharge Status Code” on Medicare FFS claims to determine whether a patient was discharged to a community setting for calculation of this measure. In all PAC settings, we tested the accuracy of determining discharge to a community setting using the “Patient Discharge Status Code” on the PAC claim by examining whether discharge to community coding based on PAC claim data agreed with discharge to community coding based on PAC assessment data. We found excellent agreement between the two data sources in all PAC settings, ranging from 94.6 percent to 98.8 percent. Specifically, in the IRF setting, using 2013 data, we found 98.8 percent agreement in coding of community and non-community discharges when comparing discharge status codes on claims and the Discharge to Living Setting (item 44A) codes on the IRF-PAI. We further examined the accuracy of the “Patient Discharge Status Code” on the PAC claim by assessing how frequently discharges to an acute care hospital were confirmed by follow-up acute care claims. We discovered that 88 percent to 91 percent of IRF, LTCH, and SNF claims with acute care discharge status codes were followed by an acute care claim on the day of, or day after, PAC discharge. We believed these data support the use of the claims “Patient Discharge Status Code” for determining discharge to a community setting for this measure. In addition, this measure can feasibly be implemented in the IRF QRP because all data used for measure calculation are derived from Medicare FFS claims and eligibility files, which are already available to CMS.
Based on the evidence discussed above, we proposed to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP for FY 2018 payment determination and subsequent years. This measure is calculated using 2 years of data. We proposed a minimum of 25 eligible stays in a given IRF for public reporting of the measure for that IRF. Since Medicare FFS claims data are already reported to the Medicare program for payment purposes, and Medicare eligibility files are also available, IRFs will not be required to report any additional data to us for calculation of this measure. The measure denominator is the risk-adjusted expected number of discharges to community. The measure numerator is the risk-adjusted estimate of the number of patients who are discharged to the community, do not have an unplanned readmission to an acute care hospital or LTCH in the 31-day post-discharge observation window, and who remain alive during the post-discharge observation window. The measure is risk-adjusted for variables such as age and sex, principal diagnosis, comorbidities, ESRD status, and dialysis, among other variables. For technical information about the proposed measure, including information about the measure calculation, risk adjustment, and denominator exclusions, we referred readers to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, available at
We stated in the proposed rule that we intend to provide initial confidential feedback to IRFs, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2015 and 2016. We intend to publicly report this measure using claims data from discharges in CY 2016 and 2017. We will submit this measure to the NQF for consideration for endorsement.
In the CY 2013 OPPS/ASC final rule (77 FR 68500), we finalized our policy to use a subregulatory approach to incorporate non-substantive changes to measures adopted in the IRF QRP, including changes to exclusions. In that rule, we noted that we expect to make this determination on a measure-by-measure basis and that examples of non-substantive changes to measures might include exclusions for a measure. For the proposed Discharge to Community-IRF QRP measure, we have added an exclusion of patients/residents with a hospice benefit in the post-discharge observation window, in response to comments received during measure development and our ongoing analysis and testing. The rationale for the exclusion of patients/residents with a hospice benefit in the post-discharge observation window aligns with the rationale for exclusion of discharges to hospice. Based on testing, we found that patients/residents with a post-discharge hospice benefit have a much higher death rate in the post-discharge observation window compared with patients/residents without a hospice benefit. We determined that the addition of this hospice exclusion enhances the measure by excluding patients/residents with a high likelihood of post-discharge death and improves the national observed discharge to community rate for IRFs by approximately 0.8 percent. With the addition of this hospice exclusion, we do not believe burden is added, nor that the addition of this exclusion is a substantive change to the overall measure. Failure to include this hospice exclusion could lead to unintended consequences and access issues for terminally-ill patients/residents in our PAC populations.
We invited public comment on our proposal to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP. The comments we received on this topic, with our responses, appear below.
We also note that Title II of the ADA requires public entities to administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities (28 CFR 35.130(d)). The preamble discussion of the “integration regulation” explains that “the most integrated setting” is one that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible. Integrated settings are those that provide individuals with disabilities opportunities to live, work, and receive services in the greater community, like individuals without disabilities (28 CFR part 35, app. A (2010) (addressing § 35.130)).
In response to the commenters' concerns that SNFs may be unfairly advantaged by this measure as compared with other PAC providers, we would like to note that, in our measure development samples, the national discharge to community rate for SNFs was 47.26 percent, while this rate for IRFs was considerably higher (69.51 percent). Further, using an MDS-claims linked longitudinal file, we found that of the SNF stays that had a pre-hospitalization non-PPS MDS assessment suggesting prior nursing facility residence, two-thirds had a discharge status code of 30 (still patient), and approximately 18 percent had a discharge status code of 02 (acute hospital). Less than 5 percent of these patients had a Discharge Status Code of 01 (discharge to home or self care). Thus, the commenters' concerns that discharges from SNF to nursing facility are largely coded as Patient Discharge Status Code 01 are not reflected in our data.
Because the discharge to community measure is a measure of discharge destination from the PAC setting, we have chosen to use the PAC-reported discharge destination (from the Medicare FFS claims) to determine whether a patient/resident was discharged to the community (based on discharge status codes 01, 06, 81, 86). We assessed the reliability of the claims discharge status code(s) by examining agreement between discharge status on claims and assessment instruments in all four PAC settings. We found between 94 and 99 percent agreement in coding of community discharges on matched claims and assessments in each of the PAC settings. We also assessed how frequently discharges to acute care, as indicated on the PAC claim, were confirmed by follow-up acute care claims, and found that 88 percent to 91 percent of IRF, LTCH, and SNF claims indicating acute care discharge were followed by an acute care claim on the day of, or day after, PAC discharge. We believe that these data support the use of the “Patient Discharge Status Code” from the PAC claim for determining discharge to a community setting for this measure.
The use of the claims discharge status code to identify discharges to the community was discussed at length with the TEP convened by our measure development contractor. TEP members did not express significant concerns regarding the accuracy of the claims discharge status code in coding community discharges, nor about our use of the discharge status code for defining this quality measure. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at
Our goal is to develop measures that are meaningful to patients and consumers, and assist them in making informed choices when selecting post-acute providers. Since the goal of PAC for most patients and family members is to be discharged to the community and remain in the community, from a patient/consumer perspective, it is important to assess whether a patient remained in the community after discharge and to separately report discharge to community rates. In addition to assessing the success of community discharges, the inclusion of post-discharge readmission and death outcomes in this measure is intended to avoid the potential unintended consequence of inappropriate discharges to the community.
We found, through our analyses in our measure development sample, that death in the 31 days following discharge to community is an infrequent event, with only 0.9 percent of IRF Medicare FFS beneficiaries dying during that period. By risk adjusting for prior service use (that is, number of hospitalizations in the past year), our intent is to adjust for patient characteristics, such as access, patient compliance, or sociodemographic and socioeconomic factors that may influence the likelihood of post-discharge readmissions. Additionally, by excluding patients discharged against medical advice from the measure, we are excluding patients who demonstrate non-compliance or non-adherence during the PAC stay.
We would like to note that we do not expect facilities to achieve a 0 percent readmission or death rate in the measure's post-discharge observation window; the focus is to identify facilities with unexpectedly high rates of unplanned readmissions and death for quality monitoring purposes.
Multiple commenters suggested that the measure include risk adjustment for functional status in all settings, as it is closely associated with patients' discharge destination. One commenter noted that functional status is associated with increased risk of 30-day all-cause hospital readmissions, and since readmissions and discharge to community are closely related, functional status risk adjustment is also important for this measure. One commenter suggested that the SNF and LTCH measures include risk adjustment that is similar to the risk adjustment for CMGs in the IRF setting and Activities of Daily Living in the HHA setting. One commenter interpreted the measure proposal as stating that CMS will not adjust the quality measures, including the discharge to community measure, to account for functional status of beneficiaries until such data are collected under the IMPACT Act.
As mandated by the IMPACT Act, we are moving toward the goal of collecting standardized patient assessment data for functional status across PAC settings. The IRF QRP includes five NQF-endorsed functional status quality measures, with a data collection start date of October 1, 2016. Two measures are related to mobility functional outcomes, two are related to self-care functional outcomes, and one is a process measure. Once standardized functional status data become available across settings, it is our intent to use these data to assess patients' functional gains during their PAC stay, and to examine the relationship between functional status, discharge destination, and patients' ability to discharge to the community. As we examine these relationships between functional outcomes and discharge to community outcomes in the future, we will assess the feasibility of leveraging these standardized patient assessment data to incorporate functional outcomes into the discharge to community measure. Standardized cross-setting patient assessment data will also allow us to examine interrelationships between the quality and resource use measures in each PAC setting, and to understand how these measures are correlated.
The HCCs are more comprehensive than the simpler diagnosis-based systems, such as the Elixhauser Comorbidity Index or Charlson Comorbidity Index, which were targeted for predicting specific outcomes (for example, hospital mortality). We believe that HCCs provide a good representation of health risk, and their use to examine outcomes other than costs is supported in the literature.
We have successfully used HCCs as risk adjusters in several other quality measures, such as the readmissions and functional status measures for post-acute care. We have found HCCs to be significant and important predictors of outcomes across these quality measures.
For details on measure specifications, modeling, and calculations, we refer readers to the Measure Specifications for Measures Adopted in the FY 2017 IRF QRP final rule, posted on the CMS IRF QRP Web page at
As with all measure development, our measure development contractor held three TEP meetings to seek input to guide development of the Discharge to Community measure. The TEP represented members of IRF, LTCH, SNF and home health agency settings. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at
For measure specifications, we refer readers to the Measure Specifications for Measures Adopted in the FY 2017 IRF QRP final rule, posted on the CMS IRF QRP Web site at:
Sections 1899B(a)(2)(E)(ii) and 1899B(d)(1)(C) of the Act require the Secretary to specify measures to address the domain of all-condition risk-adjusted potentially preventable hospital readmission rates by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We proposed the measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP as a Medicare FFS claims-based measure to meet this requirement for the FY 2018 payment determination and subsequent years.
The measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries in the 30 days post IRF discharge. The IRF admission must have occurred within up to 30 days of discharge from a prior proximal hospital stay which is defined as an inpatient admission to an acute care hospital (including IPPS, CAH, or a psychiatric hospital). Hospital readmissions include readmissions to a short-stay acute-care hospital or an LTCH, with a diagnosis considered to be unplanned and potentially preventable. This measure is claims-based, requiring no additional data collection or submission burden for IRFs. Because the measure denominator is based on IRF admissions, each Medicare beneficiary may be included in the measure multiple times within the measurement period. Readmissions counted in this measure are identified by examining Medicare FFS claims data for readmissions to either acute care hospitals (IPPS or CAH) or LTCHs that occur during a 30-day window beginning 2 days after IRF discharge. This measure is conceptualized uniformly across the PAC settings, in terms of the measure definition, the approach to risk adjustment, and the measure calculation. Our approach for defining potentially preventable hospital readmissions is described in more detail below.
Hospital readmissions among the Medicare population, including beneficiaries that utilize PAC, are common, costly, and often preventable.
We have addressed the high rates of hospital readmissions in the acute care setting as well as in PAC. For example, we developed the following measure: All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502), as well as similar measures for other PAC providers (NQF #2512 for LTCHs and NQF #2510 for SNFs).
Several general methods and algorithms have been developed to assess potentially avoidable or preventable hospitalizations and readmissions for the Medicare population. These include the Agency for Healthcare Research and Quality's (AHRQ's) Prevention Quality Indicators, approaches developed by MedPAC, and proprietary approaches, such as the 3M
• Inadequate management of chronic conditions;
• Inadequate management of infections; and
• Inadequate management of other unplanned events.
Additional details regarding the definition for potentially preventable readmissions are available in the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, available at
This measure focuses on readmissions that are potentially preventable and also unplanned. Similar to the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502), this measure uses the current version of the CMS Planned Readmission Algorithm as the main component for identifying planned readmissions. A complete description of the CMS Planned Readmission Algorithm, which includes lists of planned diagnoses and procedures, can be found on the CMS Web site
The measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, assesses potentially preventable readmission rates while accounting for patient demographics, principal diagnosis in the prior hospital stay, comorbidities, and other patient factors. While estimating the predictive power of patient characteristics, the model also estimates a facility-specific effect, common to patients treated in each facility. This measure is calculated for each IRF based on the ratio of the predicted number of risk-adjusted, unplanned, potentially preventable hospital readmissions that occur within 30 days after an IRF discharge, including the estimated facility effect, to the estimated predicted number of risk-adjusted, unplanned inpatient hospital readmissions for the same patients treated at the average IRF. A ratio above 1.0 indicates a higher than expected readmission rate (worse) while a ratio below 1.0 indicates a lower than expected readmission rate (better). This ratio is referred to as the standardized risk ratio (SRR). The SRR is then multiplied by the overall national raw rate of potentially preventable readmissions for all IRF stays. The resulting rate is the risk-standardized readmission rate (RSRR) of potentially preventable readmissions.
An eligible IRF stay is followed until: (1) The 30-day post-discharge period ends; or (2) the patient is readmitted to an acute care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned and potentially preventable, it is counted as a readmission in the measure calculation. If the readmission is planned, the readmission is not counted in the measure rate. This measure is risk adjusted. The risk adjustment modeling estimates the effects of patient characteristics, comorbidities, and select health care variables on the probability of readmission. More specifically, the risk-adjustment model for IRFs accounts for demographic characteristics (age, sex, original reason for Medicare entitlement), principal diagnosis during the prior proximal hospital stay, body system specific surgical indicators, IRF case-mix groups which capture motor function, comorbidities, and number of acute care hospitalizations in the preceding 365 days.
The measure is calculated using 2 consecutive calendar years of FFS claims data, to ensure the statistical reliability of this measure for facilities. In addition, we proposed a minimum of 25 eligible stays for public reporting of the measure.
A TEP convened by our measure contractor provided recommendations on the technical specifications of this measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members' ratings of conditions proposed as being potentially preventable, are available in the TEP summary report available on the CMS Web site at
The MAP encouraged continued development of the proposed measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP's recommendations for this measure is available at
We reviewed the NQF's consensus endorsed measures and were unable to identify any NQF-endorsed measures focused on potentially preventable hospital readmissions. We are unaware of any other measures for this IMPACT Act domain that have been endorsed or adopted by other consensus organizations. Therefore, we proposed the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, under the Secretary's authority to specify non-NQF-endorsed measures under section 1899B(e)(2)(B) of the Act, for the IRF QRP for the FY 2018 payment determination and subsequent years, given the evidence previously discussed above.
We plan to submit the measure to the NQF for consideration of endorsement. We stated in the proposed rule that we intended to provide initial confidential feedback to providers, prior to public reporting of this measure, based on 2 calendar years of data from discharges in CY 2015 and 2016. We also stated that we intended to publicly report this measure using data from CY 2016 and 2017.
We invited public comment on our proposal to adopt the measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP. We received several comments, which are summarized with our responses below.
Though readmissions may be considered potentially preventable even if they may not appear to be clinically related to the patient's original reason for IRF admission, there is substantial evidence that the conditions included in the definition may be preventable with adequately planned, explained, and implemented post-discharge instructions, including the establishment of appropriate follow-up ambulatory care. Furthermore, this measure is based on Medicare FFS claims data and it may not always be feasible to determine whether a subsequent readmission is or is not clinically related to the reason why the patient was receiving inpatient rehabilitation. We intend to conduct ongoing evaluation and monitoring of this measure, and will take these comments into consideration.
With regard to the comment related to DRGs, we wish to clarify that this measure does not use hospital DRGs to define PPRs or in the risk adjustment. Potentially preventable hospital readmissions are defined by the principal diagnosis on the readmission claim. Our risk-adjustment model uses diagnoses (not DRGs) from the prior hospital claim as risk adjusters. Though there may be variation in coding practices, claims data are the most reliable source to identify potentially preventable hospital readmissions post-IRF discharge. We would also like to clarify that the reason for receiving inpatient rehabilitation is captured as a risk adjuster by the use of the IRF PPS CMGs which also incorporate the RICs as well as function.
We would also like to clarify that the finalized risk-adjustment models and coefficients are included in the measure specifications available at
One commenter supported the use of Medicare claims data to calculate these measures because it does not require the submission of additional data by IRFs. Another commenter noted that despite the lack of a data collection burden for providers, multiple readmission measures in the program will create burden on the part of providers to track and improve performance. Another commenter expressed concern that the measures are “extensive” and will place additional financial burden on providers.
With regard to overlap with the existing IRF QRP readmission measure, retaining the all-cause measure will allow us to monitor trends in both all-cause and PPR rates in order to assess the extent to which changes in facility performance for one measure are reflected in the other. We are committed to ensuring that measures in the IRF QRP are useful in assessing quality and will continue to evaluate all readmission measures over time.
We thank commenters for their feedback related to provider burden on the measure. We would like to note that the PPR measure uses Medicare claims data and is not collected by means of an assessment instrument. Therefore, the measure does not increase data collection burden on the provider as this data is currently collected by providers. Despite the lack of data collection burden, we appreciate the comments that more education will be required for the public and providers to understand the differences between the readmission measures in the IRF QRP.
Another commenter supported the proposed risk-adjustment methodology commenting it will provide a valid assessment of quality of care in preventing unplanned, preventable hospital readmissions. One commenter also suggested that, in addition to the measure exclusion for non-surgical treatment of cancer, that other conditions with similar disease trajectories be excluded from the measure, citing end-stage Multiple Sclerosis (MS), motor neuron disease, and Alzheimer's disease.
The HCCs were developed to separate clinically-related codes by Medicare utilization implications; they represent diagnosis-based, clinically meaningful clusters of ICD codes that have also been grouped by cost implications. When we apply HCCs for risk adjustment of quality or resources use measures, we do not use the HCC models applied to payment. In our measure development, we typically test individual HCCs that are relevant to the outcome of interest; we estimate the effects of the individual HCCs or clusters on the dependent variable in the particular model and retain those that are significant or meaningful predictors of outcomes. We believe that risk adjusting for individual HCCs or small clusters provides greater sensitivity than using a single comorbidity index, which is based on selected diagnoses. Our approach accounts for an average effect for each comorbidity or comorbidity group, rather than an overall burden of comorbidities.
The HCCs are more comprehensive than the simpler diagnosis-based systems, such as the Elixhauser Comorbidity Index or Charlson Comorbidity Index, which were targeted for predicting specific outcomes (for example, hospital mortality). We believe that HCCs provide a good representation of health risk, and their use to examine outcomes other than costs is supported in the literature.
We wish to clarify that the model included in the specifications using HCCs as risk adjusters for comorbidities posted for the proposed rule demonstrated sufficient discrimination power. The model had a c-statistic of 0.74 which is within range, if not higher than, similar readmission measures finalized in public reporting programs, including the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502) previously adopted for the IRF QRP.
With regard to the suggestions that the model include sociodemographic factors and the suggestion pertaining to an approach with which to convey data comparisons, we refer the readers to section VIII.F of this final rule where we also discuss these topics. In response to the suggestion to include additional conditions from the measure, such as end-stage MS, motor neuron disease, and Alzheimer's disease, we wish to clarify that we risk adjust for these clinical characteristics in our risk-adjustment model. These are low prevalence conditions and the claims data are limited in their ability to identify disease progression. However, we will take this suggestion into consideration.
We would also like to clarify that the finalized risk-adjustment models and coefficients are included in the measure specifications available at
We would like to clarify that the MAP encouraged continued development of the proposed measure. More information about the MAP's recommendations for this measure is available at
In response to the concern regarding holding an IRF accountable for planned procedures that are treated as observation stays instead of planned hospital readmissions, we appreciate the commenter's concern and expect that this is a relatively infrequent occurrence given that most of the planned procedures are invasive surgical procedures. The measure is of hospital readmissions and does not count planned procedures that are treated as observation stays. We will take this issue into consideration for future measure development.
In addition to the measure finalized in section VIII.F.3. of this final rule, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, we proposed the Potentially Preventable Within Stay Readmission Measure for IRFs for the FY 2018 payment determination and subsequent years. This measure is similar to the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP; however, the readmission window for this measure focuses on potentially preventable hospital readmissions that take place
Similar to the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP measure for IRFs, this measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions during the IRF stay. Hospital readmissions include readmissions to a short-stay acute-care hospital or an LTCH, with a diagnosis considered to be unplanned and potentially preventable. This Medicare FFS measure is claims-based, requiring no additional data collection or submission burden for IRFs. As described in section VIII.F.3. of this final rule, we developed the approach for defining PPR measure based on a comprehensive environmental scan, analysis of claims data, and TEP input. Also, we obtained public comment.
The definition for PPRs differs by readmission window. For the within-IRF stay window, PPRs should be avoidable with sufficient medical monitoring and appropriate patient treatment. The list of PPR conditions for the Potentially Preventable Within Stay Readmission Measure for IRFs are categorized by 4 clinical rationale groupings:
• Inadequate management of chronic conditions;
• Inadequate management of infections;
• Inadequate management of other unplanned events; and
• Inadequate injury prevention.
Additional details regarding the definition for PPRs are available in our document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule available on our Web site at
Section VIII.F of this final rule discusses the relevant background and details that are also relevant for this measure. This measure defines planned readmissions in the same manner as described in section VIII.F.3 of this final rule, for the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP. In addition, similar to the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP measure, this measure uses the same risk-adjustment and statistical approach as described in section VIII.F.3 of this final rule. Note the full methodology is detailed in the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, at
A TEP convened by our measure contractor provided recommendations on the technical specifications of this measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members' ratings of conditions proposed as being potentially preventable, are available in the TEP Summary Report available on our Web site at
The MAP encouraged continued development of the proposed measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP's recommendations for this measure is available at
We plan to submit the measure to the NQF for consideration of endorsement. We stated in the proposed rule that we intended to provide initial confidential feedback to providers, prior to public reporting of this measure, based on 2 calendar years of claims data from discharges in 2015 and 2016. We proposed a minimum of 25 eligible stays in a given IRF for public reporting of the measure for that IRF. We also stated that we intended to publicly report this measure using claims data from calendar years 2016 and 2017.
We invited public comment on our proposal to adopt this measure, Potentially Preventable Within Stay Readmission Measure for IRFs. We received several comments, which are summarized with our responses below.
We would like to clarify that for the commenter's example regarding patients with leukemia, these patients would most likely be excluded from the measure because non-surgical treatment of cancer is a measure exclusion. Based on analysis of data from 2013, 0.5 percent of the IRF sample was excluded because the prior short-term acute-care stay was for nonsurgical treatment of cancer which includes leukemia. In addition, leukemia and other cancer patients that are not excluded from the measure are more likely being readmitted for planned procedures and treatments; however, this is a measure of potentially preventable hospital readmissions that are also unplanned.
With regard to excluding readmissions during the first three days of an IRF stay, we would like to clarify that the policy cited is for IRF payment determination and is not related to measurement of quality of care. This measure focuses on care transitions and coordination which is relevant to all patients, including those with shorter lengths of stay. Furthermore, excluding readmissions during the first three days of an IRF stay may result in transferring patients back sooner in order to exclude patients from the measure.
We would also like to clarify that the finalized risk-adjustment models and coefficients are included in the measure specifications available at
In addition, we wish to clarify that though this measure is not required by the IMPACT Act, capturing potentially preventable readmission measures during an IRF stay assesses important aspects of inpatient post-acute care, including care coordination. Like other hospital readmission measures for post-acute care, the measure fits within the National Quality Strategy communication and care coordination priority area. We also wish to clarify that this measure does not overlap readmission captured in other readmission measures proposed or adopted for the IRF QRP.
We would also like to clarify that the full measure specifications including preliminary results were made available at the time of the proposed rule's display. The measure is fully developed and the final measure specifications, including the finalized risk-adjustment models and descriptive statistics on IRFs' risk-standardized within-stay PPR rates, are available are included in the measure specifications available at
Though readmissions may be considered potentially preventable even if they may not appear to be clinically related to the patient's original reason for IRF admission, there is substantial evidence that the conditions included in the definition may be preventable with sufficient medical monitoring and appropriate patient treatment. Furthermore, this measure is based on Medicare claims data and it may not always be feasible to determine whether a subsequent readmission is or is not clinically related to the reason why the patient was receiving inpatient rehabilitation. We intend to conduct ongoing evaluation and monitoring of this measure, and will take these comments into consideration.
With regard to the suggestions that the model include sociodemographic factors and the suggestion pertaining to an approach with which to convey data comparisons, we refer the readers to section VIII.F of this final rule where we also discuss these topics.
We proposed to adopt one new quality measure to meet the requirements of the IMPACT Act beginning with the FY 2020 payment determination and subsequent years. The measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, addresses the IMPACT Act quality domain of Medication Reconciliation.
Sections 1899B(a)(2)(E)(i)(III) and 1899B(c)(1)(C) of the Act, as added by the IMPACT Act, require the Secretary to specify a quality measure to address the quality domain of medication reconciliation by October 1, 2018 for IRFs, LTCHs and SNFs by January 1, 2017 for HHAs. We proposed to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, for the IRF QRP as a patient-assessment based, cross-setting quality measure to meet the IMPACT Act requirements with data collection beginning October 1, 2018 for the FY 2020 payment determinations and subsequent years.
This measure assesses whether PAC providers were responsive to potential or actual clinically significant medication issue(s) when such issues were identified. Specifically, the quality measure reports the percentage of patient stays in which a drug regimen review was conducted at the time of admission and timely follow-up with a physician occurred each time potential clinically significant medication issues were identified throughout that stay.
For this quality measure, drug regimen review is defined as the review of all medications or drugs the patient is taking to identify any potential clinically significant medication issues. The quality measure utilizes both the processes of medication reconciliation and a drug regimen review, in the event an actual or potential medication issue occurred. The measure informs whether the PAC facility identified and addressed each clinically significant medication issue and if the facility responded or addressed the medication issue in a timely manner. Of note, drug regimen review in PAC settings is generally considered to include medication reconciliation and review of the patient's drug regimen to identify potential clinically significant medication issues.
Medication reconciliation is a process of reviewing an individual's complete and current medication list. Medication reconciliation is a recognized process for reducing the occurrence of medication discrepancies that may lead to Adverse Drug Events (ADEs).
The performance of timely medication reconciliation is valuable to the process of drug regimen review. Preventing and responding to ADEs is of critical importance as ADEs account for significant increases in health services utilization and costs
Medication errors include the duplication of medications, delivery of an incorrect drug, inappropriate drug omissions, or errors in the dosage, route, frequency, and duration of medications. Medication errors are one of the most common types of medical error and can occur at any point in the process of ordering and delivering a medication. Medication errors have the potential to result in an ADE.
There is strong evidence that medication discrepancies occur during transfers from acute care facilities to post-acute care facilities. Discrepancies occur when there is conflicting information documented in the medial records. Almost one-third of medication discrepancies have the potential to cause patient harm.
Medication reconciliation has been identified as an area for improvement during transfer from the acute care facility to the receiving post-acute care facility. PAC facilities report gaps in medication information between the acute care hospital and the receiving post-acute-care setting when performing medication reconciliation.
A TEP convened by our measure development contractor provided input on the technical specifications of this quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, including components of reliability, validity, and the feasibility of implementing the measure across PAC settings. The TEP supported the measure's implementation across PAC settings and was supportive of our plans to standardize this measure for cross-setting development. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and
We solicited stakeholder feedback on the development of this measure by means of a public comment period held from September 18 through October 6, 2015. Through public comments submitted by several stakeholders and organizations, we received support for implementation of this measure. The public comment summary report for the measure is available on the CMS Web site at
The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP. The MAP encouraged continued development of the quality measure to meet the mandate added by the IMPACT Act. The MAP agreed with the measure gaps identified by CMS, including medication reconciliation, and stressed that medication reconciliation be present as an ongoing process. More information about the MAPs recommendations for this measure is available at
Since the MAP's review and recommendation of continued development, we have continued to refine this measure in compliance with the MAP's recommendations. The measure is consistent with the information submitted to the MAP and supports its scientific acceptability for use in quality reporting programs. Therefore, we proposed this measure for implementation in the IRF QRP as required by the IMPACT Act.
We reviewed the NQF's endorsed measures and identified one NQF-endorsed cross-setting and quality measure related to medication reconciliation, which applies to the SNF, LTCH, IRF, and HHA settings of care: Care for Older Adults (COA), (NQF #0553). The quality measure, Care for Older Adults (COA), (NQF #0553) assesses the percentage of adults 66 years and older who had a medication review. The Care for Older Adults (COA), (NQF #0553) measure requires at least one medication review conducted by a prescribing practitioner or clinical pharmacist during the measurement year and the presence of a medication list in the medical record. This is in contrast to the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, which reports the percentage of patient stays in which a drug regimen review was conducted at the time of admission and that timely follow-up with a physician occurred each time one or more potential clinically significant medication issues were identified throughout that stay.
After careful review of both quality measures, we decided to propose the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP for the following reasons:
• The IMPACT Act requires the implementation of quality measures, using patient assessment data that are standardized and interoperable across PAC settings. The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, employs three standardized patient-assessment data elements for each of the four PAC settings so that data are standardized, interoperable, and comparable; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not contain data elements that are standardized across all four PAC settings.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, requires the identification of potential clinically significant medication issues at the beginning, during, and at the end of the patient's stay to capture data on each patient's complete PAC stay; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure only requires annual documentation in the form of a medication list in the medical record of the target population.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, includes identification of the potential clinically significant medication issues and communication with the physician (or physician designee) as well as resolution of the issue(s) within a rapid timeframe (by midnight of the next calendar day); whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not include any follow-up or timeframe in which the follow-up would need to occur.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, does not have age exclusions; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure limits the measure's population to patients aged 66 and older.
• The quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, will be reported to IRFs quarterly to facilitate internal quality monitoring and quality improvement in areas such as patient safety, care coordination, and patient satisfaction; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure would not enable quarterly quality updates, and thus data comparisons within and across PAC providers would be difficult due to the limited data and scope of the data collected.
Therefore, based on the evidence discussed above, we proposed to adopt the quality measure entitled, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, for the IRF QRP for FY 2020 payment determination and subsequent years. We plan to submit the quality measure to the NQF for consideration for endorsement.
The calculation of the quality measure is based on the data collection of three standardized items to be included in the IRF-PAI. The collection of data by means of the standardized items will be obtained at admission and discharge. For more information about the data submission required for this measure, we refer readers to section VIII.I.c of this final rule.
The standardized items used to calculate this quality measure do not duplicate existing items currently used for data collection within the IRF-PAI. The measure denominator is the number of patient stays with a discharge assessment during the reporting period. The measure numerator is the number of stays in the denominator where the medical record contains documentation of a drug regimen review conducted at: (1) Admission and (2) discharge with a lookback through the entire patient stay with all potential clinically significant medication issues identified during the course of care and followed up with a physician or physician designee by midnight of the next calendar day. This measure is not risk adjusted. For technical information about this measure, including information about the measure calculation and discussion pertaining to the standardized items used to calculate this measure, we refer readers to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule available at
Data for the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP, will be collected using the IRF-PAI with submission through the Quality Improvement Evaluation System (QIES) Assessment Submission and Processing (ASAP) system.
We invited public comment on our proposal to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP for the IRF QRP. We received several comments, which are summarized with our responses below.
As noted above, we plan to conduct further testing on this measure once we have started collecting data from the PAC settings. Once we have completed this additional measure performance testing, we plan to submit the measure to NQF for endorsement.
We agree that medication discrepancies can occur during patient admissions, transfers, and discharges. We wish to clarify that the quality measure requires the identification of potential clinically significant medication issues for each patient's complete IRF stay, from admission to discharge. Medication reconciliation and drug regimen review are interrelated activities; while medication reconciliation is a process that identifies the most accurate and current list of medications, particularly during transitions of care, it also includes the evaluation of the name, dosage, frequency, and route. Drug regimen review is a process that necessitates and includes the review of all medications for additional purposes such as the identification of potential adverse effects. The process of drug regimen review includes medication reconciliation at the time of patient transitions and throughout the patient's stay.
We invited comment on the importance, relevance, appropriateness, and applicability of each of the quality measures listed in Table 8 for future years in the IRF QRP. We are developing a measure related to the IMPACT Act domain, “Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions.” We considered the possibility of adding quality measures that rely on the patient's perspective; that is, measures that include patient-reported experience of care and health status data. We recently posted a “Request for Information to Aid in the Design and Development of a Survey Regarding Patient and Family Member Experiences with Care Received in Inpatient Rehabilitation Facilities” (80 FR 72725). Also, we are considering a measure focused on pain that relies on the collection of patient-reported pain data. Finally, we are considering a measure related to patient safety, Venous Thromboembolism Prophylaxis.
We received several comments about IRF QRP quality measures under
Many commenters remarked on the limited number of items in the IRF-PAI related to communication, cognition, and swallowing and noted that these domains are important in treating individuals with neurological disorders. One commenter encouraged CMS to adopt a specific screening instrument (Montreal Cognitive Assessment (MoCA)) or similar screening tools and assessment tools (such as the Continuity Assessment Record and Evaluation-Community, or CARE-C) to best meet the needs of Medicare beneficiaries and the intent of the IMPACT Act. Another commenter requested that CMS add a functional cognition assessment item to the IRF discharge assessment and that this information be provided to the next provider when a patient is transferred. The commenters offered to collaborate with CMS to develop future measures in the area of cognitive function.
Many commenters supported a patient experience of care measure, and supported accepting proxy response from family members and caregivers to support accurate and reliable results at the facility level. Other commenters supported a measure of patient experience, instead of only patient satisfaction, and recommended that it include several aspects unique to IRF care, including goal setting and discharge planning. Commenters recommended that CMS implement the survey as a voluntary tool prior to requiring it, which would allow IRFs to transition operationally and find a vendor, if needed. Commenters also recommended that the quality measure adjust for factors already in place for existing CAHPS® surveys, including adjusting for mode of survey administration, as well as IRF-specific patient-mix adjustment. The commenter also suggested converting responses to a 0 to 100 linear-scaled score. Several commenters recommended that CMS seek stakeholder input on the development of a patient experience of care measure.
Section 1886(j)(7)(C) of the Act requires that, for the FY 2014 payment determination and subsequent years, each IRF submit to the Secretary data on quality measures specified by the Secretary. In addition, section 1886(j)(7)(F) of the Act requires that, for the fiscal year beginning on the specified application date, as defined in section 1899B(a)(2)(E) of the Act, and each subsequent year, each IRF submit to the Secretary data on measures specified by the Secretary under section 1899B of the Act. The data required under section 1886(j)(7)(C) and (F) of the Act must be submitted in a form and manner, and at a time, specified by the Secretary. As required by section 1886(j)(7)(A)(i) of the Act, for any IRF that does not submit data in accordance with section 1886(j)(7)(C) and (F) of the Act for a given fiscal year, the annual increase factor for payments for discharges occurring during the fiscal year must be reduced by 2 percentage points.
Tables 10 through 18 represent our finalized data collection and data submission quarterly reporting periods, as well as the quarterly review and correction periods and submission deadlines for the quality measure data submitted via the IRF-PAI and the CDC/NHSN affecting the FY 2018 and subsequent year payment determinations. We also provide in Table 10 our previously finalized claims-based measures for FY 2018 and subsequent years, although we note that, for claims-based measures, there is no corresponding quarterly-based data collection or submission reporting periods with quarterly-based review and correction deadline periods.
Further, in the FY 2016 IRF PPS final rule (80 FR 47122 through 47123), we established that the IRF-PAI-based measures finalized for adoption into the IRF QRP will transition from reporting based on the fiscal year to an annual schedule consistent with the calendar year, with quarterly reporting periods followed by quarterly review and correction periods and submission deadlines, unless there is a clinical reason for an alternative data collection time frame. The pattern for annual, calendar year-based data reporting, in which we use 4 quarters of data, is illustrated in Table 10 and is in place for all Annual Payment Update (APU) years except for the measure in Table 10 for which the FY 2018 APU determination will be based on 5 calendar year quarters in order to transition this measure from FY to CY reporting. We also wish to clarify that payment determinations for the measures finalized for use in the IRF QRP that use the IRF-PAI or CDC NHSN data sources will subsequently use the quarterly data collection/submission and review, correction and submission deadlines described in Table 10 unless otherwise specified, as is with the measure NQF #0680: Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine. For this measure, we clarify in a subsequent discussion that the data collection and reporting periods, which are based on the Influenza Season, span 2 consecutive years from July 1 through June 30th and we therefore separately illustrate those collection/submission quarterly reporting periods, review and correction periods, and submission deadlines for FY 2019 and subsequent years in Table 10. We also separately distinguish the reporting periods and data submission timeframes for the finalized measure Influenza Vaccination Coverage among Healthcare Personnel which spans 2 consecutive years, as this measure is based on the Influenza vaccination season, in Table 10.
In the FY 2014 IRF PPS final rule, we adopted the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure for the FY 2017 payment determination and subsequent years (78 FR 47910 through 47911). In the FY 2014 IRF PPS final rule (78 FR 47917 through 47919), we finalized the data submission timelines and submission deadlines for the measures for FY 2017 payment determination. Refer to the FY 2014 final rule (78 FR 47917 through 47919) for a more detailed discussion of these timelines and deadlines.
We want to clarify that this measure includes all patients in the IRF one or more days during the influenza vaccination season (IVS) (October 1 of
Further, we wish to clarify that the data submission timeline for this measure includes 4 calendar quarters and is based on the influenza season (July 1 through June 30 of the subsequent year), rather than on the calendar year. For the purposes of APU determination and for public reporting, data calculation and analysis uses data from an influenza vaccination season that is within the
Refer to Table 16 for details about the quarterly data collection/submission and the review and correction deadlines for FY 2019 and subsequent years for NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine.
We finalized in the FY 2014 IRF PPS final rule (78 FR 47905 through 47906) that for FY 2016 and subsequent years IRFs will submit data on the quality measure Influenza Vaccination Coverage among Healthcare Personnel (NQF
Although we did not solicit feedback, we received several comments about the previously finalized policy to adopt calendar year data collection time frames, unless there is a clinical reason for an alternative data collection time frame, which are summarized with our responses below.
With regard to concerns about increased burden with the change in data collection periods and requests for leniency regarding submission deadlines, we disagree that leniency is warranted, given that there is no discrepancy in the data set and the policy only affects the first quarter of data collection for newly adopted measures. We have ongoing education regarding data submission deadlines, including quarterly email reminders of upcoming deadlines. We also remind the reader of the availability of the reconsideration process, in which IRFs may file for reconsideration if they believe the finding of non-compliance is in error, or they have evidence of the impact of extraordinary circumstances which prevented timely submission of data.
The MSPB PAC IRF QRP measure; Discharge to Community PAC IRF QRP measure; Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP; and Potentially Preventable Within Stay Readmission Measure for IRFs, which we are finalizing in this final rule, are Medicare FFS claims-based measures. Because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, no additional information collection will be required from IRFs. As discussed in section VIII.F of this final rule, these measures will use 2 years of claims-based data beginning with CY 2015 and CY 2016 claims to inform confidential feedback reports for IRFs, and CYs 2016 and 2017 claims data for public reporting.
We invited public comments on this proposal. We did not receive comments related to data submission mechanisms for these measures. For comments related to the measures, please see section VIII.F of this final rule. For comments related to the future public display of these measures, please see section VIII.N of this final rule.
We finalize the timeline and data submission mechanisms for FY 2018 payment determination and subsequent years as proposed.
As discussed in section VIII.F of this final rule, we proposed that the data for the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, affecting FY 2020 payment determination and subsequent years, be collected by completing data elements that will be added to the IRF-PAI with submission through the QIES-ASAP system. Data collection will begin on October 1, 2018. More information on IRF reporting using the QIES-ASAP system is located at the Web site at
For the FY 2020 payment determinations, we proposed to use CY 2018 4th quarter data, that is, beginning with discharges on October 1, 2018, through discharges on December 31, 2018, to remain consistent with the usual October release schedule for the IRF-PAI, to give IRFs sufficient time to update their systems so that they can comply with the new data reporting requirements, and to give us sufficient time to determine compliance for the FY 2020 program. The proposed use of 1 quarter of data for the initial year of assessment data reporting in the IRF QRP, to make compliance determinations related to the applicable FY APU, is consistent with the approach we used previously for the SNF, LTCH, and Hospice QRPs.
Table 18 presents the proposed data collection period and data submission timelines for the new IRF QRP quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, for the FY 2020 Payment Determination. We invited public comments on this proposal.
Following the close of the reporting quarter, October 1, 2018, through December 31, 2018, for the FY 2020 payment determination, IRFs will have the already established additional 4.5 months to correct their quality data and that the final deadline for correcting data for the FY 2020 payment determination will be May 15, 2019 for these measures. We further proposed that for the FY 2021 payment determination and subsequent years, we will collect data using the calendar year reporting cycle as described in section VIII.I.c of this final rule, and illustrated in Table 20. We invited public comments on this proposal.
We did not receive any comments on the proposed data collection periods and data submission timelines for the new proposed IRF QRP quality measure for the FY 2020 and FY 2021 payment determination and subsequent years.
In the FY 2015 IRF PPS final rule (79 FR 45921 through 45923), we finalized IRF QRP thresholds for completeness of IRF data submissions. To ensure that IRFs are meeting an acceptable standard for completeness of submitted data, we finalized the policy that, beginning with the FY 2016 payment determination and for each subsequent year, IRFs must meet or exceed two separate data completeness thresholds: One threshold set at 95 percent for completion of quality measures data collected using the IRF-PAI submitted through the QIES and a second threshold set at 100 percent for quality measures data collected and submitted using the CDC NHSN.
Additionally, we stated that we will apply the same thresholds to all measures adopted as the IRF QRP expands and IRFs begin reporting data on previously finalized measure sets. That is, as we finalize new measures through the regulatory process, IRFs will be held accountable for meeting the previously finalized data completion threshold requirements for each measure until such time that updated threshold requirements are proposed and finalized through a subsequent regulatory cycle.
Further, we finalized the requirement that an IRF must meet or exceed both thresholds to avoid receiving a 2 percentage point reduction to their annual payment update for a given fiscal year, beginning with FY 2016 and for all subsequent payment updates. For a detailed discussion of the finalized IRF QRP data completion requirements, please refer to the FY 2015 IRF PPS final rule (79 FR 45921 through 45923). We proposed to codify the IRF QRP Data Completion Thresholds at § 412.634. We invited public comments on this proposal.
We received several comments with concerns about the proposal to codify the IRF QRP Data Completion Thresholds at § 412.634, which are summarized below.
Validation is intended to provide added assurance of the accuracy of the data that will be reported to the public as required by sections 1886(j)(7)(E) and 1899B(g) of the Act. In the FY 2015 IRF PPS rule (79 FR 45923), we finalized, for the FY 2016 adjustments to the IRF PPS annual increase factor and subsequent years, a process to validate the data submitted for quality purposes. However, in the FY 2016 IRF PPS final rule (80 FR 47124), we finalized our decision to temporarily suspend the implementation of this policy. We did not propose a data validation policy in the FY 2017 IRF PPS proposed rule, as we are developing a policy that could be applied to several PAC QRPs. We intend to propose a data validation policy through future rulemaking.
Refer to § 412.634 for requirements pertaining to submission exception and extension for the FY 2017 payment determination and subsequent years. We proposed to revise § 412.634 to change the timing for submission of these exception and extension requests from 30 days to 90 days from the date of the qualifying event which is preventing an IRF from submitting their quality data for the IRF QRP. We proposed the increased time allotted for the submission of the requests from 30 to 90 days to be consistent with other quality reporting programs; for example, the Hospital Inpatient Quality Reporting (IQR) Program also proposed to extend the deadline to 90 days in the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 25205). We believe that this increased time will assist providers experiencing
We invited public comments on the proposal to revise § 412.634 to change the timing for submission of these exception and extension requests from 30 days to 90 days from the date of the qualifying event which is preventing an IRF from submitting their quality data for the IRF QRP. We received one comment on this proposal, which is summarized and addressed below in this section.
Refer to § 412.634 for a summary of our finalized reconsideration and appeals procedures for the IRF QRP for FY 2017 payment determination and subsequent years. We did not propose any changes to this policy. However, we wish to clarify that in order to notify IRFs found to be non-compliant with the reporting requirements set forth for a given payment determination, we may include the QIES mechanism in addition to U.S. Mail, and we may elect to utilize the MACs to administer such notifications.
We received several comments about the previously adopted and finalized IRF QRP reconsideration and appeals procedures, which are summarized below.
Section 1886(j)(7)(E) of the Act requires the Secretary to establish procedures for making the IRF QRP data available to the public. In the FY 2016 IRF PPS final rule (80 FR 47126 through 47127), we finalized our proposals to display performance data for the IRF QRP quality measures by Fall 2016 on a CMS Web site, such as the
Also, in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127), we also finalized that the display of information for fall 2016 contains performance data on three quality measures:
• Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678);
• NHSN CAUTI Outcome Measure (NQF #0138); and
• All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502).
The measures Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and NHSN CAUTI Outcome Measure (NQF #0138) are based on data collected beginning with the first quarter of 2015 or discharges beginning on January 1, 2015. With the exception of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502), rates are displayed based on 4 rolling quarters of data and will initially use discharges from January 1, 2015, through December 31, 2015 (CY 2015) for Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and data collected from January 1, 2015, through December 31, 2015 (CY 2015) for NHSN CAUTI Outcome Measure (NQF #0138). For the readmissions measure, data will be publicly report beginning with data collected for discharges beginning January 1, 2013, and rates will be displayed based on 2 consecutive years of data. For IRFs with fewer than 25 eligible cases, we proposed to assign the IRF to a separate category: “The number of cases is too small (fewer than 25) to reliably tell how well the IRF is performing.” If an IRF has fewer than 25 eligible cases, the IRF's readmission rates and interval estimates will not be publicly reported for the measure.
Calculations for all three measures are discussed in detail in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127).
Pending the availability of data, we proposed to publicly report data in CY 2017 on 4 additional measures beginning with data collected on these measures for the first quarter of 2015, or discharges beginning on January 1, 2015: (1) Facility-wide Inpatient Hospital-onset Methicillin-resistant
Standardized infection ratios (SIRs) for the Facility-wide Inpatient Hospital-onset Methicillin-resistant
Calculations for the MRSA and CDI Healthcare Associated Infection (HAI) measures adjust for differences in the characteristics of hospitals and patients using a SIR. The SIR is a summary measure that takes into account differences in the types of patients that a hospital treats. For a more detailed discussion of the SIR, please refer to the FY 2016 IRF PPS final rule (80 FR 47126 through 47127). The MRSA and CDI SIRs may take into account the laboratory methods, bed size of the hospital, and other facility-level factors. It compares the actual number of HAIs in a facility or state to a national benchmark based on previous years of reported data and adjusts the data based on several factors. A confidence interval with a lower and upper limit is displayed around each SIR to indicate that there is a high degree of confidence that the true value of the SIR lies within that interval. A SIR with a lower limit that is greater than 1.0 means that there were more HAIs in a facility or state than were predicted, and the facility is classified as “Worse than the U.S. National Benchmark.” If the SIR has an upper limit that is less than 1, the facility had fewer HAIs than were predicted and is classified as “Better than the U.S. National Benchmark.” If the confidence interval includes the value of 1, there is no statistical difference between the actual number of HAIs and the number predicted, and the facility is classified as “No Different than U.S. National Benchmark.” If the number of predicted infections is less than 1.0, the SIR and confidence interval are not calculated by CDC.
Calculations for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) are based on reported numbers of personnel who received an influenza vaccine at the reporting facility or who provided written documentation of influenza vaccination outside the reporting facility. The sum of these two numbers is divided by the total number of personnel working at the facility for at least 1 day from October 1 through March 31 of the following year, and the result is multiplied by 100 to produce a compliance percentage (vaccination coverage). No risk adjustment is applicable to these calculations. More information on these calculations and measure specifications is available at
We invited public comment on our proposal to begin publicly reporting in CY 2017, pending the availability of data, on Facility-wide Inpatient Hospital-onset MRSA Bacteremia Outcome Measure (NQF #1716); Facility-wide Inpatient Hospital-onset CDI Outcome Measure (NQF #1717); and Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). These comments are summarized and addressed below.
According to the CDC, the steward of this quality measure, cases defined by NHSN as Community-onset MRSA Bacteremia are excluded from the data that is provided by NHSN to CMS. Only those cases that meet the NHSN definition of Incident and Healthcare Facility-onset are reported as a part of the CMS IRF QRP. For IRF units within a hospital that participate in the CMS IRF QRP will be given a single MRSA bacteremia LabID SIR for each type of CMS-certified IRF unit (adult and pediatric) mapped within the hospital according to CMS Certification Number (CCN). The MRSA Bacteremia LabID SIR is calculated as: Number of all incident blood source MRSA LabID events identified >3 days after admission to an IRF unit and where the patient had no positive MRSA bacteremia LabID events in the prior 14 days in any CMS-certified IRF unit of that type divided by the total number of predicted incident healthcare facility-onset blood source MRSA LabID events. Clinicians should base decisions about diagnostic testing on the needs and clinical picture of the patient. Patients with MRSA bacteremia would be expected to be symptomatic. Routine collection of blood cultures on patients not suspected of being bacteremic would be outside of the standards of medical care. For additional information on the specifications for this measure, please refer to the CDC reference:
Minimum patient thresholds and populations are dependent on the specific measure. Each measure is specifically applied in public reporting so that there is enough volume of cases reported to protect anonymity and provide meaningful results with representative sample size. Public reporting must comply with applicable privacy laws and provide minimum sample sizes in order for facilities to compare their performance with other IRFs. If the sample size is too small, the results will not reflect their facility performance for comparison purposes.
For the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680), we proposed to display rates annually based on the influenza season to avoid reporting for more than one influenza vaccination within a CY. For example, in 2017 we will display rates for the patient vaccination measure based on discharges starting on July 1, 2015, to June 30, 2016. This is proposed because it includes the entire influenza vaccination season (October 1, 2015, to March 31, 2016).
Calculations for Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) will be based on patients meeting any one of the following criteria: Patients who received the influenza vaccine during the influenza season, patients who were offered and declined the influenza vaccine, and patients who were ineligible for the influenza vaccine due to contraindication(s). The facility's summary observed score will be calculated by combining the observed counts of all the criteria. This is consistent with the publicly reported patient influenza vaccination measure for Nursing Home Compare. Additionally, for the patient influenza measure, we will exclude IRFs with fewer than 20 stays in the measure denominator. For additional information on the specifications for this measure, please refer to the IRF Quality Reporting Measures Information Web page at
We invited public comments on our proposal to begin publicly reporting the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure on discharges from July 1st of the previous calendar year to June 30th of the current calendar year. We invited comments on the public display of the measure Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680) in 2017 pending the availability of data.
We received several comments, which are summarized below.
Additionally, we requested public comments on whether to include, in the future, public display comparison rates based on CMS regions or US census regions for Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678); All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502); and Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) for CY 2017 public display.
We did not receive any comments about whether to include, in the future, public display comparison rates based on CMS regions or US census regions for CY 2017 public display.
Section 1899B(g) of the Act requires the Secretary to establish procedures for public reporting of IRFs' performance, including the performance of individual IRFs, on quality measures specified under section 1899B(c)(1) of the Act and resource use and other measures specified under section 1899B(d)(1) of the Act (collectively, IMPACT Act measures) beginning not later than 2 years after the applicable specified application date under section 1899B(a)(2)(E) of the Act. Under section 1899B(g)(2) of the Act, the procedures must ensure, including through a process consistent with the process applied under section 1886(b)(3)(B)(viii)(VII) of the Act, which refers to public display and review requirements in the Hospital IQR Program, that each IRF has the opportunity to review and submit corrections to its data and information that are to be made public prior to the information being made public.
In the FY 2016 IRF PPS final rule (80 FR 47126 through 47128), and as illustrated in Table 10 in section VIII.I.a of this final rule, we finalized that once the provider has an opportunity to review and correct quarterly data related to measures submitted via the QIES-ASAP system or CDC NHSN, we will consider the provider to have been given the opportunity to review and correct this data. We wish to clarify that although the correction of data (including claims) can occur after the submission deadline, if such corrections are made after a particular quarter's submission and correction deadline, such corrections will not be captured in the file that contains data for calculation of measures for public reporting purposes. To have publicly displayed performance data that is based on accurate underlying data, it will be necessary for IRFs to review and correct this data before the quarterly submission and correction deadline.
We restated and proposed additional details surrounding procedures that will allow individual IRFs to review and correct their data and information on measures that are to be made public before those measure data are made public.
For assessment-based measures, we proposed a process by which we will provide each IRF with a confidential feedback report that will allow the IRF to review its performance on such measures and, during a review and correction period, to review and correct the data the IRF submitted to CMS via the CMS QIES-ASAP system for each such measure. In addition, during the review and correction period, the IRF will be able to request correction of any errors in the assessment-based measure rate calculations.
We proposed that these confidential feedback reports will be available to each IRF using the CASPER system. We
As previously finalized in the FY 2016 IRF PPS final rule and illustrated in Table 18 in section VIII.I.c of this final rule, IRFs will have approximately 4.5 months after the reporting quarter to correct any errors of their assessment-based data (that appear on the CASPER generated QM reports) and NHSN data used to calculate the measures. During the time of data submission for a given quarterly reporting period and up until the quarterly submission deadline, IRFs could review and perform corrections to errors in the assessment data used to calculate the measures and could request correction of measure calculations. However, as already established, once the quarterly submission deadline occurs, the data is “frozen” and calculated for public reporting and providers can no longer submit any corrections. We will encourage IRFs to submit timely assessment data during a given quarterly reporting period and review their data and information early during the review and correction period so that they can identify errors and resubmit data before the data submission deadline.
As noted above, the assessment data will be populated into the confidential feedback reports, and we intend to update the reports monthly with all data that have been submitted and are available. We believe that the data collection/submission quarterly reporting periods plus 4.5 months to review correct and review the data is sufficient time for IRFs to submit, review and, where necessary, correct their data and information. These time frames and deadlines for review and correction of such measures and data satisfy the statutory requirement that IRFs be provided the opportunity to review and correct their data and information and are consistent with the informal process hospitals follow in the Hospital IQR Program.
In FY 2016 IRF PPS final rule (80 FR 47126 through 47128), we finalized the data submission/correction and review period. Also, we afford IRFs a 30-day preview period prior to public display during which IRFs may preview the performance information on their measures that will be made public. We want to clarify that we will provide the
In addition to assessment-based measures and CDC measure data received via the NHSN system, we have also proposed claims-based measures for the IRF QRP. The claims-based measures include those proposed to meet the requirements of the IMPACT Act as well as the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502) which was finalized for public display in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127). As noted in section VII.N.2. of this final rule, section 1899B(g)(2) of the Act requires prepublication provider review and correction procedures that are consistent with those followed in the Hospital IQR Program. Under the Hospital IQR Program's informal procedures, for claims-based measures, we provide hospitals 30 days to preview their claims-based measures and data in a preview report containing aggregate hospital-level data. We proposed to adopt a similar process for the IRF QRP.
Prior to the public display of our claims-based measures, in alignment with the Hospital IQR, HAC and Hospital VBP Programs, we proposed to make available through the CASPER system, a confidential preview report that will contain information pertaining to claims-based measure rate calculations, for example, facility and national rates. The data and information will be for feedback purposes only and could not be corrected. This information will be accompanied by additional confidential information based on the most recent administrative data available at the time we extract the claims data for purposes of calculating the measures. Because the claims-based measures are recalculated on an annual basis, these confidential CASPER QM reports for claims-based measures will be refreshed annually. As previously finalized in the FY 2016 IRF PPS final rule (80 FR 47126 through 47128), IRFs will have 30 days from the date the preview report is made available in which to review this information. The
The proposed claims-based measures—The MSPB-PAC IRF QRP measure; Discharge to Community—PAC, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, and Potentially Preventable Within Stay Readmission Measure for IRFs—use Medicare administrative data from hospitalizations for Medicare FFS beneficiaries. Public reporting of data will be based on 2 consecutive calendar years of data, which is consistent with the specifications of the proposed measures. We proposed to create data extracts using claims data for the proposed claims-based measures-The MSPB-PAC IRF QRP measure; Discharge to Community—PAC, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, and Potentially Preventable Within Stay Readmission Measure for IRFs—at least 90 days after the last discharge date in the applicable period, which we will use for the calculations. For example, if the last discharge date in the applicable period for a measure is December 31, 2017, for data collection January 1, 2016, through December 31, 2017, we will create the data extract on approximately March 31, 2018, at the earliest, and use that data to calculate the claims-based measures for that applicable period. Since IRFs will not be able to submit corrections to the underlying claims snapshot nor add claims (for measures that use IRF claims) to this data set at the conclusion of the at least the 90-day period following the last date of discharge used in the applicable period, at that time we will consider IRF claims data to be complete for purposes of calculating the claims-based measures.
We proposed that beginning with data that will be publicly displayed in 2018, claims-based measures will be calculated using claims data at least 90 days after the last discharge date in the applicable period, at which time we will create a data extract or snapshot of the available claims data to use for the measures calculation. This timeframe allows us to balance the need to provide timely program information to IRFs with the need to calculate the claims-based measures using as complete a data set as possible. As noted, under this procedure, during the 30-day preview period, IRFs will not be able to submit corrections to the underlying claims data or to add new claims to the data extract. This is for two reasons: First, for certain measures, the claims data used to calculate the measure is derived not from the IRF's claims, but from the claims of another provider. For example, the proposed measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP uses claims data submitted by the hospital to which the patient was readmitted. The claims are not those of the IRF and, therefore, the IRF could not make corrections to them. Second, even where the claims used to calculate the measures are those of the IRF, it will not be not possible to correct the data after it is extracted for the measures calculation. This is because it is necessary to take a static “snapshot” of the claims in order to perform the necessary measure calculations.
We seek to have as complete a data set as possible. We recognize that the at least 90-day “run-out” period, when we will take the data extract to calculate the claims-based measures, is less than the Medicare program's current timely claims filing policy under which providers have up to 1 year from the date of discharge to submit claims. We considered a number of factors in determining that the proposed at least 90-day run-out period is appropriate to calculate the claims-based measures. After the data extract is created, it takes several months to incorporate other data needed for the calculations (particularly in the case of risk-adjusted or episode-based measures). We then need to generate and check the calculations. Because several months lead time is necessary after acquiring the data to generate the claims-based calculations, if we were to delay our data extraction point to 12 months after the last date of the last discharge in the applicable period, we will not be able to deliver the calculations to IRFs sooner than 18 to 24 months after the last discharge. We believe this will create an unacceptably long delay both for IRFs and for us to deliver timely calculations to IRFs for quality improvement.
We invited public comment on these proposals. We received a number of comments, which are summarized below.
Section 1899B(f) of the Act requires the Secretary to provide confidential feedback reports to post-acute care providers on their performance to the measures specified under section 1899B(c)(1) and (d)(1) of the Act, beginning 1 year after the specified application date that applies to such measures and PAC providers. As discussed earlier, the reports we proposed to provide for use by IRFs to review their data and information will be confidential feedback reports that will enable IRFs to review their performance on the measures required under the IRF QRP. We proposed that these confidential feedback reports will be available to each IRF using the CASPER system. Data contained within these CASPER reports will be updated as previously described, on a monthly basis as the data become available except for our claims-based measures, which are only updated on an annual basis.
We intend to provide detailed procedures to IRFs on how to obtain their confidential feedback CASPER reports on the IRF QRP Web site at
We sought public comment on this proposal to satisfy the requirement to provide confidential feedback reports to IRFs. We received several comments, which are summarized are below.
As previously discussed, IRFs will have an opportunity to review and utilize their data using confidential reports provided through the CASPER system. The decision to update claims-based measures on an annual basis was basis was explained previously in response to the comment concerning providing feedback reports at least twice a year.
As previously noted, section 1886(j)(7)(A)(i) of the Act requires the application of a 2-percentage point reduction of the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements. In compliance with section 1886(j)(7)(A)(i) of the Act, we proposed to apply a 2-percentage point reduction to the applicable FY 2017 market basket increase factor in calculating a proposed adjusted FY 2017 standard payment conversion factor to apply to payments for only those IRFs that failed to comply with the data submission requirements. As previously noted, application of the 2-percentage point reduction may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Also, reporting-based reductions to the market basket increase factor will not be cumulative; they will only apply for the FY involved.
We invited public comment on the proposed method for applying the reduction to the FY 2017 IRF increase factor for IRFs that fail to meet the quality reporting requirements. We did not receive any comments on this proposal.
Table 21 shows the calculation of the adjusted FY 2017 standard payment conversion factor that will be used to compute IRF PPS payment rates for any IRF that failed to meet the quality reporting requirements for the applicable reporting period(s).
In this final rule, we are adopting the provisions set forth in the FY 2017 IRF PPS proposed rule (81 FR 24178). Specifically:
• We will update the FY 2017 IRF PPS relative weights and average length of stay values using the most current and complete Medicare claims and cost report data in a budget-neutral manner, as discussed in section IV of this final rule.
• As established in the FY 2015 IRF PPS final rule (79 FR 45872 at 45882), the facility-level adjustments will remain frozen at FY 2014 levels for FY 2015 and all subsequent years (unless and until we propose to update them again through future notice-and-comment rulemaking), as discussed in section V of this final rule.
• We will update the FY 2017 IRF PPS payment rates by the market basket increase factor, based upon the most current data available, with a 0.75 percentage point reduction as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act and the productivity adjustment required by section 1886(j)(3)(C)(ii)(I) of the Act, as described in section VI of this final rule.
• We will update the FY 2017 IRF PPS payment rates by the FY 2017 wage index and the labor-related share in a budget-neutral manner and continue the phase-out of the rural adjustment as discussed in section VI of this final rule.
• We will calculate the final IRF standard payment conversion factor for FY 2017, as discussed in section VI of this final rule.
• We will update the outlier threshold amount for FY 2017, as discussed in section VII of this final rule.
• We will update the cost-to-charge ratio (CCR) ceiling and urban/rural average CCRs for FY 2017, as discussed in section VII of this final rule.
• We will adopt revisions and updates to quality measures and reporting requirements under the quality reporting program for IRFs in accordance with section 1886(j)(7) of the Act, as discussed in section VIII of this final rule.
Under the Paperwork Reduction Act of 1995 (PRA), we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
This final rule makes reference to associated information collections that are not discussed in the regulation text contained in this document.
Failure to submit data required under section 1886(j)(7)(C) and (F) of the Act will result in the reduction of the annual update to the standard federal rate for discharges occurring during such fiscal year by 2 percentage points for any IRF that does not comply with the requirements established by the Secretary. At the time that this analysis was prepared, 91, or approximately 8 percent, of the 1166 active Medicare-certified IRFs did not receive the full annual percentage increase for the FY 2016 annual payment update determination. Information is not available to determine the precise number of IRFs that will not meet the requirements to receive the full annual percentage increase for the FY 2017 payment determination.
We believe that the burden associated with the IRF QRP is the time and effort associated with data collection and reporting. As of February 1, 2016 there are approximately 1131 IRFs currently reporting quality data to CMS. In this final rule, we are adopting 5 measures. For the FY 2018 payment determinations and subsequent years, we proposed four new measures: (1)
For the FY 2020 payment determination and subsequent years, we proposed one measure: Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP. Additionally, we proposed that data for this new measure will be collected and reported using the IRF-PAI (version effective October 1, 2018).
Our burden calculations take into account all “new” items required on the IRF-PAI (version effective October 1, 2018) to support data collection and reporting for this measure. The addition of the new items required to collect the newly proposed measure is for the purpose of achieving standardization of data elements.
We estimate the additional elements for the newly proposed Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP measure will take 6 minutes of nursing/clinical staff time to report data on admission and 4 minutes of nursing/clinical staff time to report data on discharge, for a total of 10 minutes. We estimate that the additional IRF-PAI items we proposed will be completed by Registered Nurses (RN) for approximately 75 percent of the time required, and Pharmacists for approximately 25 percent of the time required. Individual providers determine the staffing resources necessary. In accordance with OMB control number 0938-0842, we estimate 398,254 discharges from all IRFs annually, with an additional burden of 10 minutes. This will equate to 66,375.67 total hours or 58.69 hours per IRF. We believe this work will be completed by RNs (75 percent) and Pharmacists (25 percent). We obtained mean hourly wages for these staff from the U.S. Bureau of Labor Statistics' May 2014 National Occupational Employment and Wage Estimates (
For the quality reporting during extraordinary circumstances, in section VIII.L of this final rule, we add a previously finalized process that IRFs may request an exception or extension from the FY 2019 payment determination and that of subsequent payment determinations. The request must be submitted by email within 90 days from the date that the extraordinary circumstances occurred.
While the preparation and submission of the request is an information collection, unlike the aforementioned temporary exemption of the data collection requirements for the new drug regimen review measure, the request is not expected to be submitted to OMB for formal review and approval since we estimate less than two requests (total) per year. Since we estimate fewer than 10 respondents annually, the information collection requirement and associated burden is not subject as stated in 5 CFR 1320.3(c) of the implementing regulations of the Paperwork Reduction Act of 1995.
As discussed in section VIII.M of this final rule, we add a previously finalized process that will enable IRFs to request reconsiderations of our initial non-compliance decision in the event that it believes that it was incorrectly identified as being subject to the 2-percentage point reduction to its annual increase factor due to non-compliance with the IRF QRP reporting requirements. While there is burden associated with filing a reconsideration request, 5 CFR 1320.4 of OMB's implementing regulations for PRA excludes activities during the conduct of administrative actions such as reconsiderations.
We received comments about the collection of information requirements associated with measures being proposed for the IRF QRP, which are summarized and addressed below.
We also wish to note that, as pointed out by one commenter, four of the five measures proposed are claims-based and have no additional data collection burden to providers. Since the data source for these measures is claims data, and is not collected by means of an assessment instrument, the measure does not increase data collection burden on the provider as this data is currently collected by providers. We also note that providers will be given a chance to review their claims-based measure data via feedback provided in the CASPER system. Despite the lack of data collection burden, we appreciate the comments that more education will be required for the public and providers to understand the claims-based measures and the feedback mechanism. We will be providing additional training for the reports that are, and will be, available for providers for reviewing their data.
Although we did not solicit feedback on the burden associated with the measures finalized in the FY 2016 IRF PPS final rule (80 FR 47100 through 47120), including functional status measures, which will be collected via the IRF-PAI Version 1.4 effective October 1, 2016, we received several comments, which are summarized below.
With regards to comments about the updated SPCF, we refer readers to the IRF PPS FY 2016 final rule (80 FR 47129 through 47137) for details regarding the Collection of Information Requirements and Regulatory Impact Analysis for the measures finalized in FY 2016. We would also like to clarify that QRP requirements are not included in the SPCF, however, per statutory requirements, the applicable annual increase factor for any IRF that does not submit the required data to CMS is reduced by 2 percentage points. Additional responses to these comments are included in sections VI.E and IX. of this final rule.
This final rule updates the IRF prospective payment rates for FY 2017 as required under section 1886(j)(3)(C) of the Act. It responds to section 1886(j)(5) of the Act, which requires the Secretary to publish in the
This final rule also implements sections 1886(j)(3)(C) and (D) of the Act. Section 1886(j)(3)(C)(ii)(I) of the Act requires the Secretary to apply a multi-factor productivity adjustment to the market basket increase factor, and to apply other adjustments as defined by the Act. The productivity adjustment applies to FYs from 2012 forward. The other adjustments apply to FYs 2010 through 2019.
Furthermore, this final rule also adopts policy changes under the statutory discretion afforded to the Secretary under section 1886(j)(7) of the Act. Specifically, we will revise and update the quality measures and reporting requirements under the IRF quality reporting program.
We have examined the impacts of this final rule as required by Executive Order 12866 (September 30, 1993, Regulatory Planning and Review), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354) (RFA), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for a major final rule with economically significant effects ($100 million or more in any 1 year). We estimate the total impact of the policy updates described in this final rule by comparing the estimated payments in FY 2017 with those in FY 2016. This analysis results in an estimated $145 million increase for FY 2017 IRF PPS payments. As a result, this final rule is designated as economically “significant” under section 3(f)(1) of Executive Order 12866, and hence a major rule under the Congressional Review Act. Also, the rule has been reviewed by OMB.
The Regulatory Flexibility Act (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, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most IRFs and most other providers and suppliers are small entities, either by having revenues of $7.5 million to $38.5 million or less in any 1 year depending on industry classification, or by being nonprofit organizations that are not dominant in their markets. (For details, see the Small Business Administration's final rule that set forth size standards for health care industries, at 65 FR 69432 at
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule 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 of a Metropolitan Statistical Area and has fewer than 100 beds. As discussed in detail below in this section, the rates and policies set forth in this final rule will not have a significant impact (not greater than 3 percent) on a substantial number of rural hospitals based on the data of the 140 rural units and 11 rural hospitals in our database of 1,133 IRFs for which data were available.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-04, enacted on March 22, 1995) also requires that agencies assess anticipated costs and benefits before
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. As stated, this final rule will not have a substantial effect on state and local governments, preempt state law, or otherwise have a federalism implication.
This final rule updates to the IRF PPS rates contained in the FY 2016 IRF PPS final rule (80 FR 47036). Specifically, this final rule updates the CMG relative weights and average length of stay values, the wage index, and the outlier threshold for high-cost cases. This final rule applies a MFP adjustment to the FY 2017 IRF market basket increase factor in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction to the FY 2017 IRF market basket increase factor in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. Further, this final rule contains revisions to the IRF quality reporting requirements that are expected to result in some additional financial effects on IRFs. In addition, section VIII of this final rule discusses the implementation of the required 2 percentage point reduction of the market basket increase factor for any IRF that fails to meet the IRF quality reporting requirements, in accordance with section 1886(j)(7) of the Act.
We estimate that the impact of the changes and updates described in this final rule will be a net estimated increase of $145 million in payments to IRF providers. This estimate does not include the implementation of the required 2 percentage point reduction of the market basket increase factor for any IRF that fails to meet the IRF quality reporting requirements (as discussed in section XII.C.6. of this final rule). The impact analysis in Table 22 of this final rule represents the projected effects of the updates to IRF PPS payments for FY 2017 compared with the estimated IRF PPS payments in FY 2016. We determine the effects by estimating payments while holding all other payment variables constant. We use the best data available, but we do not attempt to predict behavioral responses to these changes, and we do not make adjustments for future changes in such variables as number of discharges or case-mix.
We note that certain events may combine to limit the scope or accuracy of our impact analysis, because such an analysis is future-oriented and, thus, susceptible to forecasting errors because of other changes in the forecasted impact time period. Some examples could be legislative changes made by the Congress to the Medicare program that would impact program funding, or changes specifically related to IRFs. Although some of these changes may not necessarily be specific to the IRF PPS, the nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon IRFs.
In updating the rates for FY 2017, we are adopting standard annual revisions described in this final rule (for example, the update to the wage and market basket indexes used to adjust the federal rates). We are also implementing a productivity adjustment to the FY 2017 IRF market basket increase factor in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction to the FY 2017 IRF market basket increase factor in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. We estimate the total increase in payments to IRFs in FY 2017, relative to FY 2016, will be approximately $145 million.
This estimate is derived from the application of the FY 2017 IRF market basket increase factor, as reduced by a productivity adjustment in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act, which yields an estimated increase in aggregate payments to IRFs of $125 million. Furthermore, there is an additional estimated $20 million increase in aggregate payments to IRFs due to the update of the outlier threshold amount. Outlier payments are estimated to increase from approximately 2.7 percent in FY 2016 to 3.0 percent in FY 2017. Therefore, summed together, we estimate that these updates will result in a net increase in estimated payments of $145 million from FY 2016 to FY 2017.
The effects of the updates that impact IRF PPS payment rates are shown in Table 22. The following updates that affect the IRF PPS payment rates are discussed separately below:
• The effects of the update to the outlier threshold amount, from approximately 2.7 percent to 3.0 percent of total estimated payments for FY 2017, consistent with section 1886(j)(4) of the Act.
• The effects of the annual market basket update (using the IRF market basket) to IRF PPS payment rates, as required by section 1886(j)(3)(A)(i) and sections 1886(j)(3)(C) and (D) of the Act, including a productivity adjustment in accordance with section 1886(j)(3)(C)(i)(I) of the Act, and a 0.75 percentage point reduction in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act.
• The effects of applying the budget-neutral labor-related share and wage index adjustment, as required under section 1886(j)(6) of the Act.
• The effects of the budget-neutral changes to the CMG relative weights and average length of stay values, under the authority of section 1886(j)(2)(C)(i) of the Act.
• The total change in estimated payments based on the FY 2017 payment changes relative to the estimated FY 2016 payments.
Table 22 categorizes IRFs by geographic location, including urban or rural location, and location for CMS's 9 Census divisions (as defined on the cost report) of the country. In addition, the table divides IRFs into those that are separate rehabilitation hospitals (otherwise called freestanding hospitals in this section), those that are rehabilitation units of a hospital (otherwise called hospital units in this section), rural or urban facilities, ownership (otherwise called for-profit, non-profit, and government), by teaching status, and by disproportionate share patient percentage (DSH PP). The top row of Table 22 shows the overall impact on the 1,133 IRFs included in the analysis.
The next 12 rows of Table 22 contain IRFs categorized according to their geographic location, designation as either a freestanding hospital or a unit of a hospital, and by type of ownership; all urban, which is further divided into urban units of a hospital, urban freestanding hospitals, and by type of ownership; and all rural, which is further divided into rural units of a hospital, rural freestanding hospitals, and by type of ownership. There are 982 IRFs located in urban areas included in
The remaining four parts of Table 22 show IRFs grouped by their geographic location within a region, by teaching status, and by DSH PP. First, IRFs located in urban areas are categorized for their location within a particular one of the nine Census geographic regions. Second, IRFs located in rural areas are categorized for their location within a particular one of the nine Census geographic regions. In some cases, especially for rural IRFs located in the New England, Mountain, and Pacific regions, the number of IRFs represented is small. IRFs are then grouped by teaching status, including non-teaching IRFs, IRFs with an intern and resident to average daily census (ADC) ratio less than 10 percent, IRFs with an intern and resident to ADC ratio greater than or equal to 10 percent and less than or equal to 19 percent, and IRFs with an intern and resident to ADC ratio greater than 19 percent. Finally, IRFs are grouped by DSH PP, including IRFs with zero DSH PP, IRFs with a DSH PP less than 5 percent, IRFs with a DSH PP between 5 and less than 10 percent, IRFs with a DSH PP between 10 and 20 percent, and IRFs with a DSH PP greater than 20 percent.
The estimated impacts of each policy described in this final rule to the facility categories listed are shown in the columns of Table 22. The description of each column is as follows:
• Column (1) shows the facility classification categories.
• Column (2) shows the number of IRFs in each category in our FY 2016 analysis file.
• Column (3) shows the number of cases in each category in our FY 2016 analysis file.
• Column (4) shows the estimated effect of the adjustment to the outlier threshold amount.
• Column (5) shows the estimated effect of the update to the IRF labor-related share and wage index, in a budget-neutral manner.
• Column (6) shows the estimated effect of the update to the CMG relative weights and average length of stay values, in a budget-neutral manner.
• Column (7) compares our estimates of the payments per discharge, incorporating all of the policies reflected in this final rule for FY 2017 to our estimates of payments per discharge in FY 2016.
The average estimated increase for all IRFs is approximately 1.9 percent. This estimated net increase includes the effects of the IRF market basket increase factor for FY 2017 of 2.7 percent, reduced by a productivity adjustment of 0.3 percentage point in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and further reduced by 0.75 percentage point in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. It also includes the approximate 0.3 percent overall increase in estimated IRF outlier payments from the update to the outlier threshold amount. Since we are making the updates to the IRF wage index and the CMG relative weights in a budget-neutral manner, they will not be expected to affect total estimated IRF payments in the aggregate. However, as described in more detail in each section, they will be expected to affect the estimated distribution of payments among providers.
The estimated effects of the update to the outlier threshold adjustment are presented in column 4 of Table 22.
For the FY 2017 IRF PPS proposed rule, we used preliminary FY 2015 IRF claims data, and, based on that preliminary analysis, we estimated that IRF outlier payments as a percentage of total estimated IRF payments would be 2.8 percent in FY 2016 (81 FR 24178, 24193). As we typically do between the proposed and final rules each year, we updated our FY 2015 IRF claims data to ensure that we are using the most recent available data in setting IRF payments. Therefore, based on updated analysis of the most recent IRF claims data for this final rule, we now estimate that IRF outlier payments as a percentage of total estimated IRF payments are 2.7 percent in FY 2016. Thus, we are adjusting the outlier threshold amount in this final rule to set total estimated outlier payments equal to 3 percent of total estimated payments in FY 2017. The estimated change in total IRF payments for FY 2017, therefore, includes an approximate 0.3 percent increase in payments because the estimated outlier portion of total payments is estimated to increase from approximately 2.7 percent to 3 percent.
The impact of this outlier adjustment update (as shown in column 4 of Table 22) is to increase estimated overall payments to IRFs by about 0.3 percent. We estimate the largest increase in payments from the update to the outlier threshold amount to be 1.4 percent for rural IRFs in the Pacific region.
In column 5 of Table 22, we present the effects of the budget-neutral update of the wage index and labor-related share. The changes to the wage index and the labor-related share are discussed together because the wage index is applied to the labor-related share portion of payments, so the changes in the two have a combined effect on payments to providers. As discussed in section VI.C. of this final rule, we will decrease the labor-related share from 71.0 percent in FY 2016 to 70.9 percent in FY 2017.
In column 6 of Table 22, we present the effects of the budget-neutral update of the CMG relative weights and average length of stay values. In the aggregate, we do not estimate that these updates will affect overall estimated payments of IRFs. However, we do expect these updates to have small distributional effects. The largest estimated increase in payments is a 0.1 percent increase for rural IRFs in the Middle Atlantic region, and urban IRFs in the New England and East North Central regions. Rural IRFs in the Pacific region and urban IRFs in the East south Central regions are estimated to experience a 0.1 percent decrease in payments due to the CMG relative weights change.
In accordance with section 1886(j)(7) of the Act, we will implement a 2 percentage point reduction in the FY 2018 increase factor for IRFs that have failed to report the required quality reporting data to us during the most recent IRF quality reporting period. In section VIII.P of this final rule, we discuss the proposed method for applying the 2 percentage point reduction to IRFs that fail to meet the IRF QRP requirements. At the time that this analysis was prepared, 91, or approximately 8 percent, of the 1166 active Medicare-certified IRFs did not receive the full annual percentage increase for the FY 2016 annual payment update determination. Information is not available to determine the precise number of IRFs that will not meet the requirements to receive the full annual percentage increase for the FY 2017 payment determination.
In section VIII.L of this final rule, we discuss our proposal to suspend the previously finalized data accuracy validation policy for IRFs. While we cannot estimate the change in the number of IRFs that will meet IRF QRP compliance standards at this time, we believe that this number will increase due to the temporary suspension of this policy. Thus, we estimate that the suspension of this policy will decrease impact on overall IRF payments, by increasing the rate of compliance, in addition to decreasing the cost of the IRF QRP to each IRF provider by approximately $47,320 per IRF, which was the estimated cost to each IRF provider to the implement the previously finalized policy.
In section VIII.F of this final rule, we are finalizing four measures for the FY 2018 payment determinations and subsequent years: (1) MSPB-PAC IRF QRP; (2) Discharge to Community-PAC IRF QRP, and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP; (4) Potentially Preventable Within Stay Readmission Measure IRFs. These four measures are Medicare claims-based measures; because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, we believe there will be no additional impact.
In section VIII.G of this final rule, we are also finalizing one measure for the FY 2020 payment determination and subsequent years: Drug Regimen Review Conducted with Follow-Up for Identified Issues-PAC IRF QRP. Additionally, data for this measure will be collected and reported using the IRF-PAI (version effective October 1, 2018). While the reporting of data on quality measures is an information collection, we believe that the burden associated with modifications to the IRF-PAI discussed in this final rule fall under the PRA exceptions provided in 1899B(m) of the Act because they are required to achieve the standardization of patient assessment data. Section 1899B(m) of the Act provides that the PRA does not apply to section 1899B and the sections referenced in section 1899B(a)(2)(B) of the Act that require modification to achieve the standardization of patient assessment data. The requirement and burden will, however, be submitted to OMB for review and approval when the modifications to the IRF-PAI or other applicable PAC assessment instrument are not used to achieve the standardization of patient assessment data.
The total cost related to the proposed measures is estimated at $4,625.46 per IRF annually, or $5,231,398.17 for all IRFs annually.
We intend to continue to closely monitor the effects of this new quality reporting program on IRF providers and help perpetuate successful reporting outcomes through ongoing stakeholder education, national trainings, IRF provider announcements, Web site postings, CMS Open Door Forums, and general and technical help desks.
We did not receive any comments related to the Effects of Proposed Requirements for the IRF QRP for FY 2018.
The following is a discussion of the alternatives considered for the IRF PPS updates contained in this final rule.
Section 1886(j)(3)(C) of the Act requires the Secretary to update the IRF PPS payment rates by an increase factor that reflects changes over time in the prices of an appropriate mix of goods and services included in the covered IRF services Thus, we did not consider alternatives to updating payments using the estimated IRF market basket
We considered updating facility-level adjustment factors for FY 2017. However, as discussed in more detail in the FY 2015 final rule (79 FR 45872), we believe that freezing the facility-level adjustments at FY 2014 levels for FY 2015 and all subsequent years (unless and until the data indicate that they need to be further updated) will allow us an opportunity to monitor the effects of the substantial changes to the adjustment factors for FY 2014, and will allow IRFs time to adjust to the previous changes.
We considered maintaining the existing outlier threshold amount for FY 2017. However, analysis of updated FY 2015 data indicates that estimated outlier payments would be lower than 3 percent of total estimated payments for FY 2017, by approximately 0.3 percent, unless we updated the outlier threshold amount. Consequently, we are adjusting the outlier threshold amount in this final rule to reflect a 0.3 percent increase thereby setting the total outlier payments equal to 3 percent, instead of 2.7 percent, of aggregate estimated payments in FY 2017.
As required by OMB Circular A-4 (available at
Overall, the estimated payments per discharge for IRFs in FY 2017 are projected to increase by 1.9 percent, compared with the estimated payments in FY 2016, as reflected in column 7 of Table 22.
IRF payments per discharge are estimated to increase by 2.0 percent in urban areas and 1.2 percent in rural areas, compared with estimated FY 2016 payments. Payments per discharge to rehabilitation units are estimated to increase 2.2 percent in urban areas and 1.5 percent in rural areas. Payments per discharge to freestanding rehabilitation hospitals are estimated to increase 1.8 percent in urban areas and 0.0 percent in rural areas.
Overall, IRFs are estimated to experience a net increase in payments as a result of the proposed policies in this final rule. The largest payment increase is estimated to be a 3.1 percent increase for rural IRFs located in the Pacific region.
In accordance with the provisions of Executive Order 12866, this final rule was reviewed by the Office of Management and Budget.
Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, 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:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), sec. 124 of Pub. L. 106-113 (113 Stat. 1501A-332), sec. 1206 of Pub. L. 113-67, and sec. 112 of Pub. L. 113-93.
(c) * * *
(2) An IRF must request an exception or extension within 90 days of the date that the extraordinary circumstances occurred.
(f)
(2) These thresholds will apply to all measures adopted into IRF QRP.
(3) An IRF must meet or exceed both thresholds to avoid receiving a 2 percentage point reduction to their annual payment update for a given fiscal year, beginning with FY 2016 and for all subsequent payment updates.
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule will update the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2017. In addition, this rule changes the hospice quality reporting program, including adopting new quality measures. Finally, this final rule includes information regarding the Medicare Care Choices Model (MCCM).
These regulations are effective on October 1, 2016.
Debra Dean-Whittaker, (410) 786-0848 for questions regarding the CAHPS® Hospice Survey.
Michelle Brazil, (410) 786-1648 for questions regarding the hospice quality reporting program.
Hillary A. Loeffler, (410) 786-0456 for questions regarding hospice payment policy.
Wage index addenda will be available only through the internet on the CMS Web site at: (
Because of the many terms to which we refer by acronym in this final rule, we are listing the acronyms used and their corresponding meanings in alphabetical order:
This final rule updates the hospice payment rates for fiscal year (FY) 2017, as required under section 1814(i) of the Social Security Act (the Act). This rule also finalizes new quality measures and provides an update on the hospice quality reporting program (HQRP) consistent with the requirements of section 1814(i)(5) of the Act, as added by section 3004(c) of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act (Pub. L. 111-152) (collectively, the Affordable Care Act). In accordance with section 1814(i)(5)(A) of the Act, starting in FY 2014, hospices that have failed to meet quality reporting requirements receive a 2 percentage point reduction to their payments. Finally, this final rule shares information on the Medicare Care Choices Model developed in accordance with the authorization under section 1115A of the Act for the Center for Medicare and Medicaid Innovation (CMMI) to test innovative payment and service models that have the potential to reduce Medicare, Medicaid, or Children's Health Insurance Program (CHIP) expenditures while maintaining or improving the quality of care.
In section III.B.1 of this rule, we update the hospice wage index with updated wage data and make the application of the updated wage data budget-neutral for all four levels of hospice care. In section III.B.2 we discuss the FY 2017 hospice payment update percentage of 2.1 percent. Sections III.B.3 and III.B.4 update the hospice payment rates and hospice cap amount for FY 2017 by the hospice payment update percentage discussed in section III.B.2.
In section III.C of this rule, we discuss updates to HQRP, including two new quality measures as well as of the possibility of utilizing a new assessment instrument to collect quality data. As part of the HQRP, the new measures, effective April 1, 2017, will be: (1) Hospice Visits When Death is Imminent, assessing hospice staff visits to patients and caregivers in the last week of life; and (2) Hospice and Palliative Care Composite Process Measure, assessing the percentage of hospice patients who received care processes consistent with existing guidelines. In section III.C we will also discuss the enhancement of the current Hospice Item Set (HIS) data collection instrument to be more in line with other post-acute care settings. This new data collection instrument will be a comprehensive patient assessment instrument, rather than the current chart abstraction tool. Additionally, in this section we discuss our plans for sharing HQRP data publicly during calendar year (CY) 2016 as well as plans to provide public reporting via a Compare Site in CY 2017.
Finally, in section III.D, we are providing information regarding the Medicare Care Choices Model (MCCM). This model is testing a new option for Medicare and dual eligible beneficiaries with certain advanced diseases who meet the model's other eligibility criteria to receive hospice-like support services from MCCM participating hospices while receiving care from other Medicare providers for their terminal illness. This model is designed to: (1) Increase access to supportive care services provided by hospice; (2) improve quality of life and patient/family/caregiver satisfaction; and (3) inform new payment systems for the Medicare and Medicaid programs.
Hospice care is an approach to treatment that recognizes that the impending death of an individual warrants a change in the focus from curative care to palliative care for relief of pain and for symptom management. The goal of hospice care is to help terminally ill individuals continue life with minimal disruption to normal activities while remaining primarily in the home environment. A hospice uses an interdisciplinary approach to deliver medical, nursing, social, psychological, emotional, and spiritual services through use of a broad spectrum of professionals and other caregivers, with the goal of making the beneficiary as physically and emotionally comfortable as possible. Hospice is compassionate beneficiary and family-centered care for those who are terminally ill. It is a comprehensive, holistic approach to treatment that recognizes that the impending death of an individual necessitates a transition from curative to palliative care.
Medicare regulations define “palliative care” as “patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and to facilitate patient autonomy, access to information, and choice.” (42 CFR 418.3) Palliative care is at the core of hospice philosophy and
Medicare hospice care is palliative care for individuals with a prognosis of living 6 months or less if the terminal illness runs its normal course. When a beneficiary is terminally ill, many health problems are brought on by underlying condition(s), as bodily systems are interdependent. In the 2008 Hospice Conditions of Participation final rule, we stated that the medical director or physician designee must consider the primary terminal condition, related diagnoses, current subjective and objective medical findings, current medication and treatment orders, and information about unrelated conditions when considering the initial certification of the terminal illness. (73 FR 32176). As referenced in our regulations at § 418.22(b)(1), to be eligible for Medicare hospice services, the patient's attending physician (if any) and the hospice medical director must certify that the individual is “terminally ill,” as defined in section 1861(dd)(3)(A) of the Act and our regulations at § 418.3; that is, the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course. The certification of terminal illness must include a brief narrative explanation of the clinical findings that supports a life expectancy of 6 months or less as part of the certification and recertification forms, as set out at § 418.22(b)(3).
While the goal of hospice care is to allow the beneficiary to remain in his or her home environment, circumstances during the end-of-life may necessitate short-term inpatient admission to a hospital, skilled nursing facility (SNF), or hospice facility for treatment necessary for pain control or acute or chronic symptom management that cannot be managed in any other setting. These acute hospice care services are to ensure that any new or worsening symptoms are intensively addressed so that the beneficiary can return to his or her home environment. Limited, short-term, intermittent, inpatient respite services are also available to the family/caregiver of the hospice patient to relieve the family or other caregivers. Additionally, an individual can receive continuous home care during a period of crisis in which an individual requires primarily continuous nursing care to achieve palliation or management of acute medical symptoms so that the individual can remain at home. Continuous home care may be covered on a continuous basis for as much as 24 hours a day, and these periods must be predominantly nursing care, in accordance with our regulations at § 418.204. A minimum of 8 hours of nursing care, or nursing and aide care, must be furnished on a particular day to qualify for the continuous home care rate (§ 418.302(e)(4)).
Hospices are expected to comply with all civil rights laws, including the provision of auxiliary aids and services to ensure effective communication with patients and patient care representatives with disabilities consistent with section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act, and to provide language access for such persons who are limited in English proficiency, consistent with Title VI of the Civil Rights Act of 1964. Further information about these requirements may be found at
Before the creation of the Medicare hospice benefit, hospice programs were originally operated by volunteers who cared for the dying. During the early development stages of the Medicare hospice benefit, hospice advocates were clear that they wanted a Medicare benefit that provided all-inclusive care for terminally-ill individuals, provided pain relief and symptom management, and offered the opportunity to die with dignity in the comfort of one's home rather than in an institutional setting.
As stated in the December 16, 1983 Hospice final rule, the fundamental premise upon which the hospice benefit was designed was the “revocation” of traditional curative care and the “election” of hospice care for end-of-life symptom management and maximization of quality of life (48 FR 56008). After electing hospice care, the beneficiary typically returns to the home from an institutionalized setting or remains in the home, to be surrounded by family and friends, and to prepare emotionally and spiritually, if requested, for death while receiving expert symptom management and other supportive services. Election of hospice care also requires waiving the right to Medicare payment for curative treatment for the terminal prognosis, and instead receiving palliative care to manage pain or other symptoms.
The benefit was originally designed to cover hospice care for a finite period of time that roughly corresponded to a life expectancy of 6 months or less. Initially, beneficiaries could receive three election periods: Two 90-day periods and one 30-day period. Currently, Medicare beneficiaries can elect hospice care for two 90-day periods and an unlimited number of subsequent 60-day periods; however, at the beginning of each period, a physician must certify that the beneficiary has a life expectancy of 6 months or less if the terminal illness runs its normal course.
One requirement for coverage under the Medicare Hospice benefit is that hospice services must be reasonable and necessary for the palliation and management of the terminal illness and related conditions. Section 1861(dd)(1) of the Act establishes the services that are to be rendered by a Medicare certified hospice program. These covered services include: Nursing care; physical therapy; occupational therapy; speech-language pathology therapy; medical social services; home health aide services (now called hospice aide services); physician services; homemaker services; medical supplies (including drugs and biologicals); medical appliances; counseling services (including dietary counseling); short-term inpatient care in a hospital, nursing facility, or hospice inpatient facility (including both respite care and procedures necessary for pain control and acute or chronic symptom management); continuous home care during periods of crisis, and only as necessary to maintain the terminally ill individual at home; and any other item or service which is specified in the plan of care and for which payment may otherwise be made under Medicare, in accordance with Title XVIII of the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for providing hospice care to a beneficiary who is a hospice patient be established before care is provided by, or under arrangements made by, that hospice program and that the written plan be periodically reviewed by the beneficiary's attending physician (if any), the hospice medical director, and an interdisciplinary group (described in section 1861(dd)(2)(B) of the Act). The services offered under the Medicare hospice benefit must be available to beneficiaries as needed, 24 hours a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the implementation of the hospice benefit, Congress expected hospices to continue to use volunteer services, though these services are not reimbursed by Medicare (see section 1861(dd)(2)(E) of the Act and 48 FR 38149). As stated in the August 22, 1983 Hospice proposed rule, the hospice interdisciplinary group should comprise paid hospice employees as well as hospice volunteers (48 FR 38149). This expectation supports the hospice philosophy of holistic, comprehensive, compassionate, end-of-life care.
Before the Medicare hospice benefit was established, Congress requested a demonstration project to test the feasibility of covering hospice care under Medicare. The National Hospice Study was initiated in 1980 through a grant sponsored by the Robert Wood Johnson and John A. Hartford Foundations and the Centers for Medicare & Medicaid Services (CMS) (then, the Health Care Financing Administration (HCFA)). The demonstration project was conducted between October 1980 and March 1983. The project summarized the hospice care philosophy and principles as the following:
• Patient and family know of the terminal condition.
• Further medical treatment and intervention are indicated only on a supportive basis.
• Pain control should be available to patients as needed to prevent rather than to just ameliorate pain.
• Interdisciplinary teamwork is essential in caring for patient and family.
• Family members and friends should be active in providing support during the death and bereavement process.
• Trained volunteers should provide additional support as needed.
The cost data and the findings on what services hospices provided in the demonstration project were used to design the Medicare hospice benefit. The identified hospice services were incorporated into the service requirements under the Medicare hospice benefit. Importantly, in the August 22, 1983 Hospice proposed rule, we stated “the hospice benefit and the resulting Medicare reimbursement is not intended to diminish the voluntary spirit of hospices” (48 FR 38149).
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of the Act, and our regulations in part 418, establish eligibility requirements, payment standards and procedures, define covered services, and delineate the conditions a hospice must meet to be approved for participation in the Medicare program. Part 418, subpart G, provides for a per diem payment in one of four prospectively-determined rate categories of hospice care (Routine Home Care (RHC), Continuous Home Care (CHC), inpatient respite care, and general inpatient care), based on each day a qualified Medicare beneficiary is under hospice care (once the individual has elected). This per diem payment is to include all of the hospice services needed to manage the beneficiary's care, as required by section 1861(dd)(1) of the Act. There has been little change in the hospice payment structure since the benefit's inception. The per diem rate based on level of care was established in 1983, and this payment structure remains today with some adjustments, as noted below:
Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided for the following two changes in the methodology concerning updating the daily payment rates: (1) Effective January 1, 1990, the daily payment rates for RHC and other services included in
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish updates to hospice rates for FYs 1998 through 2002. Hospice rates were updated by a factor equal to the hospital market basket percentage increase, minus 1 percentage point. Payment rates for FYs from 2002 have been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the payment rates for subsequent FYs will be the hospital market basket percentage increase for the FY. The Act requires us to use the inpatient hospital market basket to determine hospice payment rates.
In the August 8, 1997 FY 1998 Hospice Wage Index final rule (62 FR 42860), we implemented a new methodology for calculating the hospice wage index based on the recommendations of a negotiated rulemaking committee. The original hospice wage index was based on 1981 Bureau of Labor Statistics hospital data and had not been updated since 1983. In 1994, because of disparity in wages from one geographical location to another, the Hospice Wage Index Negotiated Rulemaking Committee was formed to negotiate a new wage index methodology that could be accepted by the industry and the government. This Committee was composed of representatives from national hospice associations; rural, urban, large and small hospices, and multi-site hospices; consumer groups; and a government representative. The Committee decided that in updating the hospice wage index, aggregate Medicare payments to hospices would remain budget neutral to payments calculated using the 1983 wage index, to cushion the impact of using a new wage index methodology. To implement this policy, a Budget Neutrality Adjustment Factor (BNAF) was computed and applied annually to the pre-floor, pre-reclassified hospital wage index when deriving the hospice wage index, subject to a wage index floor.
Inpatient hospital pre-floor and pre-reclassified wage index values, as described in the August 8, 1997 Hospice Wage Index final rule, are subject to either a budget neutrality adjustment or application of the wage index floor. Wage index values of 0.8 or greater are adjusted by the BNAF. Starting in FY 2010, a 7-year phase-out of the BNAF began (FY 2010 Hospice Wage Index final rule, (74 FR 39384, August 6, 2009)), with a 10 percent reduction in FY 2010, an additional 15 percent reduction for a total of 25 percent in FY 2011, an additional 15 percent reduction for a total 40 percent reduction in FY 2012, an additional 15 percent reduction for a total of 55 percent in FY 2013, and an additional 15 percent reduction for a total 70 percent reduction in FY 2014. The phase-out continued with an additional 15 percent reduction for a total reduction of 85 percent in FY 2015, an additional, and final, 15 percent reduction for complete elimination in FY 2016. We note that the BNAF was an adjustment which increased the hospice wage index value. Therefore, the BNAF phase-out reduced the amount of the BNAF increase applied to the hospice wage index value. It was not a reduction in the hospice wage index value itself or in the hospice payment rates.
Starting with FY 2013 (and in subsequent FYs), the market basket percentage update under the hospice payment system referenced in sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act is subject to annual reductions related to changes in economy-wide productivity, as specified in section 1814(i)(1)(C)(iv) of the Act. In FY 2013 through FY 2019, the market basket percentage update under the hospice payment system will be reduced by an additional 0.3 percentage point (although for FY 2014 to FY 2019, the potential 0.3 percentage point reduction is subject to suspension under conditions specified in section 1814(i)(1)(C)(v) of the Act).
In addition, sections 1814(i)(5)(A) through (C) of the Act, as added by section 3132(a) of the Affordable Care Act, require hospices to begin submitting quality data, based on measures to be specified by the Secretary of the Department of Health and Human Services (the Secretary), for FY 2014 and subsequent FYs. Beginning in FY 2014, hospices which fail to report quality data will have their market basket update reduced by 2 percentage points.
Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) of the Affordable Care Act, requires, effective January 1, 2011, that a hospice physician or nurse practitioner have a face-to-face encounter with the beneficiary to determine continued eligibility of the beneficiary's hospice care prior to the 180th-day recertification and each subsequent recertification, and to attest that such visit took place. When implementing this provision, we finalized in the CY 2011 Home Health Prospective Payment System final rule (75 FR 70435) that the 180th-day recertification and subsequent recertifications would correspond to the beneficiary's third or subsequent benefit periods. Further, section 1814(i)(6) of the Act, as added by section 3132(a)(1)(B) of the Affordable Care Act, authorizes the Secretary to collect additional data and information determined appropriate to revise payments for hospice care and other purposes. The types of data and information suggested in the Affordable Care Act could capture accurate resource utilization, which could be collected on claims, cost reports, and possibly other mechanisms, as the Secretary determined to be appropriate. The data collected could be used to revise the methodology for determining the payment rates for RHC and other services included in hospice care, no earlier than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. In addition, we were required to consult with hospice programs and the Medicare Payment Advisory Commission (MedPAC) regarding additional data collection and payment revision options.
When the Medicare Hospice benefit was implemented, Congress included an aggregate cap on hospice payments, which limits the total aggregate payments any individual hospice can receive in a year. Congress stipulated that a “cap amount” be computed each year. The cap amount was set at $6,500 per beneficiary when first enacted in 1983 and has been adjusted annually by the change in the medical care expenditure category of the consumer price index for urban consumers from March 1984 to March of the cap year (section 1814(i)(2)(B) of the Act). The cap year was defined as the period from November 1st to October 31st. In the August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR 47308 through 47314) for the 2012 cap year and
When electing hospice, a beneficiary waives Medicare coverage for any care for the terminal illness and related conditions except for services provided by the designated hospice and attending physician. The FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452) finalized a requirement that requires the Notice of Election (NOE) be filed within 5 calendar days after the effective date of hospice election. If the NOE is filed beyond this 5-day period, hospice providers are liable for the services furnished during the days from the effective date of hospice election to the date of NOE filing (79 FR 50474). Similar to the NOE, the claims processing system must be notified of a beneficiary's discharge from hospice or hospice benefit revocation. This update to the beneficiary's status allows claims from non-hospice providers to be processed and paid. Late filing of the NOE can result in inaccurate benefit period data and leaves Medicare vulnerable to paying non-hospice claims related to the terminal illness and related conditions and beneficiaries possibly liable for any cost-sharing associated costs. Upon live discharge or revocation, the beneficiary immediately resumes the Medicare coverage that had been waived when he or she elected hospice. The FY 2015 Hospice Wage Index and Payment Rate Update final rule also finalized a requirement that requires hospices to file a notice of termination/revocation within 5 calendar days of a beneficiary's live discharge or revocation, unless the hospices have already filed a final claim. This requirement helps to protect beneficiaries from delays in accessing needed care (§ 418.26(e)).
A hospice “attending physician” is described by the statutory and regulatory definitions as a medical doctor, osteopath, or nurse practitioner whom the beneficiary identifies, at the time of hospice election, as having the most significant role in the determination and delivery of his or her medical care. We received reports of problems with the identification of the person's designated attending physician and a third of hospice patients had multiple providers submit Part B claims as the “attending physician,” using a claim modifier. The FY 2015 Hospice Wage Index and Payment Rate Update final rule finalized a requirement that the election form include the beneficiary's choice of attending physician and that the beneficiary provide the hospice with a signed document when he or she chooses to change attending physicians (79 FR 50479).
Hospice providers are required to begin using a Hospice Experience of Care Survey for informal caregivers of hospice patients surveyed in 2015. The FY 2015 Hospice Wage Index and Payment Rate Update final rule provided background and a description of the development of the Hospice Experience of Care Survey, including the model of survey implementation, the survey respondents, eligibility criteria for the sample, and the languages in which the survey is offered. The FY 2015 Hospice Rate Update final rule also set out participation requirements for CY 2015 and discussed vendor oversight activities and the reconsideration and appeals process for entities that failed to win CMS approval as vendors (79 FR 50496).
Finally, the FY 2015 Hospice Wage Index and Payment Rate Update final rule required providers to complete their aggregate cap determination not sooner than 3 months after the end of the cap year, and not later than 5 months after, and remit any overpayments. Those hospices that fail to timely submit their aggregate cap determinations will have their payments suspended until the determination is completed and received by the Medicare Administrative Contractor (MAC) (79 FR 50503).
The Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113-185) (IMPACT Act) became law on October 6, 2014. Section 3(a) of the IMPACT Act mandated that all Medicare certified hospices be surveyed every 3 years beginning April 6, 2015 and ending September 30, 2025. In addition, section 3(c) of the IMPACT Act requires medical review of hospice cases involving beneficiaries receiving more than 180 days care in select hospices that show a preponderance of such patients; section 3(d) of the IMPACT Act contains a new provision mandating that the cap amount for accounting years that end after September 30, 2016, and before October 1, 2025 be updated by the hospice payment update rather than using the consumer price index for urban consumers (CPI-U) for medical care expenditures.
In the FY 2016 Hospice Rate Update final rule, we created two different payment rates for RHC that resulted in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for all subsequent days of hospice care (80 FR 47172). We also created a Service Intensity Add-on (SIA) payment payable for services during the last 7 days of the beneficiary's life, equal to the CHC hourly payment rate multiplied by the amount of direct patient care provided by a registered nurse (RN) or social worker that occurs during the last 7 days (80 FR 47177).
In addition to the hospice payment reform changes discussed, the FY 2016 Hospice Wage Index and Payment Rate Update final rule implemented changes mandated by the IMPACT Act, in which the cap amount for accounting years that end after September 30, 2016 and before October 1, 2025 is updated by the hospice payment update percentage rather than using the CPI-U. This was applied to the 2016 cap year, starting on November 1, 2015 and ending on October 31, 2016. In addition, we finalized a provision to align the cap accounting year for both the inpatient cap and the hospice aggregate cap with the FY, for FY 2017 and later (80 FR 47186). This allows for the timely implementation of the IMPACT Act changes while better aligning the cap accounting year with the timeframe described in the IMPACT Act.
Finally, the FY 2016 Hospice Wage Index and Payment Rate Update final rule clarified that hospices must report all diagnoses of the beneficiary on the hospice claim as a part of the ongoing data collection efforts for possible future hospice payment refinements. Reporting of all diagnoses on the hospice claim aligns with current coding guidelines as
Since the implementation of the hospice benefit in 1983, and especially within the last decade, there has been substantial growth in hospice benefit utilization. The number of Medicare beneficiaries receiving hospice services has grown from 513,000 in FY 2000 to nearly 1.4 million in FY 2015. Similarly, Medicare hospice expenditures have risen from $2.8 billion in FY 2000 to an estimated $15.5 billion in FY 2015.
There have also been changes in the diagnosis patterns among Medicare hospice enrollees. Specifically, as described in Table 2, there have been notable increases between 2002 and 2015 in neurologically-based diagnoses, including various dementia and Alzheimer's diagnoses. Additionally, there had been significant increases in the use of non-specific, symptom-classified diagnoses, such as “debility” and “adult failure to thrive.” In FY 2013, “debility” and “adult failure to thrive” were the first and sixth most common hospice claims-reported diagnoses, respectively, accounting for approximately 14 percent of all diagnoses. Effective October 1, 2014, hospice claims are returned to the provider if “debility” and “adult failure to thrive” are coded as the principal hospice diagnosis as well as other ICD-9-CM (and as of October 1, 2015, ICD-10-CM) codes that are not permissible as principal diagnosis codes per ICD-9-CM (or ICD-10-CM) coding guidelines. In the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452), we reminded the hospice industry that this policy would go into effect and claims would start to be returned to the provider effective October 1, 2014. As a result of this, there has been a shift in coding patterns on hospice claims. For FY 2015, the most common hospice principal diagnoses were Alzheimer's disease, Congestive Heart Failure, Lung Cancer, Chronic Airway Obstruction, and Senile Dementia which constituted approximately 35 percent of all claims-reported principal diagnosis codes reported in FY 2015. In Table 2 we have updated the information initially presented in the FY 2017 proposed rule (81 FR 25504-06).
While there has been a shift in the reporting of the principal diagnosis as a result of diagnosis clarifications, a significant proportion of hospice claims (49 percent) in FY 2014 only reported a single principal diagnosis, which may not fully explain the characteristics of Medicare beneficiaries who are approaching the end of life. To address this pattern of single diagnosis reporting, the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50498) reiterated ICD-9-CM coding guidelines for the reporting of the principal and additional diagnoses on the hospice claim. We reminded providers to report all diagnoses on the hospice claim for the terminal illness and related conditions, including those that affect the care and clinical management for the beneficiary. Additionally, in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47201), we provided further clarification regarding diagnosis reporting on hospice claims. We clarified that hospices will report
The Department of Health and Human Services (HHS) believes that the use of certified health IT by hospices can help providers improve internal care delivery practices and advance the interoperable exchange of health information across care partners to improve communication and care coordination. HHS has a number of initiatives designed to encourage and support the adoption of health information technology and promote nationwide health information exchange to improve health care. The Office of the National Coordinator for Health Information Technology (ONC) leads these efforts in collaboration with other agencies, including CMS and the Office of the Assistant Secretary for Planning and Evaluation (ASPE). In 2015, ONC released a document entitled “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap” (available at:
The proposed rule, titled “Medicare Program; FY 2017 Hospice Payment Rate Update” (81 FR 25497 through 25538), was published in the
In this final rule, we provide a summary of each proposed provision, a summary of the public comments received and our responses to them, and the policies we are finalizing for the FY 2017 Hospice Payment Rate Update. Comments related to the paperwork burden are addressed in the “Collection of Information Requirements” section in this final rule. Comments related to the impact analysis are addressed in the “Economic Analyses” section in this final rule.
In the FY 2017 Hospice Wage Index and Rate Update proposed rule (81 FR 25497), we provided a summary of analysis conducted on pre-hospice spending, non-hospice spending, live discharge rates, and skilled visits in the last days of life. In addition, we also provided a summary of our plans to monitor for impacts of hospice payment reform. We will continue to monitor the impact of future payment and policy changes and will provide the industry with periodic updates on our analysis in future rulemaking and/or announcements on the Hospice Center Web page at:
We received several comments on the analysis and CMS's plans for future monitoring efforts with regards to hospice payment reform outlined in the proposed rule, which are summarized below.
Several commenters suggested that CMS consider payment refinements that help to incentivize appropriate timing on enrollment for hospice. Additional commenters noted their concern regarding a potential case-mix payment system for hospice, as the commenters believe that the hospice benefit differs from all other Medicare payment systems, as it is designed to account for the patient's full scope of Medicare needs.
With regards to non-hospice spending during a hospice election, several commenters suggested that CMS take action to educate other Medicare provider types in order to increase understanding of benefits coverage and claims processing after a beneficiary has elected hospice. Several commenters also suggested that CMS investigate options for preventing other Medicare providers from billing without checking the Common Working File and notifying the hospice for a determination as to whether or not the care is related to the terminal prognosis. Several commenters requested that a greater level of specificity for Part D data be supplied to hospice providers, such that they can track where the billing issues originate and begin to address them. The commenters suggested that a coordinated system would help address the non-hospice spending.
With regards to hospice live discharge rates, a few commenters noted concerns about the difference between two types of live discharges: A patient-initiated discharge or revocation versus a hospice-initiated discharge. The commenters suggested that analysis of live discharge rates should exclude the patient-initiated discharges or revocations. Commenters suggested that for hospice-initiated discharges, the reasons for such discharges should be reported so that hospice providers can
With regards to skilled visits during the last days of life, the number of visits by RNs and social workers is anticipated to increase during the last 7 days of a beneficiary's life as a result of the service intensity add‐on payment, implemented on January 1, 2016. A few commenters stated that hospices take their cues from patients and families, who should always have the option to decline a visit. As such, decisions regarding visits made by the patient and family ought to be considered and/or reflected in the data.
Finally, most commenters supported our planned analysis to monitor the impact of hospice payment reform and would like to use the monitoring results to target program integrity efforts to those aberrant individual providers.
Although the analysis and monitoring efforts described in the proposed rule did not relate to the timely filing requirement for the hospice Notice of Election (NOE), nevertheless a few commenters expressed concern about the timely filing requirement and lost revenue due to data entry errors that cannot be immediately corrected. Commenters encouraged CMS to continue to explore the possibility of transmitting NOEs through Electronic Data Interchange rather than through direct data entry and recommended that, in the meantime, when the hospice files the NOE in good faith within the 5-day requirement, but the MAC does not accept the NOE within 5 days, the payment for hospice services should be allowed back to the date of election, once the MAC has accepted the NOE.
With regards to the comments received regarding the NOE timely filing requirement, we recognize that inadvertent NOE errors, such as transposed numbers or incorrect admission dates, will not trigger the NOE to return to the hospice for correction. The hospice must wait until the incorrect information is fully processed by Medicare systems before they can correct it, and this could cause the NOE to be late. We strongly encourage hospices to have quality assurance measures in place regarding the accuracy of the NOE information to mitigate any potential untimely NOEs. Our expectation is that the information provided on the hospice NOE is accurate and free of transcribing errors. To aid in reducing the impact of these situations on hospices, CMS is currently conducting an analysis that aims to redesign the hospice benefit period data in our systems.
The hospice wage index is used to adjust payment rates for hospice agencies under the Medicare program to reflect local differences in area wage levels, based on the location where services are furnished. The hospice wage index utilizes the wage adjustment factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustments. Our regulations at § 418.306(c) require each labor market to be established using the most current hospital wage data available, including any changes made by the Office of Management and Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.
We use the previous FY's hospital wage index data to calculate the hospice wage index values. For FY 2017, the hospice wage index will be based on the FY 2016 pre-floor, pre-reclassified hospital wage index. This means that the hospital wage data used for the hospice wage index is not adjusted to take into account any geographic reclassification of hospitals including those in accordance with section 1886(d)(8)(B) or 1886(d)(10) of the Act. The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic area in which the beneficiary resides when receiving RHC or CHC. The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving GIP or Inpatient Respite Care (IRC).
In the FY 2006 Hospice Wage Index final rule (70 FR 45130), we adopted the changes discussed in the OMB Bulletin No. 03-04 (June 6, 2003). This bulletin announced revised definitions for MSAs and the creation of micropolitan statistical areas and combined statistical areas. The bulletin is available online at
In the FY 2008 Hospice Wage Index final rule (72 FR 50214), we implemented a new methodology to update the hospice wage index for rural areas without a hospital, and thus no hospital wage data. In cases where there was a rural area without rural hospital wage data, we used the average pre-floor, pre-reclassified hospital wage index data from all contiguous CBSAs to represent a reasonable proxy for the rural area. The term “contiguous” means sharing a border (72 FR 50217). Currently, the only rural area without a hospital from which hospital wage data could be derived is Puerto Rico. However, our policy of imputing a rural pre-floor, pre-reclassified hospital wage index value based on the pre-floor, pre-reclassified hospital wage index (or indices) of CBSAs contiguous to a rural area without a hospital from which hospital wage data could be derived does not recognize the unique circumstances of Puerto Rico. In this final rule, for FY 2017, we will continue to use the most recent pre-floor, pre-reclassified hospital wage index value available for Puerto Rico, which is 0.4047.
As described in the August 8, 1997 Hospice Wage Index final rule (62 FR 42860), the pre-floor and pre-reclassified hospital wage index is used as the raw wage index for the hospice benefit. These raw wage index values are then subject to application of the hospice floor to compute the hospice wage index used to determine payments to hospices. Pre-floor, pre-reclassified hospital wage index values below 0.8 are adjusted by a 15 percent increase subject to a maximum wage index value of 0.8. For example, if County A has a pre-floor, pre-reclassified hospital wage index value of 0.3994, we would multiply 0.3994 by 1.15, which equals 0.4593. Since 0.4593 is not greater than 0.8, then County A's hospice wage index would be 0.4593. In another example, if County B has a pre-floor,
OMB has published subsequent bulletins regarding CBSA changes. On February 28, 2013, OMB issued OMB Bulletin No. 13-01, announcing revisions to the delineation of MSAs, Micropolitan Statistical Areas, and Combined Statistical Areas, and guidance on uses of the delineation in these areas. A copy of this bulletin is available online at:
A summary of the comments we received regarding the wage index and our responses to those comments appears below.
In addition, we believe that finalizing our proposal to adopt a hospice wage index standardization factor will provide a safeguard to the Medicare program as well as to hospices because it will mitigate fluctuations in the wage index by ensuring that wage index updates and revisions are implemented in a budget neutral manner.
The wage index applicable for FY 2017 is available on the CMS Web site at
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish updates to hospice rates for FYs 1998 through 2002. Hospice rates were to be updated by a factor equal to the inpatient hospital market basket index set out under section 1886(b)(3)(B)(iii) of the Act, minus 1 percentage point. Payment rates for FYs since 2002 have been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the payment rates for subsequent FYs must be the inpatient market basket percentage for that FY. The Act requires us to use the inpatient hospital market basket to determine the hospice payment rate update. In addition, section 3401(g) of the Affordable Care Act mandates that, starting with FY 2013 (and in subsequent FYs), the hospice payment update percentage will be annually reduced by changes in economy-wide productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable FY, year, cost reporting period, or other annual period) (the “MFP adjustment”). A complete description of the MFP projection methodology is available on our Web site at:
In addition to the MFP adjustment, section 3401(g) of the Affordable Care Act also mandates that in FY 2013 through FY 2019, the hospice payment update percentage will be reduced by an additional 0.3 percentage point (although for FY 2014 to FY 2019, the potential 0.3 percentage point reduction is subject to suspension under conditions specified in section 1814(i)(1)(C)(v) of the Act). The hospice payment update percentage for FY 2017 is based on the estimated inpatient hospital market basket update of 2.7 percent (based on IHS Global Insight, Inc.'s second quarter 2016 forecast with historical data through the first quarter of 2016). Due to the requirements at sections 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the estimated inpatient hospital market basket update for FY 2017 of 2.7 percent must be reduced by a MFP adjustment as mandated by Affordable Care Act (currently estimated to be 0.3 percentage point for FY 2017). The estimated inpatient hospital market basket update for FY 2017 is reduced further by 0.3 percentage point, as mandated by the Affordable Care Act. In effect, the hospice payment update percentage for FY 2017 is 2.1 percent.
Currently, the labor portion of the hospice payment rates is as follows: For RHC, 68.71 percent; for CHC, 68.71 percent; for General Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The non-labor portion is equal to 100 percent minus the labor portion for each level of care. Therefore, the non-labor portion of the payment rates is as follows: For RHC, 31.29 percent; for CHC, 31.29 percent; for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 percent.
A summary of the comments we received regarding the payment rates and our responses to those comments appear below.
There are four payment categories that are distinguished by the location and intensity of the services provided. The base payments are adjusted for geographic differences in wages by multiplying the labor share, which varies by category, of each base rate by the applicable hospice wage index. A hospice is paid the RHC rate for each day the beneficiary is enrolled in hospice, unless the hospice provides continuous home care, IRC, or general inpatient care. CHC is provided during a period of patient crisis to maintain the person at home; IRC is short-term care to allow the usual caregiver to rest and be relieved from caregiving; and General Inpatient Care (GIP) is to treat symptoms that cannot be managed in another setting.
As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47172), we implemented two different RHC payment rates, one RHC rate for the first 60 days and a second RHC rate for days 61 and beyond. In addition, in the final rule, we adopted a Service Intensity Add-on (SIA) payment, when direct patient care is provided by a RN or social worker during the last 7 days of the beneficiary's life. The SIA payment is equal to the CHC hourly rate multiplied by the hours of nursing or social work provided (up to 4 hours total) that occurred on the day of service. In order to maintain budget neutrality, as required under section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were adjusted by a SIA budget neutrality factor.
As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47177), we will continue to make the SIA payments budget neutral through an annual determination of the SIA budget neutrality factor (SBNF), which will then be applied to the RHC payment
For FY 2017, we are applying a wage index standardization factor to the FY 2017 hospice payment rates in order to ensure overall budget neutrality when updating the hospice wage index with more recent hospital wage data. Wage index standardization factors are applied in other payment settings such as under home health Prospective Payment System (PPS), IRF PPS, and SNF PPS. Applying a wage index standardization factor to hospice payments will eliminate the aggregate effect of annual variations in hospital wage data. We believe that adopting a hospice wage index standardization factor will provide a safeguard to the Medicare program as well as to hospices because it will mitigate fluctuations in the wage index by ensuring that wage index updates and revisions are implemented in a budget neutral manner. To calculate the wage index standardization factor, we simulated total payments using the FY 2017 hospice wage index and compared it to our simulation of total payments using the FY 2016 hospice wage index. By dividing payments for each level of care using the FY 2017 wage index by payments for each level of care using the FY 2016 wage index, we obtain a wage index standardization factor for each level of care (RHC days 1-60, RHC days 61+, CHC, IRC, and GIP).
Lastly, the hospice payment rates for hospices that submit the required quality data will be increased by the full FY 2017 hospice payment update percentage of 2.1 percent as discussed in section III.C.3 of this final rule. The FY 2017 RHC rates are shown in Table 11. The FY 2017 payment rates for CHC, IRC, and GIP are shown in Table 12.
Sections 1814(i)(5)(A) through (C) of the Act require that hospices begin submitting quality data, based on measures to be specified by the Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320 through 47324), we implemented a Hospice Quality Reporting Program (HQRP), as required by section 3004 of the Affordable Care Act. Hospices were required to begin collecting quality data in October 2012, and submit that quality data in 2013. Section 1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and for each subsequent FY, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements with respect to that FY. The FY 2017 rates for hospices that do not submit the required quality data will be updated by the FY 2017 hospice payment update percentage of 2.1 percent minus 2 percentage points. These rates are shown in Tables 13 and 14.
A summary of the comments we received regarding the payment rates and our responses to those comments appear below.
As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47183), we implemented changes mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). Specifically, for accounting years that end after September 30, 2016 and before October 1, 2025, the hospice cap is updated by the hospice payment update percentage rather than using the consumer price index for urban consumers (CPI-U). As required by section 1814(i)(2)(B)(ii) of the Act, the hospice cap amount for the 2016 cap year, starting on November 1, 2015 and ending on October 31, 2016, is equal to the 2015 cap amount ($27,382.63) updated by the FY 2016 hospice payment update percentage of 1.6 percent. As such, the 2016 cap amount is $27,820.75.
In the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47142), we finalized aligning the cap accounting year with the federal FY beginning in 2017. Therefore, the 2017 cap year will start on October 1, 2016 and end on September 30, 2017. Table 26 in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47185) outlines the timeframes for counting beneficiaries and payments during the 2017 transition year. The hospice cap amount for the 2017 cap year will be $28,404.99, which is equal to the 2016 cap amount ($27,820.75) updated by the FY 2017 hospice payment update percentage of 2.1 percent.
A summary of public comments and our responses to comments on the hospice cap are summarized below:
Section 3004(c) of the Affordable Care Act amended section 1814(i)(5) of the Act to authorize a quality reporting program for hospices. Section 1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and each subsequent FY, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements for that FY. Depending on the amount of the annual update for a particular year, a reduction of 2 percentage points could result in the annual market basket update being less than 0 percent for a FY and may result in payment rates that are less than payment rates for the preceding FY. Any reduction based on failure to comply with the reporting requirements, as required by section 1814(i)(5)(B) of the Act, would apply only for the particular FY involved. Any such reduction would not be cumulative or be taken into account in computing the payment amount for subsequent FYs. Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the Secretary on quality measures specified by the Secretary. The data must be submitted in a form, manner, and at a time specified by the Secretary.
Any measures selected by the Secretary must be endorsed by the consensus-based entity, which holds a contract regarding performance measurement, including the endorsement of quality measures, with the Secretary under section 1890(a) of the Act. This contract is currently held by the National Quality Forum (NQF). However, section 1814(i)(5)(D)(ii) of the Act provides that in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the consensus-based entity, the Secretary may specify measures that are not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus-based organization identified by the Secretary. Our paramount concern is the successful development of an HQRP that promotes the delivery of high quality healthcare services. We seek to adopt measures for the HQRP that promote person-centered, high quality, and safe care. Our measure selection activities for the HQRP take into consideration input from the Measure Applications Partnership (MAP), convened by the NQF, as part of the established CMS pre-rulemaking process required under section 1890A of the Act. The MAP is a public-private partnership comprised of multi-stakeholder groups convened by the NQF for the primary purpose of providing input to CMS on the selection of certain categories of quality and efficiency measures, as required by section 1890A(a)(3) of the Act. By February 1st of each year, the NQF must provide that input to CMS. Input from the MAP is located at
For the purpose of streamlining the rulemaking process, we finalized our policy in the FY 2016 Hospice Wage Index final rule (80 FR 47187) that when we adopt measures for the HQRP beginning with a payment
• Measure performance among hospices was so high and unvarying that meaningful distinction in improvements in performance could no longer be made;
• Performance or improvement on a measure did not result in better patient outcomes;
• A measure did not align with current clinical guidelines or practice;
• A more broadly applicable measure (across settings, populations, or conditions) for the particular topic was available;
• A measure that was more proximal in time to desired patient outcomes for the particular topic was available;
• A measure that was more strongly associated with desired patient outcomes for the particular topic was available; or
• Collection or public reporting of a measure led to negative unintended consequences.
For any such removal, the public would be given an opportunity to comment through the annual rulemaking process. However, if there were reason to believe continued collection of a measure raised potential safety concerns, we would take immediate action to remove the measure from the HQRP and not wait for the annual rulemaking cycle. The measures would be promptly removed, and we would immediately notify hospices and the public of such a decision through the usual CMS HQRP communication channels, including postings and announcements on the CMS HQRP Web site, Medicare Learning Network (MLN) eNews communications, national provider association calls, and announcements on Open Door Forums and Special Open Door Forums. In such instances, the removal of a measure would be formally announced in the next annual rulemaking cycle.
To further streamline the rulemaking process, we proposed to codify that if measures we are using in the HQRP have non-substantive changes in their specifications change as part of their NQF endorsement process, we would continue to utilize the measure with their new endorsed status in the HQRP. As mentioned previously, quality measures selected for the HQRP must be endorsed by the NQF unless they meet the statutory criteria for exception under section 1814(i)(5)(D)(ii) of the Act. The NQF is a voluntary consensus standard-setting organization with a diverse representation of consumer, purchaser, provider, academic, clinical, and other healthcare stakeholder organizations. The NQF was established to standardize healthcare quality measurement and reporting through its consensus measure development process (
As stated in the CY 2013 HH PPS final rule (77 FR 67068 through 67133), CMS expanded the set of required measures to include additional measures endorsed by NQF. We also stated that to support the standardized collection and calculation of quality measures by CMS, collection of the needed data elements would require a standardized data collection instrument. In response, CMS developed, tested, and implemented a hospice patient-level item set, the HIS. Hospices are required to submit a HIS-Admission record and a HIS-Discharge record for each patient admission to hospice since July 1, 2014. In developing the standardized HIS, we considered comments offered in response to the CY 2013 HH PPS proposed rule (77 FR 41548 through 41573). In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in compliance with section 1814(i)(5)(C) of the Act, we finalized the specific collection of data items that support the following 6 NQF-endorsed measures and 1 modified measure for hospice:
• NQF #1617 Patients Treated with an Opioid who are Given a Bowel Regimen,
• NQF #1634 Pain Screening,
• NQF #1637 Pain Assessment,
• NQF #1638 Dyspnea Treatment,
• NQF #1639 Dyspnea Screening,
• NQF #1641 Treatment Preferences,
• NQF #1647 Beliefs/Values Addressed (if desired by the patient) (modified).
To achieve a comprehensive set of hospice quality measures available for widespread use for quality improvement and informed decision making, and to carry out our commitment to develop a quality reporting program for hospices that uses standardized methods to collect data needed to calculate quality measures, we finalized the HIS effective July 1, 2014 (78 FR 48258). To meet the quality reporting requirements for hospices for the FY 2016 payment determination and each subsequent year, we require regular and ongoing
Hospices are required to complete and submit a HIS-Admission and a HIS-Discharge record for each patient admission. Hospices failing to report quality data via the HIS for patient admissions occurring in 2016 will have their market basket update reduced by 2 percentage points in FY 2018 (beginning in October 1, 2017). In the FY 2015 Hospice Wage Index final rule (79 FR 50485 through 50487), we finalized the proposal to codify the HIS submission requirement at § 418.312. The System of Record (SOR) Notice titled “Hospice Item Set (HIS) System,” SOR number 09-70-0548, was published in the
As mentioned in section III.C.3, a measure that is adopted and implemented in the HQRP will be adopted for all subsequent years, unless the measure is proposed for removal, suspension, or replacement by CMS. Policies and criteria for removing a measure include those mentioned in section III.C.3 of this proposed rule. CMS is not proposing to remove any of the current HQRP measures at this time. Any future proposals regarding removal, suspension, or replacement of measures will be proposed in this section of future rules.
As noted in section III.C.2 of this proposed rule, CMS's paramount concern is to develop quality measures that promote care that is person-centered, high quality, and safe. In identifying priority areas for future measure enhancement and development, CMS takes into consideration input from numerous stakeholders, including the MAP, the MedPAC, Technical Expert Panels (TEP), and national priorities, such as those established by the National Priorities Partnership, the HHS Strategic Plan, the National Strategy for Quality Improvement in Healthcare, and the CMS Quality Strategy. In addition, CMS takes into consideration vital feedback and input from research published by our payment reform contractor, as well as important observations and recommendations contained in the Institute of Medicine (IOM) report, titled “Dying in America,” released in September 2014.
As stated in the FY 2016 Hospice Wage Index final rule (80 FR 47188), based on input from stakeholders, CMS identified several high priority areas for future measure development, including: A patient reported pain outcome measure; claims-based measures focused on care practices patterns, including skilled visits in the last days of life; responsiveness of the hospice to patient and family care needs; and hospice team communication and care coordination. Of the aforementioned measure areas, CMS has pursued measure development for two quality measures: Hospice Visits when Death is Imminent Measure Pair, and Hospice and Palliative Care Composite Process Measure-Comprehensive Assessment at Admission. These measures were included in CMS' List of Measures under Consideration (MUC) list for 2015 and discussed at the MAP meeting on December 14 and 15, 2015. All materials related to the MUC list and the MAP's recommendations for each measure can be found on the National Quality Forum Web site, MAP Post-Acute Care/Long-Term Care Workgroup Web page at:
We proposed two new quality measures for the HRQP for the FY 2019 payment determination and subsequent years: Hospice Visits when Death is Imminent Measure Pair, and Hospice and Palliative Care Composite Process Measure-Comprehensive Assessment at Admission.
Several organizations and panels have identified care of the imminently dying patient as an important domain of palliative and hospice care and established guidelines and recommendations related to this high priority aspect of healthcare that affects a large number of people. The NQF 2006 report
Since the data collection mechanism is the HIS, providers would collect and submit data using the same processes that are outlined in sections III.C.7c through III.C.7e of this rule. In brief, processes in section III.C.7c through III.C.7e specify that data for the measure would be submitted to the Quality Improvement and Evaluation System (QIES) Assessment Submission and Processing (ASAP) system, in compliance with the timeliness criterion and threshold set out in sections III.C.7c through III.C.7e.
For more information on the specifications and data elements for the measure set, Hospice Visits when Death is Imminent, we refer readers to the HQRP Specifications for the Hospice Item Set-based Quality Measures document, available on the “Current Measures” portion of the CMS HQRP Web site:
We received multiple comments pertaining to the Hospice Visits when Death is Imminent Measure Pair. The following is a summary of the comments we received on this topic and our responses:
We believe that provision of hospice visits at the end of life is an important component of high quality hospice care for most patients. The last week of life is typically the period in the terminal illness trajectory with the highest symptom burden and the literature supports hospice visits when death is imminent as a high priority in end-of-life care. Clinician visits to patients at the end of life have been demonstrated to be associated with improved outcomes such as decreased risk of hospitalization, emergency room visits, and hospital death; and higher satisfaction with care.
The literature shows that health care providers' practices are responsive to
We agree with the commenter that this measure pair alone may not provide a full representation of the quality of care that hospices provide. The previously finalized measures in the HQRP address care processes at admission, and the Hospice CAHPS survey examines caregiver experience retrospectively. This measure pair fills an important gap in the HQRP by providing a measure of quality of care provided near the time of death, and it is intended to be interpreted along with the other measures in the HQRP to reflect quality of care provided by hospices across several domains of care that are important to patients and other stakeholders. CMS also plans to analyze the relationship between this quality measure pair and other quality measures to support the validity of this measure pair (that is, the measure reflects true quality of care).
Some commenters requested clarification of the calculation of each of these measures and of the disciplines included in each. One commenter recommended that Measure 1 and Measure 2 be combined into one measure in order to streamline data collection. One commenter requested that RN visits be included in both Measure 1 and Measure 2 since some interventions to manage symptoms may only be provided by an RN.
The two measures are intended to capture distinct aspects of hospice care at the end of life. The inclusion of registered nurses, physicians, nurse practitioners, and physician assistants in Measure 1 is intended to capture the range of clinical disciplines that might visit a patient, depending on patient and hospice preferences, and uses a 3-day timeframe to reflect the active dying phase. The inclusion of medical social workers, chaplains or spiritual counselors, licensed practical nurses, and hospice aides in Measure 2 is intended to allow for flexible and individualized care in line with patient, family, and caregiver preferences. The 7-day time frame covers both the active dying phase and the transition period before, and thus could also capture important visits related to preparation for active dying. To clarify, the 7-day time frame is inclusive of the 3 days prior to death. Data collection is conducted at the discipline level in order to provide us with sufficient information to conduct reliability and validity testing and possible future measure refinement.
We recognize that some providers use phone calls to supplement care provided in person and that these calls can be helpful in facilitating ongoing care and communication. However, in agreement with a TEP and based on the available evidence, we consider these calls as a supplement to, and not a replacement for, in-person care, particularly when death is imminent. For this reason, phone calls are not included in the definition of a visit for this measure pair. Prior to implementation of the HIS V2.00.0, we will provide hospices with guidance and training materials, including an updated version of the HIS Manual. These training materials will further clarify the types of visits included in this measure pair and other item coding information.
Many commenters requested that visits from volunteers be included in Measure 2. The commenters pointed out that the use of volunteers is a Medicare requirement for hospices, and that volunteers play an important role in the delivery of hospice care. One commenter indicated that it might be burdensome to report data on volunteer visits, but that inclusion of volunteers would be valuable. A couple of commenters requested that visits from music therapists or massage therapists be included in Measure 2.
Several commenters noted that although physician assistant (PA) visits are included in this quality measure pair, this discipline is not identified by CMS as a core or non-core service of a hospice provider. Some of these commenters requested that PA visits be removed from the measure in order to align with the Conditions of Participation and Medicare payment practices. Some of these commenters supported the inclusion of PAs and recommended that their role be clarified. One commenter stated that since the use of PAs is limited, inclusion of PA visits would negatively skew the data.
One commenter noted that a Licensed Practicing Nurse's (LPN) scope of practice varies from state to state, and asked that CMS consider removing LPN visits from the measure to make the measure more uniform nation-wide. One commenter expressed appreciation for the inclusion of LPNs and stated that the discipline is frequently used.
Some commenters requested that bereavement coordinator or bereavement counselor visits be included in this measure pair. One commenter requested clarification of whether a visit from a provider contracted but not employed by a hospice program would be considered a visit under this measure pair.
Regarding volunteer visits, we agree that volunteers play an important role in high quality hospice care and that their visits are important to patients and families. Visits from volunteers were included in an early version of this measure, which pilot tested for feasibility in summer 2015. Many of the hospices included in the pilot had trouble reporting data on visits from volunteers because the records of volunteer visits were often stored in a separate system and were frequently delayed. The data was unreliable, and hospices reported significant reporting burden. This topic was discussed with the TEP, held October 19 and 21, 2015. After reviewing the results from the pilot test and thoroughly discussing the issues, the TEP members did not support including visits from volunteers in this measure pair. For the same reasons, the TEP advised against including complementary and alternative therapists such as music or massage therapists in this measure pair, though they do provide important services.
Regarding physician assistant visits, although Medicare does not provide separate payments for visits from physician assistants, these services would be covered under the hospice per diem. Additionally, this measure is an all-payer measure and some states and other programs may authorize physician assistants to provide hospice care under separate payments. This measure pair is separate from payment and should focus on services provided by hospices and not be restricted by the terms of payment by Medicare. Therefore, the inclusion of physician assistants in the
We thank the commenters for their feedback regarding the inclusion of LPNs in Measure 2. Members of our TEP agreed that LPNs provide an important service in hospice care that is distinct from the role of RNs. For this reason, we have included visits from LPNs in Measure 2 of this measure pair.
We appreciate the commenters' recommendations to include bereavement coordinators, and agree that visits from these disciplines are important for many patients and families. However, we believe that bereavement services are outside the scope of this quality measure pair, which focusses specifically on visits, which may address the increased symptom burden many patients experience when death is imminent, and provide an opportunity for proactive assessment and communication.
Regarding contracted hospice staff, we clarify that visits from contracted staff may be included in this measure pair. As defined in the HIS Manual V1.02, hospice staff members may include volunteers, contractors, and affiliates.
The current specification of Measure 2 limits the numerator to patients who receive at least two visits from those disciplines in the final 7 days of life. Using two visits rather than one may also serve to reduce the expected ceiling effect that is likely to result from grouping multiple disciplines together in Measure 2.
Some commenters cautioned that this measure pair could result in an unintended consequence: Hospices might provide unnecessary or unwanted visits, thus undermining patient and family preferences and choice. One commenter cautioned that specifying when particular staff must visit would undermine the flexibility hospices have in customizing the plan of care. Some commenters pointed out that, by respecting the wishes of some patients to receive fewer visits, a hospice might have lower scores on this measure pair but that it would not reflect an issue with quality of care.
One commenter recommended that patients with a length of stay shorter than 5 days be excluded from Measure 2. This is the length of time allowed by Hospice Conditions of Participation requirements for the comprehensive assessments to be completed, and the commenter expects that some patients might not receive two visits from a medical social worker, chaplain or spiritual counselor, licensed practical nurse, or hospice aide before Day 5. Another commenter recommended that patients with a length of stay of three days or fewer be excluded from Measure 1 if the only visit received is the initial nursing assessment. The commenter expressed concern that for such short lengths of stay, the measure would function as an indicator of compliance rather than of quality.
Finally, one commenter requested clarification of whether this measure pair would be applied across all levels of care.
As currently specified, Measure 1 does not include a length of stay exclusion, while Measure 2 excludes patients with a length of stay less than or equal to one day (that is, admitted and discharged on the same day). The rationale for excluding patients with a very short length of stay from Measure 2 is that Measure 2 requires two visits from select hospice staff, and it may be difficult or possibly inappropriate to provide more than one such visit for patients receiving only one day of hospice care. We do not exclude these patients from Measure 1 because Measure 1 specifies at least one clinician visit, and it is reasonable to expect that a hospice would provide at least one such visit, even for patients with a very short length of stay. It is acceptable if this visit is the initial nursing assessment visit. One of the goals of this measure pair is to increase prospective assessment of patient needs and timely management of symptoms prior to death, and this can be accomplished during the initial nursing assessment visit as well as other types of visits provided in the final days to patients with longer length of stay. We do not intend to increase burden on providers or patients by requiring specific types of visits to meet the goals of this measure. Patients with short lengths of stay are expected to have high symptom burden throughout their short stay and can benefit from hospice visits. For these reasons, patients with short lengths of stay are included in this measure.
This measure pair currently includes only patients who received routine home care. It does not include patients who received general inpatient care, respite care, or continuous home care during the measure timeframes. Routine home care patients for whom the hospice receives a service intensity add-on payment are included in this measure, as this payment is an add-on to the routine home care rate.
While this measure is not currently NQF-endorsed, we recognize that the NQF endorsement process is an important part of measure development and plan to submit this measure for NQF endorsement. As noted, this quality measure will fill a gap by holding hospices to a higher standard of care and will motivate providers to conduct a greater number of high priority care processes for as many beneficiaries as possible upon admission as hospice patients. Furthermore, no current NQF-endorsed measures address the completion of a comprehensive care assessment at hospice admission.
Since the composite measure components are existing HIS data items, providers are already collecting the data needed to calculate the composite measure. Data collection will continue in accordance with processes outlined in sections III.C.7c through III.C.7e of this rule.
For more information on the specifications and data elements for the measure, Hospice and Palliative Care Composite Process Measure-Comprehensive Assessment at Admission, we refer readers to the
We received multiple comments pertaining to the Hospice and Palliative Care Composite Process Measure. The following is a summary of the comments we received on this topic and our responses.
Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the Secretary on quality measures specified by the Secretary. Such data must be submitted in a form and manner, and at a time specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act requires that beginning with the FY 2014 and for each subsequent FY, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements for that FY.
In the FY 2015 Hospice Wage Index final rule (79 FR 50488), we finalized a policy stating that any hospice that receives its CMS Certification Number (CCN) (also known as the Medicare Provider Number) notification letter
In the FY 2016 Hospice Wage Index final rule (80 FR 47189), we further clarified and finalized our policy for the timing of new providers to begin reporting data to CMS. The clarified policy finalized in the FY 2016 Hospice Wage Index final rule (80 FR 47189) distinguished between when new hospice providers are required to begin submitting HIS data and when providers will be subject to the potential 2 percentage point annual payment update (APU) reduction for failure to comply with HQRP requirements. In summary, the policy finalized in the FY 2016 Hospice Wage Index final rule (80 FR 47189 through 47190) clarified that providers
This policy allows CMS to receive HIS data on all patient admissions on or after the date a hospice receives their CCN notification letter, while at the same time allowing hospices flexibility and time to establish the necessary accounts for data submission before they are subject to the potential APU reduction for a given reporting year. Currently, new hospices may experience a lag between Medicare certification and receipt of their actual CCN Number. Since hospices cannot submit data to the QIES ASAP system without a valid CCN Number, CMS proposed that new hospices begin collecting HIS quality data beginning on the date noted on the CCN notification letter. We believe this policy will provide sufficient time for new hospices to establish appropriate collection and reporting mechanisms to submit the required quality data to CMS. Requiring quality data reporting beginning on the date listed in the letterhead of the CCN notification letter aligns CMS policy for requirements for new providers with the functionality of the HIS data submission system (QIES ASAP).
In the FY 2015 Hospice Wage Index final rule (79 FR 50486), we finalized our policy requiring that, for the FY 2017 reporting requirements, hospices must complete and submit HIS records for all patient admissions to hospice after July 1, 2014. For each HQRP program year, we require that hospices submit data on each of the adopted measures in accordance with the reporting requirements specified in sections III.C.7c through III.C.7e of that rule for the designated reporting period. This requirement applies to previously finalized and adopted measures, as well as new measures proposed through the rulemaking process. Electronic submission is required for all HIS records. Although electronic submission of HIS records is required, hospices do not need to have an electronic medical record to complete or submit HIS data. In the FY 2014 Hospice Wage Index final rule (78 FR 48258), we finalized a provision requiring that providers can use either the Hospice Abstraction Reporting Tool (HART) (which is free to download and use) or vendor-designed software to complete HIS records. HART provides an alternative option for hospice providers to collect and maintain facility, patient, and HIS Record information for subsequent submission to the QIES ASAP system. Once HIS records are complete, electronic HIS files must be submitted to CMS via the QIES ASAP system. Electronic data submission via the QIES ASAP system is required for all HIS submissions; there are no other data submission methods available. Hospices have 30 days from a patient admission or discharge to submit the appropriate HIS record for that patient through the QIES ASAP system. CMS will continue to make HIS completion and submission software available to hospices at no cost. We provided details on data collection and submission timing under the downloads section of the HIS Web site on the
The QIES ASAP system provides reports upon successful submission and processing of the HIS records. The final validation report may serve as evidence of submission. This is the same data submission system used by nursing homes, inpatient rehabilitation facilities, home health agencies, and long-term care hospitals for the submission of Minimum Data Set Version 3.0 (MDS 3.0), Inpatient Rehabilitation Facility-patient assessment instrument (IRF-PAI), Outcome Assessment Information Set (OASIS), and Long-Term Care Hospital Continuity Assessment Record & Evaluation Data Set (LTCH CARE), respectively. We have provided hospices with information and details about use of the HIS through postings on the HQRP Web site, Open Door Forums, announcements in the CMS MLN Connects Provider e-News (E-News), and provider training.
Hospices are evaluated for purposes of the quality reporting program based on whether or not they submit data, not on their substantive performance level for the required quality measures. In order for CMS to appropriately evaluate the quality reporting data received by hospice providers, it is essential HIS data be received in a timely manner.
The submission date is the date on which the completed record is submitted and accepted by the QIES ASAP system. In the FY 2016 Hospice Wage Index final rule (80 FR 47191), CMS finalized our policy that beginning with the FY 2018 payment determination hospices must submit all HIS records within 30 days of the event date, which is the patient's admission date for HIS-Admission records or discharge date for HIS-Discharge records.
For HIS-Admission records, the submission date must be no later than the admission date plus 30 calendar days. The submission date can be equal to the admission date, or no greater than 30 days later. The QIES ASAP system will issue a warning on the Final Validation Report if the submission date is more than 30 days after the patient's admission date.
For HIS-Discharge records, the submission date must be no later than the discharge date plus 30 calendar days. The submission date can be equal to the discharge date, or no greater than 30 days later. The QIES ASAP system will issue a warning on the Final Validation Report if the submission date is more than 30 days after the patient's discharge date.
The QIES ASAP system validation edits are designed to monitor the timeliness of submission and ensure that providers' submitted records conform to the HIS data submission specifications. Providers are notified when timing criteria have not been met by warnings that appear on their Final Validation Reports. A standardized data collection approach that coincides with timely submission of data is essential to establish a robust quality reporting program and ensure the scientific reliability of the data received.
In the FY 2016 Hospice Wage Index final rule (80 FR 47191), CMS also clarified the difference between the completion deadlines and the submission deadlines. Current sub-regulatory guidance produced by CMS (for example, HIS Manual, HIS trainings) states that the completion deadlines for HIS records are 14 days from the Event Date for HIS-Admission records and 7 days from the Event Date for HIS-Discharge records. Completion deadlines continue to reflect CMS guidance only; these guidelines are not statutorily specified and are not designated through regulation. These guidelines are intended to offer clear direction to hospice agencies in regards to the timely completion of HIS-Admission and HIS-Discharge records. The completion deadlines define only the latest possible date on which a hospice should complete each HIS record. This guidance is meant to better align HIS completion processes with clinical workflow processes; however, hospices may develop alternative internal policies to complete HIS records. Although it is at the discretion of the hospice to develop internal policies for completing HIS records, CMS continues to recommend that providers complete and attempt to submit HIS records early, prior to the previously finalized submission deadline of 30 days, beginning in FY 2018. Completing and attempting to submit records early allows providers ample time to address any technical issues encountered in the QIES ASAP submission process, such as correcting fatal error messages. Completing and attempting to submit records early will ensure that providers are able to comply with the 30 day submission deadline. HQRP guidance documents, including the CMS HQRP Web site, HIS Manual, HIS trainings, Frequently Asked Questions, and Fact Sheets, continue to offer the most up-to-date CMS guidance to assist providers in the successful completion and submission of HIS records. Availability of updated guidance will be communicated to providers through the usual CMS HQRP communication channels, including postings and announcements on the CMS HQRP Web site, MLN eNews communications, national provider association calls, and announcements on Open Door Forums and Special Open Door Forums.
To accurately analyze quality reporting data received by hospice providers, it is imperative we receive ongoing and timely submission of all HIS-Admission and HIS-Discharge records. In the FY 2016 Hospice Wage Index final rule (80 FR 47192), CMS finalized the timeliness criteria for submission of HIS-Admission and HIS-Discharge records. The finalized timeliness criteria was in response to input from our stakeholders seeking additional specificity related to HQRP compliance affecting FY payment determinations and, due to the importance of ensuring the integrity of quality data submitted.
Last year, we finalized our policy (80 FR 47191 through 47192) that beginning with the FY 2018 payment determination and subsequent FY payment determinations, all HIS records would have to be submitted within 30 days of the event date, which is the patient's admission date or discharge date. In conjunction with this requirement, we also finalized our policy (80 FR 47192) to establish an incremental threshold for compliance over a 3-year period. To be compliant for the FY 2018 APU determination, hospices must submit no less than 70 percent of their total number of HIS-Admission and HIS-Discharge records by no later than 30 days from the event date. The timeliness threshold is set at 80 percent for the FY 2019 APU determination and at 90 percent for the FY 2020 APU determination and subsequent years. The threshold corresponds with the overall amount of HIS records received from each provider that fall within the established 30 day submission timeframes. Our ultimate goal is to require all hospices to achieve a compliance rate of 90 percent or more.
To summarize, in the FY 2016 Hospice Wage Index final rule (80 FR 47193), we finalized our policy to implement the timeliness threshold requirement beginning with all HIS admission and discharge records that occur after January 1, 2016, in accordance with the following schedule.
• Beginning January 1, 2016 to December 31, 2016, hospices must submit at least 70 percent of all required HIS records within the 30 day submission timeframe for the year or be subject to a 2 percentage point reduction to their market basket update for FY 2018.
• Beginning January 1, 2017 to December 31, 2017, hospices must submit at least 80 percent of all required HIS records within the 30 day submission timeframe for the year or be subject to a 2 percentage point reduction to their market basket update for FY 2019.
• Beginning January 1, 2018 to December 31, 2018, hospices must submit at least 90 percent of all required HIS records within the 30 day submission timeframe for the year or be subject to a 2 percentage point reduction to their market basket update for FY 2020.
Timely submission of data is necessary to accurately analyze quality measure data received by providers. To support the feasibility of a hospice to achieve the compliance thresholds, CMS's measure development contractor conducted some preliminary analyses of Quarter 3 and Quarter 4 HIS data from 2014. According to this analysis, the vast majority of hospices (92 percent) would have met the compliance thresholds at 70 percent. Moreover, 88 percent and 78 percent of hospices would have met the compliance thresholds at 80 percent and 90 percent, respectively. CMS believes this analysis is further evidence that the compliance thresholds are reasonable and achievable by hospice providers.
The current reports available to providers in the Certification and Survey Provider Enhanced Reports (CASPER) system do allow providers to track the number of HIS records that are submitted within the 30 day submission timeframe. Currently, submitting an HIS record past the 30 day submission timeframe results in a non-fatal (warning) error. In April 2015, CMS made available 3 new Hospice Reports in CASPER, which include reports that can list HIS Record Errors by Field by Provider and HIS records with a specific error number. CMS is working on expanding this functionality of CASPER reports to include a timeliness compliance threshold report that
In the FY 2016 Hospice Wage Index final rule (80 FR 47192 through 47193), CMS provided clarification regarding the methodology used in calculating the 70 percent/80 percent/90 percent compliance thresholds. In general, HIS records submitted for patient admissions and discharges occurring during the reporting period (January 1st to December 31st of the reporting year involved) will be included in the denominator for the compliance threshold calculation. The numerator of the compliance threshold calculation would include any records from the denominator that were submitted within the 30 day submission deadline. In the FY 2016 Hospice Wage Index final rule (80 FR 47192), CMS also stated we would make allowances in the calculation methodology for two circumstances. First, the calculation methodology will be adjusted following the applicable reporting period for records for which a hospice is granted an extension or exemption by CMS. Second, adjustments will be made for instances of modification/inactivation requests (Item A0050. Type of Record = 2 or 3). Additional helpful resources regarding the timeliness compliance threshold for HIS submissions can be found under the downloads section of the Hospice Item Set Web site at CMS.gov at
CMS has made great progress in implementing the objectives set forth in the quality reporting and data collection activities required by sections 3004 of the Affordable Care Act. To date, CMS has established the HQRP, which includes 7 NQF-endorsed quality measures that are collected via the HIS. As stated in this rule, data on these measures are expected to be publicly reported sometime in 2017. Additionally, CMS has also implemented the Hospice CAHPS® as part of the HQRP to gather important input on patient experience of care in hospice. Over the past several years, CMS has conducted data collection and analysis on hospice utilization and trends to help reform the hospice payment system. In the FY 2016 Hospice Wage Index final rule, we finalized payment reform measures, including changes to the RHC payment rate and the implementation of a Service Intensity Add-On (SIA) payment, effective January 1st, 2016. As part of payment reform and ongoing program integrity efforts, we will continue ongoing monitoring of utilization trends for any future refinements.
To facilitate continued progress towards the requirements set forth in section 3004 of the Affordable Care Act, CMS is considering developing a new data collection mechanism for use by hospices. This new data collection mechanism would be a hospice patient assessment instrument, which would serve 2 primary objectives concordant with the Affordable Care Act legislation: (1) To provide the quality data necessary for HQRP requirements and the current function of the HIS; and (2) provide additional clinical data that could inform future payment refinements.
CMS believes that the development of a hospice patient assessment tool could offer several benefits over the current mechanisms of data collection for quality and payment purposes, which include the submission of HIS data and the submission of claims data. For future payment refinements, a hospice patient assessment tool would allow CMS to gather more detailed clinical information, beyond the patient diagnosis and comorbidities that are currently reported on hospice claims. As stated in the FY 2016 Hospice Wage Index final rule (80 FR 47203), detailed patient characteristics are necessary to determine whether a case mix payment system could be achieved. A hospice patient assessment tool would allow CMS to capture information on symptom burden, functional status, and patient, family, and caregiver preferences, all of which will inform future payment refinements.
While systematic assessment is vital throughout the continuum of care, including palliative and end-of-life care, documentation confirming completion
Moreover, symptoms are the leading reason that people seek medical care in the first place and frequently serve as the basis for establishing a diagnosis. Measures of physical function and disease burden have been used to identify older adults at high-risk for excess health care utilization, disability, or mortality.
For quality data collection, a hospice patient assessment instrument would support the goals of the HQRP as new quality measures are developed and adopted. Since the current quality data collection tool (HIS) is a chart abstraction tool, not a hospice patient assessment instrument, CMS is limited in the types of data that can be collected via the HIS. Instead of retrospective data collection elements, a hospice patient assessment tool would include data elements designed to be collected concurrent with provision of care. As such, CMS believes a hospice patient assessment tool would allow for more robust data collection that could inform development of new quality measures that are meaningful to hospice patients, their families and caregivers, and other stakeholders.
Finally, a hospice patient assessment tool that provides clinical data that is used for both payment and quality purposes would align the hospice benefit with other care settings that use similar approaches, such as nursing homes, inpatient rehabilitation facilities, and home health agencies which submit data via the MDS 3.0, IRF-PAI, and OASIS, respectively.
CMS envisions the hospice patient assessment tool itself as an expanded HIS. The hospice patient assessment tool would include current HIS items, as well as additional clinical items that could be used for payment refinement purposes or to develop new quality measures. The hospice patient assessment tool would not replace existing requirements set forth in the Medicare Hospice CoPs (such as the initial nursing and comprehensive assessment), but would be designed to complement data that are collected as part of normal clinical care. If such a patient assessment were adopted, the new data collection effort would replace the current HIS, but would not replace other HQRP data collection efforts (that is, the Hospice CAHPS® survey), nor would it replace regular submission of claims data. CMS envisions that patient assessment data would be collected upon a patient's admission to and discharge from any Medicare-certified hospice provider; additional interim data collection efforts are also possible. Should CMS develop and implement a hospice patient assessment tool, CMS would provide several training opportunities to ensure providers are able to comply with any new requirements.
CMS is not proposing a hospice patient assessment tool at this time; we are still in the early stages of development of an assessment tool to determine if it would be feasible to implement under the Medicare Hospice Benefit. In the development of such a hospice patient assessment tool, CMS will continue to receive stakeholder input from MedPAC and ongoing input from the provider community, Medicare beneficiaries, and technical experts. It is of the utmost importance to CMS to develop a hospice patient assessment tool that is scientifically rigorous and clinically appropriate, thus we believe that continued and transparent involvement of stakeholders is critical. Additionally, it is of the utmost importance to CMS to minimize data collection burden on providers; in the development of any hospice patient assessment tool, CMS will ensure that patient assessment data items are not duplicative or overly burdensome to providers, patients, caregivers, or their families.
We received multiple comments pertaining to a potential hospice patient assessment tool to collect quality, clinical and other data with the ability to be used to inform future payment refinement efforts. The following is a summary of the comments we received on this topic and our responses.
Commenters offered several suggestions for CMS to consider in moving forward with the development of a patient assessment tool. Suggestions focused on two main themes: (1) Considerations for the content of any patient assessment tool (2) considerations for the process used by CMS to develop and test a patient assessment tool. Beyond these two themes, commenters also listed other considerations, including cross-setting considerations (experience with other assessment tools and relationship to the IMPACT Act), burden and costs, use for future payment refinements, and general concerns.
Regarding considerations for the content of a patient assessment tool, overall, commenters emphasized the unique nature and care goals of hospice, urging CMS to bear in mind these complexities in the development of a patient assessment. Specifically, commenters stated that the patient assessment tool should reflect the holistic nature of hospice care delivery to the patient and their loved ones and should include physical, psychosocial, and spiritual components. Commenters also noted that the unit of care in hospice is the patient and family, and that the initial and ongoing assessment, as well as care planning and
In addition to comments about the nature and goals of hospice care, several commenters also had specific content suggestions for CMS to consider in the development of a patient assessment tool:
• Several commenters recommended that the assessment tool recognize the patient's right to refuse or defer offered services and the importance of an individualized plan of care.
• Several commenters recommended that the assessment tool accommodate care delivered in various settings, including nursing homes, assisted living facilities, hospitals, hospice facilities, and the patient's home.
• Several commenters recommended that the assessment tool allow for modified assessment of patients who are imminently dying to facilitate a focus on the urgent and immediate needs of the patient and family. Commenters noted that for imminently dying patients, the focus is the management of symptoms and the family's emotions, not necessarily a detailed medical history and physical assessment of the patient.
• Several commenters noted that the assessment tool should preserve the integrity of the hospice philosophy by allowing hospice interdisciplinary team members to individualize assessments and care based on their best clinical judgment. Additionally, commenters recommended that CMS not place overly restrictive limits on members of the interdisciplinary team that are permitted to complete the assessment tool. Commenters recommended that CMS allow several disciplines to contribute patient information and goals on the assessment, noting that this was a limitation of other assessment tools.
• One commenter recommended that CMS collect assessment data beyond the admission and discharge time points discussed in the proposed rule (81 FR 25528). The commenter noted the importance of measuring care throughout the entire stay, not just at admission and discharge.
• Commenters recommended that any outcome measure derived from the assessment be risk-adjusted.
• A couple of commenters suggested that any “Reason for Discharge” item(s) on the assessment tool differentiate the reason behind any live discharges (for example, revoked vs. moved out of service area).
• One commenter recommended CMS consider the International Classification of Function (ICF), in the development of a patient assessment tool. The commenter noted that the ICF provides a scientific basis for understanding health and health-related states as well as outcomes, related to both physical as well as social determinants, and could be a way to determine appropriate outcomes more quickly. Finally, the commenter noted that the ICF is already integrated into the ICD-10 and ICD-11 taxonomy internationally.
• Another commenter recommended that CMS align any new hospice assessment tool with the National Consensus Project for Quality Palliative Care Clinical Practice Guidelines for Quality Palliative Care.
Commenters had several suggestions regarding the process for development of any patient assessment tool. The majority of comments on the process for assessment tool development focused on systematically and comprehensively gathering input from hospice providers and other stakeholders with respect to what is appropriate and relevant to include in the assessment tool. Commenters offered specific suggestions of ways to involve the provider community, including CMS-convened technical expert panels (TEP) that include representation from hospices, physicians, and other members of the hospice Interdisciplinary Team (IDT). In addition to TEPs, one commenter suggested that CMS consider extending opportunities for input beyond TEPs and employ widespread processes for gathering provider input. Commenters also had suggestions for testing and refinement of a patient assessment tool. Commenters recommended piloting the tool with a wide variety of hospices, to ensure that the assessment tool is tested with variation in hospice size, rurality, state regulatory environments, and organization type (that is, hospital based, freestanding, those with inpatient facilities vs. those who contract for inpatient care, etc.). Commenters recommended a pilot testing process that is thorough and includes a dry-run period or phased-in implementation approach. Finally, commenters encouraged CMS to provide thorough and ongoing education and support for hospices as the patient assessment tool is implemented. Commenters specifically requested that educational materials include clear definitions of patient assessment items and data collection procedures.
Several commenters also discussed their experience with assessment tools in other care settings (for example, the OASIS in home health and the MDS in nursing homes). Some commenters expressed concerns about potential overreliance on existing assessment instrument items citing the difference in care goals between hospice and other post-acute care settings. These commenters emphasized the importance of creating an assessment tool tailored to the unique needs of hospice. On the other hand, commenters also urged CMS to create an assessment tool that is aligned and consistent with other assessment tools to facilitate care coordination and planning across the care continuum.
A few commenters offered considerations on potential burden and costs of a new assessment instrument. Commenters urged CMS to pursue efforts that would limit administrative burden, reduce redundancy, and ensure the use of definitions consistent with other assessment tools. Commenters noted that the assessment would likely be completed by different staff than those who are currently completing the HIS-Admission and HIS-Discharge records and that the assessment would likely be more time-intensive than the current HIS. Commenters urged CMS to consider increased costs to providers and to take into consideration the time and resources necessary to complete the assessment.
One commenter suggested that CMS—as appropriate—consider harmonizing measures from the IMPACT Act. The commenter noted that such harmonization would facilitate communication among providers and to measure the care of patient populations across setting measures. With respect to use of the patient assessment for future payment refinements, a few commenters noted the importance of rigorous testing of assessment items for inter-rater reliability and validity.
Beyond the support and suggestions offered, some commenters did raise concerns about a patient assessment tool. Commenters cautioned against a patient assessment tool that would lead to “checklist” assessments and undue restrictions on patient eligibility and the freedom to employ clinical judgment. Finally, one commenter had concerns about the flexibility of electronic medical record systems to capture
With respect to commenters' suggestions about the process for development of a patient assessment tool, we would again like to thank the hospice community for their detailed input and careful consideration. Again, we would like to assure the provider community that it is our intent to use a development process that is transparent and includes multiple opportunities for stakeholder input. Feedback from the provider community is vital to the development of a patient assessment tool that is meaningful and not unduly burdensome on providers. As noted by commenters and discussed in this rule, CMS plans to hold TEPs to inform the development, testing, and refinement of the patient assessment. CMS also plans to provide other opportunities for stakeholders to provide input through venues such as special open door forums and other regular HQRP communication channels. We are committed to a development process that will ensure rigorous and iterative testing of the patient assessment tool in hospices with varying organizational characteristics, patient populations, settings of care delivery, and levels of care. We recognize the emphasis that we will need to place on thorough testing and analysis of items for reliability and validity, particularly for purposes of any future payment refinements. Finally, we agree that ongoing training and education will be vital, and we will ensure access to regular HQRP education and outreach outlets, such as training webinars, manuals and access to various Helpdesks.
We also appreciate commenters' suggestions on cross-setting harmonization and for sharing their experience with assessment tools in other care settings. We would like to assure commenters that we recognize the unique nature of hospice care; it is not our intent to develop an assessment tool that inappropriately relies on items from existing tools, such as the Minimum Data Set (MDS) and Outcome and Information Assessment Information Set (OASIS). We will work diligently with the provider community to gather information on current assessment practices in hospice and to ensure that a hospice assessment tool would capture the goals of hospice care and be complementary to current clinical practice. Regarding the commenters' suggestion to harmonize assessment items and resulting quality measure with the IMPACT Act quality measures, we appreciate the commenter's suggestion and will take it under consideration for future measure and assessment development.
Finally, with respect to concerns raised by commenters about costs and administrative burden, as stated in the rule, it is our goal to minimize data collection burden on providers and ensure that patient assessment items are not duplicative or overly burdensome to providers, patients, or their families. We believe that regular, ongoing input from the provider community will aide in the development of an assessment that is not overly burdensome. We expect that development of the patient assessment will take into account the ongoing movement toward use of certified EHRs and other interoperable health IT across all patient settings. We expect that our consultations with providers and with technical experts including health IT experts will include assessing and taking advantage of opportunities to develop and deploy the instrument in a way that integrates with hospice work flows and with the potential of health IT to help providers improve care, communication and coordination across the interdisciplinary care team while reducing burden on clinicians and other care team members by streamlining data collection and management. In addition, any patient assessment tool would be submitted to OMB as required by the Paperwork Reduction Act, the purpose of which is to ensure that Federally-sponsored data collection efforts pose no undue burden on the public.
We appreciate the input from the public regarding the development of a patient assessment tool for hospice. We will continue to inform our stakeholders on any progress and proposals regarding the patient assessment tool through future rulemaking cycles.
In the FY 2015 Hospice Wage Index final rule (79 FR 50488), we finalized our proposal to allow hospices to request, and for CMS to grant, exemptions/extensions for the reporting of required HIS quality data when there are extraordinary circumstances beyond the control of the provider. When an extension/exemption is granted, a hospice will not incur payment reduction penalties for failure to comply with the requirements of the HQRP. For the FY 2016 payment determination and subsequent payment determinations, a hospice may request an extension/exemption of the requirement to submit quality data for a specified time period. In the event that a hospice requests an extension/exemption for quality reporting purposes, the hospice would submit a written request to CMS. In general, exemptions and extensions will not be granted for hospice vendor issues, fatal error messages preventing record submission, or staff error.
In the event that a hospice seeks to request an exemptions or extension for quality reporting purposes, the hospice must request an exemption or extension within 30 days of the date that the extraordinary circumstances occurred by submitting the request to CMS via email to the HQRP mailbox at
If a hospice is granted an exemption or extension, timeframes for which an exemption or extension is granted will be applied to the new timeliness requirement so such hospices are not penalized. If a hospice is granted an exemption, we will not require that the hospice submit any quality data for a given period of time. By contrast, if we grant an extension to a hospice, the hospice will still remain responsible for submitting quality data collected during the timeframe in question, although we will specify a revised deadline by which the hospice must submit these quality data.
This process does not preclude us from granting extensions/exemptions to hospices that have not requested them when we determine that an extraordinary circumstance, such as an act of nature, affects an entire region or locale. We may grant an extension/exemption to a hospice if we determine that a systemic problem with our data collection systems directly affected the ability of the hospice to submit data. If we make the determination to grant an extension/exemption to hospices in a region or locale, we will communicate this decision through routine CMS HQRP communication channels, including postings and announcements on the CMS HQRP Web site, MLN eNews communications, national provider association calls, and announcements on Open Door Forums and Special Open Door Forums.
National Implementation of the Hospice CAHPS® Survey started January 1, 2015 as stated in the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452). The CAHPS® Hospice Survey is a component of CMS' Hospice Quality Reporting Program that emphasizes the experiences of hospice patients and their primary caregivers listed in the hospice patients' records. Readers who want more information are referred to our extensive discussion of the Hospice Experience of Care Survey in the Hospice Wage Index FY 2015 final rule for a description of the measurements involved and their relationship to the statutory requirement for hospice quality reporting (79 FR 50450 also refer to 78 FR 48261).
The CAHPS® Hospice Survey is the first national hospice experience of care survey that includes standard survey administration protocols that allow for fair comparisons across hospices. Consistent with many other CMS CAHPS® surveys that are publicly reported on CMS Web sites, CMS will publicly report hospice data when at least 12 months of data are available, so that valid comparisons can be made across hospice providers in the United States, in order to help patients, family, friends, and caregivers choose the right hospice program.
The goals of the CAHPS® Hospice Survey are to:
• Produce comparable data on hospice patients' and caregivers' perspectives of care that allow objective and meaningful comparisons between hospices on domains that are important to consumers.
• Create incentives for hospices to improve their quality of care through public reporting of survey results.
• Hold hospice care providers accountable by informing the public about the providers' quality of care.
Details regarding CAHPS® Hospice Survey national implementation, and survey administration as well as participation requirements, exemptions from the survey requirement, hospice patient and caregiver eligibility criteria, fielding schedules, sampling requirements, and the languages in which is questionnaire, are available on the CAHPS® Web site,
To meet participation requirements for the FY 2019 APU, hospices must collect survey data on an ongoing monthly basis from January 2017 through December 2017 (inclusive). Data submission deadlines for the 2019 APU can be found in Table 17. The data must be submitted by the deadlines listed in Table 17 by the hospice's authorized approved CMS vendor.
Hospices provide lists of the patients who died under their care to form the sample for the Hospice CAHPS® Survey. We emphasize the importance of hospices providing complete and accurate information to their vendors in a timely manner. Hospices must contract with an approved Hospice CAHPS® Survey vendor to conduct the survey on their behalf. The hospice is responsible for making sure their vendor meets all data submission deadlines. Vendor failure to submit data on time will be the responsibility of the hospice.
Hospices that have fewer than 50 survey-eligible decedents/caregivers in the period from January 1, 2016 through December 31, 2016 are exempt from CAHPS® Hospice Survey data collection and reporting requirements for the FY 2019 payment determination. To qualify, hospices must submit an exemption request form. This form will be available in first quarter 2017 on the CAHPS® Hospice Survey Web site
CMS proposed that hospices that received their CCN after January 1, 2017 are exempted from the FY 2019 APU Hospice CAHPS® requirements due to newness. This exemption will be determined by CMS. The exemption is for 1 year only.
To meet participation requirements for the FY 2020 APU, hospices must collect survey data on an ongoing monthly basis from January 2018 through December 2018 (inclusive). Data submission deadlines for the 2020 APU can be found in Table 17. The data must be submitted by the deadlines in Table 17 by the hospice's authorized approved CMS vendor.
Hospices that have fewer than 50 survey-eligible decedents/caregivers in the period from January 1, 2017 through December 31, 2017 are exempt from CAHPS® Hospice Survey data collection and reporting requirements for the FY 2020 payment determination. To qualify, hospices must submit an exemption request form. This form will be available in first quarter 2018 on the CAHPS® Hospice Survey Web site
CMS proposed that hospices that received their CCN after January 1, 2018 are exempted from the FY 2020 APU Hospice CAHPS® requirements due to newness. This exemption will be determined by CMS. The exemption is for 1 year only.
The Affordable Care Act requires that beginning with FY 2014 and each subsequent fiscal year, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements for that fiscal year, unless covered by specific exemptions. Any such reduction will not be cumulative and will not be taken into account in computing the payment amount for subsequent fiscal years. In the FY 2015 Hospice Wage Index final rule, we added the CAHPS® Hospice Survey to the Hospice Quality Reporting Program requirements for the FY 2017 payment determination and determinations for subsequent years.
• To meet the HQRP requirements for the FY 2018 payment determination, hospices would collect survey data on a monthly basis for the months of January 1, 2016 through December 31, 2016 to qualify for the full APU.
• To meet the HQRP requirements for the FY 2019 payment determination, hospices would collect survey data on a monthly basis for the months of January 1, 2017 through December 31, 2017 to qualify for the full APU.
• To meet the HQRP requirements for the FY 2020 payment determination, hospices would collect survey data on a monthly basis for the months of January 1, 2018 through December 31, 2018 to qualify for the full APU.
Hospices are required to monitor their respective Hospice CAHPS® Survey vendors to ensure that vendors submit their data on time. The hospice CAHPS® data warehouse provides reports to vendors and hospices, including reports on the status of their data submissions. Details about the reports and emails received after data submission should be referred to the Quality Assurance Guidelines Manual. If a hospice does not know how to retrieve their reports, or lacks access to the reports, they should contact Hospice CAHPS® Technical Assistance at
In the FY 2017 payment determination and subsequent years, reporting compliance is determined by successfully fulfilling both the Hospice CAHPS® Survey requirements and the HIS data submission requirements. Providers would use the same process for submitting a reconsideration request that are outlined in section III.C.10 of this rule.
We received multiple comments pertaining to the Hospice CAHPS® Survey. The following is a summary of the comments we received on this topic and our responses.
The commenter also states that the survey is burdensome for bereaved families to complete. We thank the commenters for their comments; we have not received complaints from respondents regarding the survey being burdensome. Responses are voluntary and at the discretion of the person receiving the survey. If they find the survey too burdensome, they simply do not need to respond.
In the FY 2015 Hospice Wage Index final rule (79 FR 50496), we notified hospice providers on how to seek reconsideration if they received a noncompliance decision for the FY 2016 payment determination and subsequent years. A hospice may request reconsideration of a decision by CMS that the hospice has not met the requirements of the Hospice Quality Reporting Program for a particular period.
We clarified that any hospice that wishes to submit a reconsideration request must do so by submitting an email to CMS containing all of the requirements listed on the HQRP Web site at
In the past, only hospices found to be non-compliant with the reporting requirements set forth for a given payment determination received a notification from CMS of this finding along with instructions for requesting reconsideration in the form of a United States Postal Service (USPS) letter. In the FY 2016 Hospice Wage Index final rule (80 FR 47198), we stated that we would use the QIES CASPER reporting system as an additional mechanism to communicate to hospices regarding their compliance with the reporting requirements for the given reporting cycle. We will implement this additional communication mechanism via the QIES CASPER timeliness compliance reports referenced in section III.C.7e of this final rule. As stated in section III.C.7e of the rule, these QIES CASPER reports will be automated reports that hospices will be able to generate at any point in time to determine their preliminary compliance with HQRP requirements, specifically, the timeliness compliance threshold for the HIS. We believe the QIES CASPER timeliness compliance reports meet CMS's intent of developing a method to communicate as quickly, efficiently, and broadly as possible with hospices regarding their preliminary compliance with reporting requirements. We will continue to send notification of noncompliance via delivery of a letter via the United States Postal Service. Requesting access to the CMS systems is performed in 2 steps. Details are provided on the QIES Technical Support Office Web site at
We proposed to disseminate communications regarding the availability of hospice compliance reports in CASPER files through CMS HQRP communication channels, including postings and announcements on the CMS HQRP Web site, MLN eNews communications, national provider association calls, and announcements on Open Door Forums and Special Open Door Forums. We further proposed to publish a list of hospices who successfully meet the reporting requirements for the applicable payment determination on the CMS HQRP Web site
Under section 1814(i)(5)(E) of the Act, the Secretary is required to establish procedures for making any quality data submitted by hospices available to the public. Such procedures shall ensure that a hospice program has the opportunity to review the data that is to be made public for the hospice program prior to such data being made public. The Secretary shall report quality measures that relate to hospice care provided by hospice programs on the CMS Web site.
We recognize that public reporting of quality data is a vital component of a robust quality reporting program and are fully committed to developing the necessary systems for transparent public reporting of hospice quality data. We also recognize that it is essential that the data made available to the public be meaningful and that comparing performance between hospices requires that measures be constructed from data collected in a standardized and uniform manner. Hospices have been required to use a standardized data collection approach (HIS) since July 1, 2014. Data from July 1, 2014 onward is currently being used to establish the scientific soundness of the quality measures prior to the onset of public reporting of the 7 quality measures implemented in the HQRP. We believe it is critical to establish the reliability and validity of the quality measures prior to public reporting to demonstrate the ability of the quality measures to distinguish the quality of services provided. To establish reliability and validity of the quality measures, at least four quarters of data will be analyzed. Typically, the first 1 or 2 quarters of data reflect the learning curve of the facilities as they adopt standardized data collection procedures; these data often are not used to establish reliability and validity. We began data collection in CY 2014; the data from CY 2014 for Quarter 3 (Q3) was not used for assessing validity and reliability of the quality measures. We analyzed data collected by hospices during Quarter 4 (Q4) CY 2014 and Q1 through Q3 CY 2015. Preliminary analyses of HIS data show that all 7 quality measures that can be calculated using HIS data are eligible for public reporting (NQF #1634, NQF #1637, NQF #1639, NQF #1638, NQF #1641, modified NQF #1647, NQF #1617). Based on analyses conducted to establish reportability of the measures, 71 percent through 90 percent of all hospices would be able to participate in public reporting, depending on the measure. For additional details regarding analysis, we refer readers to the Measure Testing Executive Summary document available on the “Current Measures” section of the CMS HQRP Web site:
To inform which of the HIS measures are eligible for public reporting, CMS's measure development contractor, RTI International, examined the distribution of hospice-level denominator size for each quality measure to assess whether the denominator size is large enough to generate the statistically reliable scores necessary for public reporting. This goal of this analysis is to establish the minimum denominator size for public reporting, which is referred to as “reportability” analysis. Reportability analysis is necessary since small denominators may not yield statistically meaningful QM scores. Thus, for other quality reporting programs, such as Nursing Home Compare,
Based on reportability analysis and input from other stakeholders, we have determined that all 7 HIS measures are eligible for public reporting. Thus, we plan to publicly report all 7 HIS measures on a CMS Compare Web site for hospice agencies. For more details on each of the 7 measures, including information on measure background, justification, measure specifications, and measure calculation algorithms, we refer readers to the HQRP QM User's Manual, which is available on the downloads portion of the Current Measures CMS HQRP Web site:
Reportability analysis is typically conducted on a measure-by-measure basis. We would like to clarify that any new measure adopted as part of the HQRP will undergo reportability analysis to determine: (1) If the measure is eligible for public reporting; and (2) the data selection period and minimum denominator size for the measure. Results of reportability analyses conducted for new measures will be communicated through future rulemaking.
In addition, the Affordable Care Act requires that reporting be made public on a CMS Web site and that providers have an opportunity to review their data prior to public reporting. We are currently developing the infrastructure for public reporting and will provide hospices an opportunity to review their quality measure data prior to publicly reporting information about the quality of care provided by Medicare-certified hospice agencies throughout the nation. These quality measure data reports or “preview reports” will be made available in the CASPER system prior to public reporting and will offer providers the opportunity to review their quality measure data prior to public reporting on the CMS Compare Web site for hospice agencies. Under this process, providers would have the opportunity to review and correct data they submit on all measures that are derived from the Hospice Item Set. Reports would contain the provider's performance on each measure calculated based on HIS submission to the QIES ASAP system. The data from the HIS submissions would be populated into reports with all data that have been submitted by the provider. CMS will post preview reports with sufficient time for providers to be able to submit, review data, make corrections to the data, and view their data. Providers are encouraged to regularly evaluate their performance in an effort to ensure the most accurate information regarding their agency is reflected.
We also plan to make available additional provider-level feedback reports, which are separate from public reporting and will be for provider viewing only, for the purposes of internal provider quality improvement. As is common in other quality reporting programs, quality reports would contain feedback on facility-level performance on quality metrics, as well as benchmarks and thresholds. For the CY 2015 Reporting Cycle, several new quality reporting provider participation reports were made available in CASPER. Providers can access a detailed list and description of each of the 12 reports currently available to hospices on the QIES Web site, under the Training & Education Selections, CASPER Reporting Users Guide at
Furthermore, to meet the requirement for making such data public, we are developing a CMS Hospice Compare Web site, which will provide valuable information regarding the quality of care provided by Medicare-certified hospice agencies throughout the nation. Consumers would be able to search for all Medicare approved hospice providers that serve their city or zip code (which would include the quality measures and CAHPS® Hospice Survey results) and then find the agencies offering the types of services they need, along with provider quality information. Based on the efforts necessary to build the infrastructure for public reporting, we anticipate that public reporting of the eligible HIS quality measures on the CMS Compare Web site for hospice
Like other CMS Compare Web sites, the Hospice Compare Web site will, in time, feature a quality rating system that gives each hospice a rating of between 1 and 5 stars. Hospices will have prepublication access to their own agency's quality data, which enables each agency to know how it is performing before public posting of data on the Hospice Compare Web site. Public comments regarding how the rating system would determine a hospice's star rating and the methods used for calculations, as well as a proposed timeline for implementation will be announced via regular CMS HQRP communication channels, including postings and announcements on the CMS HQRP Web site, MLN eNews communications, provider association calls, and announcements on Open Door Forums and Special Open Door Forums. We will announce the timeline for development and implementation of the star rating system in future rulemaking.
Lastly, as part of our ongoing efforts to make healthcare more transparent, affordable, and accountable for all hospice stakeholders, the HQRP is prepared to post hospice data on a public data set, the Data.Medicare.gov Web site, and directory located at
Regarding commenters' concerns about the lack of variation in current HIS measure scores, the overall distribution and variability of the seven currently adopted HIS QMs is an indicator that most hospices are providing the required and recommended care to the majority of the patients around hospice admission, demonstrating overall high quality of care. However, the seven measures demonstrate room for improvement. Analysis conducted by our measure development contractor demonstrates that a low percentage of hospices have perfect scores for most measures and a small percentage of hospices have very low scores. We believe this is valuable and important information to communicate to consumers as well as to providers to motivate quality improvement. Additionally, we are working on the specific format for publicly reporting these 7 QMs and will take commenters' suggestions into consideration. We agree that given the skewed distribution, presenting hospice scores in formats like percentiles may provide misleading information. Presenting hospices' quality scores may provide information that is more straightforward for consumers and providers. Finally, input that we have received from hospice caregivers will also inform our strategy for public reporting of quality measure data. Our measure development contractor interviewed hospice caregivers about public display of quality data and what
With respect to the commenter's suggestion to risk adjust quality measures reported on the Hospice Compare Web site, we would like to point out that both the current HIS measure set (NQF #1634, NQF #1637, NQF #1639, NQF #1638, NQF #1617, NQF #1641 and NQF #1647) and Hospice CAHPS quality measures are currently under review by the National Quality Forum (NQF) for maintenance endorsement and endorsement, respectively. NQF criteria for review and endorsement includes consideration of risk adjustment. As stated in section III.C.3 of this rule, it is CMS's intent to implement endorsed quality measures, using the specifications as endorsed by the NQF.
In addition to modification and inactivation processes available in QIES ASAP, as we previously stated, we are currently developing the infrastructure to provide hospices with the opportunity to view their quality measure data via CASPER provider-level feedback reports. These internal provider-level feedback reports will provide hospices an initial opportunity to review QM
Finally, we will ensure providers have the opportunity to preview QM score data to be displayed on Hospice Compare, prior to public posting of the data. Prior to public reporting, quality measure data “preview” reports will be made available in CASPER system. Hospices will have a 30-day preview period prior to public display during which they can preview the performance information on their measures that will be made public. The “preview” reports will be made available using the Certification and Survey Provider Enhanced Reporting (CASPER) System because hospices are familiar with this system. In line with other PAC QRPs, hospices will have 30 days to review this information, beginning from the date on which they can access the preview report. Corrections to the underlying data would not be permitted during this time; however, hospices would be able to ask for a correction to their measure calculations during the 30-day preview period. If we determine that the measure, as it is displayed in the preview report, contains a calculation error, we would suppress the data on the public reporting Web site, recalculate the measure and publish the corrected rate at the time of the next scheduled public display date. This process is consistent with informal processes used in the Hospital IQR and other PAC programs. Technical details for how and when providers may contest their measure calculations, as well as the process for submitting a suppression request will be conveyed through the usual CMS HQRP communication channels.
We want to remind the provider community that the Medicare Care Choices Model (MCCM) is testing a new option for Medicare beneficiaries with certain advanced diseases to receive hospice-like support services from MCCM hospices while receiving care from other Medicare providers for their terminal condition. This 5 year model is being tested to encourage greater and earlier use of the Medicare and Medicaid hospice benefit to determine whether it can improve the quality of life and care received by Medicare beneficiaries, increase beneficiary, family, and caregiver satisfaction, and reduce Medicare or Medicaid expenditures. Participation in the model is limited to Medicare and dual eligible beneficiaries with advanced cancers, chronic obstructive pulmonary disease, congestive heart failure, and Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome who qualify for the Medicare or Medicaid hospice benefit and meet the eligibility requirements of the model. The model includes more than 130 hospices from 39 states across the country and is projected to serve 100,000 beneficiaries by 2020. The first cohort of MCCM participating hospices began providing services under the model in January 2016, and the second cohort will begin to provide services under the model in January 2018. The last patient will be accepted into the model 6 months before the December 31, 2020 model end date.
For more information, see the MCCM Web site:
Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of the following information collection requirements (ICRs).
Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the Secretary on quality measures specified by the Secretary. Such data must be submitted in a form, manner, and at a time specified by the Secretary. In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in compliance with section 1814(i)(5)(C) of the Act, we finalized the specific collection of data items that support the following six NQF-endorsed measures and one modified measure for hospice:
• NQF #1617 Patients Treated with an Opioid who are Given a Bowel Regimen,
• NQF #1634 Pain Screening,
• NQF #1637 Pain Assessment,
• NQF #1638 Dyspnea Treatment,
• NQF #1639 Dyspnea Screening,
• NQF #1641 Treatment Preferences,
• NQF #1647 Beliefs/Values Addressed (if desired by the patient) (modified).
Data for the aforementioned 7 measures is collected via the HIS. Data collection for the 7 NQF-endorsed measures via the HIS V1.00.0 was approved by the Office of Management and Budget April 3, 2014 (OMB control number 0938-1153—Hospice Quality Reporting Program). As outlined in this final rule, we continue data collection for these 7 NQF-endorsed measures.
In this final rule, we finalized the implementation of two new measures. The first measure is the Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission. Seven individual care processes will be captured in this composite measure, which includes the six NQF-endorsed quality measures and one modified NQF-endorsed quality measure currently implemented in the HQRP. Thus, the Hospice and Palliative Care Composite Process quality measure will use the current HQRP quality measures as its components. The data source for this measure will be currently implemented HIS items that are currently used in the calculation of the 7 component measures. Since the measure is a composite measure created from components, which are currently adopted HQRP measures, no new data collection will be required; data for the composite measure will come from existing items from the existing 7 HQRP component measures. CMS will begin calculating this measure using existing data items, beginning April 1, 2017; this means patient admissions occurring on or after April 1, 2017 will be included in the composite measure calculation.
The second measure is the Hospice Visits when Death is Imminent Measure Pair. Data for this measure will be collected via the existing data collection mechanism, the HIS. Four new items will be added to the HIS-Discharge record to collect the necessary data elements for this measure. CMS expects that data collection for this quality measure via the 4 new HIS items will begin no earlier than April 1, 2017. Thus, under current CMS timelines, hospice providers will begin data collection for this measure for patient admissions and discharges occurring on or after April 1, 2017.
The HIS V2.00.0 will fulfill the data collection requirements for the 7 currently adopted NQF measures and the 2 new measures. The HIS V2.00.0 contains:
• All items from the HIS V1.00.0, which are necessary to calculate the 7 adopted NQF measures (and thus the composite measure), plus the HIS V1.00.0 administrative items necessary for patient identification and record matching,
• One new item for measure refinement of the existing measure NQF #1637 Pain Assessment,
• New items to collect data for the Hospice Visits when Death is Imminent measure pair,
• New administrative items for patient record matching and future public reporting of hospice quality data.
Hospice providers will submit an HIS-Admission and an HIS-Discharge for each patient admission. Using HIS data for assessments submitted October 1, 2014 through September 30, 2015, we have estimated that there will be approximately 1,248,419 discharges across all hospices per year and, therefore, we would expect that there should be 1,248,419 Hospice Item Sets (consisting of one admission and one discharge assessment per patient) submitted across all hospices yearly. Over a three-year period, we expect 3,745,257 Hospice Item Sets across all hospices. There were 4,259 certified hospices in the U.S. as of January 2016;
The Hospice Item Set consists of an admission assessment and a discharge assessment. As noted above, we estimate that there will be 1,248,419 hospice admissions across all hospices per year. Therefore, we expect there to be 2,496,838 Hospice Item Set assessment submissions (admission and discharge assessments counted separately) submitted across all hospices annually, which is 208,070 across all hospices monthly, or 7,490,514 across all hospices over three years. We further estimate that there will be 586 Hospice Item Set submissions by each hospice annually, which is approximately 49 submissions monthly or 1,759 submissions over three years.
For the Admission Hospice Item Set, we estimate that it will take 14 minutes of time by a clinician, such as a Registered Nurse, at an hourly wage of $67.10
We estimate that the total nursing time required for completion of both the admission and discharge assessments is 23 minutes at a rate of $67.10 per hour. The cost across all hospices for the nursing/clinical time required to complete both the admission and discharge Hospice Item Sets is estimated to be $32,111,417 annually, or $96,334,252 over 3 years, and the cost to each individual hospice is estimated to be $7,539.66 annually, or $22,618.98 over 3 years. The estimated time burden to hospices for a medical data entry clerk to complete the admission and discharge Hospice Item Set assessments is 10 minutes at a rate of $32.24 per hour. The cost for completion of the both the admission and discharge Hospice Item Sets by a medical data entry clerk is estimated to be $6,708,171 across all hospices annually, or $20,124,514 across all hospices over 3 years, and $1,575.06 to each hospice annually, or $4,725.17 to each hospice over 3 years.
The total combined time burden for completion of the Admission and Discharge Hospice Item Sets is estimated to be 33 minutes. The total cost across all hospices is estimated to be $38,819,589 annually or $116,458,766 over 3 years. For each individual hospice, this cost is estimated to be $9,114.72 annually or $27,344.16 over 3 years. See Table 18 for breakdown of burden and cost by assessment form.
We have submitted a copy of this final rule to OMB for its review of the rule's information collection and recordkeeping requirements. These requirements are not effective until they have been approved by the OMB.
To obtain copies of the supporting statement and any related forms for the collections discussed above, please visit CMS's Web site at
We invited public comments on these potential information collection requirements. If you wish to comment, please submit your comments electronically as specified in the
We are aware of the effort hospices and vendors will have to make to prepare for implementation of the HIS. The HIS pilot showed that implementing the HIS is feasible and that hospices are most likely already collecting the information needed to complete the HIS data items. A draft version of the HIS technical data specifications was posted on the CMS Web site on May 19, 2016. Thus, vendors have been provided with more than adequate time to develop products for their clients. We expect vendors to begin reviewing the draft technical data specifications as soon as they are posted. We encourage vendors to submit questions and comments to the HIS technical email box:
Under current specifications for NQF #1634 and NQF #1637, if a patient is
Thus, directly in response to feedback from providers, CMS added the J0905 Pain Active Problem item to the HIS V2.00.0. We believe this addition will actually reduce burden on providers since it is better aligned with current clinical practice. The addition of J0905 also better aligns items in the pain section with items in Section J: Respiratory Status. CMS plans to analyze data from J0905 to inform future potential refinements to the NQF-endorsed pain quality measures.
ICR-related comments are due October 4, 2016.
We have examined the impacts of this final 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 (UMRA, March 22, 1995; Pub. L. 104-4), 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This final rule has been designated as economically significant under section 3(f)(1) of Executive Order 12866 and thus a major rule under the Congressional Review Act. Accordingly, we have prepared a regulatory impact analysis (RIA) that, to the best of our ability, presents the costs and benefits of the rulemaking. This final rule was also reviewed by OMB.
This final rule meets the requirements of our regulations at § 418.306(c), which requires annual issuance, in the
We estimate that the aggregate impact of this final rule will be an increase of $350 million in payments to hospices, resulting from the hospice payment update percentage of 2.1 percent. The impact analysis of this final rule represents the projected effects of the changes in hospice payments from FY 2016 to FY 2017. Using the most recent data available at the time of rulemaking, in this case FY 2015 hospice claims data, we apply the current FY 2016 wage index and labor-related share values to the level of care per diem payments and SIA payments for each day of hospice care to simulate FY 2016 payments. Then, using the same FY 2015 data, we apply the FY 2017 wage index and labor-related share values to simulate FY 2017 payments. Certain events may limit the scope or accuracy of our impact analysis, because such an analysis is susceptible to forecasting errors due to other changes in the forecasted impact time period. The nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon hospices.
The FY 2017 hospice payment impacts appear in Table 19. We tabulate the resulting payments according to the classifications in Table 19 (for example, facility type, geographic region, facility ownership), and compare the difference between current and proposed payments to determine the overall impact.
The first column shows the breakdown of all hospices by urban or rural status, census region, hospital-based or freestanding status, size, and type of ownership, and hospice base. The second column shows the number of hospices in each of the categories in the first column.
The third column shows the effect of the annual update to the wage index. This represents the effect of using the FY 2017 hospice wage index. The aggregate impact of this change is zero percent, due to the hospice wage index standardization factor. However, there are distributional effects of the FY 2017 hospice wage index.
The fourth column shows the effect of the hospice payment update percentage for FY 2017. The 2.1 percent hospice payment update percentage for FY 2017 is based on an estimated 2.7 percent inpatient hospital market basket update, reduced by a 0.3 percentage point productivity adjustment and by a 0.3 percentage point adjustment mandated by the Affordable Care Act, and is constant for all providers.
The fifth column shows the effect of all the changes on FY 2017 hospice payments. It is projected that aggregate payments will increase by 2.1 percent, assuming hospices do not change their service and billing practices in response.
As illustrated in Table 19, the combined effects of all the proposals vary by specific types of providers and by location. For example, due to the changes in this rule, the estimated impacts on FY 2017 payments range from a 1.1 percent increase for hospices providing care in the rural West North Central region to a 2.8 percent increase for hospices providing care in the rural Pacific region.
Since the hospice payment update percentage is determined based on statutory requirements, we did not consider not updating hospice payment rates by the payment update percentage. The 2.1 percent hospice payment update percentage for FY 2017 is based on a 2.7 percent inpatient hospital market basket update for FY 2017, reduced by a 0.3 percentage point productivity adjustment and by an
We considered not adopting a hospice wage index standardization factor. However, as discussed in section III.C.1 of this final rule, we believe that adopting a hospice wage index standardization factor would provide a safeguard to the Medicare program, as well as to hospices, because it will mitigate changes in overall hospice expenditures due to annual fluctuations in the hospital wage data from year-to-year by ensuring that hospice wage index updates and revisions are implemented in a budget neutral manner. We estimate that if the hospice wage index standardization factor is not finalized, total payments in a given year would increase or decrease by as much as 0.3 percent or $50 million.
As required by OMB Circular A-4 (available at
We estimate that aggregate payments to hospices in FY 2017 would increase by $350 million, or 2.1 percent, compared to payments in FY 2016. We estimate that in FY 2017, hospices in urban and rural areas would experience, on average, a 2.1 percent and a 2.0 percent increase, respectively, in estimated payments compared to FY 2016. Hospices providing services in the urban Pacific and rural Pacific regions would experience the largest estimated increases in payments of 2.7 percent and 2.8 percent, respectively. Hospices serving patients in rural areas in the West North Central region would experience the lowest estimated increase of 1.1 percent in FY 2017 payments.
The RFA requires agencies to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. The great majority of hospitals and most other health care providers and suppliers are small entities by meeting the Small Business Administration (SBA) definition of a small business (in the service sector, having revenues of less than $7.5 million to $38.5 million in any 1 year), or being nonprofit organizations. For purposes of the RFA, we consider all hospices as small entities as that term is used in the RFA. HHS's practice in interpreting the RFA is to consider effects economically “significant” only if they reach a threshold of 3 to 5 percent or more of total revenue or total costs. The effect of the final FY 2017 hospice payment update percentage results in an overall increase in estimated hospice payments of 2.1 percent, or $350 million. Therefore, the Secretary has determined that this final rule will not create a significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule 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 of a metropolitan statistical area and has fewer than 100 beds. This final rule only affects hospices. Therefore, the Secretary has determined that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 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 2016, that threshold is approximately $146 million. This final rule is not anticipated to have an effect on State, local, or tribal governments, in the aggregate, or on the private sector of $146 million or more.
Executive Order 13132, Federalism (August 4, 1999) requires an agency to provide federalism summary impact statement when it promulgates a proposed rule (and subsequent final rule) that has federalism implications and which imposes substantial direct requirement costs on State and local governments which are not required by statute. We have reviewed this final rule under these criteria of Executive Order 13132, and have determined that it will not impose substantial direct costs on state or local governments.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of proposed rulemaking (NOPR) and announcement of public meeting.
The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including battery chargers. In this notice, the U.S. Department of Energy (DOE) proposes new energy conservation standards for uninterruptible power supplies, a class of battery chargers, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.
Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the
The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 6E-069, 1000 Independence Avenue SW., Washington, DC 20585.
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No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (“Public Participation”).
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to
EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standard. Interested persons may contact the Division at
The docket Web page can be found at:
For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact Appliance and Equipment Standards Program staff at (202) 586-6636 or by email:
Title III, Part B
Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1))
In accordance with these and other statutory provisions discussed in this document, DOE proposes new energy conservation standards for uninterruptible power supplies (hereafter referred to as “UPSs”), a class of battery chargers. The proposed standards, which are expressed in average load adjusted efficiency, are shown in Table I.1.
These proposed standards, if adopted, would apply to all UPSs listed in Table I.1 and manufactured in, or imported into, the United States starting on and after the date two years after the publication of the final rule for this rulemaking.
Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of UPSs, as measured by the average life-cycle cost (LCC) savings and the simple payback period (PBP).
DOE's analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document.
The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the reference year through the end of the analysis period (2016 to 2048). Using a real discount rate of 6.1 percent, DOE estimates that the INPV for manufacturers of UPSs in the case without standards is $2,555 million in 2015$. Under the proposed standards, DOE expects that manufacturers may lose up to 23.4 percent of this INPV, which is approximately $598 million. Additionally, based on DOE's interviews with the manufacturers of UPSs, DOE does not expect significant impacts on manufacturing capacity or loss of employment for the industry as a whole to result from the proposed standards for UPSs.
DOE's analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this document.
DOE's analyses indicate that the proposed energy conservation standards for UPSs would save a significant amount of energy. Relative to the case without new standards, the lifetime energy savings for UPSs purchased in the 30-year period that begins in the anticipated year of compliance with the new standards (2019-2048) amount to 1.18 quadrillion British thermal units (Btu), or quads.
The cumulative net present value (NPV) of total consumer costs and savings of the proposed standards for UPSs ranges from $1.87 billion (at a7-percent discount rate) to $4.40 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for UPSs purchased in 2019-2048.
In addition, the proposed standards for UPSs are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 72.0 million metric tons (Mt)
The value of the CO
Table I.3 summarizes the national economic benefits and costs expected to result from the proposed standards for UPSs.
The benefits and costs of the proposed standards, for UPSs sold in 2019-2048, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of (1) the national economic value of the benefits in reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the value of the benefits of CO
Although the values of operating cost savings and CO
Estimates of annualized benefits and costs of the proposed standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO
DOE's analysis of the national impacts of the proposed standards is described in sections IV.H, IV.K, and IV.L of this document.
DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that UPSs achieving these standard levels are already commercially available for all product classes covered by this proposal. Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed standards to the Nation (energy savings, positive NPV of consumer benefits, consumer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumers).
DOE also considered more-stringent energy efficiency levels as potential standards, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more-stringent energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this notice that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part.
The following section briefly discusses the statutory authority underlying this proposed rule, as well as some of the relevant historical background related to the establishment of standards for battery chargers. DOE's regulations define “battery charger” as a device that charges batteries for consumer products, including battery chargers embedded in other consumer products. 10 CFR 430.2.
Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (codified as 42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances (collectively referred to as “covered products”), which includes battery chargers.
Section 309 of the Energy Independence and Security Act of 2007 (“EISA 2007”) amended EPCA by directing DOE to prescribe, by rule, definitions and test procedure for the power use of battery chargers (42 U.S.C. 6295(u)(1)), and to issue a final rule that prescribes energy conservation standards for battery chargers or classes of battery chargers or determine that no energy conservation standard is technologically feasible and economically justified. (42 U.S.C. 6295(u)(1)(E)).
Pursuant to EPCA, DOE's energy conservation program for covered products consists essentially of four parts: (1) Testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE implements the remainder of the program. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedure for battery chargers appears at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix Y.
DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including battery chargers. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and (3)(B)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard: (1) For certain products, including battery chargers, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)and (B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (Secretary) considers relevant.
Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of product that has the same function or intended use, if DOE determines that products within such group: (A) Consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate.
Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a) through (c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d)).
Finally, pursuant to the amendments contained in EISA 2007, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)and (B))
In a final rule published on June 13, 2016, DOE prescribed the current energy conservation standards for battery chargers manufactured on and after June 13, 2018. 81 FR 38266. These standards, which do not cover UPSs, are set forth in DOE's regulations at 10 CFR 430.32 and are repeated in Table II.1.
DOE originally proposed energy conservation standards for battery chargers including UPSs in the battery charger energy conservation standards NOPR published on March 27, 2012 (March 2012 NOPR). In this NOPR, DOE proposed to test all covered battery chargers, including UPSs, using the battery charger test procedure finalized on June 1, 2011 and to regulate them using a unit energy consumption (“UEC”) metric. See 77 FR 18478.
DOE issued a battery charger energy conservation standards supplemental notice of proposed rulemaking (“SNOPR”) to propose revised energy standards for battery chargers on September 1, 2015. See 80 FR 52850. This notice did not propose standards for UPSs because of DOE's intention to regulate UPS as part of the separate rulemaking for computer and battery backup systems. DOE also issued a battery charger test procedure NOPR on August 6, 2015, which proposed to exclude backup battery chargers, including UPSs, from the scope of the battery charger test procedure. See 80 FR 46855. DOE held a public meeting on September 15, 2015 to discuss both of these notices.
During 2014, DOE explored whether to regulate UPSs as “computer systems.” See,
Additionally, DOE received a number of stakeholder comments on the August 2015 battery charger test procedure NOPR and the September 2015 battery charger energy conservation standard SNOPR regarding regulation of UPSs. After considering these comments, DOE reconsidered its position and found that since a UPS meets the definition of a battery charger, it is more appropriate to regulate UPSs as part of the battery charger rulemaking, rather than the computers rulemaking. While the changes proposed in the August 2015 battery charger test procedure NOPR and the September 2015 energy conservation standard SNOPR were finalized on May 20, 2016 (81 FR 31827) and June 13, 2016 (81 FR 38266), respectively, DOE continues to conduct rulemaking activities to consider test procedures and energy conservations standards for UPSs as part of ongoing and future battery charger rulemaking proceedings. To that end, DOE published a notice of proposed rulemaking on May 19, 2016 to amend the battery charger test procedure to include specific testing requirements for UPSs (“UPS test procedure NOPR”). See 81 FR 31542. DOE is now proposing energy conservation standards for UPSs as part of the battery charger regulations in this NOPR.
DOE developed this proposal after considering verbal and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters.
DOE recently published the UPS test procedure NOPR on May 19, 2016. See 81 FR 31542. DOE advises all stakeholders to review that proposal.
In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially-available products or in working prototypes to be technologically feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i)
After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). Additionally, it is DOE policy not to include in its analysis any proprietary technology that is a unique pathway to achieving a certain efficiency level. Section IV.B of this notice discusses the results of the screening analysis for UPSs, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR technical support document (“TSD”).
When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for UPSs, using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C of this proposed rule and in chapter 5 of the NOPR TSD.
For each trial standard level (TSL), DOE projected energy savings from application of the TSL to UPSs purchased in the 30-year period that begins in the year of compliance with the proposed standards (2019-2048).
DOE used its national impact analysis (NIA) spreadsheet model to estimate national energy savings (NES) from potential amended or new standards for UPSs. The NIA spreadsheet model (described in section IV.H of this notice) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. Based on the site energy, DOE calculates NES in terms of primary energy savings at the site or at power plants, and also in terms of full-
To adopt any new or amended standards for a covered product, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals for the District of Columbia Circuit, in
As noted above, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I) through (VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking.
In determining the impacts of a potential amended standard on manufacturers, DOE conducts a manufacturer impact analysis (MIA), as discussed in section IV.J. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) industry net present value (INPV), which values the industry on the basis of expected future cash flows, (2) cash flows by year, (3) changes in revenue and income, and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the changes in LCC and payback period (PBP) associated with new standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be disproportionately affected by a standard.
EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new standards. DOE's LCC and PBP analysis is discussed in further detail in section IV.F.
Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.C, DOE uses the NIA spreadsheet models to project national energy savings.
In establishing product classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this NOPR would not reduce the utility or performance of the products under consideration in this rulemaking.
EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide
DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity, as discussed in section IV.M.
The proposed standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases (GHGs) associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K; the emissions impacts are reported in section V.B.6 of this NOPR. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L.
In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent interested parties submit any relevant information regarding economic justification that does not fit into the other categories described above, DOE could consider such information under “other factors.”
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F.9 of this proposed rule.
This section addresses the analyses DOE has performed for this rulemaking with regard to UPSs. Separate subsections address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments forecasts and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (GRIM), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE Web site for this rulemaking:
DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include: (1) A determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends, and (6) technologies or design options that could improve the energy efficiency of UPSs. The key findings of DOE's market assessment are summarized below. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment.
In the May 2016 UPS test procedure NOPR, DOE proposed the definition of UPS from section 3.1.1 of IEC 62040-3 Edition. 2.0, “Uninterruptible power systems (UPS)—Method of specifying the performance and test requirements”, March 2011 (IEC 62040-3 Ed. 2.0). See 81 FR 31542.
DOE also proposed to include definitions for voltage and frequency dependent (VFD), voltage independent (VI), and voltage and frequency independent (VFI) UPS architectures based on the definitions from section 1.0 of ENERGY STAR UPS Version 1.0, “ENERGY STAR Program Requirements for Uninterruptible Power Supplies,” Rev. July 2012 (ENERGY STAR UPS V. 1.0) to differentiate between different UPS load ratings. The proposed definitions are as follows:
“Uninterruptible power supply or UPS means a combination of convertors, switches and energy storage devices (such as batteries), constituting a power system for maintaining continuity of load power in case of input power failure.”
“Voltage and frequency dependent UPS or VFD UPS means a UPS that produces an AC output where the output voltage and frequency are dependent on the input voltage and frequency. This UPS architecture does not provide corrective functions like those in voltage independent and voltage and frequency independent systems.”
“Voltage independent UPS or VI UPS means a UPS that produces an AC output within a specific tolerance band that is independent of under-voltage or over-voltage variations in the input voltage. The output frequency of a VI
“Voltage and frequency independent UPS or VFI UPS means a UPS that produces an AC output voltage and frequency that is independent of input voltage and frequency variations and protects the load against adverse effects from such variations without depleting the stored energy source. The input voltage and frequency variations through which the UPS must remain in Normal Mode are as follows:
DOE also specified in the May 2016 UPS test procedure NOPR that only the devices that meet the definition of a UPS as outlined above and have an AC output will be subject to the testing requirements proposed in the battery charger test procedure NOPR. See 81 FR 31542. For this rulemaking, DOE proposes to maintain the scope of coverage as defined by its current proposal for the battery charger test procedure.
When evaluating and establishing energy conservation standards, DOE often divides covered products into classes by the type of energy used, the capacity of the product, or any other performance-related feature that justifies different standard levels, such as features affecting consumer utility. (42 U.S.C. 6295(q)) DOE then conducts its analysis and considers establishing or amending standards to provide separate standard levels for each product class. DOE has created three product classes to analyze UPSs as follows: Product Class 10a (VFD UPSs), Product Class 10b (VI UPSs), and Product Class 10c (VFI UPSs). UPSs are tested at different load ratings and a normal mode average efficiency rating is calculated. This is based on ENERGY STAR UPSs. Within UPSs, VFD, VI, and VFI UPSs are different product classes based on the UPS's ability to filter and correct the incoming power against faults such as over and under-voltage conditions, noise, harmonic distortions and instability in the mains frequency. These product classes are VFD for units that do not provide any corrective functions, VI for units capable of correcting only the voltage and VFI for units that can correct the voltage as well as the frequency when they are outside specifications. In addition to providing such corrective functions, devices in these three product classes offer greater utility to sensitive loads by reducing the transfer time from utility power to the internal battery in the event of a power disruption. DOE recognizes that these additional utilities as well as increasing device capacity come at the cost of efficiency. DOE therefore proposes individual standards for each product class that scale with rated output power. This is consistent with ENERGY STAR Version 1.0, “ENERGY STAR Program Requirements for Uninterruptible Power Supplies,” Rev. July 2012 (ENERGY STAR UPS V. 1.0) and IEC 62040-3 Edition 2.0. Additional details on DOE's assessment of UPS technologies can be found in chapter 3 of the NOPR TSD.
In the July 2014 computer and battery backup systems (computer systems) framework document, DOE identified three technology options for UPSs that would be expected to improve the efficiency of UPSs. These technology options are: Semiconductor improvements, digital signal processing and space vector modulation, and transformer-less UPS topologies.
DOE's further research into space vector modulation technology for UPSs has shown that it may have limited advantage in the scope of this rule and is intended primarily for higher power applications. Therefore, DOE did not consider this technology.
DOE requests comment on the potential technology options identified for improving the efficiency of UPSs (see section VII.E).
After identifying all potential technology options for improving the efficiency of UPSs, DOE performed the screening analysis (see section IV.B of this document and chapter 4 of the NOPR TSD) on these technologies to determine which to consider further in the analysis and which to eliminate.
DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:
(1)
(2)
(3)
(4)
If DOE determines that a technology, or a combination of technologies, fails to meet one or more of the above four criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology in this rulemaking are discussed below.
Transformer-less UPS designs offer some of the highest efficiencies in the industry with lowered weight, wider input voltage tolerance, near unity input power factor, reduced harmonic distortion and need for components that mitigate electromagnetic interference (EMI) generated by the device. However, interviews with manufacturers have shown this to be a limited access technology with select manufacturers holding the intellectual property required for effective implementation. DOE therefore does not intend to consider this technology for this rule.
Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.A.2 met all four screening criteria to be examined further as design options in DOE's NOPR analysis. In summary, DOE did not screen out the following technology options: Use of materials with high magnetic permeability such as Sendust for the inductor core and Litz wiring in inductor coils, silicon carbide, gallium arsenide and other wide band gap semiconductors, capacitors with low ESR, PCBs with higher copper content and variable speed fan control.
DOE determined that these technology options are technologically feasible because they are being used or have previously been used in commercially-available products or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria. For additional details, see chapter 4 of the NOPR TSD.
DOE requests comment on its screening analysis used to select the most viable options for consideration in setting this proposed standards (see section VII.E).
In the engineering analysis, DOE establishes the relationship between the manufacturer production cost (MPC) and improved UPS efficiency. This relationship serves as the basis for cost-benefit calculations for individual consumers, manufacturers, and the Nation. DOE typically structures the engineering analysis using one of three approaches: (1) Design option, (2) efficiency level, or (3) reverse engineering (cost assessment). The design-option approach involves adding the estimated cost and associated efficiency of various efficiency-improving design changes to the baseline product to model different levels of efficiency. The efficiency-level approach uses estimates of costs and efficiencies of products available on the market at distinct efficiency levels to develop the cost-efficiency relationship. The reverse-engineering approach involves testing products for efficiency and determining cost from a detailed bill of materials (BOM) derived from reverse engineering representative products. The efficiency ranges from that of the least-efficient UPS sold today (
DOE used a combination of the design-option and efficiency-level approach when determining the efficiency curves for UPSs. UPSs are composed of a single highly integrated PCB consisting of control and power conversion circuitry without any interchangeable components. The efficiency-level approach therefore is more suited to creating the cost-efficiency relationship since components cannot be removed to understand their impact on overall power consumption. However, DOE did use the design-option approach to determine the maximum technologically feasible EL because these products are not available on the market currently.
DOE began its analysis by completing a comprehensive study of the market for units that are in scope. A review of retail sales data, the ENERGY STAR qualified product list of compliant devices and manufacturer interviews aided DOE in identifying the most prevalent units in the market as well as those that are the least and most expensive and efficient. DOE then purchased units for in-house efficiency testing according to the May 2016 UPS test procedure NOPR. This testing allowed DOE to choose representative units and create multiple ELs for each product class.
In taking the hybrid efficiency-level and design option approach, DOE tested multiple units of the same product class striving to ensure variations between successive units (
Individual ELs for a UPS product class were created by curve-fitting and extrapolating the efficiency values of a single test unit known as the representative unit for that particular EL. Each of the ELs are labeled EL 0 through EL 3 and reflect increasing efficiency due to technological advances. EL 0 represents baseline performance, EL 1 is the minimum required efficiency to be ENERGY STAR compliant, EL 2 is the best technology currently available in the market and EL 3 is the maximum efficiency theoretically achievable. As such, the representative unit for EL 0 was the least efficient unit tested by DOE with EL 1 and EL 2 being represented by the least and most efficient ENERGY STAR unit respectively. While DOE derived EL 0 through EL 2 via testing, DOE created EL 3 from data obtained during manufacturer interviews.
The proposed standard for UPSs varies based on its maximum output power rating. The standard is a set of curve-fit equations. Figure IV.1 through Figure IV.3 are graphical representations of the ELs for VFD UPS, VI UPS and VFI UPS types respectively. Each EL is subdivided into power ranges for simplicity and is a piecewise approximation of the units overall efficiency across the entire power range as shown in the figures. Chapter 5 of the NOPR TSD has additional detail on the curve-fit equations for each EL and UPS product class.
DOE requests comment on the ELs selected for each product class for its analysis (see section VII.E).
For UPSs, DOE developed an average manufacturer and distribution markups for ELs by examining the annual Securities and Exchange Commission (SEC) 10-K reports filed by publicly-traded UPS manufacturers and distribution chains and further verified during stakeholder interviews. DOE used these validated markups to convert consumer prices into manufacturer selling prices (MSPs) and then into MPCs.
Table I.3 summarizes national economic costs expected to result from the proposed standards.
In general, DOE's cost analysis of representative units demonstrated a direct correlation between MPC and average load adjusted efficiency (see Figure 5.5.1 through 5.5.3 in chapter 5 of the Technical Support Document). However, the one exception to this correlation was the EL 1 representative unit for VFD UPSs. This representative unit has a higher output power rating and average load adjusted efficiency, but a lower MPC compared to the EL 0 representative unit of the same product class, resulting in a negative total incremental installed cost of $139 million and $253 million at seven and three percent discount rates, respectively.
In addition to the two representative units discussed here, DOE has found other VFD UPSs that demonstrate this negative correlation between MPC and average load adjusted efficiency between EL 0 and EL 1.
DOE believes that this exception to the otherwise direct correlation between MPC and average load adjusted efficiency of UPSs has several possible explanations. For the VFD UPSs in scope of this rulemaking, DOE believes consumers may typically be more concerned with the reliability of the protection the product provides, than its energy efficiency. Despite the presence of less expensive and more efficient units, DOE believes less efficient legacy units continue to be sold in the marketplace because consumers are familiar with these models and trust the level of protection and safety they offer even if more energy efficient UPS models with similar functionality and dependability are available at lower prices. Additionally, an unproven model that is more efficient yet less expensive may be perceived by consumers as less reliable. Therefore, UPS manufacturers may not have an incentive to improve the design of UPS models that have established a reputation of being reliable. It is also worth noting that the difference in MSP between the VFD UPS EL 0 and EL 1 representative units is $5.10 and while this can be significant on its own, it may only be a small fraction of the cost of the connected equipment that it is protecting or the potential loss in productivity if said connected equipment were to lose power. DOE believes this is one of the reasons why devices at EL 0 continue to exist in the market place at a price higher than more efficient EL 1 models.
However, negative compliance costs are unexpected in an economic theory that assumes a perfect capital market with perfect rationality of agents having complete information. In such a market, because more efficient UPSs save consumers money on operating costs compared to the baseline product, consumers would have an incentive to purchase them even in the absence of standards. For these reasons, DOE requests comment on its understanding of why less efficient UPSs continue to exist in the market place at a price higher than more efficient units and the impact that energy conservation standards for UPSs will have on the costs and efficiencies of existing UPS models, including various aspects of the inputs to the installed cost analysis, such as assumptions about consumers' response to first cost versus long-term operating cost, assumptions for manufacturer capital and product conversion costs, and other factors.
The markups analysis develops appropriate markups (
For retailers, DOE developed separate markups for baseline products (baseline markups) and for the incremental cost of more-efficient products (incremental markups). Incremental markups are coefficients that relate the change in the MSP of higher-efficiency models to the change in the retailer sales price. DOE relied on economic data from the U.S. Census Bureau
The manufacturer markups, which convert MSPs to MPCs are calculated as part of the MIA and are not presented in the markups analysis. DOE developed average manufacturer markups by examining the annual SEC 10-K reports filed by publicly traded UPS manufacturers then refining these estimates based on manufacturer feedback.
Chapter 6 of the NOPR TSD provides details on DOE's development of markups for UPSs.
The purpose of the energy use analysis is to determine the annual energy consumption of UPSs at different efficiencies in representative U.S. single-family homes, multi-family residences, and commercial buildings, and to assess the energy savings potential of increased UPS efficiency. The energy use analysis estimates the range of energy use of UPSs in the field (
To develop energy use estimates, DOE multiplied UPS power loss as a function of rated output power, as derived in the engineering analysis, by annual operating hours. DOE assumed that UPSs are operated for 24 hours per day, 365 days per year, at a typical load specific to each product class. In early 2015, UPS manufacturers indicated that a majority of in-scope products were used to back up and condition power to servers and desktop computers, with most VFD and low-end VI products attached to desktop computers and workstations. The average loading assumptions from ENERGY STAR UPS V. 1.0 with input power less than or equal to 1500 W are 67.5 percent for VFD and 75 percent for VI and VFI UPSs.
The responses to manufacturer interviews conducted in early 2015 suggest that most VFD products are used with personal computers, around three quarters of low-end VI products are used with computers and workstations, and around three quarters of higher-end VI and VFI products are used with servers. To account for the typical power draw of desktop computers, and because such computers spend some time in off or standby modes, DOE assumed average loading for VFD UPSs to be 25 percent. DOE further assumed average loading for VI products, which are operated in conjunction with both computers and servers, to be 50 percent, and average loading for VFI products to be 75 percent, in line with ENERGY STAR UPS V. 1.0. DOE requests further comment on the average loading conditions for these product classes (see section VII.E).
To capture the diversity of products available to consumers, DOE collected data on the distribution of UPS output power rating from product specifications listed on online retail Web sites. DOE then developed product samples for each UPS product class based on a market-weighted distribution of product features found to impact efficiency as determined by the engineering analysis.
Chapter 7 of the NOPR TSD provides details on DOE's energy use analysis for UPSs.
DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for UPSs. The effect of new or amended energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts:
The LCC (life-cycle cost) is the total consumer expense of an appliance or product over the life of that product, consisting of total installed cost (manufacturer selling price, distribution chain markups, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product.
The PBP (payback period) is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher efficiency levels by the change in annual operating cost for the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC relative to the LCC in the no-standards case, which reflects the estimated efficiency distribution of UPSs in the absence of new or amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE calculated the LCC and PBP for a nationally representative set of housing units, as well as one for commercial buildings. For each sample household and commercial building, DOE determined the energy consumption for the UPS and the appropriate electricity price. By developing a representative sample of households and commercial buildings, the analysis captured the variability in energy consumption and energy prices associated with the use of UPSs.
DOE was unable to locate a survey sample specific to UPS users for either the residential or commercial sector. However, as mentioned in the previous section, manufacturer interviews indicate that most VFD products are used with personal computers, around three quarters of low-end VI products are used with computers and workstations, and around three quarters of higher-end VI and VFI products are used with servers. DOE thus created residential and commercial samples for desktop computers as a proxy for the sample of VFD and VI UPS owners, and a sample for servers as a proxy for the sample of VFI UPS owners.
DOE developed its residential sample from the set of individual responses to
To create a commercial building sample, DOE relied on EIA's Commercial Buildings Energy Consumption Survey (CBECS), a nationally representative survey with a rich dataset of energy-related characteristics of the nation's stock of commercial buildings.
Inputs to the calculation of total installed cost include the cost of the product—which includes MPCs, manufacturer markups, retailer and distributor markups, and sales taxes—and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, product lifetimes, and discount rates. DOE created distributions of values for product lifetime, discount rates, and sales taxes, with probabilities attached to each value, to account for their uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and UPS user samples. The model calculated the LCC and PBP for products at each efficiency level for 10,000 housing units and 10,000 commercial buildings per simulation run.
DOE calculated the LCC and PBP for all consumers of UPSs as if each were to purchase a new product in the expected year of required compliance with new standards. Any new standards would apply to UPSs manufactured two years after the date on which any new standard is published. At this time, DOE estimates publication of a final rule in 2017. Therefore, for purposes of its analysis, DOE used 2019 as the first year of compliance with any new standards for UPSs.
Table IV.1 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 of the NOPR TSD and its appendices.
To calculate consumer product costs, DOE multiplied the MPCs developed in the engineering analysis by the markups described above (along with sales taxes). DOE used different markups for baseline products and higher-efficiency products, because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency products. The prices used in the LCC and PBP analysis are MPC in the compliance year, as described in chapter 5 of the TSD.
Examination of historical price trends for a number of appliances that have been subject to energy conservation standards indicates that an assumption of constant real prices and costs may overestimate long-term trends in appliance prices. Economic literature and historical data suggest that the real costs of these products may in fact trend downward over time according to “learning” or “experience” curves. On February 22, 2011, DOE published a notice of data availability (NODA) stating that DOE may consider refining its analysis by addressing equipment price trends. 76 FR 9696. It also raised the possibility that once sufficient long-term data are available on the cost or price trends for a given product subject to energy conservation standards, DOE would consider these data to forecast future trends. However, DOE found no data or manufacturer input to suggest
Installation cost includes labor, overhead, and any miscellaneous materials and parts needed to install the product. DOE found no evidence that installation costs would be impacted with increased efficiency levels for UPSs.
For each sampled household and commercial building, DOE determined the energy consumption for a UPS at different efficiency levels using the approach described in section IV.E of this document.
DOE used marginal electricity prices to characterize the incremental savings associated with ELs above the baseline. The marginal electricity prices vary by season, region, and baseline household electricity consumption level for the LCC. DOE estimated these prices using data published with the Edison Electric Institute (EEI) Typical Bills and Average Rates reports for summer and winter 2014.
The Information Technology Industry Council (ITI) suggested that EIA's
Repair costs are associated with repairing or replacing product components that have failed in an appliance; maintenance costs are associated with maintaining the operation of the product. For UPSs, DOE assumed that small incremental increases in product efficiency produce no changes in repair and maintenance costs compared to baseline efficiency products. This assumption is supported by the National Electrical Manufacturers Association (NEMA's) comment that no increased maintenance, repair, or installation costs are associated with more efficient UPS designs. (NEMA, No. 0015 at p. 7)
For UPSs, DOE performed a search of the published literature to identify minimum and maximum average lifetimes from a variety of sources. DOE also considered input from manufacturer interviews conducted in early 2015. ITI commented that UPS products have lifetimes of up to 20 years. (ITI, No. 0010 at p. 19) Table IV.2 summarizes the UPS lifetimes that DOE compiled from the literature and manufacture interviews. Where a range for lifetime was given, DOE noted the minimum and maximum values; where there was only one figure, DOE recorded this figure as both the minimum and maximum value. DOE computed mean lifetime by averaging these values across the product class.
Using these minimum, maximum, and mean lifetimes, DOE constructed survival functions for the various UPS product classes. No more than 10 percent of units were assumed to fail before the minimum lifetime, and no more than 90 percent of units were assumed to fail before the maximum lifetime. DOE assumed these survival functions have the form of a cumulative Weibull distribution, a probability distribution commonly used to model appliance lifetimes. Its form is similar to that of an exponential distribution, which models a fixed failure rate, except a Weibull distribution allows for a failure rate that can increase over time as appliances age. For additional discussion of UPS lifetimes, refer to chapter 8 of the NOPR TSD.
In the calculation of LCC, DOE applies discount rates appropriate to households to estimate the present value of future operating costs. DOE estimated a distribution of residential discount rates for UPSs based on consumer financing costs and opportunity cost of funds related to appliance energy cost savings and maintenance costs.
To establish residential discount rates for the LCC analysis, DOE identified all relevant household debt or asset classes in order to approximate a consumer's opportunity cost of funds related to appliance energy cost savings. It estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board's Survey of Consumer Finances
To establish commercial discount rates for the LCC analysis, DOE estimated the cost of capital for companies that purchase a UPS. The weighted average cost of capital is commonly used to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so their cost of capital is the weighted average of the cost to the firm of equity and debt financing, as estimated from financial data for publicly traded firms in the sectors that purchase UPSs. For this analysis, DOE used Damodaran online
To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE's LCC analysis considered the projected distribution (market shares) of product efficiencies under the no-standards case (
The estimated market penetration of ENERGY STAR-qualified UPSs was 78 percent in 2013, the most recent year for which data were available.
The payback period is the amount of time it takes the consumer to recover the additional installed cost of more-efficient products, compared to baseline products, through energy cost savings. Payback periods are expressed in years. Payback periods that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the product and the change in the first-year annual operating expenditures relative to the baseline. The PBP calculation uses the same inputs as the LCC analysis, except that discount rates are not needed.
As noted in this preamble, EPCA, as amended, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE determined the value of the first year's energy savings by calculating the energy savings in accordance with the applicable DOE test procedure, and multiplying those savings by the average energy price forecast for the year in which compliance with the new standards would be required.
DOE uses forecasts of annual product shipments to calculate the national impacts of potential amended energy conservation standards on energy use, NPV, and future manufacturer cash flows.
DOE relied on data from Frost & Sullivan and ENERGY STAR to develop the shipments in the no-standards case for UPSs.
Frost & Sullivan provided no classification by type of UPS within the relevant power range. However, the 2013 ENERGY STAR unit shipment data collection process
To project UPS shipments from 2020-2048, DOE extrapolated the linear trends forecasted by Frost & Sullivan from 2014 to 2019. In conjunction with the 2013 fixed split between topologies and a fixed portion of 0.9 for the United States relative to North American shipments, DOE projected the increasing linear trend in global UPS shipments <1 kW and the decreasing linear share of North American revenue to forecast shipments from 2019 to 2048. DOE requests additional information on UPS shipments and projections (see section VII.E).
Increases in product prices resulting from standards may affect shipment volumes. To DOE's knowledge, price elasticity estimates are not readily available in existing literature for UPSs, and hence DOE assumed a price elasticity of demand of zero. DOE requests comment on commercial and residential price elasticity data for UPS product classes (see section VII.E).
ITI commented that voluntary programs such as ENERGY STAR are what drive manufacturers to design products to be as efficient as possible and NEMA commented that because of the significant influence of ENERGY STAR on UPSs, little potential remains in product efficiency. (ITI, No. 0010 at p. 19) (NEMA, No. 0015 at p. 3)
DOE disagrees with the claim that little potential remains in product efficiency for UPSs. DOE's engineering analysis indicates that UPSs with higher efficiency than that required for ENERGY STAR designation are now or could be available, and the economic analysis indicates that some of these higher levels are economically justified. In the absence of standards, it is unlikely that the entire market would move to these levels. At present, approximately 20 percent of UPSs sold have efficiency below the ENERGY STAR level.
See chapter 9 of the NOPR TSD for further details on the development of shipments projections.
The NIA assesses the national energy savings (NES) and the national net present value (NPV) from a national perspective of total consumer costs and savings that would be expected to result from new or amended standards at specific efficiency levels.
DOE evaluates the impacts of new and amended standards by comparing a case without such standards with standards-case projections. The no-standards case characterizes energy use and consumer costs for each product class in the absence of new energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. DOE compares the no-standards case with projections characterizing the market for each product class if DOE adopted new standards at specific energy efficiency levels (
DOE uses a spreadsheet model to calculate the energy savings and the national consumer costs and savings from each TSL. Interested parties can review DOE's analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to probability distributions) as inputs.
Table IV.4 summarizes the inputs and methods DOE used for the NIA analysis for the NOPR. Discussion of these inputs and methods follows the table. See chapter 10 of the NOPR TSD for further details.
A key component of the NIA is the trend in energy efficiency projected for the no-standards case and each of the standards cases. Section IV.F.8 of this NOPR describes how DOE developed an energy efficiency distribution for the no-standards case (which yields a shipment-weighted average efficiency) for each of the considered product classes for the year of anticipated compliance with a new standard. To project the trend in efficiency for UPSs over the entire shipments projection period, DOE examined past improvements in efficiency over time. Little data exists to suggest that UPS efficiencies would improve in the 30 years following 2019 in the no-standards case. The approach is further described in chapter 10 of the NOPR TSD. DOE requests further comment on relevant efficiency trends for UPSs (see section VII.E).
For the standards cases, DOE used a “roll-up” scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2019). In this scenario, the market shares of products in the no-standards case that do not meet the standard under consideration would “roll up” to meet the new standard level, and the market share of products above the standard would remain unchanged. To develop standards case efficiency trends after 2019, DOE implemented the same trend as in the no-standards case: Zero percent for UPSs.
The national energy savings analysis involves a comparison of national energy consumption of the considered products between each potential standards case (TSL) and in the case with no energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each product (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-standards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (
In 2011, in response to the recommendations of a committee on “Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards” appointed by the National Academy of Sciences, DOE announced its intention to use full-fuel-cycle (FFC) measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011 notice, DOE published a statement of amended policy in which DOE explained its determination that EIA's National Energy Modeling System (NEMS) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector
The inputs for determining the NPV of the total costs and benefits experienced by consumers are (1) total annual installed cost, (2) total annual savings in operating costs, and (3) a discount factor to calculate the present value of costs and savings. DOE calculates net savings each year as the difference between the no-standards case and each standards case in terms of total savings in operating costs versus total increases in installed costs. DOE calculates operating cost savings over the lifetime of each product shipped during the forecast period.
The operating cost savings are energy cost savings, which are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the forecast of annual national-average residential energy price changes in the Reference case from
In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7-percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of
CEA commented that DOE should not use a 30-year projection to calculate national energy savings given the short product lifecycle of consumer electronics. (CEA, No. 0012 at p. 6) NEMA also disagreed with the 30-year projection and suggested a 6-year projection. (NEMA, No. 0015 at p. 2)
In performing the NIA for its energy conservation standards rulemakings, DOE has used a 30-year analysis period, beginning on the effective date of the standard, because it matches the lifetime of the longest-lived products among the products being considered for standards. Matching the lifetime of the longest-lived products allows for a full turnover of the stock. Because products have varying lifetimes, DOE uses a 30-year analysis period to maintain a consistent time frame to compare the energy savings and economic impacts from all the standards rulemakings. DOE acknowledges that using a 30-year period for shorter-lived products such as UPSs presents challenges with respect to projecting future trends. However, DOE also provides a 9-year sensitivity analysis that considers impacts for products shipped in a 9-year period. Further, with respect to the economic analysis, projected impacts for products shipped in the later part of the 30-year period play a relatively small role due to the effects of discounting.
In analyzing the potential impact of new or amended energy conservation standards on consumers, DOE evaluates the impact on identifiable subgroups of consumers that may be disproportionately affected by a new or amended national standard. The purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. DOE evaluates impacts on particular subgroups of consumers by analyzing the LCC impacts and PBP for those particular consumers from alternative standard levels. For this NOPR, DOE analyzed the impacts of the considered standard levels on two subgroups: (1) Low-income households and (2) small businesses. DOE used the LCC and PBP spreadsheet model to estimate the impacts of the considered efficiency levels on these subgroups. Chapter 11 in the NOPR TSD describes the consumer subgroup analysis.
DOE performed an MIA to estimate the financial impacts of new energy conservation standards on manufacturers of UPSs and to estimate the potential impacts of such standards on domestic employment, manufacturing capacity, and cumulative regulatory burden for those manufacturers. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA includes analyses of forecasted industry cash flows to create the INPV, as well as an analysis of the additional investments in research and development (R&D) and manufacturing capital necessary to comply with new standards, and the potential impact on domestic manufacturing employment. Additionally, the MIA seeks to qualitatively determine how new energy conservation standards might affect manufacturers' capacity and competition, as well as how standards contribute to manufacturers' overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on manufacturer subgroups, including small business manufacturers.
The quantitative part of the MIA primarily relies on the GRIM, an industry cash flow model with inputs specific to this rulemaking. The key GRIM inputs include data on the industry cost structure, unit production costs, product shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant products. The key GRIM outputs are INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industry-weighted average cost of capital, and the impact on domestic manufacturing employment. The model uses standard accounting principles to estimate the impacts of new energy conservation standards on the UPS manufacturing industry by comparing changes in INPV and domestic manufacturing employment between the no-standards case and each of the standards levels. To capture the uncertainty relating to manufacturer pricing strategies following potential new standards, the GRIM estimates a range of possible impacts under different markup scenarios.
The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard's impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In the first phase of the MIA, DOE prepared a profile of the UPS manufacturing industry based on the market and technology assessment, preliminary manufacturer interviews, and publicly-available information. This included a top-down analysis of UPS manufacturers that DOE used to derive preliminary financial inputs for the GRIM (
In the second phase of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of new energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standards and extending over a 30-year period following the compliance date of the standards. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) Creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes.
In addition, during the second phase, DOE developed an interview guide to distribute to UPS manufacturers in order to develop other key GRIM inputs, including product and capital
In the third phase of the MIA, DOE conducted structured, detailed interviews with representative UPS manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. See section IV.J.4 for a description of the key issues raised by manufacturers during the interviews. As part of the third phase, DOE also evaluated manufacturer subgroups that may be disproportionately impacted by new standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash flow analysis. Such manufacturer subgroups may include small business manufacturers, low-volume manufacturers, niche players, and/or manufacturers exhibiting a cost structure that largely differs from the industry average.
DOE identified one manufacturer subgroup for a separate impact analysis—small business manufacturers—using the small business employee threshold of 500 total employees published by the Small Business Administration (SBA). This threshold includes all employees in a business' parent company and any other subsidiaries. The complete MIA is presented in chapter 12 and in sections V.B.2.d and VII.B, and the analysis required by the Regulatory Flexibility Act, 5 U.S.C. 601,
DOE uses the GRIM to quantify the changes in cash flows over time due to new energy conservation standards. These changes in cash flows result in either a higher or lower INPV for the standards cases compared to the no-standards case. The GRIM analysis uses a standard annual cash flow analysis that incorporates manufacturer costs, manufacturer markups, shipments, and industry financial information as inputs. It then models changes in costs, investments, and manufacturer margins that result from new energy conservation standards. The GRIM uses these inputs to calculate a series of annual cash flows beginning with the reference year of the analysis, 2016, and continuing to 2048. DOE computes INPV by summing the stream of annual discounted cash flows during the analysis period.
DOE used a real discount rate of 6.1 percent for UPS manufacturers. The discount rate estimate was derived from industry corporate annual reports to the Securities and Exchange Commission (SEC 10-Ks). During manufacturer interviews, UPS manufacturers were asked to provide feedback on this specific discount rate. Based on this feedback, DOE determined that a discount rate of 6.1 percent was appropriate to use for the UPS industry. Many of the GRIM inputs came from the engineering analysis, the NIA, manufacturer interviews, and other research conducted during the MIA. The major GRIM inputs are described in detail in the following sections.
DOE seeks comment on its use of 6.1 percent as a discount rate for UPS manufacturers (see section VII.E).
DOE expects new energy conservation standards for UPSs to cause manufacturers to incur conversion costs to bring their production facilities and product designs into compliance with new standards. For the MIA, DOE classified these conversion costs into two major groups: (1) Capital conversion costs and (2) product conversion costs. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new product designs can be fabricated and assembled. Product conversion costs are investments in research, development, testing, marketing, certification, and other non-capitalized costs necessary to make product designs comply with new standards.
Using feedback from manufacturer interviews, DOE conducted a bottom-up analysis of the conversion costs necessary to comply with new standards for all product classes at each analyzed EL. DOE used manufacturer input from manufacturer interviews regarding the types and dollar amounts of discrete capital and product expenditures that would be necessary to convert specific production lines for each product class at each EL.
DOE determined that UPS manufacturers would not incur any additional capital conversion costs in the standards cases that would not be incurred in the no-standards case. Manufacturers stated that any product redesigns required to meet the proposed ELs would represent changes in component configuration as opposed to changes in the tooling and equipment used to manufacture more efficient UPSs (DOE does capture the additional costs of the more efficient components in the MPCs). Additionally, manufacturers stated that product design cycles for the majority of covered UPSs would be three years or less. The potential standards proposed in this NOPR would have a three-year compliance timeframe between the announcement of the potential standards and the compliance year of those standards. Therefore, the majority of these product design cycles would coincide with or take place before the compliance year of any potential standards. For manufacturers that have product design cycles that do not coincide with or take place before the compliance year and would have to redesign their UPSs to comply with the proposed standards, DOE included the cost of product redesign in the product conversion costs.
DOE seeks comment on its determination that product redesigns necessary to meet the ELs required by the proposed standard would not require investments in equipment and tooling and on its determination that the majority of product design cycles would either take place before or coincide with the compliance period of the potential standards for UPSs (see section VII.E).
DOE also assumes that there would be no stranded capital assets for UPS manufacturers. Again, DOE made this determination based on manufacturer feedback stating that no investments in equipment and tooling are necessary to comply with proposed standards.
The two main types of product conversion costs for UPSs that manufacturers shared with DOE during manufacturer interviews were the engineering time and effort necessary to redesign their products to meet higher efficiency standards and the testing and certification costs necessary to comply with efficiency standards. Once DOE had compiled these product conversion costs, DOE then took average values for a UPS platform (
DOE seeks comment on its methodology used to calculate product conversion costs, including the assumption of no capital conversion costs or stranded assets for UPS manufacturers at analyzed ELs (see section VII.E).
See chapter 12 of the NOPR TSD for a complete description of DOE's assumptions for the product conversion costs.
Manufacturing more efficient UPSs is more expensive than manufacturing baseline products due to the need for more costly materials and components. The higher MPCs for these more efficient products can affect the revenue and gross margin, which will then affect total volume of future shipments, and the cash flows of UPS manufacturers. DOE developed MPCs for UPSs by using efficiency testing and market data to determine the cost-efficiency relationship for UPSs currently on the market that met each efficiency level in each product class. For more information about MPCs, see section IV.C of this NOPR.
For a complete description of the MPCs, see chapter 5 of this NOPR TSD.
INPV, the key GRIM output, depends on industry revenue, which depends on the quantity and prices of UPSs shipped in each year of the analysis period. Industry revenue calculations require forecasts of: (1) Total annual shipment volume of UPSs; (2) the distribution of shipments across product classes (because prices vary by product class); and, (3) the distribution of shipments across ELs (because prices vary by efficiency).
In the no-standards case shipment analysis, shipments of UPSs were based on market forecast data. Since UPS technology evolves more rapidly than other appliance technologies, DOE extrapolated forecasted trends from market research data instead of relying on a stock accounting approach. Market forecasts from Frost and Sullivan as well as ENERGY STAR were used as the basis for standards case UPS shipments.
In the standards cases, DOE modeled a roll-up shipment scenario for UPSs. In the roll-up shipment scenario, consumers who would have purchased UPSs that fail to meet the new standards in the no-standards case, purchase UPSs that just meet the new standards, but are not more efficient than those standards, in the standards cases. Those consumers that would have purchased compliant UPSs in the no-standards case continue to purchase the exact same UPSs in the standards cases.
DOE believes that consumers purchasing UPSs covered by this rulemaking are primarily driven by the first cost of the UPSs and, therefore, most consumers will continue to purchase the lowest-cost UPSs available. This behavior is best modeled by the roll-up shipment scenario.
For a complete description of the shipments see the shipments analysis discussion in section IV.G of this NOPR.
As discussed in section IV.J.2.b, the MPCs for each of the UPS product classes are the UPS manufacturers' costs for those products. These costs include materials, direct labor, depreciation, and overhead, which are collectively referred to as the cost of goods sold (COGS). The MSP is the price received by UPS manufacturers from their customers, typically a distributor but could be the direct users, regardless of the downstream distribution channel through which the UPSs are ultimately sold. The MSP is not necessarily the cost the end-user pays for the UPS since there are typically multiple sales along the distribution chain and various markups applied to each sale. The MSP equals the MPC multiplied by the manufacturer markup. The manufacturer markup covers all the UPS manufacturer's non-production costs (
Modifying these manufacturer markups in the standards cases yields a different set of impacts on UPS manufacturers than in the no-standards case. For the MIA, DOE modeled two standards case markup scenarios to represent the uncertainty regarding the potential impacts on prices and profitability for UPS manufacturers following the implementation of new energy conservation standards. The two markup scenarios are; (1) a preservation of gross margin, or flat, markup scenario and (2) a pass through markup scenario. Each scenario leads to different manufacturer markup values, which, when applied to the inputted MPCs, result in varying revenue and cash flow impacts on UPS manufacturers.
The preservation of gross margin markup scenario assumes that the MPC for each product is marked up by a flat percentage to cover SG&A expenses, R&D expenses, interest expenses, and profit. This allows manufacturers to preserve the same gross margin percentage in the standards cases as in the no-standards case. This markup scenario represents the upper bound of the UPS industry's profitability in the standards cases because UPS manufacturers are able to fully pass on additional costs due to standards to their consumers.
To derive the preservation of gross margin markup percentages for UPSs, DOE examined the SEC 10-Ks of all publicly traded UPS manufacturers to estimate the average UPS manufacturer markup. DOE analyzed manufacturer markups for each product class separately since, based on manufacturer interviews, manufacturers frequently apply different markups to different product classes. The manufacturer markup represents the markup manufacturers apply to their MPCs to arrive at their MSPs. Based on SEC 10-Ks, DOE found the typical manufacturer markup for manufacturers that produce UPSs was 1.57.
During manufacturer interviews, DOE asked UPS manufacturers if 1.57 was an appropriate manufacturer markup to use for all UPSs. While most manufacturers agreed that 1.57 was an appropriate average manufacturer markup for all VFI, VI and VFD UPSs, these manufacturers stated that their manufacturer markup tends to vary by product class. Therefore, based on manufacturer feedback, DOE increased the manufacturer markup for VFI UPSs to 1.76 and decreased the manufacturer markup for VFD UPSs to 1.55. DOE kept the manufacturer markup for VI UPSs at 1.57 based on manufacturer feedback.
DOE included an alternative markup scenario, the pass through markup, because UPS manufacturers stated they do not expect to be able to mark up the additional cost of production in the standards cases, given the highly competitive UPS market. The pass through markup scenario assumes that UPS manufacturers are able to pass through the incremental costs of more efficient UPSs to their consumers, but without earning any additional operating profit on those higher costs. This scenario results in overall manufacturer margin compression and adverse financial impacts as UPS costs increase due to new energy conservation standards.
The pass through markup scenario represents the lower bound of industry profitability in the standards cases. This is because manufacturers are not able to markup up the additional costs necessitated by UPS energy conservation standards, as they are able to do in the preservation of gross margin markup scenario. Therefore, manufacturers earn less revenue in the pass through markup scenario than they do in the preservation of gross margin markup scenario.
DOE seeks comment on its methodology used to calculate manufacturer markups, its use of different manufacturer markups for each product class, and the specific
Interested parties commented on the assumptions and results of the July 2014 framework document. NEMA stated that if DOE sets ELs at or above the current ENERGY STAR levels for UPSs, UPS manufacturers would lose investments previously made to meet these ENERGY STAR requirements. (NEMA, No. 0015 at p. 7) DOE acknowledges that UPS energy conservation standards set at or above ENERGY STAR levels for UPSs could render some product designs obsolete. This could cause manufactures to make additional investments in product redesign and testing. DOE accounts for the one-time conversion costs that UPS manufacturers would have to make at each potential standard level as part of the MIA. Additionally, because UPS technology evolves rapidly, DOE determined that all UPSs would be redesigned in the three year time period between the publication of any UPS final rule and the compliance year of that rulemaking, so manufactures would have to redesign those products even in the no-standards case. See section V.B.2.a of this NOPR for a complete discussion of the manufacturer investments necessary to comply with the analyzed energy conservation standards.
DOE conducted interviews with manufacturers following the publication of the July 2014 framework document in preparation for the NOPR analysis. In these interviews, DOE asked manufacturers to describe their major concerns with this UPS rulemaking. UPS manufacturers identified one key issue during these interviews, the burden of testing and certification.
UPS manufacturers stated that the costs associated with testing and certifying all of their products covered by this rulemaking could be burdensome. UPS manufacturers commented that since efficient products do not typically earn a premium in the UPS market, manufacturers do not regularly conduct efficiency testing or pursue energy-efficient certifications for the majority of their product offerings. As a result, the testing and certification required for compliance with a potential standard represents additional costs to the typical product testing conducted by UPS manufacturers. Since a potential standard would require all UPS offerings to be tested and certified, UPS manufacturers explained that this process could become expensive. The UPS test procedure NOPR (81 FR 31542) analyzes the testing and certification costs manufacturers must make to comply with the analyzed energy conservation standards.
The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO
The analysis of power sector emissions uses marginal emissions factors that were derived from data in
Combustion emissions of CH
The emissions intensity factors are expressed in terms of physical units per MWh or MMBtu of site energy savings. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis.
For CH
The
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EIA was not able to incorporate CSAPR into
The attainment of emissions caps is typically flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Under existing EPA regulations, any excess SO
Beginning in 2016, however, SO
CAIR established a cap on NO
The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE's energy conservation standards would likely reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on
As part of the development of this proposed rule, DOE considered the estimated monetary benefits from the reduced emissions of CO
The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) climate-change-related changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services. Estimates of the SCC are provided in dollars per metric ton of CO
Under section 1(b)(6) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993), agencies must, to the extent permitted by law, “assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.” The purpose of the SCC estimates presented here is to allow agencies to incorporate the monetized social benefits of reducing CO
As part of the interagency process that developed these SCC estimates, technical experts from numerous agencies met on a regular basis to consider public comments, explore the technical literature in relevant fields, and discuss key model inputs and assumptions. The main objective of this process was to develop a range of SCC values using a defensible set of input assumptions grounded in the existing scientific and economic literatures. In this way, key uncertainties and model differences transparently and consistently inform the range of SCC estimates used in the rulemaking process.
When attempting to assess the incremental economic impacts of CO
Despite the limits of both quantification and monetization, SCC estimates can be useful in estimating the social benefits of reducing CO
It is important to emphasize that the interagency process is committed to updating these estimates as the science and economic understanding of climate change and its impacts on society improves over time. In the meantime, the interagency group will continue to explore the issues raised by this analysis and consider public comments as part of the ongoing interagency process.
In 2009, an interagency process was initiated to offer a preliminary assessment of how best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in how benefits are evaluated across Federal agencies, the Administration sought to develop a transparent and defensible method, specifically designed for the rulemaking process, to quantify avoided climate change damages from reduced CO
After the release of the interim values, the interagency group reconvened on a regular basis to generate improved SCC estimates. Specially, the group considered public comments and further explored the technical literature in relevant fields. The interagency group relied on three integrated assessment models commonly used to estimate the SCC: The FUND, DICE, and PAGE models. These models are frequently cited in the peer-reviewed literature and were used in the last assessment of the Intergovernmental Panel on Climate Change (IPCC). Each model was given equal weight in the SCC values that were developed.
Each model takes a slightly different approach to model how changes in emissions result in changes in economic damages. A key objective of the interagency process was to enable a consistent exploration of the three models, while respecting the different approaches to quantifying damages taken by the key modelers in the field. An extensive review of the literature was conducted to select three sets of input parameters for these models: Climate sensitivity, socio-economic and emissions trajectories, and discount rates. A probability distribution for climate sensitivity was specified as an input into all three models. In addition, the interagency group used a range of scenarios for the socio-economic parameters and a range of values for the discount rate. All other model features were left unchanged, relying on the model developers' best estimates and judgments.
In 2010, the interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-percent discount rate, was included to represent higher-than-expected impacts from climate change further out in the tails of the SCC distribution. The values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate domestic effects,
The SCC values used for this document were generated using the most recent versions of the three integrated assessment models that have been published in the peer-reviewed literature, as described in the 2013 update from the interagency working group (revised July 2015).
It is important to recognize that a number of key uncertainties remain, and that current SCC estimates should be treated as provisional and revisable because they will evolve with improved scientific and economic understanding. The interagency group also recognizes that the existing models are imperfect and incomplete. The National Research Council report mentioned previously points out that there is tension between the goal of producing quantified estimates of the economic damages from an incremental ton of carbon and the limits of existing efforts to model these effects. There are a number of analytical challenges that are being addressed by the research community, including research programs housed in many of the Federal agencies participating in the interagency process to estimate the SCC. The interagency group intends to periodically review and reconsider those estimates to reflect increasing knowledge of the science and economics of climate impacts, as well as improvements in modeling.
In summary, in considering the potential global benefits resulting from reduced CO
DOE multiplied the CO
As noted previously, DOE has estimated how the considered energy conservation standards would decrease power sector NO
DOE estimated the monetized value of NO
DOE multiplied the emissions reduction (in tons) in each year by the associated $/ton values, and then discounted each series using discount rates of 3 percent and 7 percent as appropriate.
DOE is evaluating appropriate monetization of avoided SO
The utility impact analysis estimates several effects on the electric power generation industry that would result from the adoption of new or amended energy conservation standards. The utility impact analysis estimates the changes in installed electrical capacity and generation that would result for each TSL. The analysis is based on published output from the NEMS associated with AEO 2015. NEMS produces the AEO Reference case, as well as a number of side cases that estimate the economy-wide impacts of changes to energy supply and demand. DOE uses published side cases to estimate the marginal impacts of reduced energy demand on the utility sector. These marginal factors are estimated based on the changes to electricity sector generation, installed capacity, fuel consumption and emissions in the
The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, primary fuel consumption, installed capacity and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of new or amended energy conservation standards.
Schneider Electric and ITI both commented that NEMS-BT was identified as inadequate for modeling beyond 2025 during a DOE distribution transformer rulemaking. (Schneider Electric, No. 0008 at p. 16) (ITI, No. 0010 at p. 19)
DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts from new or amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the products subject to standards, their suppliers, and related service firms. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, caused by (1) reduced spending by end users on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on new products to which the new standards apply, and (4) the effects of those three factors throughout the economy.
One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department's Bureau of Labor Statistics (BLS). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.
DOE estimated indirect national employment impacts for the standard levels considered in this NOPR using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 3.1.1 (ImSET).
DOE notes that ImSET is not a general equilibrium forecasting model, and understands the uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may over-estimate actual job impacts over the long run for this rule. Therefore, DOE generated results for near-term timeframes (2019-2024), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the NOPR TSD.
The following section addresses the results from DOE's analyses with respect to the considered energy conservation standards for UPSs. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for UPSs, and the standards levels that DOE is proposing to adopt in this NOPR. Additional details regarding DOE's analyses are contained in the NOPR TSD supporting this document.
DOE analyzed the benefits and burdens of four TSLs for UPSs. These TSLs were developed by combining specific efficiency levels for each of the product classes analyzed by DOE. DOE presents the results for the TSLs in this
TSL 1 is the minimum possible standard considered, and also corresponds to the maximum consumer NPV for each product class. TSL 2 represents an intermediate level of performance above the baseline, with maximum NES while at a positive NPV for all product classes. TSL 3 represents an intermediate level of performance above TSL 2, and corresponds to maximum NES while at positive NPV in aggregate across all three product classes (the NPV of VFD UPSs is marginally negative). Finally, TSL 4 represents the maximum technologically feasible (“max-tech”) energy efficiency for all product classes and therefore, the maximum NES.
DOE analyzed the economic impacts on UPS consumers by looking at the effects potential new standards at each TSL would have on the LCC and PBP. DOE also examined the impacts of potential standards on consumer subgroups. These analyses are discussed below.
In general, higher-efficiency products affect consumers in two ways: (1) Purchase price increases, and (2) annual operating costs decrease. Inputs used for calculating the LCC and PBP include total installed costs (
Table V.2 through Table V.4 show the LCC and PBP results for the TSL efficiency levels considered for each product class. In the first of each pair of tables, the simple payback is measured relative to the baseline product (EL 0). In Table V.5 through Table V.7, impacts are measured relative to the efficiency distribution in the no-standards case in the compliance year (see section IV.F.8 of this NOPR). Because some consumers purchase products with higher efficiency in the no-standards case, the average savings are less than the difference between the average LCC of EL 0 and the average LCC at each TSL. The savings refer only to consumers who are affected by a standard at a given TSL. Those who already purchase a product with efficiency at or above a given TSL are not affected. Consumers for whom the LCC increases at a given TSL experience a net cost.
In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on low-income households and small businesses. Table V.8 through Table V.10 compares the average LCC savings and PBP at each efficiency level for low-income households, along with the average LCC savings for the entire residential sample. Table V.11 through Table V.13 compares the average LCC savings and PBP at each TSL for small businesses, along with the average LCC savings for the commercial sample. In most cases, the average LCC savings and PBP for low-income households and small businesses at the considered efficiency levels are not substantially different from the average values found for the entire residential and commercial samples, respectively. Chapter 11 of the NOPR TSD presents the complete LCC and PBP results for the subgroups.
As discussed in section III.D.2, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for a product that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete values, and, as required by EPCA, based the energy use calculation on the DOE test procedure for UPSs. In contrast, the PBPs presented in section V.B.1.a were calculated using distributions that reflect the range of energy use in the field.
TableV.14 presents the rebuttable-presumption payback periods for the considered TSLs for UPSs. While DOE examined the rebuttable-presumption criterion, it considered whether the standard levels considered for the NOPR are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification.
DOE performed an MIA to estimate the impact of new energy conservation standards on UPS manufacturers. The following section describes the estimated impacts on UPS manufacturers at each analyzed TSL. Chapter 12 of the NOPR TSD explains the analysis in further detail.
Table V.15 and Table V.16 present the financial impacts (represented by changes in INPV) of analyzed standards on UPS manufacturers as well as the conversion costs that DOE estimates
To assess the upper (less severe) bound of the range of potential impacts on UPS manufacturers, DOE modeled a preservation of gross margin markup scenario. This scenario assumes that in the standards cases, manufacturers would be able to fully pass on higher production costs required to produce more efficient products to their consumers. Specifically, the industry would be able to maintain its average no-standards case gross margin (as a percentage of revenue) despite the higher product costs in the standards cases. In general, the larger the product price increases, the less likely manufacturers are to achieve the cash flow from operations calculated in this scenario because it is less likely that manufacturers would be able to fully mark up these larger cost increases.
To assess the lower (more severe) bound of the range of potential impacts on manufacturers, DOE modeled the pass through markup scenario. In this scenario DOE assumes that manufacturers are able to pass through the incremental costs of more efficient UPSs to their customers, but without earning any additional operating profit on those higher costs. This scenario represents the lower bound of the range of potential impacts on manufacturers because manufacture margins are compressed as a result of this markup scenario.
TSL 1 sets the efficiency level at EL 1 for all UPSs. At TSL 1, DOE estimates impacts on INPV to range from −$389 million to $191 million, or a change in INPV of −15.2 percent to 7.5 percent. At this TSL, industry free cash flow is estimated to decrease by approximately 6.3 percent to $81 million, compared to the no-standards case value of $86 million in 2018, the year leading up to the proposed standard.
DOE does not expect that UPS manufacturers will incur any capital conversion costs at any of the TSLs. DOE does expect that manufacturers will incur product conversion costs of $16.2 million at TSL 1, primarily driven by testing and certifying all covered UPSs as well as by increased R&D efforts necessary to redesign UPSs that do not meet efficiency levels required at TSL 1.
At TSL 1, the shipment-weighted-average MPCs increase by approximately 11 percent for VFI UPSs and 21 percent for VI UPSs and decrease by approximately 3 percent for VFD UPSs relative to the no-standards case MPCs in 2019, the expected compliance year of the standards. In the preservation of gross margin markup scenario, manufacturers are able to recover their $16.2 million in conversion costs over the course of the analysis period through the increases in MPCs for VFI and VI UPSs causing a slightly positive change in INPV at TSL 1 under the preservation of gross margin markup scenario.
Under the pass through markup scenario, the MPC increases at TSL 1 result in reductions in manufacturer markups from 1.76 in the no-standards case to 1.67 for VFI UPSs at TSL 1 and from 1.57 in the no-standards case to 1.44 for VI UPSs at TSL 1. The MPC decrease for VFD UPSs at TSL 1 results in an increase in manufacturer markup from 1.55 in the no-standards case to 1.57 at TSL 1. The reductions in manufacturer markups for VFI and VI UPSs and $16.2 million in conversion costs incurred by manufacturers cause a moderately negative change in INPV at TSL 1 under the pass through markup scenario.
TSL 2 sets the efficiency level at EL 1 for VFI and VFD UPSs and EL 2 for VI UPSs. At TSL 2, DOE estimates impacts on INPV to range from −$598 million to $295 million, or a change in INPV of −23.4 percent to 11.5 percent. At this TSL, industry free cash flow is estimated to decrease by approximately 7.6 percent to $80 million, compared to the no-standards case value of $86
DOE expects that product conversion costs will rise from $16.2 million at TSL 1 to $19.6 million at TSL 2. Product conversion costs incurred at TSL 2 are primarily driven by testing and certifying all covered UPSs as well as by increased R&D efforts necessary to redesign UPSs that do not meet efficiency levels required at TSL 2 and VI UPSs to have best-in-market efficiency.
At TSL 2, the shipment-weighted-average MPCs increase by approximately 11 percent for VFI UPSs and 41 percent for VI UPSs and decrease by approximately 3 percent for VFD UPSs relative to the no-standards case MPCs in 2019, the expected compliance year of the standards. In the preservation of gross margin markup scenario, manufacturers are able to recover their $19.6 million in conversion costs over the course of the analysis period through the increases in MPCs for VFI and VI UPSs causing a moderately positive change in INPV at TSL 2 under the preservation of gross margin markup scenario.
Under the pass through markup scenario at TSL 2, the MPC increases result in reductions in manufacturer markups from 1.76 in the no-standards case to 1.67 for VFI UPSs at TSL 2 and from 1.57 in the no-standards case to 1.37 for VI UPSs at TSL 2. The MPC decrease for VFD UPSs at TSL 2 results in an increase in manufacturer markup from 1.55 in the no-standards case to 1.57 in the standards case at TSL 2. The reductions in manufacturer markups for VFI and VI UPSs and $19.6 million in conversion costs cause a significantly negative change in INPV at TSL 2 under the pass through markup scenario.
TSL 3 sets the efficiency level at EL 1 for VFI UPSs and EL 2 for VI and VFD UPSs. At TSL 3, DOE estimates impacts on INPV to range from −$936 million to $428 million, or a change in INPV of −36.6 percent to 16.8 percent. At this TSL, industry free cash flow is estimated to decrease by approximately 8.0 percent to $80 million, compared to the no-standards case value of $86 million in 2018, the year leading up to the proposed standard.
DOE expects that product conversion costs will rise slightly from $19.6 million at TSL 2 to $20.4 million at TSL 3. Product conversion costs incurred at TSL 3 are primarily driven by testing and certifying all covered UPSs as well as by increased R&D efforts necessary to redesign UPSs that do not meet efficiency levels required at TSL 3 and VI and VFD UPSs to have best-in-market efficiency at TSL 3.
At TSL 3, the shipment-weighted-average MPCs increase by approximately 11 percent for VFI UPSs, 41 percent for VI UPSs, and 24 percent for VFD UPSs relative to the no-standards case MPCs in 2019, the expected compliance year of the standards. In the preservation of gross margin markup scenario, manufacturers are able to recover their $20.4 million in conversion costs over the course of the analysis period through the increases in MPCs causing a moderately positive change in INPV at TSL 3 under the preservation of gross margin markup scenario.
Under the pass through markup scenario at TSL 3, the increases in shipment-weighted-average MPCs result in reductions in manufacturer markups, from 1.76 in the no-standards case to 1.67 for VFI UPSs at TSL 3, from 1.57 in the no-standards case to 1.37 for VI UPSs at TSL 3, and from 1.55 in the no-standards case to 1.43 for VFD UPSs at TSL 3. These reductions in manufacturer markups and $20.4 million in conversion costs incurred by manufacturers cause a significantly negative change in INPV at TSL 3 under the pass through markup scenario.
TSL 4 sets the efficiency level at EL 3 for all UPSs, which represents max-tech. At TSL 4, DOE estimates impacts on INPV to range from −$3,222 million to $4,845 million, or a change in INPV of −126.1 percent to 189.7 percent. At this TSL, industry free cash flow is estimated to decrease by approximately 9.0 percent to $79 million, compared to the no-standards case value of $86 million in 2018, the year leading up to the proposed standard.
DOE expects that product conversion costs will rise from $20.4 million at TSL 3 to $23.0 million at TSL 4. Product conversion costs incurred at TSL 4 are primarily driven by testing and certifying all covered UPSs as well as by increased R&D efforts necessary to redesign UPSs that do not meet efficiency levels required at TSL 4 to have best-in-market efficiency and to use the most efficient materials and semiconductor components available.
At TSL 4, the shipment-weighted-average MPCs increase significantly by approximately 209 percent for VFI UPSs, 504 percent for VI UPSs, and 45 percent for VFD UPSs relative to the no-standards case MPCs in 2019, the expected compliance year of the standards. In the preservation of gross margin markup scenario, manufacturers are able to recover their $23.0 million in conversion costs over the course of the analysis period through the increases in MPCs causing a significantly positive change in INPV at TSL 4 under the preservation of gross margin markup scenario.
Under the pass through markup scenario at TSL 4, the MPC increases result in reductions in manufacturer markups, from 1.76 in the no-standards case to 1.30 for VFI UPSs at TSL 4, from 1.57 in the no-standards case to 1.30 for VI UPSs at TSL 4, and from 1.55 in the no-standards case to 1.36 for VFD UPSs at TSL 4. These reductions in manufacturer markups and $23.0 million in conversion costs incurred by manufacturers cause a significantly negative change in INPV at TSL 4 under the pass through markup scenario.
As part of the direct employment impact analysis, DOE attempted to quantify the number of domestic workers involved in UPS production. Manufacturer interviews and DOE's research indicate that all UPS components that would be modified to improve the efficiency of UPSs are manufactured abroad. DOE was able to identify a handful of UPS manufacturers that do assemble these UPS components domestically. However, based on manufacturer interviews, DOE does not believe that there would be an impact on the amount of domestic workers involved in the assembly of UPSs due to new energy conservation standards. While the components of UPS configurations may change, DOE estimates that the same amount of labor would be needed to assemble these products. Therefore, DOE did not conduct a quantitative domestic manufacturing employment impact analysis on UPS manufacturers for this rulemaking.
DOE also recognizes there are several UPS and UPS component manufacturers that have employees in the U.S. that work on design, technical support, sales, training, testing, certification, and other requirements. However, in interviews, manufacturers generally did not expect any negative changes in the domestic employment of the design, technical support, or other departments of UPS and UPS component manufacturers located in the U.S. in response to new energy conservation standards.
DOE seeks comment on its determination that all UPS manufacturing takes place abroad. Additionally, DOE seeks comment on the presence of any domestic UPS manufacturing beyond assembly, R&D, testing, and certification, and if there are any potential negative impacts to domestic employment that could arise due to energy conservation standards on UPSs that are not fully captured by the
UPS manufacturers stated that they did not anticipate any capacity constraints at any of the analyzed ELs, given a three-year timeframe from the publication of a final rule and the compliance year.
DOE seeks comment on any potential UPS and UPS component manufacturer capacity constraints caused by the proposed standards in this NOPR (see section VII.E).
Using average cost assumptions to develop an industry cash-flow estimate may not be adequate for assessing differential impacts among manufacturer subgroups. Small manufacturers, niche product manufacturers, and manufacturers exhibiting cost structures substantially different from the industry average could be affected disproportionately. lDOE identified one manufacturer subgroup that it believes could be disproportionally impacted by energy conservation standards and would require a separate analysis in the MIA, small businesses. DOE analyzes the impacts on small businesses in a separate analysis in section VI.B of this NOPR as part of the Regulatory Flexibility Analysis. DOE did not identify any other adversely impacted manufacturer subgroups for this rulemaking based on the results of the industry characterization.
DOE seeks comment on any other manufacturer subgroups that DOE should analyze and/or types of UPS manufacturers for the manufacturer subgroup analysis, including the identification of UPS manufacturer subgroups that should be analyzed separately (see section VII.E).
One aspect of assessing manufacturer burden involves considering the cumulative impact of multiple DOE standards and the regulatory actions of other Federal agencies and States that affect the manufacturers of a covered product. A standard level is not economically justified if it contributes to an unacceptable cumulative regulatory burden. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect manufacturers' financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing products. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency.
Some UPS manufacturers could also make other products that could be subject to energy conservation standards set by DOE. DOE looks at these regulations that could affect UPS manufacturers that will take effect approximately 3 years before or after the estimated 2019 compliance date of any amended energy conservation standards for UPSs. These energy conservation standards include external power supplies that have a compliance date in 2016
The compliance dates and expected industry conversion costs of relevant energy conservation standards are indicated in Table V.17. DOE notes that very few of the products listed in Table V.17 are manufactured domestically.
DOE discusses these and other requirements and includes the full details of the cumulative regulatory burden analysis in chapter 12 of the NOPR TSD. DOE will continue to evaluate its approach to assessing cumulative regulatory burden for use in future rulemakings to ensure that it is effectively capturing the overlapping impacts of its regulations. In particular, DOE will assess whether looking at rules where any portion of the compliance period potentially overlaps with the compliance period for the subject rulemaking would yield a more accurate reflection of cumulative regulatory burden.
DOE seeks comment on the compliance costs of any other regulations on products that UPS manufacturers also manufacture, especially if compliance with those regulations is required within three years before or after the estimated compliance date of this proposed standard (2019) (see section VII.E). Additionally, DOE welcomes comment on how it analyzes and considers cumulative regulatory burden.
To estimate the energy savings attributable to potential standards for UPSs, DOE compared their energy consumption under the no-standards case to their anticipated energy consumption under each TSL. The savings are measured over the entire lifetime of products purchased in the 30-year period that begins in the year of anticipated compliance with amended standards (2019-2048). Table V.18 present DOE's projections of the national energy savings for each TSL considered for UPSs. The savings were calculated using the approach described in section IV.H of this NOPR.
OMB Circular A-4
DOE estimated the cumulative NPV of the total costs and savings for consumers that would result from the TSLs considered for UPSs. In accordance with OMB's guidelines on regulatory analysis,
The NPV results based on the aforementioned 9-year analytical period are presented in Table V.23. The impacts are counted over the lifetime of products purchased in 2019-2027. As mentioned previously, such results are presented for informational purposes only and are not indicative of any change in DOE's analytical methodology or decision criteria.
The above results reflect the use of no price trend for UPSs over the analysis period (see section IV.F.1 of this document).
DOE expects energy conservation standards for UPSs to reduce energy bills for consumers of those products, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect employment impacts of the TSLs that DOE considered in this rulemaking. DOE understands that there are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2016-2048), where these uncertainties are reduced.
The results suggest that the proposed standards are likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the NOPR TSD presents detailed results regarding anticipated indirect employment impacts.
Based on testing conducted in support of this proposed rule, discussed in section IV.C.1.b of this NOPR, DOE has tentatively concluded that the standards proposed in this NOPR would not reduce the utility or performance of the UPSs under consideration in this rulemaking. Manufacturers of these products currently offer units that meet or exceed the proposed standards.
As discussed in section III.D.1.e, the Attorney General determines the impact, if any, of any lessening of competition likely to result from a
Enhanced energy efficiency, where economically justified, improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy production. Reduced electricity demand due to energy conservation standards is also likely to reduce the cost of maintaining the reliability of the electricity system, particularly during peak-load periods. As a measure of this reduced demand, chapter 15 in the NOPR TSD presents the estimated reduction in generating capacity, relative to the no-standards case, for the TSLs that DOE considered in this rulemaking.
Energy conservation resulting from new standards for UPSs is expected to yield environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases. Table V.24 provides DOE's estimate of cumulative emissions reductions expected to result from the TSLs considered in this rulemaking. The table includes both power sector emissions and upstream emissions. The emissions were calculated using the multipliers discussed in section IV.K. DOE reports annual emissions reductions for each TSL in chapter 13 of the NOPR TSD.
As part of the analysis for this proposed rule, DOE estimated monetary benefits likely to result from the reduced emissions of CO
Table V.25 presents the global value of CO
DOE is well aware that scientific and economic knowledge about the contribution of CO
DOE also estimated the cumulative monetary value of the economic benefits associated with NO
The Secretary of Energy, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis.
The NPV of the monetized benefits associated with emissions reductions can be viewed as a complement to the NPV of the consumer savings calculated for each TSL considered in this rulemaking. Table V.27 presents the NPV values that result from adding the estimates of the potential economic benefits resulting from reduced CO
In considering the above results, two issues are relevant. First, the national operating cost savings are domestic U.S. monetary savings that occur as a result of market transactions, while the value of CO
When considering proposed standards, the new or amended energy conservation standards that DOE adopts for any type (or class) of covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of new standards for UPSs at each TSL, beginning with the maximum technologically feasible level, to determine whether that level was economically justified. Where the max-tech level was not justified, DOE then considered the next most efficient level and undertook the same evaluation until it reached the highest efficiency level that is both technologically feasible and economically justified and saves a significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of each TSL, tables in this section present a summary of the results of DOE's quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification. These include the impacts on identifiable subgroups of consumers who may be disproportionately affected by a national standard and impacts on employment.
DOE also notes that the economics literature provides a wide-ranging discussion of how consumers trade off upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information, (2) a lack of sufficient salience of the long-term or aggregate benefits, (3) a lack of sufficient savings to warrant delaying or altering purchases, (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments, (5) computational or other difficulties associated with the evaluation of relevant tradeoffs, and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Having less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher than expected rate between current consumption and uncertain future energy cost savings.
In DOE's current regulatory analysis, potential changes in the benefits and costs of a regulation due to changes in consumer purchase decisions are included in two ways. First, if consumers forego the purchase of a product in the standards case, this decreases sales for product manufacturers, and the impact on manufacturers attributed to lost revenue is included in the MIA. Second, DOE accounts for energy savings attributable only to products actually used by consumers in the standards case; if a regulatory option decreases the number of products purchased by consumers, this decreases the potential energy savings from an energy conservation standard. DOE provides estimates of shipments and changes in the volume of product purchases in chapter 9 of the NOPR TSD. However, DOE's current analysis does not explicitly control for
While DOE is not prepared at present to provide a fuller quantifiable framework for estimating the benefits and costs of changes in consumer purchase decisions due to an energy conservation standard, DOE is committed to developing a framework that can support empirical quantitative tools for improved assessment of the consumer welfare impacts of appliance standards. DOE has posted a paper that discusses the issue of consumer welfare impacts of appliance energy conservation standards, and potential enhancements to the methodology by which these impacts are defined and estimated in the regulatory process.
Table V.28 and Table V.29 summarize the quantitative impacts estimated for each TSL for UPSs. The national impacts are measured over the lifetime of UPSs purchased in the 30-year period that begins in the anticipated year of compliance with amended standards (2019-2048). The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. The efficiency levels contained in each TSL are described in section V.A of this NOPR.
DOE first considered TSL 4, which represents the max-tech efficiency levels. TSL 4 would save an estimated 2.65 quads of energy, an amount DOE considers significant. Under TSL 4, the NPV of consumer benefit would be −$29.5 billion using a discount rate of 7 percent, and −$51.2 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 161 Mt of CO
At TSL 4, the average LCC impact is a savings of −$13 for VFD UPSs, −$400 for VI UPSs, and −$380 for VFI UPSs. The simple payback period is 4.4 years for VFD UPSs, 39 years for VI UPSs, and 18 years for VFI UPSs. The fraction of consumers experiencing a net LCC cost is 79 percent for VFD UPSs, 100 percent for VI UPSs, and 99 percent for VFI UPSs.
At TSL 4, the projected change in INPV ranges from a decrease of $3,222 million to an increase of $4,845 million, which represents a decrease of 126.1 percent to an increase of 189.7 percent, respectively.
The Secretary tentatively concludes that at TSL 4 for UPSs, the benefits of energy savings, emission reductions, and the estimated monetary value of the emissions reductions would be outweighed by the negative NPV of consumer benefits, economic burden on most consumers, and the impacts on manufacturers, including the conversion costs and profit margin impacts that could result in a large reduction in INPV. Consequently, the Secretary has tentatively concluded that TSL 4 is not economically justified.
DOE then considered TSL 3, which would save an estimated 1.26 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $749 million using a discount rate of 7 percent, and $2.41 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 76.7 Mt of CO
At TSL 3, the average LCC impact is a savings of −$0.08 for VFD UPSs, $6.1 for VI UPSs, and $35 for VFI UPSs. The simple payback period is 2.7 years for VFD UPSs, 4.6 years for VI UPSs, and 4.7 years for VFI UPSs. The fraction of consumers experiencing a net LCC cost is 38 percent for VFD UPSs, 44 percent for VI UPSs, and 2.3 percent for VFI UPSs.
At TSL 3, the projected change in INPV ranges from a decrease of $936 million to an increase of $428 million, which represents a decrease of 36.6 percent to an increase of 16.8 percent, respectively.
After considering the analysis and weighing the benefits and burdens, the Secretary has tentatively concluded that at TSL 3 for UPSs, the benefits of energy savings, overall positive NPV of consumer benefits, emissions reductions, and the estimated monetary value of the emissions reductions would be outweighed by the negative impacts on some consumers and potential negative impacts on manufacturers, including the conversion costs that could result in a reduction in INPV for manufacturers. In particular, the average LCC is negative for the VFD UPS product class. Consequently, the Secretary has tentatively concluded that TSL 3 is not economically justified.
DOE then considered TSL 2, which would save an estimated 1.18 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefit would be $1.87 billion using a discount rate of 7 percent, and $4.40 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 72.0 Mt of CO
At TSL 2, the average LCC impact is a savings of $33 for VFD UPSs, $6.1 for VI UPSs, and $35 for VFI UPSs. The simple payback period is immediate for VFD UPSs, 4.6 years for VI UPSs, and 4.7 years for VFI UPSs. The fraction of consumers experiencing a net LCC cost is 0 percent for VFD UPSs, 44 percent for VI UPSs, and 2.3 percent for VFI UPSs.
At TSL 2, the projected change in INPV ranges from a decrease of $598 million to an increase of $295 million, which represents a decrease of 23.4 percent to an increase of 11.5 percent, respectively.
After considering the analysis and weighing the benefits and burdens, the Secretary has tentatively concluded that at TSL 2 for UPSs, the benefits of energy savings, positive NPV of consumer benefits, emission reductions, the estimated monetary value of the emissions reductions, and positive average LCC savings would outweigh the negative impacts on some consumers and on manufacturers, including the conversion costs that could result in a reduction in INPV for manufacturers. Accordingly, the
Therefore, based on the above considerations, DOE proposes to adopt the energy conservation standards for UPSs at TSL 2. The proposed amended energy conservation standards for UPSs are shown in Table V.30.
The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The annualized net benefit is the sum of (1) the annualized national economic value (expressed in 2015$) of the benefits from operating products that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in product purchase costs) and (2) the annualized monetary value of the benefits of CO
Table V.31 shows the annualized values for UPSs under TSL 2, expressed in 2015$. The results under the primary estimate are as follows.
Using a 7-percent discount rate for benefits and costs other than CO
Using a 3-percent discount rate for all benefits and costs and the average SCC series corresponding to a value of $40.6/t in 2015 (2015$), the estimated cost of the proposed standards for UPSs is $250 million per year in increased equipment costs, while the estimated annual benefits are $488 million in reduced operating costs, $133 million in CO
Section 1(b)(1) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993), requires each agency to identify the problem that it intends to address, including, where applicable, the failures of private markets or public institutions that warrant new agency action, as well as to assess the significance of that problem. The problems that the proposed standards set forth in this NOPR are intended to address are as follows:
(1) Insufficient information and the high costs of gathering and analyzing relevant information leads some consumers to miss opportunities to make cost-effective investments in energy efficiency.
(2) In some cases, the benefits of more-efficient equipment are not realized due to misaligned incentives between purchasers and users. An example of such a case is when the equipment purchase decision is made by a building contractor or building owner who does not pay the energy costs.
(3) There are external benefits resulting from improved energy efficiency of appliances and equipment that are not captured by the users of such products. These benefits include externalities related to public health, environmental protection, and national energy security that are not reflected in energy prices, such as reduced emissions of air pollutants and greenhouse gases that impact human health and global warming. DOE attempts to quantify some of the external benefits through use of social cost of carbon values.
The Administrator of the Office of Information and Regulatory Affairs (OIRA) in the OMB has determined that the proposed regulatory action is a significant regulatory action under section (3)(f) of Executive Order 12866. Accordingly, pursuant to section 6(a)(3)(B) of the Order, DOE has provided to OIRA: (i) The text of the draft regulatory action, together with a reasonably detailed description of the need for the regulatory action and an explanation of how the regulatory action will meet that need; and (ii) An assessment of the potential costs and benefits of the regulatory action, including an explanation of the manner in which the regulatory action is
In addition, the Administrator of OIRA has determined that the proposed regulatory action is an “economically” significant regulatory action under section (3)(f)(1) of Executive Order 12866. Accordingly, pursuant to section 6(a)(3)(C) of the Order, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation why the planned regulatory action is preferable to the identified potential alternatives. These assessments can be found in the technical support document for this rulemaking.
DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011. 76 FR 3281 (Jan. 21, 2011). Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that 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 specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.
DOE emphasizes as well that Executive Order 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, OIRA has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, DOE believes that this NOPR is consistent with these principles, including the requirement that, to the extent permitted by law, benefits justify costs and that net benefits are maximized.
The Regulatory Flexibility Act (5 U.S.C. 601
For manufacturers of UPSs, the Small Business Administration (SBA) has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. See 13 CFR part 121. The size standards are listed by North American Industry Classification System (NAICS) code and industry description and are available at
UPS manufacturing is classified under NAICS 335999, “All Other Miscellaneous Electrical Equipment and Component Manufacturing.” The SBA sets a threshold of 500 employees or less for an entity to be considered as a small business manufacturer of those product classes.
To estimate the number of companies that could be small businesses that manufacture or sell UPSs covered by this rulemaking, DOE conducted a market survey using publicly available information. DOE first attempted to identify all potential UPS manufacturers by researching certification databases (
DOE initially identified a total of 48 potential companies that sell UPSs in the United States. Of these, DOE estimated that 12 are small business. After reviewing publicly available information on these potential small UPS businesses, DOE determined that none of these businesses manufacture the UPSs that they sell in the United States or are subsidiaries of the foreign companies that manufacture UPSs. Additionally it is not thought that DOE's regulation of UPSs will put small businesses in the U.S. that purchase UPSs from foreign manufacturers at a competitive disadvantage in the marketplace, because these companies are not responsible for the conversion costs to comply with standards as these UPS companies do not own the manufacturing facilities and tooling used to produce UPSs. Because there are no domestic small business UPS manufacturers, DOE's UPS regulation will not have a direct effect on U.S. small business in this manufacturing space. As such, DOE certifies that this proposed rulemaking will not have a significant economic impact on a substantial number of small entities, and the preparation of an IRFA is not warranted.
DOE will provide its certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b). DOE seeks comment on its tentative conclusion that the proposed standard will not have a significant impact on a substantial number of small entities.
Manufacturers of UPSs must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedure for UPSs, including any amendments adopted for that test procedure. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment. 76 FR 12422 (March 7, 2011). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. DOE requested OMB approval of an extension of this information collection for three years, specifically including the collection of information for battery chargers, and estimated that the annual number of burden hours under this extension is 30 hours per company. In response to DOE's request, OMB approved DOE's information collection requirements covered under OMB control number 1910-1400 through November 30, 2017. 80 FR 5099 (January 30, 2015).
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
Pursuant to the National Environmental Policy Act (NEPA) of 1969, DOE has determined that the proposed rule fits within the category of actions included in Categorical Exclusion (CX) B5.1 and otherwise meets the requirements for application of a CX. (See 10 CFR part 1021, App. B, B5.1(b); 1021.410(b) and App. B, B(1)-(5).) The proposed rule fits within this category of actions because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, and for which none of the exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX determination for this rulemaking, and DOE does not need to prepare an Environmental Assessment or Environmental Impact Statement for this proposed rule. DOE's CX determination for this proposed rule is available at
Executive Order 13132, “Federalism,” 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) Therefore, no further action is required by Executive Order 13132.
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” imposes on Federal agencies the general duty to adhere to the following requirements (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy statement is also available at
Although this proposed rule does not contain a Federal intergovernmental mandate, it may require expenditures of $100 million or more in any one year by the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by UPS manufacturers in the years between the final rule and the
Section 202 of UMRA authorizes a Federal agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the proposed rule. (2 U.S.C. 1532(c)) The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The
Under section 205 of UMRA, the Department is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to select from those alternatives the most cost-effective and least burdensome alternative that achieves the objectives of the proposed rule unless DOE publishes an explanation for doing otherwise, or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6295(d), (f), and (o), 6313(e), and 6316(a), this proposed rule would establish new energy conservation standards for UPS that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified. A full discussion of the alternatives considered by DOE is presented in chapter 17 of the TSD for this proposed rule.
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Public Law 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
Pursuant to Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 15, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this NOPR under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which proposes new energy conservation standards for UPS, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this proposed rule.
On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (OSTP), issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government's scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are “influential scientific information,” which the Bulletin defines as “scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.”
In response to OMB's Bulletin, DOE conducted formal in-progress peer reviews of the energy conservation standards development process and analyses and has prepared a Peer Review Report pertaining to the energy conservation standards rulemaking analyses. Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. The “Energy Conservation Standards Rulemaking Peer Review Report” dated February 2007 has been disseminated and is available at the following Web site:
The time, date, and location of the public meeting are listed in the DATES and
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In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE's Web site at
Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the
DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C. 6306) A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the public meeting, interested parties may submit further comments on the proceedings, as well as on any aspect of the rulemaking, until the end of the comment period.
The public meeting will be conducted in an informal, conference style. DOE will present summaries of comments received before the public meeting, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will allow, as time permits, other participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly and comment on statements made by others. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket, which can be viewed as described in the
DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the
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Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery/courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
Factors of interest to DOE when evaluating requests to treat submitted information as confidential include (1) a description of the items, (2) whether and why such items are customarily treated as confidential within the industry, (3) whether the information is generally known by or available from other sources, (4) whether the information has previously been made available to others without obligation concerning its confidentiality, (5) an explanation of the competitive injury to the submitting person that would result from public disclosure, (6) when such information might lose its confidential character due to the passage of time, and (7) why disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:
(1) DOE requests comments on the potential technology options identified for improving the efficiency of UPSs. See section IV.A.2 for further detail.
(2) DOE requests comment on its screening analysis used to select the most viable options for consideration in setting this proposed standards. See section IV.B.2 for further detail.
(3) DOE requests comment on the ELs selected for each product class for its analysis. See section IV.C.2 for further detail.
(4) DOE requests comment on its understanding of why less efficient UPSs continue to exist in the market place at a price higher than more efficient units. See section IV.C.3 for further detail.
(5) DOE requests further comment on the average loading conditions for UPS product classes. See section IV.E for further detail.
(6) DOE requests additional information on UPS shipment volumes and projections. See section IV.G for further detail.
(7) DOE requests comment on commercial and residential price elasticity data for UPS product classes. See section IV.G for further detail.
(8) DOE requests comment or data that may inform historical or forecasted efficiency trends for UPSs. See section IV.H for further detail.
(9) DOE seeks comment on its use of 6.1 percent as a discount rate for UPS manufacturers. See section IV.J.2 for further detail.
(10) DOE seeks comment on its determination that product redesigns necessary to meet the ELs required by the proposed standard would not require investments in equipment and tooling, and on its determination that the majority of product design cycles would either take place before or coincide with the compliance period of the potential standards for UPSs. See section IV.J.2.a for further detail.
(11) DOE seeks comment on its methodology used to calculate product conversion costs, including the assumption of no capital conversion costs or stranded assets for UPS manufacturers at analyzed ELs. See section IV.J.2.a for further detail.
(12) DOE seeks comment on its methodology used to calculate manufacturer markups, its use of different manufacturer markups for each product class, and the specific manufacturer markups DOE estimated for each UPS product class. See section IV.J.2.d for further detail.
(13) DOE seeks comment on its determination that all UPS manufacturing takes place abroad. Additionally, DOE seeks comment on the presence of any domestic UPS manufacturing beyond assembly, R&D, testing, and certification, and if there are any potential negative impacts to domestic employment that could arise due to energy conservation standards on UPSs that are not fully captured by the direct employment impact analysis. See section V.B.2.b for further detail.
(14) DOE seeks comment on any potential UPS component manufacturer capacity constraints caused by the proposed standards in this NOPR. See section V.B.2.c for further detail.
(15) DOE seeks comment on any other manufacturer subgroups that DOE should analyze and/or types of UPS manufacturers for the manufacturer subgroup analysis, including the identification of UPS manufacturer subgroups that should be analyzed separately. See section V.B.2.d for further detail.
(16) DOE seeks comment on the compliance costs that UPS manufacturers must make for any other regulations, especially if compliance with those regulations is required within three years before or after the estimated compliance year of this
(17) DOE seeks comment on its tentative conclusion that the proposed standard will not have a significant impact on a substantial number of small entities. See section VI.B.3 for further detail.
(18) DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See
The Secretary of Energy has approved publication of this notice of proposed rulemaking.
Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Incorporation by reference, Intergovernmental relations, Small businesses.
For the reasons set forth in the preamble, DOE proposes to amend part 430 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below:
42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
(z) * * *
(3) All uninterruptible power supplies (UPS) manufactured on and after [
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service or FWS), are amending regulations for National Wildlife Refuges (NWRs) in Alaska that govern predator control and public participation and closure procedures. The amendments to the regulations are designed to clarify how our existing mandates for the conservation of natural and biological diversity, biological integrity, and environmental health on refuges in Alaska relate to predator control; prohibit several particularly effective methods and means for take of predators; and update our public participation and closure procedures. This rule does not change Federal subsistence regulations or restrict the taking of fish or wildlife for subsistence uses under Federal subsistence regulations.
This rule is effective September 6, 2016.
Stephanie Brady, Chief of Conservation Planning and Policy, or Carol Damberg, Inventory and Monitoring Biologist, National Wildlife Refuge System, Alaska Regional Office, 1011 E. Tudor Rd., Mail Stop 211, Anchorage, AK 99503; telephone (907) 306-7448 or (907) 786-3327. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.
On January 8, 2016, we published a proposed rule in the
During the comment period, we held nine public hearings on the proposed rule (January 26, 2016, in Kotzebue, AK; February 8, 2016, in Bethel, AK; February 10, 2016, in Fairbanks, AK; February 11, 2016, in Tok, AK; February 16, 2016, in Soldotna, AK; February 18, 2016, in Anchorage, AK; March 1, 2016, in Dillingham, AK; March 2, 2016, in Kodiak, AK; and March 3, 2016, in Galena, AK). Approximately 218 individuals attended these hearings, and 104 participants provided testimony during the public hearings. We also offered to consult in person with Tribes and Alaska Native Claims Settlement Act, 43 U.S.C. 1601
We received approximately 3,643 pieces of correspondence on the proposed rule during the public comment period, and from the correspondence, we derived over 80 comment statements (a comment statement is a portion of the text within a correspondence that addresses a single subject). Correspondence included unique comment letters and form letters. Approximately 2,530 correspondence documents were form letters. Approximately 409 pieces of correspondence received provided substantive comments. Some commenters sent comments by multiple methods. We attempted to match such duplicates and count them as one comment. Additionally, many comments were signed by more than one person. We counted a letter as a single comment, regardless of the number of signatories. A summary of comments and FWS responses is provided below in the section entitled Summary of and Response to Public Comments. After considering the public comments and conducting additional review, FWS made some changes in this final rule from that proposed. These changes are summarized below in the table entitled, Summary of primary differences between our proposed rule and this final rule.
FWS and the State of Alaska work together to manage fish and wildlife in the National Wildlife Refuge System (NWR System). State fish and wildlife authority remains the comprehensive management backdrop in the absence of specific, overriding Federal law which exists for specific statutory purposes. As explained below, FWS has ultimate management authority over resources in the Federal NWR System pursuant to a variety of statutes. However, effective stewardship of fish and wildlife resources, various statutory provisions, and Department of the Interior policy require close cooperation with the State. Indeed, as a general rule, State regulations governing hunting and fishing on refuges in Alaska are adopted with exceptions tailored to the purpose of each refuge and the relevant Federal authority.
FWS has various mandates it must adhere to in managing the National Wildlife Refuge System (NWR System). There are three statutes in particular that provide direction and authority specific to NWRs in Alaska: The 1980 Alaska National Interest Lands Conservation Act (ANILCA; 16 U.S.C. 3111-3126); the National Wildlife Administration Act of 1966 (Administration Act) as amended by the National Wildlife Refuge System Improvement Act of 1997 (Improvement Act) (16 U.S.C. 668dd-ee); and the 1964 Wilderness Act (16 U.S.C. 1131-1136).
The Improvement Act provides that ANILCA controls if there is a conflict between the two. ANILCA added approximately 54 million acres of land to the NWR System in Alaska, by establishing new NWRs or expanding and redesignating existing NWRs. ANILCA also designated 18.7 million acres in 13 wilderness areas on refuges in Alaska as units of the National Wilderness Preservation System.
Under ANILCA, each refuge in Alaska has a list of purposes for which it was established, including the first-listed purpose to “conserve fish and wildlife populations and habitats in their natural diversity” followed by a list of representative species particular to each refuge. Kenai NWR has an additional statutory purpose to provide opportunities for fish and wildlife-oriented recreation in a manner compatible with these purposes. The other purposes established by ANILCA for Alaska refuges (except international treaty obligations) must be managed consistent with the purpose to conserve fish and wildlife populations and habitats in their natural diversity. Legislative history for ANILCA provides important guidance on the intent and meaning of the term “natural diversity.” The 1979 Senate Report on H.R. 39 (ANILCA) states that refuges represent, “the opportunity to manage these areas on a planned ecosystem-wide basis with all of their pristine ecological processes intact” (S. Rep. No. 96-413 at 174 (1979),
Nine days after ANILCA was signed into law on December 2, 1980, Congressman Morris Udall, Chairman of the Committee on Interior and Insular Affairs and Floor Manager for H.R. 39, during a speech on the floor of the House of Representatives described the source of the term “natural diversity.” He stated that the conservation of natural diversity refers to “protecting and managing all fish and wildlife populations within a particular wildlife refuge system unit in the natural `mix,' not to emphasize management activities favoring one species to the detriment of another” (126 Cong. Rec. H12, 352-53 (daily ed. Dec. 11, 1980) (statement of Rep. Udall)). During this floor speech, Congressman Udall also stated that in managing for natural diversity it was the intent of Congress, “to direct the U.S. Fish and Wildlife Service to the best of its ability, . . . to manage wildlife refuges to assure that habitat diversity is maintained through natural means, avoiding artificial developments and habitat manipulation programs. . .; to assure that wildlife refuge management fully considers the fact that humans reside permanently within the boundaries of some areas and are dependent, . . . on wildlife refuge subsistence resources; and to allow management flexibility in developing new and innovative management programs different from lower 48 standards, but in the context of maintaining natural diversity of fish and wildlife populations and their dependent habitats for the long term benefit of all citizens” (126 Cong. Rec. H12, 352-53 (daily ed. Dec. 11, 1980) (statement of Rep. Udall)).
Although the above congressional testimonies provide slightly differing views about what is encompassed by managing for natural diversity, there is a common theme to protect and maintain the flora and fauna within each refuge while providing opportunities for subsistence under Title VIII of ANILCA. This legislative history, other ANILCA background documentation, and FWS laws, mandates, and policies serve to guide refuge management to meet the natural diversity purpose language of ANILCA and were used to develop the definition of natural diversity contained in this rule.
In its ANILCA Title VIII statement of policy, Congress also stated, “nonwasteful subsistence uses of fish and wildlife and other renewable resources [by rural residents] shall be the priority consumptive uses of all such resources on the public lands of Alaska when it is necessary to restrict taking in order to assure the continued viability of a fish or wildlife population or the continuation of subsistence uses of such population, the taking of such population for nonwasteful subsistence uses shall be given preference on the public land over other consumptive uses” (16 U.S.C. 3112(2)). This subsistence priority applies within all National Wildlife Refuges in Alaska.
All refuges in Alaska (except Kenai National Wildlife Refuge) have among their stated statutory purposes the requirement to provide the opportunity for continued subsistence use by local rural residents in a manner consistent with the conservation of fish and wildlife populations and habitats in their natural diversity and fulfilling the international treaty obligations of the United States with respect to fish and wildlife and their habitats. In a further statement of ANILCA Title VIII policy, Congress stated that “consistent with sound management principles, and the conservation of healthy populations of fish and wildlife, the utilization of the public lands in Alaska is to cause the least adverse impact possible on rural residents who depend upon subsistence uses of the resources of such lands; consistent with management of fish and wildlife in accordance with recognized scientific principles and the purposes for each unit established . . . the purpose of this title [Title VIII] is to provide the opportunity for rural residents engaged in a subsistence way of life to do so” (16 U.S.C. 3112(1)). The Senate Committee on Energy and Natural Resources in its report on H.R. 39 stated that “the phrase `the conservation of healthy populations of fish and wildlife' is to mean the maintenance of fish and wildlife resources in their habitats in a condition which assures stable and continuing natural populations and species mix of plants and animals in relation to their ecosystems, including recognition that local rural residents engaged in subsistence uses may be a natural part of that ecosystem . . .” (S. Rep. No. 96-413 at 233,
FWS recognizes the importance of the fish, wildlife, and other natural
The Improvement Act states that refuges must be managed to fulfill the mission of the NWR System and purposes of the individual refuge. The Improvement Act established the mission of the NWR System, to “administer a national network of lands and waters for the conservation, management, and where appropriate, restoration of fish, wildlife, and plant resources and their habitats within the United States for the benefit of present and future generations of Americans.” Section 4(a)(4)(B) of the Improvement Act states that “In administering the System, the Secretary shall . . . ensure that the biological integrity, diversity, and environmental health [BIDEH] of the System are maintained for the benefit of present and future generations of Americans . . .” (16 U.S.C. 668dd(a)(4)(B)). The FWS BIDEH policy (601 FW 3), which provides guidance for implementation of this aspect of the Improvement Act, defines biological integrity as “biotic composition, structure, and functioning at genetic, organism, and community levels comparable with historic conditions, including the natural biological processes that shape genomes, organisms, and communities.” In that policy, biological diversity is defined as “the variety of life and its processes, including the variety of living organisms, the genetic differences among them, and communities and ecosystems in which they occur.” The policy defines environmental health as the “composition, structure, and functioning of soil, water, air, and other abiotic features comparable with historic conditions, including the natural abiotic processes that shape the environment.” Abiotic features are nonliving chemical and physical features of the environment (
Based on the above discussion, we conclude that management in accordance with the BIDEH policy mandated by the Improvement Act is essentially the same as managing for natural diversity as mandated by ANILCA. Each mandate requires us to manage for natural diversity using minimum manipulation where possible, but also recognizes that active management may be required relative to other mandates, altered landscapes, and changing human influences. Each mandate allows appropriate management tools to remain available as needed for future refuge management. The terms biological integrity, diversity, and environmental health are defined in the BIDEH policy, which directs FWS to maintain the variety of life and its processes; to maintain biotic and abiotic compositions, structure, and functioning; and to manage populations for natural densities and levels of variation throughout the NWR System.
The Wilderness Act (16 U.S.C. 1131-1136) states that wilderness “is hereby recognized as an area where the earth and its community of life are untrammeled by man . . . which is protected and managed so as to preserve its natural conditions.” Our wilderness stewardship policy (610 FW 1) interprets “untrammeled” to be “the freedom of a landscape from the human intent to permanently intervene, alter, control, or manipulate natural conditions or processes.” The second chapter of the wilderness stewardship policy, which outlines administration and resource stewardship (610 FW 2), directs that FWS will not manipulate ecosystem processes, specifically including predator/prey fluctuations, in wilderness areas unless “necessary to accomplish the purposes of the refuge, including Wilderness Act purposes, or in cases where these processes become unnatural” (
The overarching goal of our wildlife-dependent recreation policy is to enhance opportunities and access to quality visitor experiences on refuges and to manage the refuge to conserve fish, wildlife, plants, and their habitats (605 FW 1.6). We recognize hunting as one of many priority uses of the NWR System (when and where compatible with refuge purposes) that is a healthy, traditional outdoor pastime, deeply rooted in the American heritage (605 FW 2). As stated at 50 CFR part 36, the taking of fish and wildlife through public recreational activities, including sport hunting, is authorized on refuges in Alaska “as long as such activities are conducted in manner compatible with the purposes for which the areas were established” (50 CFR 36.31(a)).
In 1970, the Secretary of the Interior developed a policy statement on intergovernmental cooperation in the preservation, use, and management of fish and wildlife resources. The purpose of the policy (36 FR 21034, November 3, 1971; 43 CFR part 24) was to strengthen and support the missions of the several States and the Department of the Interior respecting fish and wildlife. Federal authority exists for specified purposes while State authority regarding fish and resident wildlife remains the comprehensive backdrop applicable in the absence of specific, overriding Federal law.
In general, the States possess broad trustee and police powers over fish and wildlife within their borders, including fish and wildlife found on Federal lands within a State. Under the Property Clause of the Constitution, Congress is given the power to “make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” In the exercise of power under the Property Clause, Congress may choose to preempt State management of fish and wildlife on Federal lands and, in circumstances where the exercise of power under the Commerce Clause is available, Congress may choose to establish restrictions on the taking of fish and wildlife whether or not the activity occurs on Federal lands, as well as to establish restrictions on possessing, transporting, importing, or exporting fish and wildlife.
Units of the National Wildlife Refuge System constitute federally owned or controlled areas set aside primarily as conservation areas for migratory waterfowl and other species of fish or wildlife. In contrast to multiple use public lands, the conservation,
In Alaska, as such, sport hunting and trapping on refuges are generally regulated by the States, unless further restricted by Federal law (see 50 CFR 32.2(d)) or closures to Federal public land, such as under Federal subsistence regulations (36 CFR 242.26 or 50 CFR 100.26). In Alaska, sport hunting is commonly referred to as general hunting and trapping and includes State subsistence hunts and general permits open to both Alaska residents and nonresidents (see definition of “sport hunting” under the Regulation Promulgation section, below). These activities remain subject to Federal law, including mandates under ANILCA; the Improvement Act; and, where applicable, the Wilderness Act. Applicable directives and guidance can also be found in policies in the Service Manual at 601 FW 3 (Biological Integrity, Diversity, and Environmental Health), 605 FW 2 (Hunting), 610 FW 2 (Wilderness Administration and Resource Stewardship), and 610 FW 5 (Special Provisions for Alaska Wilderness). Additionally, the regulations at 50 CFR 36.32(a) state that the Refuge Manager “may designate areas where, and establish periods when, no taking of a particular population of fish or wildlife shall be permitted.”
The State of Alaska's (State) legal framework for managing wildlife is based on a different principle than the legal framework applicable to management of the NWR system; it is based on the principle of sustained yield, which is defined by statute to mean “the achievement and maintenance in perpetuity of the ability to support a high level of human harvest of game, subject to preferences among beneficial uses, on an annual or periodic basis” (Alaska Statute (AS) 16.05.255(j)(5)). Since 1994, Alaska State law (AS 16.05.255) has prioritized human consumptive use of ungulates—specifically moose, caribou, and deer. Known as the Intensive Management (IM) statute, the law requires the Alaska Board of Game (BOG) to designate populations of ungulates for which human consumptive use is the highest priority use and to set population and harvest objectives for those populations. To that end, the BOG must “adopt regulations to provide for intensive management programs to restore the abundance or productivity of identified big game prey populations as necessary to achieve human consumptive use goals” (AS 16.05.255(e)). Once designated as an IM population, if either populations or harvests fail to meet management objectives, nonresident hunting must first be eliminated, followed by reductions or eliminations of resident harvest opportunities. However, under the IM statute, the BOG may not significantly reduce the harvest opportunities of an identified IM ungulate population unless it has adopted or is considering the adoption of regulations “to restore the abundance or productivity of the ungulate population through habitat enhancement, predation control, or other means” (AS 16.05.255(e)-(g) and (j)).
The BOG has adopted regulations under the IM statute that require targeted reductions of wolf, black bear, brown bear, or a combination of these in designated “predation control areas” within game management units. These State regulations are implemented through IM plans (5 Alaska Administrative Code (AAC) 92.106-5 AAC 92.127) that authorize activities including aerial shooting of wolves or bears or both by State agency personnel, trapping of wolves by paid contractors, allowance under permit for same-day airborne hunting of wolves and bears by the public, and allowance under permit for the take of any black or brown bear through baiting or snaring by the public (5 AAC 92).
Thirteen of the 16 refuges in Alaska contain lands within game management units officially designated for IM. While predator control activities occurring under the authority of an IM plan have not been permitted by FWS on any refuge in Alaska, some predator control programs and activities are being implemented in predation control areas immediately adjacent to refuges. Given the large home ranges of many species affected by IM actions, these control programs have the potential to impact wildlife resources, natural systems, and ecological processes, as well as conservation and management of these species on adjacent refuges.
In recent years, concurrent with its adoption and implementation of IM plans for predation control areas, the BOG has also authorized measures under its general hunting and trapping regulations that potentially increase the take of predators to a degree that disrupts natural processes and wildlife interactions. Examples of these recently adopted measures, which apply beyond areas officially designated for IM, including many refuges in Alaska, are:
• Harvesting brown bears over bait at registered black bear bait stations;
• Taking wolves and coyotes (including pups) during the denning season;
• Expanding season lengths and increasing bag limits;
• Classifying black bears as both furbearers and big game species (which could allow for trapping and snaring of bears and sale of their hides and skulls); and
• Authorizing same-day airborne take of bears at registered bait stations (5 AAC 85).
Many of the recent actions by the BOG to liberalize the State's regulatory frameworks for general hunting and trapping of wolves, bears, and coyotes reverse long-standing prohibitions and restrictions on take of these wildlife species under State law. Unlike the recent practice of taking brown bears over bait, black bear baiting has been an authorized practice in Alaska since 1982, including on refuges. Black bear baiting is authorized by the State pursuant to a permit and, in some instances, a special use permit (Service Form 3-1383-G) issued by refuges. Taking of brown bears at black bear baiting stations was recently authorized under State regulations in certain game management units within the State (several of which are within refuges) and is subject to the same restrictions as black bear baiting. The State regulations prohibit setting up a bait station within 1 mile of a home or other dwelling, business, or campground, or within
Implementation of IM actions under the IM statute and many of the recent liberalizations of the general hunting and trapping regulations have direct implications for the management of refuges in Alaska. The different purposes of State and Federal laws and the increased focus on predator control by the State have resulted in the need for FWS to deviate, in certain respects, from applying State regulations within
In managing for natural diversity, FWS conserves, protects, and manages all fish and wildlife populations within a particular wildlife refuge system unit in the natural `mix,' not to emphasize management activities favoring one species to the detriment of another. FWS assures that habitat diversity is maintained through natural means on refuges in Alaska, avoiding artificial developments and habitat manipulation programs, whenever possible. FWS fully recognizes and considers that rural residents use, and are often dependent on, refuge resources for subsistence purposes, and FWS manages for this use consistent with the conservation of species and habitats in their natural diversity.
This rule does not change Federal subsistence regulations (36 CFR part 242 and 50 CFR part 100) or otherwise restrict the taking of fish or wildlife for subsistence by federally qualified users under those regulations. The rule does not apply to take in defense of life and property as defined under State regulations (see 5 AAC 92.410). Hunting and trapping are priority uses of refuges in Alaska. The rule will not affect implementation of State hunting and trapping regulations that are consistent with Federal law and FWS policies on refuges, nor will it restrict hunting or trapping activities outside FWS-managed refuge lands and waters.
We developed the changes to existing refuge regulations included in our January 8, 2016, proposed rule to meet our legal mandates and to ensure consistency with policy, directives, and approved management plans.
This rule makes the following substantive changes to existing NWR regulations:
(1) We define “natural diversity” in regulation based on the legislative history from ANILCA. Natural diversity means the existence of all fish, wildlife, and plant populations within a particular wildlife refuge system unit in the natural mix and in a healthy condition for the long-term benefit of current and future generations. Managing for natural diversity includes avoiding emphasis of management activities favoring some species to the detriment of others and assuring that habitat diversity is maintained through natural means, avoiding artificial developments and habitat manipulation programs whenever possible.
(2) We prohibit predator control on refuges in Alaska, unless it is determined necessary to meet refuge purposes; is consistent with Federal laws and policy; and is based on sound science in response to a conservation concern. Demands for more wildlife for human harvest cannot be the sole or primary basis for predator control.
We define predator control as the intention to reduce the population of predators for the benefit of prey species. For clarity, this includes predator reduction practices, such as, but not limited to, those undertaken by government officials or authorized agents, aerial shooting, or same-day airborne take of predators. Other less intrusive predator reduction techniques such as, but not limited to, live trapping and transfer, authorization of particularly effective public harvest methods and means, or utilizing physical or mechanical protections (barriers, fences) are also included with exception for barriers for human life and property safety.
A Refuge Manager will authorize predator control activities on a National Wildlife Refuge in Alaska only if:
(a) Alternatives to predator control have been evaluated as a practical means of achieving management objectives;
(b) Proposed actions have been evaluated in compliance with the National Environmental Policy Act (42 U.S.C. 4321
(c) A formal refuge compatibility determination has been completed, as required by law; and
(d) The potential effects of predator control on subsistence uses and needs have been evaluated through an ANILCA section 810 analysis.
This rule ensures that take of wildlife on refuges in Alaska under State regulations and implementation of predator control is consistent with our legal mandates and policies for administration of those refuges.
(3) This rule prohibits the following practices for the taking of wildlife on Alaska National Wildlife refuges (except for subsistence uses by federally qualified subsistence users in accordance with applicable Federal laws and regulations):
• Taking black or brown bear cubs or sows with cubs (exception allowed for resident hunters to take black bear cubs or sows with cubs under customary and traditional use activities at a den site October 15-April 30 in specific game management units in accordance with State law);
• Taking brown bears over bait;
• Taking of bears using traps or snares;
• Taking wolves and coyotes during the denning season (May 1-August 9); and
• Taking bears from an aircraft or on the same day as air travel has occurred. The take of wolves or wolverines from an aircraft or on the same day as air travel has occurred is already prohibited under current refuge regulations.
FWS requested comment on the type of bait allowed to be used for the baiting of black or brown bears. Currently, State regulations, which are adopted on refuges, require the bait used at bear baiting stations to be biodegradable. People use a range of different types of bait for the baiting of bears, including parts of fish and game that are not required to be salvaged when these species are harvested, as well as human and pet food products. We received very few comments expressing opinions on appropriate baits. Based on this, we will continue to adopt State regulations.
(4) We update our regulations to reflect Federal assumption of management of subsistence hunting and fishing under Title VIII of ANILCA by the Federal Government from the State in the 1990s.
(5) As set forth in our January 8, 2016, proposed rule (81 FR 887), we remove a statement at the current 50 CFR 36.32(e) that references compliance with other mandates (such as the Airborne Hunting Act, 16 U.S.C. 742j-1) in order to reduce redundancy. The requirement for compliance with applicable State and Federal laws is set forth at 50 CFR 36.32(a) in this final rule. We also correct the regulations at 50 CFR part 36 by removing a statement set forth at the current 50 CFR 36.32(e) that references sections of subchapter C of title 50 of the CFR (regarding the taking of depredating wildlife) that no longer exist.
(6) We amend 50 CFR 32.2(h) to state that black bear baiting is authorized in accordance with State regulations on NWRs in Alaska. This change ensures
(7) We update procedures for implementing closures or restrictions on refuges, including the taking of fish and wildlife under sport hunting and trapping, to more effectively engage and inform the public and make the notice and durational provisions more consistent with procedures set forth in Federal subsistence closure policy and regulations at 36 CFR 242.19 and 50 CFR 100.19 for emergency special actions on Federal public lands in Alaska. Improved consistency between these Federal regulations and processes will help minimize confusion and make it easier for the public to be involved in the process.
The regulations provide for emergency, temporary, and permanent closures and restrictions. This rule limits emergency closures and restrictions to 60 days, and temporary closures and restrictions are limited to the minimum time necessary, and will not exceed 12 months.
This rule also updates the closures and restrictions notification procedures for refuges in Alaska to reflect the availability of alternative communications technologies and approaches that have emerged or evolved over the last few decades. These changes recognize that the Internet has become one of the primary methods to communicate with the public and is an effective tool for engaging Alaskans and the broader American public and that there are other forms of broadcast media, beyond just the radio, that we may want to use.
The changes to the notification procedures are not intended to limit public involvement or reduce public notice; rather, we intend to engage in ways more likely to encourage public involvement and in a manner that is fiscally responsible. We recognize that in-person public meetings will continue to be the most effective way to engage Alaskans, and we intend to continue that practice. We also recognize that many individuals in rural Alaska do not have access to high speed Internet, and for that reason, we will continue to use other methods of communication, such as regional and local newspapers, posting flyers at local post offices, and radio announcements, where available to provide adequate notice.
(8) We codify definitions for several terms (see the Regulation Promulgation section, below). These terms include “Bait,” “Big game,” “Cub bear,” “Furbearer,” “Natural diversity,” “Predator control,” “Sport hunting,” and “Trapping.” Most of these definitions, including bait, big game, cub bear, furbearer, and predator control, are based on existing definitions in Federal subsistence regulations or policy.
During our scoping and comment period, and through tribal consultation efforts, we heard that definitions for biological integrity, biological diversity, natural diversity, and environmental health and the origins of these definitions are of significant interest to people. As discussed above, FWS is mandated under the Improvement Act to “ensure that the biological integrity, diversity, and environmental health [BIDEH] of the System are maintained
We reviewed and considered all substantive information we received during the comment period. A summary of substantive comments and FWS responses is provided below. The previous table sets out changes we have made to the provisions of the proposed rule based on the analysis of the comments and other considerations. As comments were often similar or covered multiple topics, we have grouped comments and responses by topic areas, which generally correspond to specific sections of the January 8, 2016, proposed rule.
FWS agrees that consultation with all constituent communities is extremely important and in particular continues to strive for increased cooperation and dialogue with rural Alaskans. We held nine public meetings in urban and rural communities, attended RAC and BOG meetings throughout the State, and contacted Alaska Native Tribes for government-to-government consultation and ANCSA corporations for consultations. We met and communicated with the Tribes and ANCSA corporations that requested formal consultation. Details on the outreach that was conducted with Tribes, the State, and the public are detailed in this rule and the finding of no significant impact (FONSI). FWS remains available to discuss the application of the rule with Tribes and ANCSA corporations at their request.
Second, FWS is committed to continuing to work with the State and prefers for the State to manage wildlife populations on refuge lands when consistent with NWR mandates, policies, and laws. However, as explained in more detail above, FWS is required under Federal law to make decisions regarding management of wildlife on refuges to ensure consistency with the purposes for which Congress established those refuges. While State law is the backdrop for fish and wildlife management, pursuant to the Property Clause, Congress enacted certain statutes, including those referenced in the Department's Wildlife Policy statement found at 43 CFR part 24, which obligate FWS to manage Federal refuge lands consistent with their authorized purposes. Cooperation with the States is required in certain respects, but specific laws have provided the Secretary the ultimate authority to make decisions that are required and/or allowed by Federal law. Congress in enacting the Administration Act and the Improvement Act provided FWS with the authority to manage fish and wildlife and their habitats on Federal lands including those within the boundaries of Alaska NWRs. ANILCA section 304(a) directs that “Each refuge shall be administered by the Secretary . . . in accordance with the laws governing the administration of units of the NWR System and this Act.”
In addition to the authorities discussed above, the Improvement Act (Act) clarifies Federal and State authorities in (16 U.S.C. 668dd(k)): “Notwithstanding any other provision of this Act, the Secretary may temporarily suspend, allow, or initiate any activity in a refuge in the System if the Secretary determines it is necessary to protect the health and safety of the public or any fish or wildlife populations.”
With respect to the role of the States, one commenter asserted that the Improvement Act actually affords States the authority, to the exclusion of FWS, to make management decisions for fish and wildlife on Federal refuges. At 16 U.S.C. 668dd(m), the Improvement Act states: “Nothing in this Act shall be construed as affecting the authority, jurisdiction, or responsibility of the several States to manage, control, or regulate fish and resident wildlife under State law or regulations in any area within the System. Regulations permitting hunting or fishing of fish and resident wildlife within the System shall be, to the extent practicable, consistent with State fish and wildlife laws, regulations, and management plans.” This section establishes a preference for State management and reliance on State regulations where “practicable,” but by its very terms contemplates that FWS must make independent determinations to ensure “practicability,” which includes compatibility with refuge purposes. The section affirms the responsibility of the State to enforce its fish and wildlife laws and the role of the State in management of fish and wildlife even on Federal refuges, but does not suggest that State authority is exclusive. Furthermore, the reading suggested by the commenter would have the effect of nullifying the many other provisions of the Improvement Act and other laws that impose upon FWS the responsibility to make decisions regarding management of Federal refuges.
Furthermore, this final rule is consistent with the provisions regarding taking of fish and wildlife that are stated in section 1314 of ANILCA. Subsection (a) provides that except for Federal subsistence, nothing in ANILCA “is intended to enlarge or diminish the responsibility and authority of the State of Alaska for management of fish and wildlife on the public lands”; subsection (b) states that except as specifically provided in ANILCA, “nothing in this Act is intended to enlarge or diminish the responsibility
Prior to initiating this rulemaking process, FWS met with State officials on multiple occasions over the past 10 years to discuss and attempt to resolve the issues that are finally addressed in this rule. Additional meetings with the State occurred during the development of the rule and after we published the proposed rule, but we have been unable to come to common ground. Thus we are proceeding with this rulemaking process in order to ensure that wildlife management on Alaskan NWRs remains consistent with the Service's legal mandates and authorities.
By law (Improvement Act), regulations (43 CFR part 24), and policy (the Service Manual at 605 FW 1 and 605 FW 2), FWS must, to the extent practicable, ensure that NWR regulations permitting hunting and fishing are consistent with State laws, regulations, and management plans. In recognition of the above, non-conflicting State general hunting and trapping regulations are usually adopted on NWRs. Hunting and trapping, however, remain subject to legal mandates, regulations, and management policies pertinent to the administration and management of NWRs.
The context for FWS' interpretation of “natural diversity” was included in information shared with the State and the Tribes as early as 2014. Reference to legislative history information that provided specific context for developing FWS' definition of “natural diversity” was provided repeatedly to the State and Tribes during the drafting of the rule starting in 2014. Upon repeated requests from the State and Tribes throughout the 2014-2015 rule development, FWS developed the definition of “natural diversity” set forth in this rule. We included this definition in the draft of the proposed rule that we shared with the State and Tribes (November 2015) prior to publishing the proposed rule in January 2016. In addition, there was a 90-day comment period to provide a revised or alternate definition. One commenter referenced an alternate definition (see Comment (24), below) that was evaluated and determined inappropriate for this rule. In response to comments, we added additional ANILCA legislation history language from Senator Ted Stevens to the preamble of this rule to provide a broader context for evaluating the interpretation of natural diversity.
Fortunately, Alaska NWRs are generally large enough to maintain natural and biological diversity and integrity, despite these challenges. Despite differences in their respective management mandates, Federal and State wildlife managers throughout Alaska strive for as much interagency consistency as possible when developing and implementing wildlife management actions. Such consistency is in the best interests of both our constituents and the wildlife resources they value.
We published our proposed rule on January 8, 2016 (81 FR 887). The comment period for our proposed rule, as extended (see 81 FR 9799; February 26, 2016), lasted 90 days, ending April 7, 2016. In accordance with the E-Government Act of 2002 (Pub. L. 107-347), FWS provided for submission of comments by electronic means, as well as by hard copy or in person or at public meetings, and made available online the comments and other materials included in the rulemaking docket. We received over 3,600 comments, including substantial comments from the State, BOG, Alaska Native Tribes, ANCSA corporations, RACs, Association of Fish and Wildlife Agencies (AFWA), and numerous other Alaskan constituents, organizations, and businesses. Electronic sites to notify the public about the 30-day extension of the original 60-day comment period (81 FR 9799; February 26, 2016) for the proposed rule were updated immediately on the Alaska NWR System Web site (February 25, 2016) and the Federal eRulemaking Portal (
This rule, as well as the proposed rule, contains revisions to regulations in order to comply with longstanding Presidential directions to use plain language in regulations. Such revisions do not modify the substance of the previous regulations. These types of changes include using “you” to refer to the reader and “we” to refer to the NWR System, using the word “allow” instead of “permit” when we do not require the use of a permit for an activity, and using active voice (
Executive Order (E.O.) 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 rule is not 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 rule in a manner consistent with these requirements.
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
As described above and in the January 8, 2016, proposed rule (81 FR 887), the changes in this rule will amend regulations for NWRs in Alaska. This rule primarily: (1) Codifies how our existing mandates relate to predator control in Alaska (50 CFR 36.1); (2) prohibits several particularly effective methods and means for take of predators (50 CFR 36.32); and (3) updates our public participation and closure procedures (50 CFR 36.42). Predator control is prohibited on NWRs in Alaska unless it is determined necessary to meet refuge purposes, is consistent with Federal laws and policy, and is based on sound science in response to a conservation concern. Demands for more wildlife to harvest cannot be the sole or primary basis for predator control. This rule does not change Federal subsistence regulations (36 CFR part 242 and 50 CFR part 100) or restrict taking of fish or wildlife for subsistence uses under Federal subsistence regulations. Codifying how our existing mandates relate to predator control in Alaska (50 CFR 36.1) will not result in a significant change of refuge use because these practices were historically prohibited by the State, and thus enforced as a matter of the adoption of non-conflicting provisions of State law. The rule ensures that these prohibitions continue. Codifying previously and currently prohibited sport hunting and trapping practices will not have a significant impact because the few changes that have occurred have been relatively recent, and this rule constitutes a reinstatement of the prior status quo. State general hunting and trapping regulations currently apply to NWRs in Alaska. Therefore, the prohibition of particular methods and means for the take of predators under State regulations on NWRs in Alaska that may affect visitor use on those NWRs include the take of brown bears over bait, take of wolves and coyotes during the denning season, and same-day airborne take of bears. The take of black bear sows with cubs is only allowed under State regulations in specific game management units for customary and traditional use; therefore, it is not currently nor in the past has it been legal for the general public to participate in this activity outside of that framework. As a result, big game hunting may decrease if a hunter's preferred hunting method is prohibited on a NWR and they choose not to hunt elsewhere where such methods are not prohibited. Conversely, wildlife watching activities may well increase if there are increased opportunities to view wildlife, including bears, wolves, and coyotes. From 2009 to 2013, big game hunting on NWRs in Alaska averaged about 40,000 days annually and represented 2 percent of wildlife-related recreation on NWRs. For Statewide hunting, big game hunting on NWRs in Alaska represented only 4 percent of all big game hunting days (1.2 million days). Due to the past ban on these prohibited methods and means for take of predators, we estimate that these hunting methods (take of brown bears over bait, take of wolves and coyotes during the denning season, and same-day airborne take of bears) represent a small fraction of all big game hunting on NWRs. As a result, big game hunting on NWRs is expected to change minimally. This change in opportunity will most likely be offset by other sites (located outside of NWRs) gaining participants. Therefore, there may be a substitute site for these hunting methods, and participation rates will not necessarily change.
Hunters' spending contributes income to the regional economy and benefits local businesses. Due to the unavailability of site-specific expenditure data, we use the Alaska estimate from the 2011 National Survey of Fishing, Hunting, and Wildlife Associated Recreation to identify expenditures for food and lodging, transportation, and other incidental expenses. Using the average trip-related expenditures for big game hunting ($139 per day) yields approximately $5.9 million annually in big game hunting-related expenditures on NWRs in Alaska. Since only a small fraction of big game hunters are likely to choose not to hunt on NWRs because of this rule, the impact will be minimal. The net loss to the local communities should be no more than $5.9 million annually, and most likely considerably less because few hunters use the prohibited methods and those hunters that do will likely choose a substitute site.
Small businesses within the retail trade industry (such as hotels, gas stations, taxidermy shops, etc.) may be impacted from some decreased refuge visitation. A large percentage of these retail trade establishments in local communities around NWRs qualify as small businesses. We expect that the incremental recreational changes will be scattered, and so we do not expect that the rule will have a significant economic effect on a substantial number of small entities in Alaska.
With the small change in overall spending anticipated from this rule, it is unlikely that a substantial number of small entities will have more than a small impact from the spending change near the affected NWRs. Therefore, we certify that this rule will not have a significant economic effect on a substantial number of small entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the SBREFA. This rule:
a. Will not have an annual effect on the economy of $100 million or more.
b. Will not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions.
c. Will 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.
As this rule applies to uses on federally owned and managed NWRs, it will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule will not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
This rule does not effect a taking of private property or otherwise have taking implications under E.O. 12630. This rule affects only the public use and management of Federal lands managed by FWS in Alaska. A takings implication assessment is not required.
As discussed in the
This rule complies with the requirements of E.O. 12988. Specifically, this rule:
a. Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and
b. Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951 (May 4, 1994)), Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments; 65 FR 67249 (November 9, 2000)), and the Department of the Interior Manual, 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis, and we did seek the Tribes' input in evaluating the proposed rule. In addition, we evaluated the proposed rule in accordance with 512 DM 4 under Department of the Interior Policy on Consultation with Alaska Native Claims Settlement Act (ANCSA) Corporations, August 10, 2012.
Prior to the development of the proposed rule, we sought feedback from interested parties, including Tribal governments, ANCSA corporations, the State of Alaska, and the Federal Subsistence RACs. We contacted 146 Tribal governments, 12 regional and 106 village ANCSA corporations, and 13 Native nonprofits, all within proximity to NWRs in Alaska. In response to what we heard, we significantly narrowed the scope and complexity of what we proposed (
We sent out an initial invitation consultation to Tribal governments, ANCSA corporations, and Native nonprofit organizations in Alaska, and the Alaska Federation of Natives, on September 24, 2014. We then sent a follow-up letter to the same contacts in the first week of February 2015, and another in mid-May 2015. In December 2015, several weeks prior to publication of the proposed rule and EA, we sent out a fourth letter notifying the Tribal governments and ANCSA corporations of the impending publication and scheduled hearings, and we provided an overview of the proposed rule, as well as another invitation to consult with us on the proposed rule. In early March 2016, we sent letters and/or emails to all Tribal governments, ANCSA corporations, and Native nonprofit organizations to notify them that we extended the comment period on the proposed rule for another 30 days, ending April 7, 2016.
FWS conducted three Statewide Tribal consultation teleconferences that included opportunity to dialogue with the Regional Director and the Chief of NWRs for Alaska. These teleconferences were held in November 2014 and February 2015. We also reached out to Tribal governments, ANCSA corporations, and Native nonprofit organizations through phone calls, emails, and meetings to notify them of our availability for consultation and to encourage comment on the proposed rule. Specific consultations requested during the comment period occurred with the following: Allakaket Council and Alatna Council on March 1, 2016; Doyon Corporation on March 7, 2016; Gwichyaa Zhee Tribal Council on February 24, 2016; Kaktovik Tribal Council on February 16, 2016; Native Village of Venetie Tribal Council and the Venetie Village Council on February 25, 2016; Nulato Tribe on February 3, 2016; and Togiak Tribal Council on April 1, 2016.
We provided information on the proposed rule at conferences and meetings including the Alaska Federation of Natives (October 2014 and 2015), Bureau of Indian Affairs Service Providers Conference (December 2014 and 2015), and the Federal Subsistence RACs meetings (September-October
The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and tribal sovereignty. We evaluated this rule under the criteria in E.O. 13175 and under the Department's tribal consultation and ANCSA corporation policies and determined that tribal consultation is not required because the rule will have no substantial direct effect on federally recognized Indian Tribes. While FWS has determined the rule will have no substantial direct effect on federally recognized Indian Tribes or ANCSA corporation lands, water areas, or resources, FWS has consulted with Alaska Native Tribes and ANCSA corporations on the proposed rule as indicated above.
This rule does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the PRA (44 U.S.C. 3501
FWS has analyzed this rule in accordance with the criteria of the National Environmental Policy Act (42 U.S.C. 4321
Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking actions that significantly affect energy supply, distribution, or use. This rule is not a significant regulatory action under E.O. 12866, and we do not expect it to significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action, and no Statement of Energy Effects is required.
The primary authors of this rule are Heather Abbey Tonneson, Stephanie Brady, and Carol Damberg of the U.S. Fish and Wildlife Service, Alaska Regional Office, with considerable review and input from other Service Alaska refuge and Office of Subsistence Management managerial and biological staff.
Fishing, Hunting, Reporting and recordkeeping requirements, Wildlife, Wildlife refuges.
Alaska, Recreation and recreation areas, Reporting and recordkeeping requirements, Wildlife refuges.
For the reasons set forth in the preamble, the Service amends title 50, chapter I, subchapter C, of the Code of Federal Regulations as follows:
5 U.S.C. 301; 16 U.S.C. 460k, 664, 668dd-668ee, and 715i.
16 U.S.C. 460(k)
(a) National Wildlife Refuges in Alaska are maintained to conserve species and habitats in their natural diversity and to ensure biological integrity, diversity, and environmental health of these refuges are maintained for the continuing benefit of present and future generations.
Fish may be taken by federally qualified subsistence users, as defined at 50 CFR 100.5, for subsistence uses on Alaska National Wildlife Refuges where subsistence uses are allowed in compliance with this subpart and 50 CFR part 100.
Federally qualified subsistence users, as defined at 50 CFR 100.5, may hunt and trap wildlife for subsistence uses on Alaska National Wildlife Refuges where subsistence uses are allowed in compliance with this subpart and 50 CFR part 100.
(a) The taking of fish and wildlife for sport hunting and trapping and for sport fishing is authorized in accordance with applicable State and Federal law, and such laws are hereby adopted and made a part of these regulations, except as set forth in this section and provided however, that the Refuge Manager, pursuant to § 36.42, may designate areas where, and establish periods when, no taking of a particular population of fish or wildlife will be allowed.
(b) Predator control is prohibited on National Wildlife Refuges in Alaska, unless it is determined necessary to meet refuge purposes, is consistent with Federal laws and policy, and is based on sound science in response to a conservation concern. Demands for more wildlife for human harvest cannot be the sole or primary basis for predator control. A Refuge Manager will authorize predator control activities on a National Wildlife Refuge in Alaska only if:
(1) Alternatives to predator control have been evaluated as a practical means of achieving management objectives;
(2) Proposed actions have been evaluated in compliance with the National Environmental Policy Act (42 U.S.C. 4321
(3) A formal refuge compatibility determination has been completed, as required by law; and
(4) The potential effects of predator control on subsistence uses and needs have been evaluated through an ANILCA section 810 analysis.
(c) The exercise of valid commercial fishing rights or privileges obtained pursuant to existing law, including any use of refuge areas for campsites, cabins, motorized vehicles, and aircraft landing directly incident to the exercise of such rights or privileges, is authorized;
(d) The following provisions apply to any person while engaged in the taking of fish and wildlife within an Alaska National Wildlife Refuge:
(1)
(ii) Each person must comply with the applicable provisions of Federal law.
(iii) In addition to the requirements of paragraphs (a) and (c) of this section, each person must continue to secure a trapping permit from the appropriate Refuge Manager prior to trapping on the Kenai, Izembek, and Kodiak Refuges and the Aleutian Islands Unit of the Alaska Maritime Refuge.
(iv) It is unlawful for a person having been airborne to use a firearm or any other weapon to take or assist in taking any species of bear, wolf, or wolverine until after 3 a.m. on the day following the day in which the flying occurred, except that a trapper may use a firearm or any other weapon to dispatch a legally caught wolf or wolverine in a trap or snare on the same day in which the flying occurred. This prohibition does not apply to flights on regularly scheduled commercial airlines between regularly maintained public airports.
(v) The following methods and means for take of wildlife are prohibited:
(2)
(ii) Each person must comply with the applicable provisions of Federal law.
(e) Persons transporting fish or wildlife through Alaska National Wildlife Refuges must carry an Alaska State hunting or fishing license, or in cases where a person is transporting game for another person, they are required to carry an Alaska State “Transfer of Possession Form” on their person and make these available when
(f) Nothing in this section applies to or restricts the taking or transporting of fish and wildlife by federally qualified subsistence users under Federal subsistence regulations.
(g) Animal control programs will only be conducted in accordance with a special use permit issued by the Refuge Manager.
(a)
(b) * * *
(c)
(2) Emergency closures or restrictions relating to the taking of fish and wildlife will be accompanied by notice pursuant to paragraph (f) of this section with a subsequent hearing;
(3) Other emergency closures or restrictions will become effective upon notice as prescribed in paragraph (f) of this section; and
(4) No emergency closure or restriction will exceed 60 days. Closures or restrictions requiring longer than 60 days will follow nonemergency closure procedures (
(d)
(2) Temporary closures or restrictions related to the taking of fish and wildlife will be effective only after notice pursuant to paragraph (f) of this section and after allowing for the opportunity for public comment and a public hearing in the vicinity of the area(s) affected, and other locations as appropriate. Temporary closures or restrictions related to the taking of fish and wildlife also require consultation with the State and affected Tribes and Native Corporations.
(3) Other temporary closures will be effective upon notice as set forth at paragraph (f) of this section.
(4) Temporary closures or restrictions will extend only for as long as necessary to achieve the purpose of the closure or restriction, and may not exceed 12 months;
(e)
(f)
(1) Publication in a newspaper of general circulation in the State and in local newspapers;
(2) Use of electronic media, such as the Internet and email lists;
(3) Broadcast media (radio, television, etc.); or
(4) Posting of signs in the local vicinity or at the Refuge Manager's office.
(g)
(h) Except as otherwise specifically allowed under the provisions of this part, entry into closed areas or failure to abide by restrictions established under this section is prohibited.
Fish and Wildlife Service, Interior.
Final rule.
In accordance with the Marine Mammal Protection Act of 1972, as amended, and its implementing regulations, we, the U.S. Fish and Wildlife Service, finalize incidental take regulations (ITR) that authorize the nonlethal, incidental, unintentional take of small numbers of Pacific walruses and polar bears during oil and gas industry activities in the Beaufort Sea and adjacent northern coast of Alaska. Industry operations include similar types of activities covered by the previous 5-year Beaufort Sea ITRs effective from August 3, 2011, through August 3, 2016. This rule is also effective for 5 years from the date of issuance.
This rule is effective August 5, 2016, and remains effective through August 5, 2021.
You may view this rule, the associated environmental assessment, biological opinion, comments received, and other supporting material at
Christopher Putnam, Marine Mammals Management Office, U.S. Fish and Wildlife Service, 1011 East Tudor Road, MS-341, Anchorage, AK 99503, Telephone 907-786-3844, or Email:
In accordance with the Marine Mammal Protection Act of 1972, as amended (MMPA), and its implementing regulations, we, the U.S. Fish and Wildlife Service (Service or we), finalize incidental take regulations (ITR) that authorize the nonlethal, incidental, unintentional take of small numbers of Pacific walruses (
This rule sets forth permissible methods of incidental nonlethal taking, mitigation measures designed to ensure the least practicable adverse impacts upon these species and their habitats, and requirements for monitoring and reporting. This rule is based on our findings that the total takings of Pacific walruses (walruses) and polar bears during Industry activities will impact only small numbers of animals, will have a negligible impact on these species, and will not have an unmitigable adverse impact on the availability of these species for subsistence use by Alaska Natives. We base our findings on data from monitoring the encounters and interactions between these species and Industry; research on these species; oil spill risk assessments; potential and documented Industry effects on these species; information regarding the natural history and conservation status of walruses and polar bears; and data reported from Alaska Native subsistence hunters. Compliance with the rule is not expected to result in additional costs to Industry that it has not already been subjected to during all previous ITRs for this area. These costs are minimal in comparison to those related to actual Industry operations. We also prepared an environmental assessment (EA) in accordance with NEPA requirements for this rulemaking and made a finding of no significant impact (FONSI).
In accordance with 5 U.S.C. 553(d)(3), we find that we have good cause to make this rule effective less than 30 days after publication (see
In preparing these final regulations for the Pacific walrus and polar bear, we reviewed and considered comments and information from the public on our proposed rule published in the
In this final rule, we have:
1. Revised text throughout the document referring to Industry activity as “proposed” or “lawful” to simply state Industry activity.
2. Revised text in the “Background” section clarifying the meaning of the term “least practicable adverse impacts.”
3. Revised text clarifying when a Plan of Cooperation will be required in the “Description of Plans of Cooperation (POCs)” section.
4. Revised text clarifying Caelus Energy Alaska, LLC's Oooguruk production activities, Nuna development activities, and Tulimaniq exploration activities in the “Description of Activities” section.
5. Revised text citing recent scientific findings in the “Climate Change” section.
6. Revised text in the “Take Estimates for Pacific Walruses and Polar Bears” section clarifying how we addressed the least practicable adverse impacts requirement by adding a subsection titled “
7. Revised text in the “Findings” section clarifying how we addressed the least practicable adverse impacts requirement by adding a subsection titled “
8. Revised text clarifying the meaning of the term “small numbers” in section 18.121 of the regulation.
9. Revised text in section 18.128(c)(4) clarifying that the mitigation measure described is relevant for vessels transiting through the Chukchi Sea bound for the Beaufort Sea.
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) gives the Secretary of the Interior (Secretary) the authority to allow the incidental, but not intentional, taking of small numbers of marine mammals, in response to requests by U.S. citizens (as defined in 50 CFR 18.27(c)) engaged in a specified activity (other than commercial fishing) in a specified geographic region. The Secretary has delegated authority for implementation of the MMPA to the U.S. Fish and Wildlife Service (Service). According to the MMPA, the Service
(1) Will affect only small numbers of individuals of these species;
(2) will have no more than a negligible impact on these species;
(3) will not have an unmitigable adverse impact on the availability of these species for taking for subsistence use by Alaska Natives; and
(4) we issue regulations that set forth:
(a) Permissible methods of taking,
(b) means of effecting the least practicable adverse impact on the species, their habitat, and the availability of the species for subsistence uses, and
(c) requirements for monitoring and reporting.
The term “take,” as defined by the MMPA, means to harass, hunt, capture, or kill, or attempt to harass, hunt, capture, or kill any marine mammal. Harassment, as defined by the MMPA, for activities other than military readiness activities or scientific research conducted by or on behalf of the Federal Government, means “any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild” (the MMPA calls this Level A harassment); or “(ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering” (the MMPA calls this Level B harassment).
The terms “negligible impact” and “unmitigable adverse impact” are defined in 50 CFR 18.27 (
Also defined in 50 CFR 18.27 is the term “small numbers,” however, we do not rely on that definition here as it conflates “small numbers” with “negligible impacts.” We recognize “small numbers” and “negligible impacts” as two separate and distinct requirements for promulgating ITRs under the MMPA. Instead, for our small numbers determination, we estimate the likely number of takes of marine mammals, and evaluate if that take is small relative to the size of the population or stock.
The term “least practicable adverse impact” is not defined in the MMPA or its enacting regulations. For these ITRs, we ensure the least practicable adverse impact by requiring mitigation measures that are effective in reducing the impact of Industry activities, but are not so restrictive as to make Industry activities unduly burdensome or impossible to undertake and complete.
In these ITRs, the term “Industry” includes individuals, companies, and organizations involved in exploration, development, production, extraction, processing, transportation, marketing, research, monitoring, and support services of petroleum products, and other substantially similar activities. Industry activities may result in the taking of walruses and polar bears. The MMPA does not require that Industry must obtain incidental take authorization; however, any taking that occurs without authorization is a violation of the MMPA. Since 1993, the oil and gas industry operating in the Beaufort Sea and the adjacent northern coast of Alaska has requested, and we have issued, ITRs for the incidental take of walruses and polar bears in specified areas during specified activities. For a detailed history of our recent Beaufort Sea ITRs, refer to the
On May 5, 2014, the Service received a petition from the Alaska Oil and Gas Association (AOGA) on behalf of its members and other participating companies to promulgate regulations for nonlethal incidental take of small numbers of walruses and polar bears in the Beaufort Sea and adjacent northern coast of Alaska for a period of 5 years (2016-2021). The anticipated incidental takes would be limited to Level B harassment. We received an amendment to the petition on July 1, 2015. The petition and previous regulations are available at:
The AOGA application requests regulations that will be applicable to any company conducting oil and gas exploration, development, and production activities as described within the application. This includes AOGA members and other non-member companies planning to conduct oil and gas operations in the specified geographic region. Members of AOGA represented in the petition include Alyeska Pipeline Service Company, Apache Corporation, BP Exploration (Alaska) Inc. (BPXA), Caelus Energy Alaska, LLC, Chevron USA, Inc., Eni Petroleum; ExxonMobil Production Company, Flint Hills Resources, Inc., Hilcorp Alaska, LLC, Petro Star Inc., Repsol, Shell Exploration & Production Company (Shell), Statoil, Tesoro Alaska Company, and XTO Energy, Inc.
Non-AOGA companies include ConocoPhillips Alaska, Inc. (CPAI), Brooks Range Petroleum Corporation (BRPC), and Arctic Slope Regional Corporation (ASRC) Energy Services. The activities and geographic region specified in AOGA's request, and considered in these regulations, are described in the following sections titled Description of Activities and Description of Geographic Region.
In response to this request, prior to issuing regulations at 50 CFR part 18 subpart J, we have evaluated the level of Industry activities, their associated potential effects upon walruses and polar bears, and their effects on the availability of these species for subsistence use. The information provided by the petitioners indicates that projected oil and gas activities over this period will encompass onshore and offshore exploration, development, and production activities. The Service analyzed the impacts that Industry activities will have on walruses and polar bears. In addition, we evaluated the potential for oil spills and associated impacts on walruses and polar bears.
These regulations do not authorize, or “permit,” Industry activities. Rather, they authorize the nonlethal incidental, unintentional take of small numbers of walruses and polar bears associated with those activities based on standards set forth in the MMPA. The Bureau of
• Permissible methods of nonlethal taking;
• Measures designed to ensure the least practicable adverse impact on walruses and polar bears and the availability of these species for subsistence uses; and
• Requirements for monitoring and reporting.
Under these ITRs, companies, groups, or individuals conducting an Industry, or other substantially similar, activity within the specified geographic region may request an LOA for the authorized nonlethal, incidental, Level B take of walruses and polar bears. We must receive requests for LOAs in writing at least 90 days before the activity is to begin. Requests must include an operations plan for the activity, a walrus and polar bear interaction plan, and a site-specific marine mammal monitoring and mitigation plan that specifies the procedures to monitor and mitigate the effects of the activities on walruses and polar bears. We will evaluate each request for an LOA, including plans of operation and interaction plans, based on the activity and location. We will condition each LOA depending on specific circumstances for the activity and location to ensure the activity and level of take are consistent with our findings in these ITRs. We will issue an LOA if the activity and the level of take caused by the activity are consistent with the findings of these ITRs. We must receive an after action report on the monitoring and mitigation activities within 90 days after the LOA expires.
The monitoring and mitigation measures included in each LOA will be designed to ensure that the effects of Industry activity are both negligible and effect the least practicable adverse impacts from Industry activities. For example, conditions include, but are not limited to: (1) A reminder that LOAs do not authorize intentional taking of walruses or polar bears, nor lethal incidental take; (2) measures to protect pregnant polar bears during denning activities (
A POC is a documented plan with potentially affected subsistence hunting communities that describes measures to mitigate potential conflicts between Industry activities and subsistence hunting. To ensure that Industry activities do not adversely impact subsistence hunting opportunities, applicants requesting an LOA must provide the Service documentation of communication and coordination with potentially affected Alaska Native communities potentially affected by the Industry activity and, as appropriate, with representative subsistence hunting and co-management organizations, such as the North Slope Borough (NSB) and Eskimo Walrus Commission (EWC), among others. A POC is not always needed, and in many cases communication and coordination is sufficient to document community concerns and mitigate conflicts whether voluntarily by Industry or through mitigation measures in an LOA. We will require a POC in cases where Alaska Native communities or representative subsistence hunting organizations express a desire for a more formal process and commitment from Industry. We may also require a POC in other cases if we are not satisfied with an LOA applicant's communication and coordination process, responsiveness to community concerns, or subsistence hunting conflict mitigation measures. As part of the POC process, Industry representatives engage with Native communities to provide information and respond to questions and concerns. Industry representatives inquire whether their activities will adversely affect the availability of walruses and polar bears for subsistence use. If community concerns suggest that Industry activities may have an impact on the subsistence uses of these species, the POC must document the procedures for how Industry will cooperate with the affected subsistence communities and what actions Industry will take to mitigate adverse impacts on the availability of walruses and polar bears for subsistence uses. We will review these plans and provide guidance to ensure compliance with the MMPA. We will not accept POCs if they fail to provide adequate measures to ensure that Industry activities will not have an unmitigable adverse impact on the availability of walruses and polar bears for subsistence uses.
The geographic region covered by the requested ITRs (Beaufort Sea ITR region (Figure 1)) encompasses all Beaufort Sea waters east of a north-south line through Point Barrow, Alaska (71°23′29″ N., −156°28′30″ W., BGN 1944), and extending approximately 322 kilometers (km) (~200 miles (mi)) north, including all Alaska State waters and Outer Continental Shelf (OCS) waters, and east of that line to the Canadian border. The offshore boundary of the Beaufort Sea ITR region matches the boundary of the BOEM Beaufort Sea Planning area, approximately 322 km (~200 mi) offshore. The onshore region is the same north/south line through Point Barrow, extending 40.2 km (25 mi) inland and east to the Canning River. The Arctic National Wildlife Refuge (ANWR) is not included in the Beaufort Sea ITR region. The geographical extent of the Beaufort Sea ITR region (approximately 29.8 million hectares (ha) (~73.6 million acres (ac))) is similar to the region covered in previous regulations (approximately 29.9 million ha (~68.9 million ac)) (76 FR 47010, August 3, 2011). An increase in the geographic area of the Beaufort Sea ITR region versus the region set forth in previous ITRs (approximately 1.9 million ha (~4.7 million ac)) is the result of matching the offshore boundary with that of the BOEM Beaufort Sea Planning area boundary.
This section summarizes the type and scale of Industry activities in the Beaufort Sea ITR region from 2016 to 2021. Year-round onshore and offshore Industry activities are anticipated. Planned and potential activities considered in our analysis include activities described by the petitioners (AES Alaska 2015) and other potential activities identified by the Service and deemed substantially similar to the activities requested in the petition. During the 5 years that the ITRs will be in place, Industry activities are expected to be generally similar in type, timing, and effect to activities that have been evaluated under the prior ITRs. Due to the large number of variables affecting Industry activities, prediction of exact dates and locations of activities is not possible. However, operators must provide specific dates and locations of activities in their application for an LOA. Requests for LOAs for activities and impacts that exceed the scope of analysis and determinations for these ITRs will not be issued. Additional information is available in the AOGA petition for ITRs at:
In the Beaufort Sea ITR region, oil and gas exploration occurs onshore, in coastal areas, and in the offshore environment. Exploration activities may include geological and geophysical surveys consisting of: Geotechnical site investigations, reflective seismic exploration, vibratory seismic data collection, airgun and water gun seismic data collection, explosive seismic data collection, vertical seismic profiling, and subsea sediment sampling. Exploratory drilling involves construction and use of drilling structures such as caisson-retained islands, ice islands, bottom-supported or bottom-founded structures such as the steel drilling caisson, or floating drill vessels. Exploratory drilling and associated support activities and features may include: Transportation to site; setup and relocation of lodging camps and support facilities (such as lights, generators, snow removal, water plants, wastewater plants, dining halls, sleeping quarters, mechanical shops, fuel storage, landing strips, aircraft support, health and safety facilities, data recording facilities, and communication equipment); building gravel pads; building gravel islands with sandbag and concrete block protection; construction of ice islands, pads, and ice roads; gravel hauling; gravel mining; road building; road maintenance; operating heavy equipment; digging trenches; burying and covering pipelines; security operations; dredging; moving floating drill units; helicopter support; and conducting ice, water, and flood management. Support facilities include pipelines, electrical lines, water lines, buildings and facilities, sea lifts, and large and small vessels. Exploration activities could also include the development of staging facilities; oil spill prevention, response, and cleanup activities; and site restoration and remediation. The level of exploration activities is similar to levels during past regulatory periods, although exploration projects may shift to different locations, particularly to the National Petroleum Reserve—Alaska (NPR-A). During the 5-year regulatory period, exploration activities are anticipated to occur in the offshore environment and to continue in the existing oilfield units.
BOEM manages oil and gas leases in the Alaska OCS region, which encompasses 242 million ha (600 million ac). Of that acreage, approximately 26 million ha (~65 million ac) are within the Beaufort Sea Planning Area and within the scope of the ITRs. Ten lease sales have been held in this area since 1979, resulting in 147 active leases, where 32 exploratory wells were drilled. Production has occurred on one joint Federal/State unit, with Federal oil production accounting for more than 28.7 million barrels (bbl) (1 bbl = 42 U.S. gallons or 159 liters) of oil since 2001 (BOEM 2015). Details regarding availability of future leases, locations, and acreages are not yet available, but exploration of the OCS is expected to continue. Lease Sale 242 previously planned in the Beaufort Sea during 2017 (BOEM 2012) was cancelled in 2015. A Draft Programmatic Environmental Impact Statement (EIS) for the 2017-2022 OCS Oil and Gas Leasing Program is planned for public comment in 2016 and is expected to propose Beaufort Sea Lease Sale 255 for the year 2020 (BOEM 2015).
Shell Exploration and Production Company (Shell) is the majority lease holder of BOEM Alaska OCS leases. In 2015 Shell announced that it would cease exploration activities on its BOEM Alaska OCS leases for the foreseeable future. Nevertheless, it is possible that Shell may pursue some sort of exploration activities on its Beaufort Sea BOEM Alaska OCS leases or State of Alaska offshore leases during the 5-year period of these ITRs. Shell may conduct exploration and/or delineation drilling during the open-water Arctic drilling season from a floating drilling vessel along with attendant ice management and oil spill response (OSR) equipment. For the winter drilling season, Shell may conduct drilling from an ice island or bottom-founded structure, along with attendant OSR equipment. Shell will provide a detailed exploration plan prior to conducting any activities in the Beaufort Sea BOEM Alaska lease area.
The BLM manages the 9.2-million-ha (22.8-million-ac) NPR-A of which 1.3 million ha (3.2 million ac) occur within the Beaufort Sea ITR region. Within this area, the BLM has offered approximately 4.7 million ha (~11.8 million ac) for oil and gas leasing (BLM 2013a). Between 1999 and 2014, 2.1 million ha (5.1-million ac) were sold in 10 lease sales. As of January 2015, there were 205 leases amounting to over 0.6 million ha (1.7 million ac) leased (BLM 2015). From 2000 to 2013, Industry drilled 29 wells in federally managed portions of the NPR-A and 3 in adjacent Native lands (BLM 2013b). ConocoPhillips Alaska, Inc. (CPAI) currently holds a majority of the leased acreage and is expected to continue exploratory efforts, especially seismic work and exploratory drilling, within the Greater Mooses Tooth and Bear Tooth Units of the NPR-A. Other operators, including Anadarko E&P Onshore LLC and NORDAQ Energy, Inc. also hold leases in the NPR-A. Caelus Energy Alaska, LLC (Caelus) has recently announced acquisition of leases and intentions to pursue exploratory drilling and possible development near Smith Bay in the Tulimaniq prospect. This exploration phase of the Tulimaniq project would include construction of ice pads, ice roads, temporary camps, and a temporary ice airstrip. The development phase would include construction of ice roads, gravel roads, gravel pads, and camps.
The State of Alaska Department of Natural Resources (ADNR), Oil and Gas Division, holds annual lease sales of State lands available for oil and gas development. Lease sales are organized by planning area. The approximately 0.8 million ha (~2 million ac) Beaufort Sea planning area occurs in coastal land and shallow waters along the shoreline of the North Slope between the NPR-A and the ANWR (State of Alaska 2015a). It is entirely within the boundary of the Beaufort Sea ITR region. The North Slope planning area includes tracts located to the south and inland from the Beaufort Sea planning area. Of the approximately 2.1 million ha (~5.1 million ac), 0.8 million ha (2 million ac) occur within the Beaufort Sea ITR region. As of August 2015, there were 1,253 active leases on the North Slope, encompassing 1.1 million ha (2.8 million ac), and 261 active leases in the State waters of the Beaufort Sea, encompassing 284,677 ha (703,452 ac; State of Alaska 2015b). The number of acres leased has increased by 25 percent on the North Slope and 14 percent in the Beaufort Sea planning areas since 2013. Although most of the existing oil and gas development in the Southern Beaufort ITR region is concentrated in these State planning areas, the increase in leased acreage suggests that exploration on State lands and waters will continue during the 2016-2021 ITR period.
Industry operations during oil and gas development may include construction of roads, pipelines, waterlines, gravel pads, work camps (personnel, dining, lodging, and maintenance facilities), water production and wastewater
Continued expansion of the existing Alpine oilfield within the Colville River Unit is planned for the 2016-2021 ITR period. Three new drill sites, Colville Delta drill site 5 (CD5, also known as Alpine West), GMT-1 (Lookout prospect, formerly CD6), and GMT-2 (Rendezvous prospect, formerly CD7) are located in the Northeast NPR-A. The GMT-1 project would facilitate the first production of oil from Federal lands in the NPR-A (although within NPR-A, CD5 is not on Federal land). These facilities will connect to existing infrastructure at Alpine via a gravel road and four bridges over the Colville River (BLM 2014). Development of CD5 is currently under way, and commercial oil production began in October 2015. The GMT-1 project has received permits, and road, pad, pipeline, and facilities construction is anticipated for 2017-2018, but due to permitting delays and low oil prices, CPAI has slowed construction plans that would have begun production by late 2017 (CPAI 2015). Permitting for GMT-2 has not yet been completed, but construction and first production is tentatively scheduled for 2019 and 2020. In addition to new drill site development in the NPR-A, expansion of existing drill sites in the Colville River Unit are also being considered. Additional development infrastructure in the area is planned with construction of the Nuiqsut spur road. Although the road is not specifically for Industry purposes, it will provide access to Alpine workers living in Nuiqsut.
The region between the Alpine field and the Kuparuk Unit has been called the Colville-Kuparuk Fairway (NSB 2014). Within this region, Brooks Range Petroleum Corporation (BRPC) has proposed development of 3 drill sites by 2020 as part of the 13-well Mustang development. An independent processing center is proposed at the hub of the Mustang Development, but production pipelines will tie into the Kuparuk facilities. Approximately 32.2 km (~20 mi) of gravel road and pipeline will need to be constructed to tie in the drill sites back to the Mustang development and provide year-round access. First production of oil is planned for 2016. BRPC has also proposed development within the Tofkat Unit southeast of the Alpine oilfield for the years 2020-2021. If constructed, the Tofkat gravel pad will cover approximately 6.07 ha (~15 ac) and will connect to Alpine infrastructure via an 8-km (5-mi) gravel road and pipeline.
Caelus has begun development of the Nuna prospect within the fairway. This project is located at the northeast end, within the Oooguruk Unit. Development activities include seismic surveys, continued exploratory drilling, drilling production wells, and construction of drill pads, roads, and pipeline connections to Kuparuk infrastructure.
Spanish oil company, Repsol, has submitted plans for development of five potential well locations with a three-well exploration program just northwest of the Alpine field. If deemed commercial, a spine-and-spur road system expanded from these drill sites to existing Kuparuk facilities is easily envisaged, along with multiple new drill sites, a centralized processing facility, and a network of flow lines tied into the Alpine Pipeline System.
CPAI has pursued ongoing infield and peripheral development at the existing Kuparuk River Unit over the past decade and is likely to do so into the foreseeable future. Efforts have focused on improving technologies, expanding current production, and developing new drill sites. Technological advancements have included hydraulic fracturing, enhanced oil recovery, coil-tube drilling, and 4-D seismic surveys. Two new drill rigs are being brought online in 2016. As of 2015, a new drill site “2S” in the southwest “Shark Tooth” portion of the unit is under construction. It will require approximately 3.2 km (2 mi) of additional gravel road, pipelines, and power lines. Oil production from this well is planned for later in 2016. The “Northeast West Sak” expansion of the existing “1H” drill site is also under way. The 3.8-ha (9.3-ac) project will accommodate additional wells and is planned to be complete in 2017. Oil from these facilities would be routed through the Kuparuk facilities to the Trans-Alaska pipeline. Other pad expansions and two additional drill sites in the eastern portion of the Kuparuk Unit may be developed later this decade to access additional oil resources.
New development within the Prudhoe Bay Unit is planned to help offset declining production from older wells. The newer wells employ horizontal and multilateral drilling, improved water and miscible gas injection techniques, multi-stage fracturing, and other technologies to access oil from sediments with low permeability at the periphery of the main oilfield. The BPXA has discussed the possibility of development of as many as 200 new wells within the Greater Prudhoe Bay Unit area during the upcoming decade. Much of this expansion is planned to occur as part of the “West End Development Program.” Proposed activities in this program include drilling 16 new wells, improving capacity of existing facilities, adding 25 additional miles of pipeline, construction of the first new pad in more than a decade, adding 2 drill rigs to the fleet, and expanding 2 additional pads within the unit. This program of development has been under way since 2013 and is expected to be completed in 2017 or later.
The Beechey Point Unit lies immediately north of the Prudhoe Bay Unit near the shore of Gwydyr Bay. The unit operator, BRPC, is planning to produce oil from several small hydrocarbon accumulations in and near this unit as part of the East Shore Development Project. Existing Prudhoe Bay infrastructure will be incorporated with new development to access the estimated 26 million bbl of recoverable reserves in the Central North Slope region. The East Shore pad will cover approximately 6.07 ha (~15 ac). An 8.9-km (5.5-mi) gravel road will be constructed to provide year-round access to production facilities. Oil will be transported via a 1.6-km (1-mi) pipeline from the East Shore pad to
Hilcorp Alaska, LLC (Hilcorp) recently assumed operation of the Liberty Unit, located in nearshore Federal waters in Foggy Island Bay about 17 km (11 mi) west of the Prudhoe Bay Unit. Initial development of the Liberty Unit began in early 2009 but was suspended following changes in production strategy. The current project concept involves production from a gravel island over the reservoir with full on-island processing capacity. Support infrastructure would include a 12.9-km (8-mi) subsea pipeline connecting to the existing Badami pipeline. Pending permit approvals, first oil production is expected by 2020 or later. This project concept supersedes the cancelled Liberty ultraextended-reach drilling project.
The Point Thomson Unit is located approximately 25 km (~20 mi) east of the Liberty Unit and 97 km (60 mi) east of Prudhoe Bay. The reservoir straddles the coastline of the Beaufort Sea. It consists of a gas condensate reservoir containing up to 8 trillion cubic feet (ft
Two proposals currently exist for construction of a natural gas pipeline to transport natural gas from the Point Thomson and Prudhoe Bay production fields. The Alaska Liquefied Natural Gas (LNG) project is an Industry-sponsored partnership whose members include BP Alaska LNG LLC; ConocoPhillips Alaska LNG Company; and ExxonMobil Alaska LNG LLC. The Alaska LNG project proposes to build a large-diameter (45-106 centimeters (cm), 18-42 inch (in)) natural gas pipeline from the North Slope to Southcentral Alaska. In 2014, the State of Alaska joined in the project as a 25 percent co-investor. Since then, the project has begun the preliminary front end engineering and design phase, which has extended into 2016 with gross spending of more than $500 million. The routing of the Alaska LNG project pipeline is from Prudhoe Bay, generally paralleling the Dalton Highway corridor from the North Slope to Fairbanks. An approximately 56.3-km (~35-mi) lateral pipeline will take off from the main pipeline and end at Fairbanks. The main pipeline would continue south, terminating at a natural gas liquefaction plant near Nikiski. There the remaining hydrocarbons will be condensed for export to national and international markets.
The second partnership, the Alaska Stand Alone Gas Pipeline (ASAP) project, was originally planned as a 24-in diameter natural gas pipeline with a natural gas flow rate of 500 million ft
Either project would include an underground pipeline with elevated bridge stream crossings, compressor stations, possible fault crossings, pigging facilities, and off-take valve locations. Both pipelines would be designed to transport a highly conditioned natural gas product, and would follow the same general route. As currently proposed, approximately 40 km (~25 mi) of pipeline would occur within the Beaufort ITR region. A gas conditioning facility would need to be constructed near Prudhoe Bay and will likely require one or more large equipment modules to be off-loaded at the West Dock loading facility. The West Dock facility is a gravel causeway stretching 4 km (2.5 mi) into Prudhoe Bay. Shipments to West Dock will likely require improvements to the dock facilities including installing breasting dolphins to facilitate berthing and mooring of vessels, and raising the height of the existing dockhead to accept the large shipments. Dredging will be needed to deepen the navigational channel to the dockhead. Continued preconstruction project engineering and design work involving site evaluations and environmental surveys on the North Slope is likely to occur in the 2016-2021 period. Additional early-phase construction work could occur during this time but would likely be limited to expansion of West Dock beginning in 2020, gravel extraction and placement for pads and roads near Prudhoe Bay beginning in 2019, and ice-road construction in 2018-2021.
North Slope production facilities occur between the oilfields of the Alpine Unit in the west to Badami and Point Thomson in the east. Production activities include building operations, oil production, oil transport, facilities maintenance and upgrades, restoration, and remediation. Production activities are permanent, year-round activities, whereas exploration and development activities are usually temporary and seasonal. Alpine and Badami are not connected to the road system and must be accessed by airstrips, barges, and seasonal ice roads. Transportation on the North Slope is by automobile, airplanes, helicopters, boats, rolligons, tracked vehicles, and snowmobiles. Aircraft, both fixed wing and helicopters, are used for movement of personnel, mail, rush-cargo, and perishable items. Most equipment and materials are transported to the North Slope by truck or barge. Much of the barge traffic during the open water season unloads from West Dock. Maintenance dredging of up to 220,000 cubic yards per year of material is performed at West Dock to ensure continued operation.
Oil pipelines extend from each developed oilfield to the Trans-Alaska Pipeline System (TAPS). The 122-cm (48-in) diameter TAPS pipeline extends 1,287 km (800 mi) from the Prudhoe Bay oilfield to the Valdez Marine Terminal. Alyeska Pipeline Service Company conducts pipeline operations and maintenance. Access to the pipeline is primarily from established roads, such as the Spine Road and the Dalton Highway, or along the pipeline right-of-way.
The Alpine oilfield within the Colville River Unit was discovered in 1994 and began production in 2000. CPAI maintains a majority interest and is the primary operator. Alpine is currently the westernmost production
The Oooguruk Unit, operated by Caelus, is located at the north end of the Colville-Kuparuk fairway, adjacent to the Kuparuk Unit in shallow waters of Harrison Bay. The Oooguruk drillsite is located on a 6 acre artificial island in the shallow waters of Harrison Bay. A 9.2 kilometer (5.7 mile) system of subsea flowlines, power cables, and communications cables connects the island to onshore support facilities. Production began in 2008. Expansion of the drill site in the future would increase the working surface area from 2.4 hectare (6 acres) to 3.8 hectare (9.5 acres). Drilling of additional production wells are planned and new injection well technology will be employed. Cumulative production was estimated to be 9.8 million bbl as of 2011 (AOGCC 2013).
The Kuparuk oilfield, operated by CPAI, is Alaska's second-largest producing oilfield behind Prudhoe Bay. The gross volume of the oilfield has been estimated to be 6 billion bbl; more than 2.5 billion bbl have been produced as of 2014 (CPAI 2014). Nearly 900 wells have been drilled in the Greater Kuparuk Area, which includes the satellite oilfields of Tarn, Palm, Tabasco, West Sak, and Meltwater. The total development area in the Greater Kuparuk Area is approximately 603 ha (~1,508 ac), including 167 km (104 mi) of gravel roads, 231 km (144 mi) of pipelines, 6 gravel mine sites, and over 50 gravel pads. The Kuparuk operations center and construction camp can accommodate up to 1,200 personnel.
The Nikaitchuq Unit, operated by Eni, is north of the Kuparuk River Unit. The offshore portion of Nikaitchuq, the Spy Island Development, is located south of the barrier islands of the Jones Island group and 6.4 km (4 mi) north of Oliktok Point. In 2007, Eni became the operator in the area and subsequently constructed an offshore gravel pad and onshore production facilities at Spy Island and Oliktok Point. The offshore pad is located in shallow water (
The Milne Point Unit, operated by Hilcorp, is located approximately 56 km (~35 mi) northwest of Prudhoe Bay and immediately east of the Nikaitchuq Unit. This field consists of more than 220 wells drilled from 12 gravel pads. Milne Point produces oil from three main fields: Kuparuk, Schrader Bluff, and Sag River. Cumulative oil production as of the end of 2012 was 308 million barrrels of oil equivalent (BOE, the amount of hydrocarbon product containing the energy equivalent of a barrel of oil). Average daily production rate in 2012 was 17,539 BOE with 114 production wells online. The total gravel footprint of Milne Point and its satellites is 182 ha (450 ac). The Milne Point Operations Center has accommodations for up to 180 people. An expansion program is under way for the Milne Point Unit. It is likely to improve technology of existing wells and may also include building a new drill pad, roads, and associated wells.
The Prudhoe Bay Unit, operated by BPXA, is one of the largest oilfields by production in North America and ranks among the 20 largest oilfields worldwide. Over 12 billion bbl have been produced from a field originally estimated to have 25 billion bbl of oil in place. The Prudhoe Bay oilfield also contains an estimated 26 trillion ft
The Prudhoe Bay Unit encompasses several oilfields, including the Point McIntyre, Lisburne, Niakuk, Western Niakuk, West Beach, North Prudhoe Bay, Borealis, Midnight Sun, Polaris, Aurora, and Orion reservoirs. Of these, the largest field by production is the Point McIntyre oilfield, which lies about 11 km (7 mi) north of Prudhoe Bay. Cumulative oil production between 1993 and 2011 was 436 million bbl (AOGCC 2013). In 2014, production at Point McIntyre averaged about 18,700 bbl of oil per day. The Lisburne field is largest by area. It covers about 80,000 ac just northwest of the main Prudhoe Bay field. Production was reported as 7,070 bbl per day in 2011, and cumulative production was approximately 182 million BOE as of 2014. The Niakuk fields have also reached high cumulative yields among the Greater Prudhoe Bay area oilfields. Between 1994 and 2011, these fields produced about 157 million bbl. In 2014, the combined Niakuk fields yielded about 1,200 bbl per day. Orion, Aurora, Polaris, Borealis and Midnight Sun are considered satellite fields and were producing more than 22,500 bbl per day combined in 2014 (BPXA 2015). In total, Prudhoe Bay satellite fields have produced more than 184 million BOE.
The total development area in the Prudhoe Bay Unit is approximately 2,785 ha (~6,883 ac) within an area of about 86,418 ha (213,543 ac). On the east side of the field the main construction camp can accommodate up to 625 people, the Prudhoe Bay operations center houses up to 449 people, and the Tarmac Camp houses 244 people. The base operations center on the western side of the Prudhoe Bay oilfield can accommodate 474 people. Additional personnel are housed at facilities in nearby Deadhorse industrial center or in temporary camps placed on existing gravel pads. Activities in the Prudhoe Bay Unit are likely to emphasize greater production of natural gas if a gas pipeline is approved during the 2016-2021 ITR period.
The Northstar oilfield, currently operated by Hilcorp, is located 6 km (4 mi) northwest of the Point McIntyre and 10 km (6 mi) north of the Prudhoe Bay Unit in approximately 10 m (~33 ft) of water. It was developed by BPXA in 1995, and began producing oil in 2001. The 15,360 ha (38,400 ac) reservoir lies offshore in waters up to 40 ft deep. A 2-ha (5-ac) artificial island supports 24 operating wells and all support facilities for this field. A subsea pipeline
The Endicott oilfield, operated by Hilcorp, is located in the Duck Island Unit approximately 16 km (~10 mi) northeast of Prudhoe Bay. In 1986 it became the first continuously producing offshore field in the U.S. Arctic. The Endicott oilfield was developed from two man-made gravel islands connected to the mainland by a gravel causeway. The operations center and processing facilities are located on the 24-ha (58-ac) main production island approximately 4.8 km (~3 mi) offshore. As of August 2013, 501 million BOE have been produced from Endicott. Production is from the Endicott reservoir in the Kekiktuk formation and two satellite fields (Eider and Sag Delta North) in the Ivishak formation. All wells were drilled from Endicott's main production island. The total area of development is 210 ha (522 ac) of land (including the Liberty satellite drilling island) with 24 km (15 mi) of roads, 43 km (24 mi) of pipelines, and 1 gravel mine site. Approximately 85 people can be housed at Endicott's Liberty camp.
The Badami and Point Thomson units are located in the eastern portion of the North Slope and Beaufort Sea planning areas. Production from the Badami oilfield began in 1998 and from Point Thomson in 1983, but has not been continuous from either unit. The Badami field is located approximately 56 km (~35 mi) east of Prudhoe Bay and is the most easterly oilfield currently in production on the North Slope. Point Thomson, located 4 km (2.5 mi) east of Badami, was not in production as of 2016. The Badami development area is approximately 34 ha (~85 ac) of tundra including 7 km (4.5 mi) of gravel roads, 56 km (35 mi) of pipeline, 1 gravel mine site, and 2 gravel pads with a total of eight wells. As of 2011, cumulative production had reached 5.7 million bbl. There is no permanent road connection from Badami to Prudhoe Bay. A pipeline connecting the Badami oilfield to the common carrier pipeline system at Endicott was built from an ice road.
Growing interest in the North Slope's methane gas hydrate resources is expected to continue in the upcoming 5 years. The U.S. Geological Survey (USGS) has estimated the volume of technically recoverable undiscovered methane gas hydrate on the North Slope is approximately 85 trillion ft
The NSB operates the Barrow Gas Fields located south and east of the city of Barrow. The Barrow Gas Fields include the Walakpa, South, and East Gas Fields; of these, the Walakpa Gas Field and a portion of the South Gas Field are located within the boundaries of the Chukchi Sea geographical region and, therefore, not discussed here. The East Field and part of the South Field are included in the Beaufort Sea ITR region.
The Barrow Gas Fields provide a source of heat and electricity for the Barrow community. Drilling and testing of the East Barrow Field began in 1974, and regular gas production from the pool began in December 1981. Production peaked at about 2.75 million ft
Although activities within the Barrow Gas Fields were not specifically identified by the Applicants, the petition did include this area as part of the request for ITRs. Additionally, a portion of the Barrow Gas Fields are similarly described in ITRs for the Chukchi Sea (78 FR 35364, June 12, 2013), while the remainder is located in the Beaufort Sea geographic region. Therefore, as part of this analysis, we have included the Barrow Gas Fields in the event that LOAs for activities on the Beaufort Sea side of the field are requested. Gas production is expected to continue at its current rate during the next 5 years, and will be accompanied by maintenance and support activities, including possible access by air or over land, ice road construction, survey work, or on-pad construction.
Based on the Industry request, we assume that the activities will increase the area of the industrial footprint with the addition of new facilities, such as drill pads, pipelines, and support facilities at a rate consistent with prior 5-year regulatory periods. However, oil production volume is expected to continue a long-term decline during this 5-year regulatory period despite new development. This prediction is due to declining production from currently producing fields. During the period covered by the regulations, we assume the annual level of activity at existing production facilities, as well as levels of new annual exploration and development activities, will be similar to that which occurred under the previous regulations, although exploration and development may shift to new locations and new production facilities will add to the overall Industry footprint. Additional onshore and offshore facilities are being considered within the timeframe of these regulations, potentially adding to the total permanent activities in the area. The rate of progress is similar to prior production schedules, but there is a potential increase in the accumulation of the industrial footprint, with an increase mainly in onshore facilities.
Pacific walruses constitute a single panmictic population inhabiting the shallow continental shelf waters of the Bering and Chukchi seas (Lingqvist
Although most walruses remain in the Chukchi Sea throughout the summer months, a few occasionally range into the Beaufort Sea in late summer. Industry monitoring reports have observed no more than 35 walruses in the area of these ITRs between 1995 and 2016, with only a few instances of disturbance to those walruses (AES Alaska 2015, Kalxdorff and Bridges 2003, USFWS unpubl. data). Beginning in 2008, the USGS, and since 2013 the Alaska Department of Fish and Game (ADF&G), have fitted about 30-60 walruses with satellite transmitters each year during spring and summer. In 2014, a female tagged by ADF&G spent about 3 weeks in Harrison Bay (ADF&G 2014). The USGS tracking data indicates that at least one instrumented walrus ventured into the Beaufort Sea for brief periods in all years except 2011. Most of these movements extend northeast of Barrow to the continental shelf edge north of Smith Bay (USGS 2015). All available information indicates that few walruses enter the Beaufort Sea and those that do spend little time there. The Service and USGS are conducting multiyear studies on the walrus population to investigate movements and habitat use patterns. It is possible that as sea-ice diminishes in the Chukchi Sea beyond the 5-year period of this rule, walrus distribution and habitat use may change.
Walruses are generally found in waters of 100 m (328 ft) or less although they are capable of diving to greater depths. They use sea-ice as a resting platform over feeding areas, as well as for giving birth, nursing, passive transportation and avoiding predators (Fay 1982, Ray
Walruses are social and gregarious animals. They travel and haul-out onto ice or land in groups. Walruses spend approximately 20-30 percent of their time out of the water. Hauled-out walruses tend to be in close physical contact. Young animals often lie on top of adults. The size of the hauled out groups can range from a few animals up to several thousand individuals. The largest aggregations occur at land haulouts. In recent years, the barrier islands north of Point Lay, Alaska, have held large aggregations of walruses (20,000-40,000) in late summer and fall (Monson
The size of the walrus population has never been known with certainty. Based on large sustained harvests in the 18th and 19th centuries, Fay (1957) speculated that the pre-exploitation population was represented by a minimum of 200,000 animals. Since that time, population size following European contact is believed to have fluctuated markedly in response to varying levels of human exploitation. Large-scale commercial harvests are believed to have reduced the population to 50,000-100,000 animals in the mid-1950s (Fay
Between 1975 and 1990, aerial surveys conducted jointly by the United States and Russia at 5-year intervals produced population estimates ranging from about 200,000 to 255,000 individuals, with large confidence intervals. Efforts to survey the walrus population were suspended by both countries after 1990 because problems with survey methods produced population estimates with unknown bias and unknown variances that severely limited their utility. In 2006, the United States and Russia conducted another joint aerial survey in the pack ice of the Bering Sea using thermal imaging systems to more accurately count walruses hauled out on sea-ice and apply satellite transmitters to account for walruses in the water. The number of walruses within the surveyed area was estimated at 129,000 with 95 percent confidence limits of 55,000 to 507,000 individuals. This estimate should be considered a minimum, as weather conditions forced termination of the survey before large areas of the Bering Sea were surveyed (Speckman
Taylor and Udevitz (2015) used both the aerial survey population estimates described above and ship-based age and sex composition counts that occurred in 1981-1984, 1998, and 1999 (Citta
A detailed description of the Pacific walrus stock can be found in the Pacific Walrus (
Polar bears are known to prey on walruses, particularly calves, and killer whales
Walruses have been hunted by coastal Natives in Alaska and Chukotka for thousands of years. Exploitation of the walrus population by Europeans has also occurred in varying degrees since beginning with the arrival of exploratory expeditions. Commercial harvest of walruses ceased in the United States in 1941 and sport hunting ceased in 1972 with the passage of the MMPA. Commercial harvest of walruses in Russia ceased in 1990. Presently, walrus hunting in Alaska and Chukotka is restricted to subsistence use by aboriginal peoples. Harvest mortality from 2000-2014 for both the United States and Russian Federation averaged 3,207 (SE = 194) walruses per year. This mortality estimate includes corrections for under-reported harvest (U.S. only) and struck and lost animals. Harvests have been declining by about 3 percent per year since 2000 and were exceptionally low in the United States in 2012-2014. Resource managers in Russia have concluded that the population has declined and reduced harvest quotas in recent years accordingly (Kochnev 2004; Kochnev 2005; Kochnev 2010; pers. comm.; Litovka 2015, pers. comm.), based in part on the lower abundance estimate generated from the 2006 survey. However, Russian hunters have never reached the quota (Litovka 2015, pers. comm.).
Intra-specific trauma at coastal haulouts is also a known source of injury and mortality (USFWS 2015). Disturbance events can cause walruses to stampede into the water and have been known to result in injuries and mortalities. The risk of stampede-related injuries increases with the number of animals hauled out. Calves and young animals are particularly vulnerable to trampling injuries and mortality. Management and protection programs in both the United States and Russian Federation have been successful in reducing disturbances and large mortality events at coastal haulouts (USFWS 2015).
The Service announced a 12-month petition finding to list the Pacific walrus as endangered or threatened and to designate critical habitat on February 10, 2011 (76 FR 7634). The listing of walruses was found to be warranted, but precluded due to higher priority listing actions, and the Pacific walrus was added to the list of candidate species under the Endangered Species Act (ESA; 16 U.S.C. 1533
Polar bears are found throughout the ice-covered seas and adjacent coasts of the Arctic with a current population estimate of approximately 26,000 individuals (95 percent Confidence Interval (CI) = 22,000-31,000) (Wiig
Females can initiate breeding at 5 to 6 years of age. Females without dependent cubs breed in the spring. Pregnant females enter maternity dens by late November, and the young are usually born in late December or early January. Only pregnant females den for an extended period during the winter; other polar bears may excavate temporary dens to escape harsh winter winds. On average two cubs are born per reproductive event, and, therefore, reproductive potential (intrinsic rate of increase) is low. The average reproductive interval for a polar bear is 3 to 4 years, and a female polar bear can produce 8-10 cubs in her lifetime, in healthy populations, and 50-60 percent of the cubs will survive.
In late March or early April, the female and cubs emerge from the den. If the mother moves young cubs from the den before they can walk or withstand the cold, mortality to the cubs increases. Therefore, it is thought that successful denning, birthing, and rearing activities require a relatively undisturbed environment. Radio and satellite telemetry studies elsewhere indicate that denning can occur in multiyear pack ice and on land. In the Southern Beaufort Sea (SBS) population the proportion of dens on pack ice declined from approximately 60 percent from 1985 through 1994 to 40 percent from 1998 through 2004 (Fischbach
In Alaska, maternal polar bear dens appear to be less densely concentrated than those in Canada and Russia. In Alaska, certain areas, such as barrier islands (linear features of low-elevation land adjacent to the main coastline that are separated from the mainland by bodies of water), river bank drainages, much of the North Slope coastal plain, and coastal bluffs that occur at the interface of mainland and marine habitat, receive proportionally greater use for denning than other areas. Maternal denning occurs on tundra-bearing barrier islands along the Beaufort Sea and also in the large river deltas, such as those associated with the Colville and Canning rivers.
During the late summer/fall period (August through October), polar bears are most likely to be encountered along the coast and barrier islands. They use these areas as travel corridors and hunting areas. Based on Industry observations, encounter rates are higher during the fall (August to October) than any other time period. The duration of time the bears spend in these coastal habitats depends on a variety of factors including storms, ice conditions, and the availability of food. In recent years, polar bears have been observed in larger numbers than previously recorded during the fall period. The remains of
In 2008, the Service listed polar bears as threatened under the ESA due to the loss of sea-ice habitat caused by climate change (73 FR 28212, May 15, 2008). The Service later published a final rule under section 4(d) of the ESA for the polar bear, which was vacated then reinstated when procedural requirements were satisfied (78 FR 11766, February 20, 2013). This special rule provides for measures that are necessary and advisable for the conservation of polar bears. Specifically, the 4(d) rule: (a) Adopts the conservation regulatory requirements of the MMPA and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) for the polar bear as the appropriate regulatory provisions, in most instances; (b) provides that incidental, nonlethal take of polar bears resulting from activities outside the bear's current range is not prohibited under the ESA; (c) clarifies that the special rule does not alter the Section 7 consultation requirements of the ESA; and (d) applies the standard ESA protections for threatened species when an activity is not covered by an MMPA or CITES authorization or exemption.
The Service designated critical habitat for polar bear populations in the United States effective January 6, 2011 (75 FR 76086, December 7, 2010). On January 13, 2013, the U.S. District Court for the District of Alaska issued an order that vacated and remanded the polar bear critical habitat final rule to the Service (
Critical habitat identifies geographic areas that contain features that are essential for the conservation of a threatened or endangered species and that may require special management or protection. Under section 7 of the ESA, if there is a Federal action, we will analyze the potential impacts of the action upon polar bear critical habitat. Polar bear critical habitat units include: Barrier island habitat, sea-ice habitat (both described in geographic terms), and terrestrial denning habitat (a functional determination). Barrier island habitat includes coastal barrier islands and spits along Alaska's coast; it is used for denning, refuge from human disturbance, access to maternal dens and feeding habitat, and travel along the coast. Sea-ice habitat is located over the continental shelf, and includes water 300 m (~984 ft) or less in depth. Terrestrial denning habitat includes lands within 32 km (~20 mi) of the northern coast of Alaska between the Canadian border and the Kavik River and within 8 km (~5 mi) between the Kavik River and Barrow. The total area designated covers approximately 484,734 km
Management and conservation concerns for the SBS and Chukchi/Bering Seas (CS) polar bear populations include sea-ice loss due to climate change, bear-human conflict, oil and gas industry activity, oil spills and contaminants, increased marine shipping, increased disease, and the potential for overharvest. Research has linked declines in sea-ice to reduced physical condition, growth, and survival of polar bears (Bromaghin
Polar bears are distributed throughout the circumpolar Arctic region. In Alaska, polar bears have historically been observed as far south in the Bering Sea as St. Matthew Island and the Pribilof Islands (Ray 1971). A detailed description of the SBS and CS polar bear stocks can be found in the Polar Bear
The SBS polar bear population is shared between Canada and Alaska. Radio-telemetry data, combined with eartag returns from harvested bears, suggest that the SBS population occupies a region with a western boundary near Icy Cape, Alaska, and an eastern boundary near Pearce Point, Northwest Territories, Canada (USFWS 2010).
Early estimates from the mid-1980s suggested the size of the SBS population was approximately 1,800 polar bears, although uneven sampling was known to compromise the accuracy of that estimate. A population analysis of the SBS stock was completed in June 2006 through joint research coordinated between the United States and Canada. That analysis indicated the population of the region between Icy Cape and Pearce Point was approximately 1,500 polar bears (95 percent confidence intervals approximately 1,000-2,000). Although the confidence intervals of the 2006 population estimate overlapped the previous population estimate of 1,800, other statistical and ecological evidence (
The CS polar bear population is shared between Russia and Alaska. The CS stock is widely distributed on the pack-ice in the Chukchi Sea, northern Bering Sea, and adjacent coastal areas in Alaska and Chukotka, Russia. Radio-telemetry data indicate that the northeastern boundary of the CS population is near the Colville Delta in the central Beaufort Sea and the western boundary is near the Kolyma River in
It has been difficult to obtain a reliable population estimate for this stock due to the vast and inaccessible nature of the habitat, movement of bears across international boundaries, logistical constraints of conducting studies in the Russian Federation, and budget limitations (Amstrup and DeMaster 1988; Garner
Estimates of the stock have been derived from observations of dens and aerial surveys (Chelintsev 1977; Stishov 1991a; Stishov 1991b; Stishov
As atmospheric greenhouse gas concentrations increase so will global temperatures (Pierrehumbert 2011). The Arctic has warmed at twice the global rate (IPCC 2007), and long-term data sets show that substantial reductions in both the extent and thickness of Arctic sea-ice cover have occurred over the past 40 years (Meier
For walruses, climate-driven trends in the Chukchi Sea have resulted in seasonal fall sea-ice retreat beyond the continental shelf over deep Arctic Ocean waters. Reasonably foreseeable impacts to walruses as a result of diminishing sea-ice cover include potential shifts in range, habitat use, local abundance, increased frequency and duration at coastal haulouts, increased vulnerability to predation and disturbance, and localized declines in prey. It is unknown if walruses will utilize the Beaufort Sea more in the future due to climate change effects. Currently, and for the next 5 years, it appears that walruses will remain uncommon in the Beaufort Sea.
For polar bears, sea-ice habitat loss due to climate change has been identified as the primary cause of conservation concern. Amstrup
Climate change is likely to have serious consequences for the worldwide population of polar bears and their prey (Amstrup
Decreased sea-ice extent may impact the reproductive success of denning polar bears. In the 1990s, approximately 50 percent of the maternal dens of the SBS polar bear population occurred annually on the pack-ice in contrast to terrestrial sites (Amstrup and Gardner 1994). The proportion of dens on sea-ice declined from 62 percent in 1985-1994 to 37 percent in 1998-2004 (Fischbach
Atwood
Few walruses are harvested in the Beaufort Sea along the northern coast of Alaska since their primary range is in the Bering and Chukchi seas. Walruses constitute a small portion of the total marine mammal harvest for the village of Barrow. Hunters from Barrow harvested 451 walruses in the past 20 years with 78 harvested since 2009.
Based on subsistence harvest reports, polar bear hunting is less prevalent in communities on the north coast of Alaska than it is in west coast communities. There are no quotas under the MMPA for Alaska Native polar bear harvest in the Southern Beaufort Sea; however, there is a Native-to-Native agreement between the Inuvialuit in Canada and the Inupiat in Alaska, created in 1988. This agreement, referred to as the Inuvialuit-Inupiat Polar Bear Management Agreement, established quotas and recommendations concerning protection of denning females, family groups, and methods of take. In Canada, Native polar bear hunters are subject to provincial regulations consistent with the Agreement, while in Alaska implementation is on a voluntary basis by Native polar bear hunters. Commissioners for the Inuvialuit-Inupiat Agreement set the original quota at 76 bears in 1988, split evenly between the Inuvialuit in Canada and the Inupiat in the United States. In July 2010, the quota was reduced to 70 bears per year.
The Alaska Native subsistence harvest of polar bears from the SBS population has remained relatively consistent since 1980 and averages 36 bears annually. From 2005 through 2009, Alaska Natives harvested 117 bears from the SBS population, an average of approximately 23 bears annually. From 2010 through 2014, Alaska Natives harvested 98 polar bears from the SBS population, an average of approximately 20 bears annually. The reason for the decline of harvested polar bears from the SBS population is unknown. Alaska Native subsistence hunters and harvest reports have not indicated a lack of opportunity to hunt polar bears or disruption by Industry activity.
Barrow and Kaktovik are expected to be affected to a lesser degree by Industry activities than Nuiqsut. Nuiqsut is located within 5 mi of ConocoPhillips' Alpine production field to the north and ConocoPhillips' Alpine Satellite development field to the west. However, Nuiqsut hunters typically harvest polar bears from Cross Island during the annual fall bowhead whaling. Cross Island is approximately 16 km (~10 mi) offshore from the coast of Prudhoe Bay. We have received no evidence or reports that bears are altering their habitat use patterns, avoiding certain areas, or being affected in other ways by the existing level of oil and gas activity near communities or traditional hunting areas that would diminish their availability for subsistence use.
Changes in activity locations may trigger community concerns regarding the effect on subsistence uses. Industry will need to remain proactive to address potential impacts on the subsistence uses by affected communities through consultations, and where warranted, POCs. Open communication through venues such as public meetings, which allow communities to express feedback prior to the initiation of operations, will be required as part of an LOA application. If community subsistence use concerns arise from new activities, appropriate mitigation measures are available and will be applied, such as a cessation of certain activities at certain locations during specified times of the year,
No unmitigable concerns from the potentially affected communities regarding the availability of walruses or polar bears for subsistence uses have been identified through Industry consultations with the potentially affected communities of Barrow, Kaktovik, and Nuiqsut. Based on Industry reports, aerial surveys, direct observations, community consultations, and personal communication with hunters, it appears that subsistence hunting opportunities for walruses and polar bears have not been affected by past Industry activities, and we do not anticipate that the activities for these ITRs will have different effects.
Individual walruses and polar bears can be affected by Industry activities in numerous ways. These include (1) noise disturbance, (2) physical obstructions, (3) human encounters, and (4) effects on habitat and prey. In order to evaluate effects to walruses and polar bears, we analyzed both documented and potential effects, including those that could have more than negligible impacts. The effects analyzed included the loss or preclusion of habitat, harassment, lethal take, and exposure to oil spills.
Walruses do not utilize the Beaufort Sea frequently and the likelihood of encountering walruses during Industry operations is low. During the time period of these regulations, Industry operations may occasionally encounter small groups of walruses swimming in open water or hauled out onto ice floes or along the coast. Industry monitoring data have reported 35 walruses between 1995 and 2016, with only a few instances of disturbance to those walruses (AES Alaska 2015, USFWS unpublished data). From 2009 through 2014 no interactions between walrus and Industry were reported in the Beaufort Sea ITR region. We have no evidence of any physical effects or impacts to individual walruses due to Industry activity in the Beaufort Sea ITR region. If an interaction did occur, it could potentially result in some level of disturbance. The response of walruses to disturbance stimuli is highly variable. Anecdotal observations by walrus hunters and researchers suggest that males tend to be more tolerant of disturbances than females and individuals tend to be more tolerant than groups. Females with dependent calves are considered least tolerant of disturbances. In the Chukchi Sea, disturbance events are known to cause walrus groups to abandon land or ice haulouts and occasionally result in trampling injuries or cow-calf separations, both of which are potentially fatal. Calves and young animals at terrestrial haulouts are particularly vulnerable to trampling injuries.
Walruses hear sounds both in air and in water. Kastelein
Seismic operations, pile driving, ice breaking, and various other Industry activities introduce substantial levels of noise into the marine environment. Greene
Typical source levels associated with underwater marine 3D and 2D seismic surveys are 230-240 dB. Airgun arrays produce broadband frequencies from 10 Hz to 2 kHz with most of the energy concentrated below 200 Hz. Frequencies used for high-resolution oil and gas exploration surveys are typically 200 Hz-900 kHz. Commercial sonar systems may also generate lower frequencies audible to marine mammals (Deng et al 2012). Some surveys use frequencies as low as 50 Hz or as high as 2 MHz. Broadband source levels for high-resolution surveys can range from 210 to 226 dB at 1 m. Sound attenuates in air more rapidly than in water, and underwater sound levels can be loud enough to cause hearing loss in nearby animals and disturbance of animals at greater distances.
Noise generated by Industry activities, whether stationary or mobile, has the potential to disturb walruses. Marine mammals in general have variable reactions to noise sources, particularly mobile sources such as marine vessels. Reactions depend on the individuals' prior exposure to the disturbance source, their need, or desire to be in the particular habitat or area where they are exposed to the noise, and visual presence of the disturbance source. Walruses are typically more sensitive to disturbance when hauled out on land or ice than when they are in the water. In addition, females and young are generally more sensitive to disturbance than adult males.
Potential impacts of Industry-generated noise include displacement from preferred foraging areas, increased stress, energy expenditure, interference with feeding, and masking of communications. Any impact of Industry noise on walruses is likely to be limited to a few individuals due to their geographic range and seasonal distribution. Walruses typically inhabit the pack-ice of the Bering and Chukchi seas and do not often move into the Beaufort Sea.
In the nearshore areas of the Beaufort Sea, stationary offshore facilities could produce high levels of noise that has the potential to disturb walruses. These include Endicott, BPXA's Saltwater Treatment Plant (located on the West Dock Causeway), Oooguruk, and Northstar facilities. The Liberty project will also have this potential when it commences operations. From 2009 through 2014 there were no reports of walruses hauling out at Industry facilities in the Beaufort Sea ITR region. Previous observations have been reported of walruses hauled out on Northstar Island and swimming near the Saltwater Treatment Plant. In 2007, a female and a subadult walrus were observed hauled-out on the Endicott Causeway. In instances where walruses have been seen near these facilities, they have appeared to be attracted to them, possibly as a resting area or haulout.
In the open waters of the Beaufort Sea, seismic surveys and high-resolution site-clearance surveys will be the primary source of high levels of underwater sound. Such surveys are typically carried out away from the edge of the seasonal pack-ice. This scenario will minimize potential interactions with large concentrations of walruses, which typically favor sea-ice habitats. The most likely response of walruses to acoustic disturbances in open water will be for animals to move away from the source of the disturbance. Displacement from a preferred feeding area may reduce foraging success, increase stress levels, and increase energy expenditures. Potential adverse effects of Industry noise on walruses can be reduced through the implementation of the monitoring and mitigation measures identified in these ITRs.
Potential acoustic injuries from high levels of sound such as those produced during seismic surveys may manifest in the form of temporary or permanent changes in hearing sensitivity. The underwater hearing abilities of the Pacific walrus have not been studied sufficiently to develop species-specific criteria for preventing harmful exposure. Sound pressure level thresholds have been developed for other members of the pinniped taxonomic group, above which exposure is likely to cause behavioral responses and injuries (Finneran 2015). Otariid pinnipeds in particular, as a group, appear to have hearing characteristics most similar to Pacific walruses ((Kastelein et al. 1996; Hemilä et al. 2006; Finneran 2015). Therefore, the Service uses the data available for otariid pinnipeds in conjunction with that for walruses to evaluate acoustic disturbance and develop mitigation measures.
Historically, the National Oceanic and Atmospheric Administration's National Marine Fisheries Service (NOAA Fisheries Service, or NMFS) has used 190 dB
The NMFS 190-dB
Based on these data, and applying a precautionary approach in the absence of empirical information, we assume it is possible that walruses exposed to 190-dB or greater sound levels from underwater activities (especially seismic surveys) could suffer injury from PTS. Walruses exposed to underwater sound pressure levels greater than 180 dB
The acoustic thresholds for marine mammals under NMFS' jurisdiction are currently being revised (NOAA 2015, NOAA 2016). New thresholds will estimate PTS onset levels for impulsive (
Once NMFS' new criteria for preventing harm to marine mammals from sound exposure are finalized, the Service will evaluate the new thresholds for applicability to walruses. In many cases, the Service's existing thresholds for Pacific walrus will result in greater separation distances or shorter periods of exposure to Industry sound sources than would NMFS' draft pinniped thresholds. Assuming walrus hearing sensitivities are similar to other otariid pinnipeds, the Service's sound exposure thresholds are, in many situations, likely to be more conservative and therefore provide additional protection against potential injury from PTS and TTS. However, animals may be exposed to multiple stressors beyond acoustics during an activity, with the possibility of additive, cumulative, or synergistic effects (
To reduce the likelihood of Level B harassment, and prevent behavioral responses capable of causing Level A harassment, the Service has established an 805-m (0.5-mile) operational exclusion zone around groups of walruses feeding in water or any walrus observed on land or ice. As mentioned previously, walruses show variable reactions to noise sources. Relatively minor reactions, such as increased vigilance, are not likely to disrupt biologically important behavioral patterns and, therefore, do not reach the level of harassment, as defined by the MMPA. However, more significant reactions have been documented in response to noise. Industry monitoring efforts in the Chukchi Sea suggest that icebreaking activities can displace some walrus groups up to several kilometers away (Brueggeman
Because some seismic survey activities are expected to occur in nearshore regions of the Beaufort Sea, impacts associated with support vessels and aircraft are likely to be locally concentrated, but distributed over time and space. Therefore, noise and disturbance from aircraft and vessel traffic associated with seismic surveys are expected to have relatively localized, short-term effects. The mitigation measures stipulated in these ITRs will require seismic survey vessels and associated support vessels to apply acoustic mitigation zones, maintain an 805-m (0.5-mile) distance from Pacific walrus groups, introduce noise gradually by implementing ramp-up procedures, and to maintain a 457-m (1,500-ft) minimum altitude above walruses. These measures are expected to reduce the intensity of disturbance events and to minimize the potential for injuries to animals.
With the low occurrence of walruses in the Beaufort Sea and the adoption of the mitigation measures required by this ITR, the Service concludes that the only anticipated effects from Industry noise in the Beaufort Sea would be short-term behavioral alterations of small numbers of walruses.
Although seismic surveys and offshore drilling operations are expected to occur in areas of open water away from the pack ice, support vessels and aircraft servicing seismic and drill operations may encounter aggregations of walruses hauled out onto sea-ice. The sight, sound, or smell of humans and machines could potentially displace these animals from any ice haulouts. Walruses react variably to noise from vessel traffic; however, it appears that low-frequency diesel engines cause less of a disturbance than high-frequency outboard engines. In addition, walrus densities within their normal distribution are highest along the edge of the pack-ice, and Industry vessel traffic typically avoids these areas. The reaction of walruses to vessel traffic is dependent upon vessel type, distance, speed, and previous exposure to disturbances. Walruses in the water appear to be less readily disturbed by vessels than walruses hauled out on land or ice. Furthermore, barges and vessels associated with Industry activities travel in open water and avoid large ice floes or land where walruses are likely to be found. In addition, walruses can use a vessel as a haul-out platform. In 2009, during Industry activities in the Chukchi Sea, an adult walrus was found hauled out on the stern of a vessel. It eventually left once confronted.
Drilling operations are expected to involve drill ships attended by icebreaking vessels to manage
Monitoring programs associated with exploratory drilling operations in the Chukchi Sea since 1990 noted that approximately 25 percent of walrus groups encountered in the pack-ice during icebreaking responded by diving into the water, with most reactions occurring within 1 km (0.6 mi) of the ship. The monitoring report noted that: (1) Walrus distributions were closely linked with pack-ice; (2) pack-ice was near active prospects for relatively short time periods; and (3) ice passing near active prospects contained relatively few animals. The report concluded that effects of the drilling operations on walruses were limited in time, geographical scale, and the proportion of population affected.
When walruses are present, underwater noise from vessel traffic in the Beaufort Sea may “mask” ordinary communication between individuals by preventing them from locating one another. It may also prevent walruses from using potential habitats in the Beaufort Sea and may have the potential to impede movement. Vessel traffic will likely increase if offshore Industry expands and may increase if warming waters and seasonally reduced sea-ice cover alter northern shipping lanes.
Because offshore exploration activities are expected to move throughout the Beaufort Sea, impacts associated with support vessels and aircrafts are likely to be distributed in time and space. Therefore, the only effect anticipated would be short-term behavioral alterations impacting small numbers of walruses in the vicinity of active operations. Adoption of mitigation measures that include an 805-m (0.5-mi) exclusion zone for marine vessels around walrus groups observed on ice are expected to reduce the intensity of disturbance events and minimize the potential for injuries to animals.
Aircraft overflights may disturb walruses. Reactions to aircraft vary with range, aircraft type, and flight pattern, as well as walrus age, sex, and group size. Adult females, calves, and immature walruses tend to be more sensitive to aircraft disturbance. Fixed-winged aircraft are less likely to elicit a response than helicopter overflights. Walruses are particularly sensitive to changes in engine noise and are more likely to stampede when planes turn or fly low overhead. Researchers conducting aerial surveys for walruses in sea-ice habitats have observed little reaction to fixed-winged aircraft above 457 m (1,500 ft) (USFWS unpubl. data). Although the intensity of the reaction to noise is variable, walruses are probably most susceptible to disturbance by fast-moving and low-flying aircraft (100 m (328 ft) above ground level) or aircraft that change or alter speed or direction. In the Chukchi Sea there are recent examples of walruses being disturbed by aircraft flying in the vicinity of haulouts. It appears that walruses are more sensitive to disturbance when hauled out on land versus sea-ice.
Based on known walrus distribution and the very low numbers found in the Beaufort Sea, it is unlikely that walrus movements would be displaced by offshore stationary facilities, such as the Northstar Island or causeway-linked Endicott complex, or by vessel traffic. There is no indication that the few walruses that used Northstar Island as a haulout in the past were displaced from their movements. Vessel traffic could temporarily interrupt the movement of walruses, or displace some animals when vessels pass through an area. This displacement would probably have minimal or no effect on animals and would last no more than a few hours.
Human encounters with walruses could occur in the course of Industry activities, although such encounters would be rare due to the limited distribution of walruses in the Beaufort Sea. These encounters may occur within certain cohorts of the population, such as calves or animals under stress. In 2004, a suspected orphaned calf hauled-out on the armor of Northstar Island numerous times over a 48-hour period, causing Industry to cease certain activities and alter work patterns before it disappeared in stormy seas. Additionally, a walrus calf was observed for 15 minutes during an exploration program 60 ft from the dock at Cape Simpson in 2006. From 2009 through 2014, Industry reported no similar interactions with walruses.
Walruses feed primarily on immobile benthic invertebrates. The effect of Industry activities on benthic invertebrates most likely would be from oil discharged into the environment. Oil has the potential to impact walrus prey species in a variety of ways including, but not limited to, mortality due to smothering or toxicity, perturbations in the composition of the benthic community, as well as altered metabolic and growth rates. Relatively few walruses are present in the central Beaufort Sea. It is important to note that, although the status of walrus prey species within the Beaufort Sea are poorly known, it is unclear to what extent, if any, prey abundance plays in limiting the use of the Beaufort Sea by walruses. Further study of the Beaufort Sea benthic community as it relates to walruses is warranted. The low likelihood of an oil spill large enough to affect prey populations (see the section titled Risk Assessment of Potential Effects Upon Polar Bears from a Large Oil Spill in the Beaufort Sea) combined with the fact that walruses are not present in the region during the ice-covered season and occur only infrequently during the open-water season indicates that Industry activities will likely have limited indirect effects on walruses through effects on prey species.
Noise produced by Industry activities during the open-water and ice-covered seasons could disturb polar bears. The impact of noise disturbances may affect bears differently depending upon their reproductive status (
Noise disturbance can originate from either stationary or mobile sources. Stationary sources include construction, maintenance, repair and remediation activities, operations at production facilities, gas flaring, and drilling operations from either onshore or offshore facilities. Mobile sources include vessel and aircraft traffic, open-water seismic exploration, winter vibroseis programs, geotechnical surveys, ice road construction, vehicle traffic, tracked vehicles and snowmobiles, drilling, dredging, and ice-breaking vessels.
Noise produced by stationary activities could elicit variable responses
Industry activities may potentially disturb polar bears at maternal den sites. The timing of potential Industry activity compared with the timing of the maternal denning period can have variable impacts on the female bear and her cubs. Disturbance, including noise, may negatively impact bears less during the early stages of denning when the pregnant female has less investment in a den site before giving birth. She may abandon the site in search of another one and still successfully den and give birth. Premature den site abandonment after the birth of cubs may also occur. If den site abandonment occurs before the cubs are able to survive outside of the den, or if the female abandons the cubs, the cubs will die.
An example of a den abandonment in the early stages of denning occurred in January 1985, where a female polar bear appears to have abandoned her den in response to Rolligon traffic within 500 m (1,640 ft) of the den site. In spring 2002, noise associated with a polar bear research camp in close proximity to a bear den is thought to have caused a female bear and her cub(s) to abandon their den and move to the ice prematurely. In spring 2006, a female with two cubs emerged from a den 400 m (1,312 ft) from an active river crossing construction site. The den site was abandoned within hours of cub emergence, and 3 days after the female had emerged. In spring 2009, a female with two cubs emerged from a den within 100 m (328 ft) of an active ice road with heavy traffic and quickly abandoned the site. In January 2015 a freshly dug polar den was discovered in an active gravel pit adjacent to an active landfill and busy road. The bear abandoned the den after 56 days. During the time the bear occupied the den, Industry activity in the area was restricted, and the den was constantly monitored. A subsequent investigation of the den found no evidence that the bear gave birth. It is unknown if or to what extent Industry activity contributed to the bear leaving the den. While such events may have occurred, information indicates they have been infrequent and isolated. It is important to note that the knowledge of these recent examples occurred because of the monitoring and reporting program established by the ITRs.
Conversely, during the denning seasons of 2000-2002, two dens known to be active were located within approximately 0.4 km and 0.8 km (~0.25 mi and ~0.5 mi) of remediation activities on Flaxman Island in the Beaufort Sea with no observed impact to the polar bears. This observation suggests that polar bears exposed to routine industrial noises may habituate to those noises and show less vigilance than bears not exposed to such stimuli. This observation came from a study that occurred in conjunction with industrial activities performed on Flaxman Island in 2002 and a study of undisturbed dens in 2002 and 2003 (N = 8) (Smith
The potential for disturbance increases once the female emerges from the den. She is more vigilant against perceived threats and easier to disturb. As noted earlier, in some cases, while the female is in the den, Industry activities have progressed near den site with no observed disturbance. In the 2006 denning example previously discussed, it was believed that Industry activity commenced in the area after the den had been established. Industry activities occurred within 50 m (164 ft) of the den site with no apparent disturbance while the female was in the den. Ongoing activity most likely had been occurring for approximately 3 months in the vicinity of the den.
Likewise, in 2009, two bear dens were located along an active ice road. The bear at one den site appeared to establish her site prior to ice road activity and was exposed to approximately 3 months of activity 100 m (328 ft) away and emerged at the appropriate time. The other den site was discovered after ice road construction commenced. This site was exposed to ice road activity, 100 m (328 ft) away, for approximately 1 month. Known instances of polar bears establishing dens prior to the onset of Industry activity within 500 m (1,640 ft) or less of the den site, but remaining in the den through the normal denning cycle and later leaving with her cubs, apparently undisturbed despite the proximity of sometimes ongoing Industry activity, occurred in 2006, 2009, 2010, and 2011.
Industry observation data suggests that, with proper mitigation measures in place, some activities can continue in the vicinity of dens until the emergence by the female bear. Mitigation measures such as activity shutdowns near the den and 24-hour monitoring of the den site can minimize impacts to the animals and allow the female bear to naturally abandon the den when she chooses. For example, in the spring of 2010, an active den site was observed approximately 60 m (197 ft) from a heavily used ice road. A 1.6-km (1-mi) exclusion zone was established around the den, closing a 3.2 km (2-mi) section of the road. Monitors were assigned to observe bear activity and monitor human activity to minimize any other impacts to the bear group. These mitigation measures minimized disturbance to the bears and allowed them to abandon the den site naturally.
Mobile sources of sound,
In 2012, during the open-water season, Shell vessels encountered a few polar bears swimming in ice-free water more than 70 mi (112.6 km) offshore in the Chukchi Sea. In those instances the bears were observed to either swim away from or approach the Shell vessels. Sometimes a polar bear would
Polar bears are more likely to be affected by on-ice or in-ice Industry activities versus open-water activities. From 2009 through 2014 there were a few Industry observation reports of polar bears during on-ice activities. Those observations were primarily of bears moving through an area during winter seismic surveys on near-shore ice. The disturbance to bears, if any, was minimal, short-term, and temporary due to the mobility of such projects and limited to small-scale alterations to bear movements.
During the open-water season, most polar bears remain offshore associated with the multiyear pack ice and are not typically present in the ice-free areas where vessel traffic occurs. Barges and vessels associated with Industry activities travel in open water and avoid large ice floes. As demonstrated in the 2012 Shell example previously, encounters between vessels and polar bears would most likely result in short-term and temporary behavioral disturbance only.
Routine Industry aircraft traffic should have little to no effect on polar bears, though frequent and chronic aircraft activity may cause more significant disturbance. Observations of polar bears during fall coastal surveys, which flew at much lower altitudes than is required of Industry aircraft (see mitigation measures), indicate that the reactions of non-denning polar bears should be limited to short-term changes in behavior ranging from no reaction to running away. Such disturbance should have no more than short-term, temporary, and minor impacts on individuals and no discernible impacts on the polar bear population, unless it was chronic and long-term. In contrast, denning bears could prematurely abandon their dens in response to repeated aircraft overflight noise. Mitigation measures, such as minimum flight elevations over polar bears, habitat areas of concern, and flight restrictions around known polar bear dens, will be required, as appropriate, to reduce the likelihood that polar bears are disturbed by aircraft.
Industry facilities may act as physical barriers to movements of polar bears. Most facilities are located onshore and inland where polar bears are less frequently found. The offshore and coastal facilities are more likely to be approached by polar bears. The majority of Industry bear observations occur within 1.6-km (1-mi) of the coastline as bears use this area as travel corridors. As bears encounter these facilities, the chances for human-bear interactions increase. The Endicott and West Dock causeways, as well as the facilities supporting them, have the potential to act as barriers to movements of polar bears because they extend continuously from the coastline to the offshore facility. However, polar bears have frequently been observed crossing existing roads and causeways and appear to traverse the human-developed areas as easily as the undeveloped areas. Offshore production facilities, such as Northstar, Spy Island, and Oooguruk, have frequently been approached by polar bears, but appear to present only a small-scale, local obstruction to the bears' movement. Of greater concern is the increased potential for polar bear-human interaction at these facilities.
Historically, polar bear observations are seasonally common, but close encounters with Industry personnel are uncommon. These encounters can be dangerous for both polar bears and humans.
Encounters are more likely to occur during the fall at facilities on or near the coast. Polar bear interaction plans, training, and monitoring required by the ITRs have proven effective at reducing polar bear-human encounters and the risks to bears and humans when encounters occur. Polar bear interaction plans detail the policies and procedures that Industry facilities and personnel will implement to avoid attracting and interacting with polar bears as well as minimizing impacts to the bears. Interaction plans also detail how to respond to the presence of polar bears, the chain of command and communication, and required training for personnel.
Industry has also developed and uses technology to aid in detecting polar bears, including bear monitors, closed-circuit television (CCTV), video cameras, thermal cameras, radar devices, and motion-detection systems. In addition, some companies take steps to actively prevent bears from accessing facilities using safety gates and fences.
Known polar bear dens around the oilfield, discovered opportunistically, or as a result of planned surveys, such as tracking marked bears or den detection surveys, are monitored by the Service. However, these sites are only a small percentage of the total active polar bear dens for the SBS stock in any given year. Each year Industry coordinates with the Service to conduct surveys to determine the location of Industry's activities relative to known dens and denning habitat. Industry activities are required to avoid known polar bear dens by 1 mi. There is the possibility that an unknown den may be encountered during Industry activities. When a previously unknown den is discovered in proximity to Industry activity, the Service implements mitigation measures such as the 1.6-km (1-mi) activity exclusion zone around the den and 24-hour monitoring of the site.
The effects of Industry activity upon polar bear prey, primarily ringed seals, will be similar to that of effects upon walruses, and primarily through noise disturbance or exposure to an oil spill. Seals may be displaced by disturbance from habitat areas such as pupping lairs or haulouts and abandon breathing holes near Industry activity. However, these disturbances appear to have minor, short-term, and temporary effects (NMFS 2013). Effects of contamination from oil discharges for seals are described in the following section.
Industry activities may result in some incremental cumulative effects to the relatively few walruses exposed to these activities through the potential exclusion or avoidance of walruses from resting areas and disruption of associated biological behaviors. However, based on the habitat use patterns of walruses and their close association with seasonal pack-ice, relatively few animals are likely to be encountered during the open-water season when marine activities are expected to occur. Required monitoring and mitigation measures designed to minimize interactions between Industry activities and walruses are also expected to limit these impacts. Hunting pressure, climate change, and the increase of other human activities in walrus habitat all have potential to impact walruses. But those activities and their impacts are mostly a concern in the Bering and Chukchi seas where large numbers of walruses are found. Therefore, we conclude that in the Beaufort Sea, Industry activities during the 5-year period covered by these regulations, as mitigated through the regulatory process, are not expected to
The effects of Industry activity are evaluated, in part, through information gained in monitoring reports, which are required for each LOA issued. Information from these reports provides a history of past effects on polar bears from interactions with Industry activities. In addition, information used in our effects evaluation includes published and unpublished polar bear research and monitoring reports, information from the 2008 ESA polar bear listing, stock assessment reports, status reviews, conservation plans, Alaska Native traditional knowledge, anecdotal observations, and professional judgment.
Since 1993, the documented impacts of incidental take by Industry activity in the Beaufort Sea ITR region affected only small numbers of bears, were primarily short-term changes to behavior, and had no long-term impacts on individuals and no impacts on the SBS polar bear population, or the global population. Industry monitoring data has documented various types of interactions between polar bears and Industry. The most significant impacts to polar bears from Industry activity have been the result of close bear-human encounters, some of which have led to deterrence events.
For the analysis of Industry take of polar bears, we included both incidental and intentional takes that occurred from 2010 through 2014. We included intentional takes to provide a transparent and complete analysis of Industry-related polar bear takes on the North Slope of Alaska. Intentional take of polar bears is a separate authorization under sections 101(a)(4)(A), 109(h), and 112(c) of the MMPA and is distinct from the ITRs. Intentional take authorizations allow citizens conducting activities in polar bear habitat to take polar bears by nonlethal, non-injurious harassment for the protection of both human life and polar bears. The purpose of the intentional take authorization is to deter polar bears prior to a bear-human encounter escalating to the use of deadly force against a polar bear. The Service provides guidance and training as to the appropriate harassment response necessary for polar bears. The MMPA-specific authorizations have proven to be successful in preventing injury and death to humans and polar bears.
From 2010 through 2014, a total of 107 LOAs were issued to Industry, and polar bear observations were recorded for 36.4 percent (39) of those LOAs. Industry reported 1,234 observations of 1,911 polar bears. The highest number of bears was observed during the months of August and September. Industry polar bear observations have increased from previous regulatory time periods. The higher number of bear sightings was most likely the result of an increased number of bears using terrestrial habitat as a result of changes in sea-ice, multiple vessel-based projects occurring near barrier islands, and the increased compliance and improved monitoring of Industry projects. This trend in observations is consistent with the anticipation that polar bears will increase their use of coastal habitats during the months when sea-ice is far from shore and over deep water. Because some of the reports were repeat observations of the same bears on different dates, the actual number of individual bears encountered is lower than reported. However, due to the nature of the information in the Industry observation reports, we must accept the information “as is” while acknowledging that it collectively over-reports bear numbers.
When we compared the reported bear numbers to the SBS population (
For the 2011-2016 ITR, the Service estimated that takes of polar bears by all Level B harassment events would not exceed 150 per year. Our analysis of Industry polar bear observation reports shows that from 2010 through 2014 an average of 68 Level B harassment events occurred per year, well below our estimated value. Industry activities that occur on or near the Beaufort Sea coast continue to have the greatest potential for encountering polar bears rather than Industry activities occurring inland or far offshore.
From 2010 through 2014, intentional harassment by deterrence of 260 polar bears (14 percent of the observed 1,911) resulted in Level B take. The percentage of polar bear deterrence events that result in Level B take has decreased over time from a high of 39 percent of observed bears in 2005. The Service attributes this long-term decrease in deterrence events to increased polar bear safety and awareness training of Industry personnel as well as our ongoing deterrence education, training, and monitoring programs. We have no indication that nonlethal, non-injurious harassment by deterrence, which temporarily alters the behavior and movement of some bears, has an effect on survival and recruitment in the SBS polar bear population.
Lethal take of polar bears by Industry activity is very rare. Since 1968, three documented cases of lethal take of polar bears associated with oil and gas activities have occurred. In winter 1968-1969, an Industry employee shot and killed a polar bear in defense of human life. In 1990, a female polar bear was killed at a drill site on the west side of Camden Bay, also in defense of human life. Since the beginning of the incidental take program in 1993, which includes measures that minimize impacts to the species, one polar bear has been killed due to encounters associated with current Industry activities on the North Slope. In August 2011, a female polar bear was accidentally killed on the Endicott causeway when an attempt to non-lethally deter the bear was not conducted properly. After the 2011 lethal take incident, the Service reviewed the circumstances that contributed to the death of the bear and implemented a series of corrective actions with Industry. The Service believes that the corrective actions significantly reduce the potential for a similar situation to arise in the future. Therefore, we do not anticipate any lethal take of polar bears during the 5-year period of these ITRs.
Industry activities are likely to result in incremental cumulative effects to polar bears during the 5-year regulatory period. Based on Industry monitoring information, for example, deflection from travel routes along the coast appears to be a common occurrence, where bears move around coastal facilities rather than traveling through them. Incremental cumulative effects could also occur through the potential exclusion or temporary avoidance of polar bears from feeding, resting, or denning areas and disruption of associated biological behaviors. However, based on monitoring results acquired from past ITRs, the level of cumulative effects, including those of climate change, during the 5-year regulatory period would result in negligible effects on the bear population.
Mitigation measures required for all projects will include a polar bear interaction plan, training of personnel, a record of communication with potentially affected communities, and a POC when appropriate. Mitigation measures that may be used on a case-by-case basis include the use of trained marine mammal monitors associated with marine activities, the use of den habitat maps developed by the USGS, surveys to locate polar bear dens, timing of the activity to limit disturbance around dens, the 1.6-km (1-mi) buffer surrounding known dens, and suggested work actions around known dens. The Service implements certain mitigation measures based on need and effectiveness for specific activities based largely on timing and location. For example, the Service will implement different mitigation measures for a 2-month-long exploration project 20 mi inland from the coast, than for an annual nearshore development project in shallow waters.
An example of the application of this process would be in the case of Industry activities occurring around a known polar bear den. Each LOA requires a polar bear interaction plan and a minimum 1.6-km (1-mi) buffer between Industry activities and known denning sites. If a den is discovered after Industry activities have begun, we may require Industry to cease activities within the buffer zone until the bears have left the den and departed the area undisturbed. To further reduce the potential for disturbance to denning females we conduct surveys, in cooperation with Industry, to detect active polar bear dens using remote sensing techniques, such as thermal imagery (Forward Looking Infra-Red, FLIR, cameras), and maps of potential denning habitat along the Beaufort Sea coast.
Thermal imagery, as a mitigation tool, is used in conjunction with polar bear denning habitat maps. Industry activity areas, such as coastal ice roads, are compared to polar bear denning habitat, and transects are then created to survey the specific habitat within the Industry area. FLIR heat signatures within a standardized den location protocol are noted, and further mitigation measures are placed around these locations. FLIR surveys are more effective at detecting polar bear dens than visual observations. The effectiveness increases when FLIR surveys are combined with site-specific, scent-trained dog surveys. These techniques will continue to be required as conditions of LOAs when appropriate.
Industry has sponsored cooperative research evaluating how polar bears perceive and respond to various types of disturbance. This information has been useful to refine site-specific mitigation measures. Using current mitigation measures, Industry activities have had no known polar bear population-level effects during the period of previous regulations. We anticipate that, with continued mitigation measures, the impacts to denning and non-denning polar bears will be at the same low level as under previous regulations.
The Service believes that the required mitigation measures will be effective in minimizing the impacts of Industry activity upon polar bears during the 5-year timeframe of these ITRs as they have in the past.
For further information on the cumulative effects of oil and gas development on polar bears in Alaska, refer to the Service's 2008 “Range-Wide Status Review of the Polar Bear (
Walrus and polar bear ranges overlap with many active and planned Industry activities. There is a risk of oil spills from facilities, ships, and pipelines in both offshore and onshore habitat. To date, no major offshore oil spills have occurred in the Alaska Beaufort Sea. Though numerous small onshore spills have occurred on the North Slope, there have been no documented effects to polar bears.
Oil spills are unintentional releases of oil or petroleum products. In accordance with the National Pollutant Discharge Elimination System Permit Program, all North Slope oil companies must submit an oil spill contingency plan. It is illegal to discharge oil into the environment, and a reporting system requires operators to report spills. Between 1977 and 1999, an average of 70 oil and 234 waste product spills occurred annually on the North Slope oilfields. Although most spills have been small by Industry standards (less than 50 bbl), larger spills (more than 500 bbl) accounted for much of the annual volume. Seven large spills occurred between 1985 and 2009 on the North Slope. The largest spill occurred in the spring of 2006 when approximately 6,190 bbl leaked from flow lines near an oil gathering center. More recently, several large spills have occurred. In 2012, 1,000 bbl of drilling mud and 100 bbl of crude were spilled in separate incidents, in 2013, approximately 166 bbl of crude oil was spilled, and in 2014, 177 bbl of drilling mud was spilled. Those spills occurred primarily in the terrestrial environment in heavily industrialized areas not utilized by walruses or polar bears and posed little risk to the animals.
Walruses and polar bears could encounter spilled oil from exploratory operations, existing offshore facilities, pipelines, or from marine vessels. The shipping of crude oil, oil products, or other toxic substances, as well as the fuel for the shipping vessels, increases the risk of a spill. Future reductions in Arctic sea-ice extent are expected to improve access to Arctic shipping lanes and extend the Arctic shipping season, also increasing the risk of a spill.
Oil spills in the sea-ice environment, at the ice edge, in leads, polynyas, and similar areas of importance to walruses and polar bears, are of particular concern. Oil spilled in those areas presents an even greater challenge because of both the difficulties associated with cleaning oil in sea-ice, and the presence of wildlife in those areas. As additional offshore Industry projects are planned, the potential for large spills in the marine environment increases.
Oiling of food sources, such as ringed seals, may result in indirect effects on polar bears, such as a local reduction in ringed seal numbers, or a change to the local distribution of seals and bears. More direct effects on polar bears could occur from: (1) Ingestion of oiled prey, potentially resulting in reduced survival of individual bears; (2) oiling of fur and subsequent ingestion of oil from grooming; (3) oiling and fouling of fur with subsequent loss of insulation, leading to hypothermia; and (4) disturbance, injury, or death from interactions with humans during oil spill response activities. Polar bears may be particularly vulnerable to disturbance when nutritionally stressed and during denning. Cleanup operations that disturb a den could result in death of cubs through abandonment, and perhaps death of the sow as well. In spring, females with cubs of the year that denned near or on land and migrate to contaminated offshore areas may encounter oil following a spill (Stirling in Geraci and St. Aubin 1990).
In the event of an oil spill, the Service follows oil spill response plans to respond to the spill, coordinate with partners, and reduce the impact of a spill on wildlife. Several factors will be considered when responding to an oil spill. They include the location of the spill, the magnitude of the spill, oil viscosity and thickness, accessibility to spill site, spill trajectory, time of year, weather conditions (
BOEM has acknowledged that there are difficulties in effective oil-spill response in broken-ice conditions, and the National Academy of Sciences has determined that “no current cleanup methods remove more than a small fraction of oil spilled in marine waters, especially in the presence of broken ice.” BOEM advocates the use of nonmechanical methods of spill response, such as in-situ burning, during periods when broken-ice would hamper an effective mechanical response (MMS 2008b). An in-situ burn has the potential to rapidly remove large quantities of oil and can be employed when broken-ice conditions may preclude mechanical response. However, the resulting smoke plume may contain toxic chemicals and high levels of particulates that can pose health risks to marine mammals, birds and other wildlife, as well as to humans. Smoke trajectories must be considered before making the decision to burn spilled oil. Another potential nonmechanical response strategy is the use of chemical dispersants to speed dissipation of oil from the water surface and disperse it within the water column in small droplets. Dispersant use presents environmental trade-offs. While walruses and polar bears would likely benefit from reduced surface or shoreline oiling, dispersant use could have negative impacts on the aquatic food chain. Oil spill cleanup in the broken-ice and open-water conditions that characterize Arctic waters is problematic.
The MMPA does not authorize the incidental take of marine mammals as the result of illegal actions, such as oil spills. Any event that results in an injurious or lethal outcome to a marine mammal is not authorized under these ITRs. However, for the purpose of determining whether Industry activity would have a negligible effect on walruses and polar bears, the Service evaluated the potential impacts of oil spills within the Beaufort Sea ITR region.
As stated earlier, the Beaufort Sea is not within the primary range for walruses. Therefore, the probability of walruses encountering oil or waste products as a result of a spill from Industry activities is low. Onshore oil spills would not impact walruses unless oil moved into the offshore environment. In the event of a spill that occurs during the open-water season, oil in the water column could drift offshore and possibly encounter a small number of walruses. Oil spills from offshore platforms could also contact walruses under certain conditions. Spilled oil during the ice-covered season not cleaned up could become part of the ice substrate and be eventually released back into the environment during the following open-water season. During spring melt, oil would be collected by spill response activities, but it could eventually contact a limited number of walruses.
Little is known about the effects of oil specifically on walruses as no studies have been conducted. Hypothetically, walruses may react to oil much like other pinnipeds. Walruses are not likely to ingest oil while grooming since walruses have very little hair and exhibit no grooming behavior. Adult walruses may not be severely affected by the oil spill through direct contact, but they will be extremely sensitive to any habitat disturbance by human noise and response activities. In addition, due to the gregarious nature of walruses, an oil spill would most likely affect multiple individuals in the area. Walruses may also expose themselves more often to the oil that has accumulated at the edge of a contaminated shore or ice lead if they repeatedly enter and exit the water.
Walrus calves are most likely to suffer the effects of oil contamination. Female walruses with calves are very attentive, and the calf will stay close to its mother at all times, including when the female is foraging for food. Walrus calves can swim almost immediately after birth and will often join their mother in the water. It is possible that an oiled calf will be unrecognizable to its mother either by sight or by smell, and be abandoned. However, the greater threat may come from an oiled calf that is unable to swim away from the contamination and a devoted mother that would not leave without the calf, resulting in the potential mortality of both animals. Further, a nursing calf might ingest oil if the cow was oiled, also increasing the risk of injury or mortality.
Walruses have thick skin and blubber layers for insulation. Heat loss is regulated by control of peripheral blood flow through the animal's skin and blubber. The peripheral blood flow is decreased in cold water and increased at warmer temperatures. Direct exposure of walruses to oil is not believed to have any effect on the insulating capacity of their skin and blubber, although it is unknown if oil could affect their peripheral blood flow.
Damage to the skin of pinnipeds can occur from contact with oil because some of the oil penetrates into the skin, causing inflammation and death of some tissue. The dead tissue is discarded, leaving behind an ulcer. While these skin lesions have only rarely been found on oiled seals, the effects on walruses may be greater because of a lack of hair to protect the skin. Direct exposure to oil can also result in conjunctivitis. Like other pinnipeds, walruses are susceptible to oil contamination in their eyes. Continuous exposure to oil will quickly cause permanent eye damage.
Inhalation of hydrocarbon fumes presents another threat to marine mammals. In studies conducted on pinnipeds, pulmonary hemorrhage, inflammation, congestion, and nerve damage resulted after exposure to concentrated hydrocarbon fumes for a period of 24 hours. If the walruses were also under stress from molting, pregnancy, etc., the increased heart rate associated with the stress would circulate the hydrocarbons more quickly, lowering the tolerance threshold for ingestion or inhalation.
Walruses are benthic feeders, and much of the benthic prey contaminated by an oil spill would be killed immediately. Others that survived would become contaminated from oil in bottom sediments, possibly resulting in slower growth and a decrease in
The relatively few walruses in the Beaufort Sea and the low potential for a large oil spill (1,000 bbl or more), which is discussed in the following Risk Assessment Analysis, limit potential impacts to walruses to only certain events (
To date, large oil spills from Industry activities in the Beaufort Sea and coastal regions that would impact polar bears have not occurred, although the interest in, and the development of, offshore hydrocarbon reservoirs has increased the potential for large offshore oil spills. With limited background information available regarding oil spills in the Arctic environment, the outcome of such a spill is uncertain. For example, in the event of a large spill equal to a rupture in the Northstar pipeline and a complete drain of the subsea portion of the pipeline (approximately 5,900 bbl), oil would be influenced by seasonal weather and sea conditions including temperature, winds, wave action, and currents. Weather and sea conditions also affect the type of equipment needed for spill response and the effectiveness of spill cleanup. Based on the experiences of cleanup efforts following the Exxon Valdez oil spill, where logistical support was readily available, spill response may be largely unsuccessful in open-water conditions. Indeed, spill response drills have been unsuccessful in the cleanup of oil in broken-ice conditions.
Small spills of oil or waste products throughout the year could potentially impact some bears. The effects of fouling fur or ingesting oil or wastes, depending on the amount of oil or wastes involved, could be short-term or result in death. For example, in April 1988, a dead polar bear was found on Leavitt Island, northeast of Oliktok Point. The cause of death was determined to be due to a mixture that included ethylene glycol and Rhodamine B dye (Amstrup
During the ice-covered season, mobile, non-denning bears would have a higher probability of encountering oil or other production wastes than non-mobile, denning females. Current management practices by Industry, such as requiring the proper use, storage, and disposal of hazardous materials, minimize the potential occurrence of such incidents. In the event of an oil spill, it is also likely that polar bears would be intentionally hazed to keep them away from the area, further reducing the likelihood of impacting the population.
In 1980, Oritsland
Oiling of the pelt causes significant thermoregulatory problems by reducing the insulation value. Irritation or damage to the skin by oil may further contribute to impaired thermoregulation. Experiments on live polar bears and pelts showed that the thermal value of the fur decreased significantly after oiling, and oiled bears showed increased metabolic rates and elevated skin temperature. Oiled bears are also likely to ingest oil as they groom to restore the insulation value of the oiled fur.
Oil ingestion by polar bears through consumption of contaminated prey, and by grooming or nursing, could have pathological effects, depending on the amount of oil ingested and the individual's physiological state. Death could occur if a large amount of oil were ingested or if volatile components of oil were aspirated into the lungs. Indeed, two of three bears died in the Canadian experiment, and it was suspected that the ingestion of oil was a contributing factor to the deaths. Experimentally oiled bears ingested much oil through grooming. Much of it was eliminated by vomiting and in the feces; some was absorbed and later found in body fluids and tissues.
Ingestion of sublethal amounts of oil can have various physiological effects on polar bears, depending on whether the animal is able to excrete or detoxify the hydrocarbons. Petroleum hydrocarbons irritate or destroy epithelial cells lining the stomach and intestine, thereby affecting motility, digestion, and absorption.
Polar bears swimming in, or walking adjacent to, an oil spill could inhale toxic, volatile organic compounds from petroleum vapors. Vapor inhalation by polar bears could result in damage to the respiratory and central nervous systems, depending on the amount of exposure.
Oil may also affect food sources of polar bears. Seals that die as a result of an oil spill could be scavenged by polar bears. This food source would increase exposure of the bears to hydrocarbons and could result in lethal impacts or reduced survival to individual bears. A local reduction in ringed seal numbers as a result of direct or indirect effects of oil could temporarily affect the local distribution of polar bears. A reduction in density of seals as a direct result of mortality from contact with spilled oil could result in polar bears not using a particular area for hunting. Possible impacts from the loss of a food source could reduce recruitment and/or survival.
Spilled oil can concentrate and accumulate in leads and openings that occur during spring breakup and autumn freeze-up periods. Such a concentration of spilled oil would increase the chance that polar bears and their principal prey would be oiled. To access ringed and bearded seals, polar bears in the SBS concentrate in shallow waters less than 300 m (984 ft) deep over the continental shelf and in areas
Due to their seasonal use of nearshore habitat, the times of greatest impact from an oil spill to polar bears are likely the open-water and broken-ice periods (summer and fall). This scenario is important because distributions of polar bears are not uniform through time. Nearshore and offshore polar bear densities are greatest in fall, and polar bear use of coastal areas during the fall open-water period has increased in recent years in the Beaufort Sea. An analysis of data collected from 2001-2005 during the fall open-water period concluded: (1) On average approximately 4 percent of the estimated polar bears in the Southern Beaufort population were observed onshore in the fall; (2) 80 percent of bears onshore occurred within 15 km (9 mi) of subsistence-harvested bowhead whale carcasses, where large congregations of polar bears have been observed feeding; and (3) sea-ice conditions affected the number of bears on land and the duration of time they spent there (Schliebe
The persistence of toxic subsurface oil and chronic exposures, even at sublethal levels, can have long-term effects on wildlife (Peterson
Polar bears are biological sinks for some pollutants, such as polychlorinated biphenyls or organochlorine pesticides, because they are an apex predator of the Arctic ecosystem and are also opportunistic scavengers of other marine mammals. Additionally, their diet is composed mostly of high-fat sealskin and blubber (Norstrom
In addition, subadult polar bears are more vulnerable than adults to environmental effects (Taylor
Evaluation of the potential impacts of spilled Industry waste products and oil suggest that individual bears could be adversely impacted by exposure to these substances (Oritsland
In this section, we qualitatively assess the likelihood that polar bears may be oiled by a large oil spill. We considered: (1) The probability of a large oil spill occurring in the Beaufort Sea; (2) the probability of that oil spill impacting coastal polar bear habitat; (3) the probability of polar bears being in the area and coming into contact with that large oil spill; and (4) the number of polar bears that could potentially be impacted by the spill. Although the majority of the information in this evaluation is qualitative, the probability of all of these factors occurring sequentially in a manner that impacts polar bears in the Beaufort Sea is low. Since walruses are not often found in the Beaufort Sea, and there is little information available regarding the potential effects of an oil spill upon walruses, this analysis emphasizes polar bears.
The analysis was based on polar bear distribution and habitat use using four sources of information that, when combined, allowed the Service to make conclusions on the risk of oil spills to polar bears. This information included: (1) The description of existing offshore oil and gas production facilities previously discussed in the Description of Activities section; (2) polar bear distribution information previously discussed in the Biological Information section; (3) BOEM Oil-Spill Risk Analysis (OSRA) for the OCS, including polar bear environmental resource areas (ERAs) and land segments (LSs), which allowed us to qualitatively analyze the risk to polar bears and their habitat from a marine oil spill; and (4) the most recent polar bear risk assessment from the previous ITRs.
Development of offshore production facilities with supporting pipelines increases the potential for large offshore spills. The probability of a large oil spill from offshore oil and gas facilities and the risk to polar bears is a scenario that has been considered in previous regulations (71 FR 43926, August 2, 2006 and 76 FR 47010, August 3, 2011). With the limited background information available regarding the effects of large oil spills on polar bears in the marine Arctic environment, the impact of a large oil spill is uncertain. As far as is known, polar bears have not been affected by oil spilled as a result of North Slope Industry activities.
In order to effectively evaluate how a large oil spill may affect polar bears, we considered the following factors in developing our oil spill assessment for polar bears: The origin (location) of a large spill; the volume of a spill; oil viscosity; accessibility to spill site; spill trajectory; time of year; weather conditions (
The oil-spill scenario for this analysis considers the potential impacts of a large oil spill (
Because the BOEM OSRA provides the most current and rigorous treatment of potential oil spills in the Beaufort Sea Planning Area, our analysis of potential oil spill impacts applied BOEM's OSRA (MMS 2008a) to help analyze potential impacts of a large oil spill originating in the Beaufort Sea ITR region to polar bears. The OSRA is a computer model that analyzes how and where large offshore spills will likely move (Smith
The BOEM OSRA model was developed for the Federal offshore waters and does not include analysis of oil spills in the State of Alaska-controlled nearshore waters. Northstar, Oooguruk, Spy Island, and the Endicott/Liberty complex are located in nearshore State waters. Northstar has one Federal well, and Liberty is a Federal reservoir to be developed from State waters. Although the OSRA cannot calculate trajectories of oil spills originating from specific locations in the nearshore area, it can be used to help examine how habitat may be affected by a spill should one originate in the OCS. We can then compare the location of the affected habitat to habitat use by bears.
The OSRA model predicted where the oil trajectory would go if the oil persisted as a slick at a particular time of year. Oil spills of less than 1,000 bbl are not expected to persist on the water long enough to warrant a trajectory analysis. For this reason, we only analyzed the effects of a large oil spill. Although no large spills from oil and gas activities have occurred on the Alaska OCS to date, the large spill volume assumptions used by BOEM were based on the reported spills from oil exploration and production in the Gulf of Mexico and Pacific OCS regions. BOEM used the median spill size in the Gulf of Mexico and Pacific OCS in the period 1985-1999 as the likely large spill size for analysis purposes. The median size of a large crude oil spill from a pipeline in the period 1985-1999 on the U.S. OCS was 4,600 bbl, and the average was 6,700 bbl (Anderson and LaBelle 2000). The median large spill size for a platform on the OCS over the entire record in the period 1964-1999 is 1,500 bbl, and the average is 3,300 bbl (Anderson and LaBelle 2000).
The OSRA estimated that the statistical mean number of large spills is less than one over the 20-year life of past, present, and reasonably foreseeable developments in the Beaufort Sea Planning Area. In addition large spills are more likely to occur during development and production than during exploration in the Arctic (MMS 2008). Our oil spill assessment during a 5-year regulatory period was predicated on the same assumptions.
Between 1971 and 2007, OCS operators have produced almost 15 billion bbl of oil in the United States. During this period, 2,645 spills totaled approximately 164,100 bbl spilled (~0.001 percent of bbl produced), or about 1 bbl spilled for every 91,400 bbl produced. Between 1993 and 2007, almost 7.5 billion bbl of oil were produced. During this period, 651 spills totaled approximately 47,800 bbl spilled (~0.0006 percent of bbl produced), or approximately 1 bbl spilled for every 156,900 bbl produced.
Between July 1, 2009, and June 30, 2014, the North Slope industrial area reported an average of 59,043 gallons of spilled substances annually, with a total of 138 crude oil spills. Statewide during this period, approximately 5.6 percent of the total volume of spilled material consisted of crude oil. The volume of spilled crude on the North Slope was, therefore, estimated to be approximately 79 bbl (~1,406 × 0.056 = ~79). Recent large spills of crude oil have included a subsurface release of 166 bbl from a well at Milne Point, and a 100 bbl spill from a tank. Secondary containment retained the smaller of these spills.
Two large onshore terrestrial oil spills have occurred as a result of pipeline failures. In the spring of 2006, approximately 6,200 bbl of crude oil spilled from a corroded pipeline operated by BP Exploration (Alaska). The spill impacted approximately 0.8 ha (~2 ac). In November 2009, a spill of approximately 1,150 bbl from a “common line” carrying oil, water, and natural gas operated by BP occurred as well, impacting approximately 780 m
The BLM and BOEM modelled the likelihood of spills occurring during exploration and development in the NPR-A and in the Beaufort and Chukchi Sea planning area (BLM 2012 and BOEM 2011, respectively). Large (≥1,000 bbl) or very large spills (≥120,000 bbl) were considered extremely unlikely to occur during oil and gas exploration. The two sources of potential large crude oil spills are from pipelines and long-duration blowout resulting from a well-control incident. The loss of the entire volume in an onshore pipeline between two valves would also result in a large spill of crude oil. The BLM estimated a 28 percent chance that one or more large crude oil spills would occur during 50 years. Based on information on past spills, spill volumes close to the lower end of the “large spill” range (1,000 bbl) are much more likely than spill volumes in the upper end of the range (119,999 bbl). BOEM (2014) considered spill sizes of 1,700 and 5,100 bbl to be the largest spill size likely to occur from a pipeline or facility, respectively. BOEM estimated that the occurrence and frequency of large and very large spills from OCS exploratory and delineation wells at 0.003 (mean spill frequency per 1,000 years) and 2.39 × 10
Across the United States, in the period 1971-2010, one well control
Although it is reasonable to conclude that the chance of one or more large spills occurring during the period of these regulations on the Alaskan OCS from production activities is low, for analysis purposes, we assume that a large spill does occur in order to evaluate potential impacts to polar bears. The BOEM OSRA model analyzes the likely paths of more than two million simulated oil spills in relation to the shoreline and biological, physical, and sociocultural resource areas specific to the Beaufort Sea. The chance that a large oil spill will contact a specific ERA of concern within a given time of travel from a certain location (launch area or pipeline segment) is termed a “conditional probability.” Conditional probabilities assume that no cleanup activities take place, and that there are no efforts to contain the spill. We used the BOEM OSRA analysis from the Arctic Multi-sale DEIS to estimate the conditional probabilities of a large spill contacting sensitive ERAs pertinent to polar bears.
How long an oil spill persists on water or on the shoreline can vary, depending upon the size of the oil spill, the environmental conditions at the time of the spill, and the substrate of the shoreline. In its large oil spill analysis, BOEM assumed 1,500-bbl and 4,600-bbl spills could last up to 30 days on the water as a coherent slick based on oil weathering properties and dispersal data specific to North Slope crude oils. Therefore, we assumed that winter spills (October-June) could last up to 180 days as a coherent slick (
We used three BOEM launch areas (LAs), LA 8, LA 10, LA 12, and three pipeline segments (PLs), PL 10, PL 11, and PL 12, from Appendix A of the Arctic Multi-sale DEIS (Map A.1-4) to represent the oil spills moving from hypothetical offshore areas. These LAs and PLs were selected because of their close proximity to current offshore facilities.
For purposes of its oil spill trajectory simulation, BOEM made the following assumptions: All spills occur instantaneously; large oil spills occur in the hypothetical origin areas or along the hypothetical pipeline segments noted above; large spills do not weather for purposes of trajectory analysis; weathering is calculated separately; the model does not simulate cleanup scenarios; the oil spill trajectories move as though no oil spill response action is taken; and large oil spills stop when they contact the mainland coastline.
As noted above, the chance that a large oil spill will contact a specific ERA of concern within a given time of travel from a certain location (LA or PL), assuming a large spill occurs and that no cleanup takes place, is termed a “conditional probability.” From the DEIS, Appendix A, we chose ERAs and LSs to represent areas of concern pertinent to polar bears (MMS 2008a). Those ERAs and LSs and the conditional probabilities that a large oil spill originating from the selected LAs or PLs could affect those ERAs and LSs are presented in Table 1. From Table 1, we noted the highest chance of contact and the range of chances of contact that could occur should a large spill occur from LAs or PLs.
Polar bears are most vulnerable to a large oil spill during the open-water period when bears form aggregations onshore. In the Beaufort Sea these aggregations often form in the fall near subsistence-harvested bowhead whale carcasses. Specific aggregation areas include Point Barrow, Cross Island, and Kaktovik. In recent years, more than 60 polar bears have been observed feeding on whale carcasses just outside of Kaktovik, and in the autumn of 2002, NSB and Service biologists documented more than 100 polar bears in and around Barrow. In order for significant
We identified polar bear aggregations in environmental resource areas and non-grouped land segments (ERA 55, 93, 95, 96, 100; LS 85, 107). Assuming a spill occurs during summer or winter, the OSRA estimates the chance of contacting these aggregations is less than 13 percent (Table 1). The OSRA estimates for LA12 has the highest chance of a large spill contacting ERA 96 (Midway, Cross, and Bartlett islands). Some polar bears will aggregate at these islands during August-October (3 months). If a large oil spill occurred and contacted those aggregation sites outside of the timeframe of use by polar bears, potential impacts to polar bears would be reduced.
Coastal areas provide important denning habitat for polar bears, such as the ANWR and nearshore barrier islands (containing tundra habitat) (Amstrup 1993, Amstrup and Gardner 1994, Durner
Assuming a large oil spill occurs, and extrapolating the OSRA estimates to tundra relief barrier islands (ERA 92, 93, and 94, LS 97 and 102), these areas have up to a 12 percent chance of a large spill contacting them (a range of less than 0.5 percent to 12 percent) from LA 12 (Table 1). The OSRA estimates suggest that there is an 11 percent chance that oil would contact the coastline of the ANWR (LS 138). The Kaktovik area (ERA 95 and 100, LS 107) has up to a 5 percent chance of a spill contacting the coastline, assuming spills occur during the summer season and contact the coastline within 60 days. The chance of a spill contacting the coast near Barrow (ERA 55, LS 85) would be as high as 5 percent (Table 1).
All barrier islands are important resting and travel corridors for polar bears, and larger barrier islands that contain tundra relief are also important denning habitat. Tundra-bearing barrier islands within the geographic region and near oilfield development are the Jones Island group of Pingok, Bertoncini, Bodfish, Cottle, Howe, Foggy, Tigvariak, and Flaxman islands. In addition, Cross Island has gravel relief where polar bears have denned. The Jones Island group is located in ERA 92 and LS 97. If a spill were to originate from an LA 8 pipeline segment during the summer months, the probability that this spill would contact these land segments could be as great as 8 percent. The probability that a spill from LA 10 would contact the Jones Island group would range from 1 percent to as high as 11 percent. Likewise, for LA 12, PL 11 the range would be from 4 percent to as high as 12 percent, and for LA 12, PL 12 the range would be from 3 percent to as high as 12 percent.
In previous ITRs, we used a risk assessment method that considered oil spill probability estimates for two sites (Northstar and Liberty), oil spill trajectory models, and a polar bear distribution model based on location of satellite-collared females during September and October (68 FR 66744, November 28, 2003; 71 FR 43926, August 2, 2006; and 76 FR 47010, August 3, 2011). To support the analysis for this action, we reviewed the previous analysis and used the data to compare the potential effects of a large oil spill in a nearshore production facility (less than 5 mi), such as Liberty, and a facility located further offshore, such as Northstar. Even though the risk assessment of 2006 did not specifically model spills from the Oooguruk or Nikaitchuq sites, we believe it was reasonable to assume that the analysis for Liberty, and indirectly Northstar, adequately reflected the potential impacts likely to occur from an oil spill at either of these additional locations due to the similarity in the nearshore locations.
The first step of the risk assessment analysis was to examine oil spill probabilities at offshore production sites for the summer (July-October) and winter (November-June) seasons based on information developed for the original Northstar and Liberty EISs. We assumed that one large spill occurred during the 5-year period covered by the regulations. A detailed description of the methodology can be found at 71 FR 43926 (August 2, 2006). The second step in the risk assessment was to estimate the number of polar bears that could be impacted by a large spill. All modeled polar bear grid cell locations that were intersected by one or more cells of a rasterized spill path (a modeled group of hundreds of oil particles forming a trajectory and pushed by winds and currents and impeded by ice) were considered “oiled” by a spill. For purposes of the analysis, if a bear contacted oil, the contact was assumed to be lethal. This analysis involved estimating the distribution of bears that could be in the area and overlapping polar bear distributions and seasonal aggregations with oil spill trajectories. The trajectories previously calculated for Northstar and Liberty sites were used. The trajectories for Northstar and Liberty were provided by the BOEM and reported in Amstrup
The second step of the risk assessment analysis incorporated polar bear densities overlapped with the oil spill trajectories. To accomplish this, in 2004, USGS completed an analysis investigating the potential effects of hypothetical oil spills on polar bears. Movement and distribution information was derived from radio and satellite locations of collared adult females. Density estimates were used to determine the distribution of polar bears in the Beaufort Sea. Researchers then created a grid system centered over the Northstar production island and the Liberty site to estimate the number of bears expected to occur within each 1-km
In summary, the maximum numbers of bears potentially oiled by a 5,912 bbl spill during the September open-water season from Northstar was 27, and the maximum from Liberty was 23, assuming a large oil spill occurred and no cleanup or mitigation measures take place. Potentially oiled polar bears ranged up to 74 bears with up to 55 bears during October in mixed-ice conditions for Northstar and Liberty, respectively. Median number of bears oiled by the 5,912 bbl spill from the Northstar simulation site in September and October were 3 and 11 bears, respectively. Median numbers of bears oiled from the Liberty simulation site for September and October were 1 and
When calculating the probability that a 5,912 bbl spill would oil 5 or more bears during the annual fall period, we found that oil spills and trajectories were more likely to affect fewer than 5 bears versus more than 5 bears. Thus, for Northstar, the chance that a 5,912 bbl oil spill affected (resulting in mortality) 5 or more bears was 1.0-3.4 percent; 10 or more bears was 0.7-2.3 percent; and 20 or more bears was 0.2-0.8 percent. For Liberty, the probability of a spill that would affect 5 or more bears was 0.3-7.4 percent; 10 or more bears, 0.1-0.4 percent; and 20 or more bears, 0.1-0.2 percent.
After reviewing the prior risk assessment, we have concluded that it remains a valid methodology and analysis for use in this rule. The key conditions and considerations used in the analysis remain valid today. For this reason, we find that it is appropriate to continue to rely on the results of the analysis as it was set forth in 71 FR 43926, August 2, 2006.
The location of Industry sites within the marine environment is important when analyzing the potential for polar bears to contact a large oil spill. Simulations from the prior risk assessment suggested that bears have a higher probability of being oiled from facilities located further offshore, such as Northstar. Northstar Island is nearer the active ice zone and in deeper water than Endicott/Liberty, Oooguruk, and Nikaitchuq, areas where higher bear densities were calculated. Furthermore, Northstar is not sheltered by barrier islands. By comparison through modeling, the land-fast ice inside the shelter of the barrier islands appeared to dramatically restrict the extent of most oil spills in comparison to Northstar, which lies outside the barrier islands and in deeper water. However, it should be noted that while oil spreads more in deep water and breaks up faster in deeper waters where wind and wave action are higher, oil persists longer in shallow waters and along the shore.
Based on the simulations, a nearshore island production site (less than 5 mi from shore) would potentially involve less risk of polar bears being oiled than a facility located further offshore (greater than 5 mi). For any spill event, seasonality of habitat use by bears will be an important variable in assessing risk to polar bears. During the fall season when a portion of the SBS bear population aggregate on terrestrial sites and use barrier islands for travel corridors, spill events from nearshore industrial facilities may pose more chance of exposing bears to oil due to its persistence in the nearshore environment. Conversely, during the ice-covered and summer seasons, Industry facilities located further offshore (greater than 5 mi) may increase the chance of bears being exposed to oil as bears will be associated with the ice habitat.
In summary, to date documented oil spill-related impacts in the marine environment to polar bears in the Beaufort Sea by the oil and gas Industry are minimal. No large spills by Industry in the marine environment have occurred in Arctic Alaska. Nevertheless, the possibility of oil spills from Industry activities and the subsequent impacts on polar bears that contact oil remain a major concern.
There has been much discussion about effective techniques for containing, recovering, and cleaning up oil spills in Arctic marine environments, particularly the concern that effective oil spill cleanup during poor weather and broken-ice conditions has not been proven. Given this uncertainty, limiting the likelihood of a large oil spill becomes an even more important consideration. Industry oil spill contingency plans describe methodologies in place to prevent a spill from occurring. For example, all current offshore production facilities have spill containment systems in place at the well heads. In the event an oil discharge should occur, containment systems are designed to collect the oil before it contacts the environment.
With the limited background information available regarding oil spills in the Arctic environment, it is unknown what the outcome of such a spill event would be if one were to occur. Polar bears could encounter oil spills during the open-water and ice-covered seasons in offshore or onshore habitat. Although most polar bears in the SBS population spend a large amount of their time offshore on the pack-ice, it is likely that some bears would encounter oil from a large spill that persisted for 30 days or more.
Although the extent of impacts from a large oil spill would depend on the size, location, and timing of spills relative to polar bear distributions and on the effectiveness of spill response and cleanup efforts, under some scenarios, population-level impacts could be expected. A large spill originating from a marine oil platform could have significant impacts on polar bears if an oil spill contacted an aggregation of polar bears. Likewise, a spill occurring during the broken-ice period could significantly impact the SBS polar bear population in part because polar bears may be more active during this season.
In the event that an offshore oil spill contaminated numerous bears, a potentially significant impact to the SBS population could result. This effect would be magnified in and around areas of polar bear aggregations. Bears could also be affected indirectly either by food contamination or by chronic lasting effects caused by exposure to oil. During the 5-year period of these regulations, however, the chance of a large spill occurring is low.
While there is uncertainty in the analysis, certain factors must align for polar bears to be impacted by a large oil spill occurring in the marine environment. First, a large spill must occur. Second, the large spill must contaminate areas where bears may be located. Third, polar bears must be seasonally distributed within the affected region when the oil is present. Assuming a large spill occurs, BOEM's OSRA estimated that there is up to a 13 percent chance that a large spill from the analyzed sites (LAs 8, 10, and 12 and PLs 10, 11, and 12) would contact Cross Island (ERA 96) within 60 days, as much as an 11 percent chance that it would contact Barter Island and/or the coast of the ANWR (ERA 95 and 100, LS 107 and 138), and up to a 5 percent chance that an oil spill would contact the coast near Barrow (ERA 55, LS 85) during the summer time period. Data from polar bear coastal surveys indicate that polar bears are unevenly and seasonally distributed along the coastal areas of the Beaufort Sea ITR region. Seasonally only a portion of the SBS population utilizes the coastline between the Alaska/Canada border and Barrow and only a portion of those bears could be in the oil-spill-affected region.
As a result of the information considered here, the Service concludes that the likelihood of an offshore spill from an offshore production facility in the next 5 years is low. Moreover, in the unlikely event of a large spill, the likelihood that spills would contaminate areas occupied by large numbers of bears is low. While individual bears could be negatively
The following analysis concludes that only small numbers of walruses and polar bears are likely to be subjected to Level B take by harassment incidental to the described Industry activities relative to their respective populations.
1. The number of walruses and polar bears that will be harassed by Industry activity is expected to be small relative to the number of animals in their populations.
As stated previously, walruses are extralimital in the Beaufort Sea with nearly the entire walrus population found in the Chukchi and Bering seas. Industry monitoring reports have observed no more than 35 walruses between 1995 and 2016, with only a few observed instances of disturbance to those walruses (AES Alaska 2015, USFWS unpublished data). Between those years, Industry walrus observations in the Beaufort Sea ITR region averaged approximately two walruses per year, although the actual observations were of a single or a few animals, often separated by several years. We do not anticipate that seasonal movements of a few walruses into the Beaufort Sea will increase. We conclude that over the 5-year period of these ITRs, Industry activities will potentially result in a small number of Level B takes of walruses.
As we stated previously, from 2010 through 2014, Industry made 1,234 reports of polar bears comprising 1,911 bears. We found that as much as 42 percent of the SBS polar bear population may have been observed by Industry personnel over that time period, though this is likely an overestimate due to the nature of the Industry observation data. When we evaluated the effects upon the 1,911 bears observed, we found that 81 percent (1,549) resulted in instances of non-taking. Over those 5 years, Level B takes of polar bears totaled 338, approximately 18 percent of the observed bears, or 7.5 percent of the SBS population. We conclude that over the 5-year period of these ITRs, Industry activities will result in a similarly small number of Level B takes of polar bears.
2. Within the specified geographical region, the area of Industry activity is expected to be small relative to the range of walruses and polar bears.
Walruses and polar bears range well beyond the boundaries of the Beaufort Sea ITR region. The facts that walruses are extralimital in the Beaufort Sea and polar bears move through the areas of Industry activity seasonally suggest that Industry activities in the geographic area of this rule will have relatively few interactions with walruses and polar bears. As reported by AOGA, the total area of infrastructure on the North Slope as of 2012 was approximately 7,462 ha (~18,439 ac), or approximately 0.1 percent of the Arctic Coastal Plain between the Colville and Canning rivers. The 2012 estimated area of Industry activity was approximately 0.025 percent of the geographic region of this rule. This area is smaller when compared to the proportion of the range of walruses or the SBS polar bear population. Allowing for past Industry activity area growth, and anticipating the level of activity for the 5-year period of this rule, the Service concludes that the area of Industry activity will be relatively small compared to the range of walruses and polar bears.
3. Monitoring requirements and adaptive mitigation measures are expected to significantly limit the number of incidental takes of animals.
Holders of an LOA will be required to adopt monitoring requirements and mitigation measures designed to reduce potential impacts of their operations on walruses and polar bears. For Industry activities in terrestrial environments, where denning polar bears may be a factor, mitigation measures will require that den detection surveys be conducted at least a 1.6-km (1-mi) distance from any known polar bear den. A full description of the mitigation, monitoring, and reporting requirements associated with an LOA can be found in 50 CFR 18.128.
We expect that only a small proportion of the Pacific walrus population or the SBS polar bear population are likely to be affected by Industry activities because: (1) Only a small proportion of the walrus or polar bear population will occur in the areas where Industry activities will occur; (2) only small numbers will be impacted because walruses are extralimital in the Beaufort Sea and SBS polar bears are widely distributed throughout their expansive range, which encompasses areas beyond the Beaufort Sea ITR region; and (3) the monitoring requirements and mitigation measures described below will further reduce potential impacts.
Based upon our review of the nature, scope, and timing of Industry activities and required mitigation measures, and in consideration of the best available scientific information, we have determined that the activities will have a negligible impact on walruses and polar bears. Factors considered in our negligible effects determination include:
1. The behavior and distribution of walruses and polar bears in areas that overlap with Industry activities are expected to limit interactions of walruses and polar bears with those activities.
The distribution and habitat use patterns of walruses and polar bears indicates that relatively few animals will occur in the areas of Industry activity at any particular time, and, therefore, few animals are likely to be affected. As discussed previously, only small numbers of walruses are likely to be found in the Beaufort Sea where and when offshore Industry activities are proposed. Likewise, SBS polar bears are widely distributed, are most often closely associated with pack-ice, and are unlikely to interact with open-water industrial activities, and their range is greater than the geographic region of the ITRs.
2. The predicted effects of Industry activities on walruses and polar bears will be nonlethal, temporary takes of animals.
The documented impacts of previous Industry activities on walruses and polar bears, taking into consideration cumulative effects, suggests that the types of activities analyzed for these ITRs will have minimal effects and will be short-term, temporary behavioral changes. The vast majority of reported polar bear observations have been of polar bears moving through the oilfields, undisturbed by the Industry activity.
3. The footprint of the Industry activities is expected to be small relative to the range of the walrus and polar bear populations.
The relatively small area of Industry activity compared to the range of walruses and polar bears will reduce the
4. Mitigation measures will limit potential effects of Industry activities.
Holders of an LOA will be required to adopt monitoring requirements and mitigation measures designed to reduce the potential impacts of their operations on walruses and polar bears. Seasonal restrictions, early detection monitoring programs, den detection surveys for polar bears, and adaptive mitigation and management responses based on real-time monitoring information (described in these regulations) will be used to avoid or minimize interactions with walruses and polar bears and, therefore, limit potential Industry disturbance of these animals.
We, therefore, conclude that any incidental take reasonably likely to or reasonably expected to occur in association with the Industry activities addressed under these regulations will have no more than a negligible impact on walruses and polar bears within the Beaufort Sea region. We do not expect any resulting disturbance to negatively impact the rates of recruitment or survival for the walrus and polar bear populations. These regulations do not authorize lethal take, and we do not anticipate that any lethal take will occur.
We evaluated the practicality and effectiveness of mitigation measures based on the nature, scope, and timing of Industry activities; the best available scientific information; and over 20 years of monitoring data during Industry activities in the Beaufort and Chukchi seas. We have determined that the mitigation measures in these ITRs will ensure the least practicable adverse impacts on Pacific walruses and polar bears from Industry activities. The mitigation measures discussed in these ITRs and specified in section “18.128 Mitigation, monitoring, and reporting requirements” are generally intended to ensure the least practicable adverse impacts on Pacific walruses and polar bears from Industry activities.
Polar bear den surveys before activities begin during the denning season, and the resulting 1.6-km (1-mi) operational exclusion zone around all known polar bear dens and restrictions on the timing and types of activities in the vicinity of dens, ensures that impacts to denning female polar bears and their cubs are minimized during this critical time. The operational exclusion zone for vessels of 805-m (0.5-mi) around walruses and polar bears on land or ice and feeding walrus groups, the restrictions on vessels separating members of a group of walruses from other members of the group, and vessel speed reduction in low visibility ensures disturbance from vessels is minimized. The restriction that vessels bound for the Beaufort Sea ITR Region may not transit through the Chukchi Sea prior to July 1 is intended to allow walruses the opportunity to move through the Bering Strait and disperse from the confines of the spring lead system into the Chukchi Sea with minimal disturbance as well as minimize vessel impacts on the availability of walruses for Alaska Native subsistence hunters. We considered a variety of mitigation measures for vessels and aircraft, such as greater distances, increased altitudes, alternate timing, speed reductions, and others. Based on the information we currently have regarding vessels and aircraft disturbances and how walruses and polar bears may be impacted by them, we concluded that we practically and effectively minimize disturbance from these activities with the mitigation measures in these ITRs. We will continue to evaluate the effectiveness of these mitigation measures as more information becomes available.
Mitigation measures are required for sound-producing offshore activities that include monitoring and mitigation zones for activities expected to produce pulsed underwater sounds with received sound levels ≥160 dB re 1 μPa. The acoustically verified zones surrounding a sound source include a walrus monitoring zone where the received pulsed sound level would be ≥ 160 dB re 1 μPa (walruses in this zone are assumed to experience Level B take), a walrus mitigation zone where the received pulsed sound level would be ≥ 180 dB re 1 μPa, and a walrus and polar bear mitigation zone where the received pulsed sound level would be ≥ 190 dB re 1 μPa. We also require adaptive mitigation measures for these zones including sound source ramp-up procedures (
We considered other acoustic thresholds for underwater sound. For example, NMFS adopts an interim 120 dB re 1 μPa generic acoustic threshold criterion for MMPA Level B take for non-impulsive underwater sounds. Since the development of these thresholds in the late 1990s, the understanding of the effects of noise on marine mammal hearing has advanced. While NMFS has recognized the need for updated acoustic criteria, no final guidance is yet available. In this ITR, we examined the current information to determine the appropriate acoustic threshold levels for walruses exposed to underwater sounds from Industry activities.
Only one study on one individual is available to evaluate walrus underwater hearing (Kastelein et al. 2002), no studies are available to evaluate walrus responses to underwater sounds, and no information is available on which to base walrus hearing thresholds relative to injury and disturbance. The NMFS 120 dB re 1 μPa threshold was developed primarily from behavioral studies of gray whales and bowhead whales rather than pinnipeds (
There is even less information available to evaluate underwater polar bear hearing than for walruses. Polar bears could be affected by underwater sound, but underwater sound attenuates near the surface due to the pressure release effect near the surface (Greene and Richardson 1988; Richardson et al. 1995). Because polar bears generally do not spend much time with their heads underwater it is likely that they would be exposed to very little underwater sound. It is likely that polar bears
We considered acoustic thresholds for underwater sound that would effectively minimize impacts to polar bears. Based on our understanding of polar bear biology and behavior we determined that a polar bear would have to be exposed to relatively loud underwater sound in order to experience disturbance, and even louder sound to risk potential injury. We determined that there is sufficient evidence to conclude that polar bears are unlikely to experience disturbance from underwater sounds at ≥ 160 dB re 1 μPa. We further determined that there is sufficient evidence to conclude that polar bears may experience Level B take from underwater sounds at ≥ 180 dB re 1 μPa and may risk TTS ≥ 190 dB re 1 μPa. We developed the mitigation measures in this ITR accordingly.
We, therefore, conclude that the mitigation measures required by these ITRs will effect the least practicable adverse impacts from any incidental take likely to occur in association with Industry activities.
We make the following findings regarding this action:
Walruses are extralimital in the Beaufort Sea, thus, the number of walruses exposed to the impacts of Industry activities will be inherently small. Between 1995 and 2016, Industry observed no more than 35 walruses in the Beaufort Sea ITR region, with only a few instances of disturbance to some of those walruses. We do not anticipate the potential for any lethal take from Industry activities. We estimate that there will be no more than 10 Level B harassment takes of Pacific walruses by Industry activities during the 5-year period of these ITRs.
Industry observation reports from the period 2010-2014 indicate that on average 383 polar bears were observed annually during Industry activities. Some of these observations are sightings of the same bears on different occasions. While the majority of observations were sightings with no interaction between polar bears and Industry activity (~81 percent of observed bears), takes by harassment do occur. According to Industry monitoring data, the number of Level B takes has averaged 68 per year from 2010 through 2014.
Based on this information, we estimate that there will be no more than 340 Level B harassment takes of polar bears during the 5-year period of these ITRs. All takes are anticipated to be nonlethal Level B harassment involving short-term and temporary changes in bear behavior. The required mitigation and monitoring measures described in the regulations are expected to prevent injurious Level A takes, and, therefore, the number of lethal takes is estimated to be zero.
Based on the best scientific information available, the results of Industry monitoring data from the previous ITRs, the review of the information generated by the listing of the polar bear as a threatened species and the designation of polar bear critical habitat, current information on Pacific walruses, the results of our modeling assessments, and the status of the populations, we find that any incidental take reasonably likely to result from Industry, or substantially similar, activities during the period of the ITRs, in the Beaufort Sea and adjacent northern coast of Alaska, will have no more than a negligible impact on walruses and polar bears. We do not expect that the total of these disturbances will affect rates of recruitment or survival for walruses or polar bears. In making this finding, we considered the following: The distribution of the species; the biological characteristics of the species; the nature of Industry activities; the potential effects of Industry activities and potential oil spills on the species; the probability of oil spills occurring; the documented impacts of Industry activities on the species, taking into consideration cumulative effects; the potential impacts of climate change, where both walruses and polar bears can potentially be displaced from preferred habitat; mitigation measures designed to minimize Industry impacts through adaptive management; and other data provided by Industry monitoring programs in the Beaufort and Chukchi seas.
We also considered the specific Congressional direction in balancing the potential for a significant impact with the likelihood of that event occurring. The specific Congressional direction that justifies balancing probabilities with impacts follows:
If potential effects of a specified activity are conjectural or speculative, a finding of negligible impact may be appropriate. A finding of negligible impact may also be appropriate if the probability of occurrence is low but the potential effects may be significant. In this case, the probability of occurrence of impacts must be balanced with the potential severity of harm to the species or stock when determining negligible impact. In applying this balancing test, the Service will thoroughly evaluate the risks involved and the potential impacts on marine mammal populations. Such determination will be made based on the best available scientific information (53 FR 8474, March 15, 1988; 132 Cong. Rec. S 16305 (October. 15, 1986)).
We reviewed the effects of the oil and gas Industry activities on walruses and polar bears, including impacts from noise, physical obstructions, human encounters, and oil spills. Based on our review of these potential impacts, past LOA monitoring reports, and the biology and natural history of walrus and polar bear, we conclude that any incidental take reasonably likely to or reasonably expected to occur as a result of projected activities will have a negligible impact on the walrus and polar bear populations. Furthermore, we do not expect these disturbances to affect the rates of recruitment or survival for the walrus and polar bear populations. These regulations do not authorize lethal take, and we do not anticipate any lethal take will occur.
The probability of an oil spill that will cause significant impacts to walruses and polar bears appears extremely low. We have included information from both offshore and onshore projects in our oil spill analysis. We have analyzed the likelihood of a marine oil spill of the magnitude necessary to lethally take a significant number of polar bears for offshore projects and, through a risk assessment analysis, found that it is unlikely that there will be any lethal take associated with a release of oil. In the unlikely event of a catastrophic spill, we will take immediate action to minimize the impacts to these species and reconsider the appropriateness of authorizations for incidental taking through section 101(a)(5)(A) of the MMPA.
After considering the cumulative effects of existing and future development, production, and exploration activities, and the likelihood of any impacts, both onshore and offshore, we find that the total expected takings resulting from oil and gas Industry activities will affect no more than small numbers and will have no more than a negligible impact on the walrus and polar bear populations inhabiting the Beaufort Sea area on the North Slope coast of Alaska.
Our finding of negligible impact applies to incidental take associated with Industry, or substantially similar, activities as mitigated through the
Within the described geographic region of this rule, Industry effects on walruses and polar bears are expected to occur at a level similar to what has taken place under previous regulations. We anticipate that there will be an increased use of terrestrial habitat in the fall period by polar bears. We also anticipate a continued increased use of terrestrial habitat by denning bears. Nevertheless, we expect no significant impact to these species as a result of these anticipated changes. The mitigation measures will be effective in minimizing any additional effects attributed to seasonal shifts in distribution or denning polar bears during the 5-year timeframe of the regulations. It is likely that, due to potential seasonal changes in abundance and distribution of polar bears during the fall, more frequent encounters may occur and Industry may have to implement mitigation measures more often, possibly increasing polar bear deterrence events. In addition, if additional polar bear den locations are detected within industrial activity areas, spatial and temporal mitigation measures, including cessation of activities, may be instituted more frequently during the 5-year period of the rule.
We have evaluated climate change in regard to walruses and polar bears. Climate change is a global phenomenon and was considered as the overall driver of effects that could alter walrus and polar bear habitat and behavior. Though climate change is a pressing conservation issue for walruses and polar bears, we have concluded that the authorized taking of walruses and polar nears during Industry activities during this 5-year rule will not adversely impact the survival of these species and will have no more than negligible effects. The Service is currently involved in research to help us understand how climate change may affect walruses and polar bears. As we gain a better understanding of climate change effects, we will incorporate the information in future actions.
We find that the mitigation measures required by these ITRs will effect the least practicable adverse impacts from any incidental take likely to occur in association with Industry activities. In making this finding, we considered the biological characteristics of Pacific walruses and polar bears, the nature of Industry activities, the potential effects of Industry activities on walruses and polar bears, the documented impacts of Industry activities on walruses and polar bears, data provided by Industry monitoring programs in the Beaufort and Chukchi seas, and alternative mitigation measures.
Based on community consultations, locations of hunting areas, the potential overlap of hunting areas and Industry projects, the best scientific information available, and the results of monitoring data, we find that take caused by oil and gas exploration, development, and production activities in the Beaufort Sea and adjacent northern coast of Alaska will not have an unmitigable adverse impact on the availability of walruses and polar bears for taking for subsistence uses during the period of the rule. In making this finding, we considered the following: Records on subsistence harvest from the Service's Marking, Tagging, and Reporting Program; community consultations; effectiveness of the POC process between Industry and affected Native communities; and anticipated 5-year effects of Industry activities on subsistence hunting.
Walruses and polar bears represent a small portion, in terms of the number of animals, of the total subsistence harvest for the communities of Barrow, Nuiqsut, and Kaktovik. However, the low numbers do not mean that the harvest of these species is not important to Alaska Natives. Prior to receipt of an LOA, Industry must provide evidence to us that community consultations have occurred or that an adequate POC has been presented to the subsistence communities. Industry will be required to contact subsistence communities that may be affected by its activities to discuss potential conflicts caused by location, timing, and methods of operations. Industry must make reasonable efforts to ensure that activities do not interfere with subsistence hunting and that adverse effects on the availability of walruses and polar bear are minimized. Although multiple meetings for multiple projects from numerous operators have already taken place, no official concerns have been voiced by the Native communities with regard to Industry activities limiting availability of walruses or polar bears for subsistence uses. However, should such a concern be voiced as Industry continues to reach out to the Native communities, development of POCs, which must identify measures to minimize any adverse effects, will be required. The POC will ensure that oil and gas activities will not have an unmitigable adverse impact on the availability of the species or stock for subsistence uses. This POC must provide the procedures addressing how Industry will work with the affected Native communities and what actions will be taken to avoid interference with subsistence hunting of walruses and polar bears, as warranted.
The Service has not received any reports and is aware of no information that indicates that walruses or polar bears are being or will be deflected from hunting areas or impacted in any way that diminishes their availability for subsistence use by the expected level of oil and gas activity. If there is evidence during the 5-year period of the regulations that oil and gas activities are affecting the availability of walruses or polar bears for take for subsistence uses, we will reevaluate our findings regarding permissible limits of take and the measures required to ensure continued subsistence hunting opportunities.
The purpose of monitoring requirements is to document and provide data for the assessment the effects of industrial activities on walruses and polar bears and to ensure that take is consistent with that anticipated in the negligible impact and subsistence use analyses, and to detect any unanticipated effects on the species. Monitoring plans include steps to document when and how bears and walruses are encountered, the number of bears and walruses, and their behavior during the encounter. This information allows the Service to measure encounter rates and trends of walrus and polar bear activity in the industrial areas (such as numbers and gender, activity, seasonal use) and to estimate numbers of animals potentially affected by Industry. Monitoring plans are site-specific, dependent on the proximity of the activity to important habitat areas, such as den sites, travel corridors, and food sources; however, all activities are required to report all sightings of walruses and polar bears. To the extent possible, monitors will
Monitoring activities will be summarized and reported in a formal report each year. The applicant must submit an annual monitoring and reporting plan at least 90 days prior to the initiation of the activity, and the applicant must submit a final monitoring report to us no later than 90 days after the expiration of the LOA. We base each year's monitoring objective on the previous year's monitoring results.
We require an approved plan for monitoring and reporting the effects of oil and gas Industry exploration, development, and production activities on polar bear and walruses prior to issuance of an LOA. Since production activities are continuous and long-term, upon approval, LOAs and their required monitoring and reporting plans will be issued for the life of the activity or until the expiration of the regulations, whichever occurs first. Each year, prior to January 15, we require that the operator submit development and production activity monitoring results of the previous year's activity. We require approval of the monitoring results for continued operation under the LOA.
The ITRs are consistent with the 1973 Agreement on the Conservation of Polar Bears, a multilateral treaty executed in Oslo, Norway among the Governments of Canada, Denmark, Norway, Russia, and the United States. Article II of this Polar Bear Agreement lists three obligations of the Parties in protecting polar bear habitat. Parties are obliged to: (1) Take appropriate action to protect the ecosystem of which polar bears are a part; (2) give special attention to habitat components such as denning and feeding sites and migration patterns; and (3) manage polar bear populations in accordance with sound conservation practices based on the best available scientific data.
This rule is also consistent with the Service's treaty obligations because it incorporates mitigation measures that ensure the protection of polar bear habitat. LOAs for industrial activities are conditioned to include area or seasonal timing limitations or prohibitions, such as placing 1.6-km (1-mi) avoidance buffers around known or observed dens (which halts or limits activity until the bear naturally leaves the den), building roads perpendicular to the coast to allow for polar bear movements along the coast, and monitoring the effects of the activities on polar bears. Available denning habitat maps are provided by the USGS.
We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(a) Be logically organized:
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
We requested written comments from the public in order to ensure that any final action be as accurate and as effective as possible. The comment period on the proposed ITRs opened on June 7, 2016 (81 FR 36664), and closed on July 7, 2016. During that time, we received nine comment submissions; these included comments on the proposed rule as well as the draft EA.
The Service received comments from the Marine Mammal Commission, private companies, Industry organizations, environmental organizations, and the general public. We reviewed all comments received for substantive issues, new information, and recommendations regarding the ITRs and the EA. The comments on the proposed ITRs, aggregated by subject matter, summarized and addressed below, are incorporated into the final rule as appropriate. The Service has summarized and responded to comments pertaining to the draft EA in our final EA. A summary of the changes to these final ITRs from the proposed ITRs is found in the preamble section “Summary of Changes from the Proposed Rule.”
The Service disagrees with the logic that “If each take was a unique bear, it would account for 38 percent of the population.” The comment is a fundamental mischaracterization of our analysis. The Service explained how we conducted our analysis of takes and arrived at our determination of small numbers in the preamble section “Take Estimates for Pacific Walruses and Polar Bears.” Our analysis uses data gathered from Industry observation reports. Those data show that individual polar bears may experience multiple takes over time. The number 340 in our determination refers to polar bear takes, not the number of individual polar bears potentially taken. Further, the best available information shows that only a portion of the SBS polar bear stock encounters Industry activity, and only a portion of those bears experience harassment that is considered “take” as defined by the MMPA. The Service believes that based on the nature of the data used to conduct our analysis the results are likely an overestimate rather than an underestimate.
The Service does not assume that the level of Industry activity during the 5-year period of these ITRs would be the same as the previous 5-year period as the commenters assert. During the 5 years that the ITRs will be in place, Industry activities are expected to be generally similar in type, timing, and effect to activities that have been evaluated under the prior ITRs. We assume the overall annual level of Industry activity will be similar to, but not the same as, that which occurred under the previous regulations, although exploration and development may shift to new locations and new facilities will add to the overall Industry footprint. The Service evaluated the
The Service does not assume that “the level of take will remain constant” as the commenters assert. The timing and nature of polar bear/Industry interactions in the Beaufort Sea ITR Region are seasonal and variable over time. Though overall polar bear observation reports from Industry are increasing, that does not automatically equate to an increase of takes. The Service believes this is largely due to the mitigation measures found in this and previous ITRs, as well the polar bear/human conflict management programs run by the Service.
If potential effects of a specified activity are conjectural or speculative, a finding of negligible impact may be appropriate. A finding of negligible impact may also be appropriate if the probability of occurrence is low but the potential effects may be significant. In this case, the probability of occurrence of impacts must be balanced with the potential severity of harm to the species or stock when determining negligible impact. In applying this balancing test, the Service will thoroughly evaluate the risks involved and the potential impacts on marine mammal populations. Such determination will be made based on the best available scientific information [53 FR 8474, March 15, 1988; 132 Cong. Rec. S 16305 (October. 15, 1986)].
We evaluated the effects of Industry activities on walruses and polar bears, including impacts from noise, physical obstructions, human encounters, and oil spills, including the cumulative effects of existing and future development, production, and exploration activities, and the likelihood of impacts, both onshore and offshore. The evaluation of the scale of Industry activities in comparison with the range of SBS polar bears was only one part of the complete analysis. The Service does not state that the range of a species alone is determinative of the impact of take on a population. Rather, we conclude that the relatively small area of Industry activity compared to the range of walruses and polar bears will reduce the potential of their exposure to and disturbance from Industry activities.
The Service is not aware of any information that indicates harassment from Industry activities has significant impacts on the polar bear population. These ITRs, and previous ITRs, include specific mitigation measures to protect denning polar bears. These mitigation measures have proven very effective for protecting denning polar bears.
The best available information indicates that encounters between vessels and polar bears will likely result in no more than short-term and temporary behavioral disturbance and likely have no significant effects. The Service considered deterrence events of polar bears in addition to incidental takes for a more thorough analysis, as well as for the sake of transparency. The Service believes we have thoroughly evaluated the anticipated number of takes of polar bears and Pacific walruses likely to occur during the 5-year period of these ITRs. Again as stated in the response to comment 5, 340 refers to the number of polar bear takes, not the number of individual polar bears. Likewise, the estimate of up to 10 Pacific walruses refers to the number of takes and not the number of individual Pacific walruses.
The LOA process described in these ITRs ensures the opportunity for communities to review Industry plans and make recommendations for additional mitigation measures. The process requires Industry to work with Alaska Native communities to address concerns and mitigate impacts to resource availability. Industry must provide the Service documentation of communication and coordination with Alaska Native communities during our consideration of each individual LOA. The Service offers guidance during the POC process, and must review and approve Industry POCs to ensure that the process and content are sufficient.
The Service's finding is based on the best available information, such as the polar bear and walrus harvest data provided by Alaska Native subsistence hunters through the Service's Marking, Tagging, and Reporting Program. That information indicates that activities will not have an unmitigable, adverse impact on the availability of species for subsistence take. We also based our finding on: (1) The results of coastal aerial surveys; (2) direct observations of polar bears occurring near bowhead whale carcasses on Barter Island and on Cross Island during the annual fall bowhead whaling efforts; (3) community consultations; (4) locations of hunting areas; (5) the potential overlap of hunting areas and Industry projects; (6) results of monitoring data; and (7)
The Service recognizes the primary threat to the continued existence of polar bears is loss of sea ice habitat due to climate change and that sea ice habitat is also of concern for Pacific walruses. The Service addressed its position on greenhouse gas (GHG) in the Final Polar Bear Special Rule (78 FR 11766, February 20, 2013) and previous ITRs for the Beaufort Sea and Chukchi Sea. The Service considered the effects of climate change upon polar bears, walruses, and their habitats (particularly the effects upon sea ice) while developing these ITRs. Broader questions about climate change and how it may cause additive stress on polar bear and walrus populations over the long term are beyond the scope of these ITRs analysis but are explored generally in the EA.
The commenter suggests that we eliminated the mitigation measure regarding groups of 12 or more walruses from these ITRs because it was impractical. That was not the case. We eliminated it because it was irrelevant in the Beaufort Sea. Groups of 12 or more walruses have not been observed in the Beaufort Sea ITR Region for more than 20 years. If the Service becomes aware of information that walruses begin to occur in the Beaufort Sea in groups of 12 or more, we will re-evaluate the need for such a mitigation measure.
As we point out in the preamble, we may require additional mitigation measures when we determine they would be needed to implement least practicable adverse impacts during an activity. We may also decline to issue an LOA if the impacts of an activity exceed the scope and determinations of these ITRs. As new evidence or specific information on the effectiveness of the mitigation, monitoring and reporting measures for these ITRs becomes available, we will consider it and make any appropriate changes.
For the sake of clarity on how we addressed the least practicable adverse impacts requirement, we revised text in the “Take Estimates for Pacific Walruses and Polar Bears” section by adding a subsection titled “Least Practicable Adverse Impacts Determination” and we revised text in the “Findings” section by adding a subsection titled “Least Practicable Adverse Impacts.”
The commenters provided information regarding the potential impacts of hydraulic fracturing, most of which is not relevant for the type and scale of hydraulic fracturing conducted in the Beaufort Sea ITR Region. The Service is not aware of any information (and none was provided by the commenter) that indicates that polar bears or walruses have experienced take, as defined by the MMPA, or other negative effects, from hydraulic fracturing on the North Slope.
The Service agrees that the release of toxic substances, from hydraulic fracturing or any other source, into the habitat of polar bears and Pacific walruses may have detrimental effects upon those animals exposed. The Service's analysis acknowledges there is a potential for spills to occur. The accidental release of toxic substances, such as in the case of an oil spill, is an illegal act. No part of this rule authorizes the release of toxic substances into the environment, or the exposure of wildlife to such toxins. For these ITRs, we evaluated the probability of an oil spill and the dynamics of how polar bears and walruses would interact with a potential spill through their behavior, physiology, and habitat use. Using this information the Service has developed mitigation measures and response plans to minimize impacts on these species in the event of a spill. The Service believes that the occurrence of such an event is minimized by adherence to the regulatory standards that are in place. This is supported by historical evidence, which shows that adherence to oil spill plans and best management practices has resulted in no major spills in the nearshore and offshore areas where Industry activities occur in the Beaufort Sea ITR Region. In the event of a spill, we would reassess the impacts to the polar bear and walrus populations and reconsider the appropriateness of authorizations for taking through Section 101(a)(5)(A) of the MMPA.
While we recognize that the primary threat to the continued existence of the polar bear is loss of sea ice habitat due to climate change, and that loss of sea ice habitat is also of concern for the Pacific walrus. The Service addressed its position on GHG in the Final Polar Bear Special Rule (78 FR 11766, February 20, 2013) and previous ITRs for the Beaufort Sea and Chukchi Sea. The Service finds that while GHG emissions are clearly contributing to climate change, the comprehensive authority to regulate those emissions is not found in the statutes that govern the management of marine mammals. The challenge posed by climate change and its ultimate solution is much broader than the scope and scale of these ITRs.
We have prepared an environmental assessment (EA) in conjunction with this rulemaking, and have determined that this rulemaking is not a major Federal action significantly affecting the quality of the human environment within the meaning of Section 102(2)(C) of the NEPA of 1969. For a copy of the EA, go to
In 2008, the Service listed the polar bear as a threatened species under the ESA (73 FR 28212, May 15, 2008) and later designated critical habitat for polar bear populations in the United States, effective January 6, 2011 (75 FR 76086, December 7, 2010). Section 7(a)(1) and (2) of the ESA (16 U.S.C. 1536(a)(1) and (2)) directs the Service to review its programs and to utilize such programs in the furtherance of the purposes of the ESA and to ensure that an action is not likely to jeopardize the continued existence of an ESA-listed species or result in the destruction or adverse modification of critical habitat. In addition, the status of Pacific walruses rangewide was reviewed for potential listing under the ESA. The listing of walruses was found to be warranted, but precluded due to higher priority listing actions (
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 rule is not 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 rule in a manner consistent with these requirements.
OIRA bases its determination upon the following four criteria: (a) Whether the rule will have an annual effect of $100 million or more on the economy or adversely affect an economic sector, productivity, jobs, the environment, or other units of the government; (b) Whether the rule will create inconsistencies with other Federal agencies' actions; (c) Whether the rule will materially affect entitlements, grants, user fees, loan programs, or the rights and obligations of their recipients; (d) Whether the rule raises novel legal or policy issues.
Expenses will be related to, but not necessarily limited to: The development of applications for LOAs; monitoring, recordkeeping, and reporting activities conducted during Industry oil and gas operations; development of polar bear interaction plans; and coordination with Alaska Natives to minimize effects of operations on subsistence hunting. Compliance with the rule is not expected to result in additional costs to Industry that it has not already borne under all previous ITRs. Realistically, these costs are minimal in comparison to those related to actual oil and gas exploration, development, and production operations. The actual costs to Industry to develop the petition for promulgation of regulations and LOA requests probably do not exceed $500,000 per year, short of the “major rule” threshold that would require preparation of a regulatory impact analysis. As is presently the case, profits will accrue to Industry; royalties and taxes will accrue to the Government; and the rule will have little or no impact
We have determined that this rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule is also not likely to result in a major increase in costs or prices for consumers, individual industries, or government agencies or have significant adverse effects on competition, employment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.
We have also determined that this rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule does not have takings implications under Executive Order 12630 because it authorizes the nonlethal, incidental, but not intentional, take of walruses and polar bears by oil and gas Industry companies and, thereby, exempts these companies from civil and criminal liability as long as they operate in compliance with the terms of their LOAs. Therefore, a takings implications assessment is not required.
This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132. The MMPA gives the Service the authority and responsibility to protect walruses and polar bears.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951, May 4, 1994), Executive Order 13175, Department of the Interior Secretarial Order 3225 of January 19, 2001 (Endangered Species Act and Subsistence Uses in Alaska (Supplement to Secretarial Order 3206)), Department of the Interior Secretarial Order 3317 of December 1, 2011 (Tribal Consultation and Policy), Department of the Interior Memorandum of January 18, 2001 (Alaska Government-to-Government Policy), the Department of the Interior's manual at 512 DM 2, and the Native American Policy of the U.S. Fish and Wildlife Service, January 20, 2016, we readily acknowledge our responsibility to communicate and work directly on a Government-to-Government basis with federally recognized Tribes in developing programs for healthy ecosystems, to seek their full and meaningful participation in evaluating and addressing wildlife conservation concerns, to remain sensitive to Alaska Native culture, and to make information available to Alaska Natives. Furthermore, and in accordance with Department of the Interior Policy on Consultation with Alaska Native Claims Settlement Act of 1971 (ANCSA) Corporations, August 10, 2012, we likewise acknowledge our responsibility to communicate and work directly with ANCSA Corporations.
Prior to publication of the proposed ITR, we sent letters to the Alaska Native communities and co-management organizations within the Beaufort Sea ITR Region to notify them of the AOGA petition for ITRs and invited them to contact us directly if they had comments, questions, or concerns. We received no replies to those letters.
Furthermore, to facilitate co-management activities we continue to maintain cooperative agreements with subsistence hunting and co-management organizations, such as the NSB, EWC, and the Qayassiq Walrus Commission (QWC). We previously maintained a cooperative agreement with the ANC and look forward to working with its successor organization. The cooperative agreements fund a wide variety of management issues, including: Commission co-management operations; biological sampling programs; harvest monitoring; collection of Native knowledge in management; international coordination on management issues; cooperative enforcement of the MMPA; and development of local conservation plans. To help realize mutual management goals, the Service, NSB, EWC, and QWC regularly hold meetings to discuss future expectations and outline a shared vision of co-management.
The Service also has ongoing cooperative relationships with the NSB and the Inupiat-Inuvialuit Game Commission where we work cooperatively to ensure that data collected from harvest and research are used to ensure that polar bears are available for harvest in the future; provide information to co-management partners that allows them to evaluate harvest relative to their management agreements and objectives; and provide information that allows evaluation of the status, trends, and health of polar bear populations.
The Departmental Solicitor's Office has determined that this regulation does not unduly burden the judicial system and meet the applicable standards provided in Sections 3(a) and 3(b)(2) of Executive Order 12988.
This rule contains information collection requirements. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. OMB has reviewed and approved the information collection requirements included in this rule and assigned OMB control number 1018-0070, which expires March 31, 2017. This control number covers the information collection, recordkeeping, and reporting requirements in 50 CFR 18, subpart J, which are associated with the development and issuance of specific regulations and LOAs.
Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain
For a list of the references cited in this rule, see Docket No. FWS-R7-ES-2016-0060, available at
Administrative practice and procedure, Alaska, Imports, Indians, Marine mammals, Oil and gas exploration, Reporting and recordkeeping requirements, Transportation.
For the reasons set forth in the preamble, the Service amends part 18, subchapter B of chapter 1, title 50 of the Code of Federal Regulations as set forth below.
16 U.S.C. 1361
Regulations in this subpart apply to the nonlethal incidental, but not intentional, take of small numbers of polar bear and Pacific walrus by U.S. citizens while engaged in oil and gas exploration, development, production, and/or other substantially similar activities in the Beaufort Sea and adjacent northern coast of Alaska. “U.S. citizens” is defined in 50 CFR 18.27(c). The term “small numbers” is also defined in 50 CFR 18.27(c), however, we do not rely on that definition here as it conflates “small numbers” with “negligible impacts.” Regulations in this subpart rely on a small numbers determination where we estimated the likely number of takes of polar bears and Pacific walruses during the specified activities, and evaluated if that take is small relative to the size of the population or stock.
This subpart applies to the specified geographic region that encompasses all Beaufort Sea waters east of a north-south line through Point Barrow, Alaska (71°23′29″ N., −156°28′30″ W., BGN 1944), and approximately 322 kilometers (km) (~200 miles (mi)) north of Point Barrow, including all Alaska State waters and Outer Continental Shelf (OCS) waters, and east of that line to the Canadian border.
(a) The offshore boundary of the Beaufort Sea incidental take regulations (ITR) region will match the boundary of the Bureau of Ocean Energy Management (BOEM) Beaufort Sea Planning area, approximately 322 km (~200 mi) offshore. The onshore region is the same north/south line at Barrow, 40.2 km (25 mi) inland and east to the Canning River.
(b) The Arctic National Wildlife Refuge is not included in the Beaufort Sea ITR region. Figure 1 shows the area where this subpart applies.
Regulations in this subpart are effective from August 5, 2016, through August 5, 2021, for year-round oil and gas exploration, development, production and other substantially similar activities.
(a) An applicant must be a U.S. citizen as defined in § 18.27(c).
(b) If an applicant proposes to conduct oil and gas industry exploration, development, production, and/or other substantially similar activity in the Beaufort Sea ITR region described in § 18.122 that may cause the taking of Pacific walruses and/or polar bears and wants nonlethal incidental take authorization under the regulations in this subpart J, the applicant must apply for an LOA. The applicant must submit the request for authorization to the Service's Alaska Region Marine Mammals Management Office (see § 2.2 for address) at least 90 days prior to the start of the activity.
(c) The request for an LOA must include the following information and must comply with the requirements set forth in § 18.128:
(1) A plan of operations that describes in detail the activity (
(2) A site-specific marine mammal monitoring and mitigation plan to monitor and mitigate the effects of the activity on Pacific walruses and polar bears.
(3) A site-specific Pacific walrus and polar bear safety, awareness, and interaction plan. The plan for each activity and location will detail the policies and procedures that will provide for the safety and awareness of personnel, avoid interactions with Pacific walruses and polar bears, and minimize impacts to these animals.
(4) A Plan of Cooperation (POC) to mitigate potential conflicts between the activity and subsistence hunting, where relevant. Applicants must provide documentation of communication with potentially affected subsistence communities along the Beaufort Sea coast (
(a) We will evaluate each request for an LOA based on the specific activity and the specific geographic location. We will determine whether the level of activity identified in the request exceeds that analyzed by us in considering the number of animals likely to be taken and evaluating whether there will be a negligible impact on the species or an adverse impact on the availability of the species for subsistence uses. If the level of activity is greater, we will reevaluate our findings to determine if those findings continue to be appropriate based on the greater level of activity that the applicant has requested. Depending on the results of the evaluation, we may grant the authorization, add further conditions, or deny the authorization.
(b) In accordance with § 18.27(f)(5), we will make decisions concerning withdrawals of an LOA, either on an individual or class basis, only after notice and opportunity for public comment.
(c) The requirement for notice and public comment in paragraph (b) of this section will not apply should we determine that an emergency exists that poses a significant risk to the well-being of the species or stocks of polar bears or Pacific walruses.
(a) An LOA allows for the nonlethal, non-injurious, incidental, but not intentional take by Level B harassment, as defined in § 18.3 and under section 3 of the Marine Mammal Protection Act (16 U.S.C. 1371
(b) Each LOA will identify terms and conditions for each activity and location.
Except as otherwise provided in this subpart, prohibited taking is described in § 18.11 as well as:
(a) Intentional take, Level A harassment, as defined in section 3 of the Marine Mammal Protection Act (16 U.S.C. 1371
(b) Any take that fails to comply with this subpart or with the terms and conditions of an LOA.
(a)
(1) All holders of an LOA must:
(i) Cooperate with the Service's Marine Mammals Management Office and other designated Federal, State, and local agencies to monitor and mitigate the impacts of oil and gas industry activities on Pacific walruses and polar bears.
(ii) Designate trained and qualified personnel to monitor for the presence of Pacific walruses and polar bears, initiate mitigation measures, and monitor, record, and report the effects of oil and gas industry activities on Pacific walruses and/or polar bears.
(iii) Have an approved Pacific walrus and polar bear safety, awareness, and interaction plan on file with the Service's Marine Mammals Management Office and onsite, and provide polar bear awareness training to certain personnel. Interaction plans must include:
(A) The type of activity and where and when the activity will occur (
(B) A food, waste, and other “bear attractants” management plan;
(C) Personnel training policies, procedures, and materials;
(D) Site-specific walrus and polar bear interaction risk evaluation and mitigation measures;
(E) Walrus and polar bear avoidance and encounter procedures; and
(F) Walrus and polar bear observation and reporting procedures.
(2) All applicants for an LOA must contact affected subsistence communities and hunter organizations to discuss potential conflicts caused by the activities and provide the Service documentation of communications as described in § 18.124.
(b)
(1)
(2)
(3)
(4)
(c)
(2) At all times, vessels must maintain the maximum distance possible from concentrations of walruses or polar bears. Under no circumstances, other than an emergency, should any vessel approach within an 805-m (0.5-mi) radius of walruses or polar bears observed on land or ice.
(3) Vessel operators must take every precaution to avoid harassment of concentrations of feeding walruses when a vessel is operating near these animals. Vessels should reduce speed
(4) Vessels bound for the Beaufort Sea ITR Region may not transit through the Chukchi Sea prior to July 1. This operating condition is intended to allow walruses the opportunity to move through the Bering Strait and disperse from the confines of the spring lead system into the Chukchi Sea with minimal disturbance. It is also intended to minimize vessel impacts upon the availability of walruses for Alaska Native subsistence hunters. Exemption waivers to this operating condition may be issued by the Service on a case-by-case basis, based upon a review of seasonal ice conditions and available information on walrus and polar bear distributions in the area of interest.
(5) All vessels must avoid areas of active or anticipated walrus or polar bear subsistence hunting activity as determined through community consultations.
(6) In association with marine activities, we may require trained marine mammal monitors on the site of the activity or on board drill ships, drill rigs, aircraft, icebreakers, or other support vessels or vehicles to monitor the impacts of Industry's activity on polar bear and Pacific walruses.
(d)
(2) Under no circumstances, other than an emergency, should aircraft operate at an altitude lower than 457 m (1,500 ft) within 805 m (0.5 mi) of walruses or polar bears observed on ice or land. Helicopters may not hover or circle above such areas or within 805 m (0.5 mile) of such areas. When weather conditions do not allow a 457-m (1,500-ft) flying altitude, such as during severe storms or when cloud cover is low, aircraft may be operated below this altitude. However, when weather conditions necessitate operation of aircraft at altitudes below 457 m (1,500 ft), the operator must avoid areas of known walrus and polar bear concentrations and should take precautions to avoid flying directly over or within 805 m (0.5 mile) of these areas.
(3) Plan all aircraft routes to minimize any potential conflict with active or anticipated walrus or polar bear hunting activity as determined through community consultations.
(e)
(1)
(ii) A walrus mitigation zone is required where the received pulsed sound level would be ≥ 180 dB re 1 μPa.
(iii) A walrus or polar bear mitigation zone is required where the received pulsed sound level would be ≥ 190 dB re 1 μPa.
(2)
(i)
(A) Visually monitor the ≥180 dB re 1 μPa and ≥190 dB re 1 μPa mitigation zones and adjacent waters for walruses and polar bears for at least 30 minutes before initiating ramp-up procedures. If no walruses or polar bears are detected, ramp-up procedures may begin. Do not initiate ramp-up procedures when mitigation zones are not observable (
(B) Initiate ramp-up procedures by activating a single, or least powerful, sound source, in terms of energy output and/or volume capacity.
(C) Continue ramp-up by gradually increasing sound output over a period of at least 20 minutes, but no longer than 40 minutes, until the desired operating level of the sound source is obtained.
(ii)
(A) One or more walruses is observed or detected within the area delineated by the pulsed sound ≥180 dB re 1 μPa walrus mitigation zone; and
(B) One or more walruses or polar bears are observed or detected within the area delineated by the pulsed sound ≥190 dB re 1 μPa walrus or polar bear mitigation zone.
(iii)
(B) If observations are made or credible reports are received that one or more walruses or polar bears within the area of the sound source activity are believed to be in an injured or mortal state, or are indicating acute distress due to received sound, the sound source must be immediately shut down and the Service contacted. The sound source will not be restarted until review and approval has been given by the Service. The ramp-up procedures must be followed when restarting.
(f)
(1)
(2)
(i) A description of the procedures by which the holder of the LOA will work and consult with potentially affected subsistence hunters; and
(ii) A description of specific measures that have been or will be taken to avoid or minimize interference with subsistence hunting of walruses and polar bears and to ensure continued availability of the species for subsistence use.
(iii) The Service will review the POC to ensure that any potential adverse effects on the availability of the animals are minimized. The Service will reject POCs if they do not provide adequate safeguards to ensure the least practicable adverse impact on the availability of walruses and polar bears for subsistence use.
(g)
(1) Develop and implement a site-specific, Service-approved marine mammal monitoring and mitigation plan to monitor and evaluate the effectiveness of mitigation measures and the effects of activities on walruses, polar bears, and the subsistence use of these species.
(2) Provide trained, qualified, and Service-approved onsite observers to carry out monitoring and mitigation activities identified in the marine mammal monitoring and mitigation plan.
(3) For offshore activities, provide trained, qualified, and Service-approved observers on board all operational and support vessels to carry out monitoring and mitigation activities identified in the marine mammal monitoring and mitigation plan. Offshore observers may be required to complete a marine mammal observer training course approved by the Service.
(4) Cooperate with the Service and other designated Federal, State, and local agencies to monitor the impacts of oil and gas activities on walruses and polar bears. Where information is insufficient to evaluate the potential effects of activities on walruses, polar bears, and the subsistence use of these species, holders of an LOA may be required to participate in joint monitoring and/or research efforts to address these information needs and ensure the least practicable impact to these resources.
(h)
(1)
(A) Notify the Service at least 48 hours prior to the onset of activities;
(B) Provide the Service weekly progress reports of any significant changes in activities and/or locations; and
(C) Notify the Service within 48 hours after ending of activities.
(ii)
(A) Date, time, and location of each walrus sighting;
(B) Number of walruses;
(C) Sex and age (if known);
(D) Observer name and contact information;
(E) Weather, visibility, sea state, and sea-ice conditions at the time of observation;
(F) Estimated range at closest approach;
(G) Industry activity at time of sighting;
(H) Behavior of animals sighted;
(I) Description of the encounter;
(J) Duration of the encounter; and
(K) Mitigation actions taken.
(iii)
(A) Date, time, and location of observation;
(B) Number of bears;
(C) Sex and age (if known);
(D) Observer name and contact information;
(E) Weather, visibility, sea state, and sea-ice conditions at the time of observation;
(F) Estimated closest distance of bears from personnel and facilities;
(G) Industry activity at time of sighting;
(H) Possible attractants present;
(I) Bear behavior;
(J) Description of the encounter;
(K) Duration of the encounter; and
(L) Mitigation actions taken.
(2)
(i) All information specified for an observation report;
(ii) A complete detailed description of the incident; and
(iii) Any other actions taken.
(3)
(i) Copies of all observation reports submitted under the LOA;
(ii) A summary of the observation reports;
(iii) A summary of monitoring and mitigation efforts including areas, total hours, total distances, and distribution;
(iv) Analysis of factors affecting the visibility and detectability of walruses and polar bears during monitoring;
(v) Analysis of the effectiveness of mitigation measures;
(vi) Analysis of the distribution, abundance, and behavior of walruses and/or polar bears observed; and
(vii) Estimates of take in relation to the specified activities.
(a) We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. OMB has approved the collection of information contained in this subpart and assigned OMB control number 1018-0070. You must respond to this information collection request to obtain a benefit pursuant to section 101(a)(5) of the Marine Mammal Protection Act. We will use the information to:
(1) Evaluate the application and determine whether or not to issue specific Letters of Authorization; and
(2) Monitor impacts of activities and effectiveness of mitigation measures conducted under the Letters of Authorization.
(b) Comments regarding the burden estimate or any other aspect of this requirement must be submitted to the Information Collection Clearance Officer, U.S. Fish and Wildlife Service, at the address listed in 50 CFR 2.1.