[Federal Register Volume 78, Number 87 (Monday, May 6, 2013)]
[Rules and Regulations]
[Pages 26250-26251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10694]



38 CFR Part 17

RIN 2900-AN98

Payment for Home Health Services and Hospice Care to Non-VA 

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.


SUMMARY: The Department of Veterans Affairs (VA) amends its regulations 
concerning the billing methodology for non-VA providers of home health 
services and hospice care. Because the newly applicable methodology 
cannot supersede rates for which VA has specifically contracted, this 
rulemaking will only affect home health and hospice care providers who 
do not have existing negotiated contracts with VA. This rule also 
rescinds internal guidance documents that could be interpreted as 
conflicting with this final rule.

DATES: Effective Date: This final rule is effective November 15, 2013.

FOR FURTHER INFORMATION CONTACT: Lisa Brown, Chief, Policy Management 
Department, Health Administration Center, Veterans Health 
Administration, Department of Veterans Affairs, 3773 Cherry Creek Drive 
North, East Tower, Ste. 485, Denver, CO 80209, (303) 331-7829. (This is 
not a toll-free number.)

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on November 21, 2011 (76 FR 71920), VA proposed to amend its 
regulations concerning the billing methodology for non-VA providers of 
home health services and hospice care.
    The proposed rulemaking indicated it would make the VA regulation 
governing payments for certain non-VA health care, 38 CFR 17.56, 
applicable to non-VA home health services and hospice care. Section 
17.56 provides, among other things, that Medicare fee schedule or 
prospective payment system amounts will be paid to certain non-VA 
providers, unless VA negotiates other payment amounts with such 
providers. See 38 CFR 17.56(a)(2)(i). Interested persons were invited 
to submit comments to the proposed rule on or before December 21, 2011. 
We received one comment, which supported the proposed rule because it 
would standardize VA's payment methodology for non-VA home health and 
hospice care. The comment indicated, however, that the projected loss 
in revenue for home care and hospice providers due to the application 
of Sec.  17.56 rates may affect the level of care provided to veterans.
    We make no changes to the rule based on this comment. We are not 
aware of any evidence that supports an inference that, because of 
potentially lower payments, home care and hospice providers will offer 
a lower level of care to veterans than these providers have offered to 
veterans in the past. We are also not aware of evidence that suggests 
that home care and hospice providers offer a substandard level of care 
to any patient for which the provider receives the applicable Medicare 
rate, which is the rate that will now apply to veterans under this 
rule. Additionally, as stated in the proposed rule, we estimate that 
each home health care and hospice provider that does not separately 
negotiate a payment rate with VA may lose up to $1,346.28 annually, 
which is not a significant amount when compared to the average annual 
revenue for home health and hospice agencies of $4.7 million (as 
indicated by data from the Medicare Payment Advisory Commission as well 
as the Census Bureau). Lastly, to the extent any affected provider 
makes significantly less than $4.7 million of annual revenue on 
average, we also reiterate from the proposed rule that affected 
providers may benefit from any ``phase-in'' of the Sec.  17.56 rates as 
contemplated by Medicare rates themselves, as set forth in Sec.  
17.56(a)(2)(i), which requires that VA pay ``[t]he applicable Medicare 
fee schedule or prospective payment system amount (`Medicare Rate') for 
the period in which the service was provided.'' 38 CFR 17.56(a)(2)(i).
    Based on the rationale set forth in the proposed rule and in this 
document, VA is adopting the provisions of the proposed rule as a final 
rule with no changes.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
rulemaking, represents VA's implementation of its legal authority on 
this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance must be read to conform with 
this rulemaking if possible or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

    This final rule contains no collections of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. About 8,400 providers without negotiated contracts offer home 
health care or hospice care to veterans at rates that are equivalent 
to, or not significantly higher than, those offered by this final rule. 
VA costs of purchased skilled home care were compared to Medicare Home 
Health Prospective Payment System (HH-PPS) reimbursement for a 60-day 
period. The average VA reimbursement level per veteran for a 60-day 
period was $2,537.40 in fiscal year (FY) 2010. The average Medicare 
reimbursement level for skilled home care per beneficiary was $2,312.94 
in FY 2010. This difference amounts to providers receiving $3.74 less 
per day from VA for a 60-day episode of care. On average, each provider 
cares for six veterans at VA expense. The potential annual revenue loss 
will be approximately $1,346.28 per provider, an insignificant amount 
of revenue for these providers. Therefore, pursuant to 5 U.S.C. 605(b), 
this rulemaking is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

[[Page 26251]]

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in 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 final rule will have no such effect on 
State, local, and tribal governments, or the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.009, Veterans Medical 
Care Benefits and 64.010, Veterans Nursing Home Care.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jose D. 
Riojas, Interim Chief of Staff, Department of Veterans Affairs, 
approved this document on April 30, 2013 for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs-health, Government programs-
veterans, Health care, Health facilities, Health professions, Health 
records, Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Veterans.

    Dated: May 1, 2013.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of General 
Counsel, Department of Veterans Affairs.
    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 17 as follows:


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

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

Sec.  17.56  [Amended]

2. Amend Sec.  17.56(a) introductory text by removing ``and except for 
non-contractual payments for home health services and hospice care''.
[FR Doc. 2013-10694 Filed 5-3-13; 8:45 am]