Due to the preliminary anticipated Federal cost of this project, NRCS policy requires that an environmental impact statement be prepared.

The project concerns a plan to address groundwater declines and measures to increase water use efficiency. Alternatives under consideration to reach this objective include the construction of on-farm water storage reservoirs, underground pipelines, tailwater recovery systems, and improved irrigation management.

A draft environmental impact statement will be prepared and circulated for review by agencies and the public. The Natural Resources Conservation Service invites participation and consultation of agencies and individuals that have special expertise, legal jurisdiction, or interest in the preparation of the draft environmental impact statement. NRCS held a combined public hearing and scoping meeting with the Arkansas Soil and Water Commission on February 1, 2001 at Weiner, Arkansas to discuss this watershed. Comments were received at and following this meeting. In order to comply with the National Environmental Policy Act of 1969 (NEPA), additional comments from the public and interested agencies will be accepted until July 15, 2002. Further information on the proposed action or future public meetings may be obtained from Kalven L. Trice, State Conservationist, at the above address and telephone number.

The Committee imposes certain requirements on nonprofit agencies that participate in the Javits-Wagner-O'Day (JWOD) Program. The requirements being proposed are recordkeeping for specific products and services sold under the JWOD Act. This is a change in current requirements that only require records be kept and reported in the aggregate, rather than by specific JWOD product or service. If approved, recordkeeping shall reflect dollar sales of each product and service sold under the authority of JWOD Act, direct labor hours performed by all workers on each product and service sold under the JWOD Act, and files which document the disability and competitive employability of each worker counted toward the nonprofit agencies' ratio of disabled direct labor. Such records and files are required to ensure the effective administration of the JWOD Program and to ensure that nonprofit agencies seeking to participate in the Committee's program meet the requirements of 41 U.S.C. 46-48(c).

On April 12, April 19, May 3, and May 10, 2002, the Committee for Purchase From People Who Are Blind or Severely Disabled published notice (67 FR 17966, 19392, 22398, and 31765) of proposed additions to the Procurement List.

After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the services and impact of the additions on the current or most recent contractors, the Committee has determined that the services listed below are suitable for procurement by the Federal Government under 41 U.S.C. 46-48c 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 services to the Government.

2. The action will result in authorizing small entities to furnish the services to the Government.

3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-48c) in connection with the services proposed for addition to the Procurement List.Accordingly, the following services are added to the Procurement List:

This action does not affect current contracts awarded prior to the effective date of this addition or options that may be exercised under those contracts.

This notice is published pursuant to 41 U.S.C 47(a) (2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the possible impact of the proposed actions.

If the Committee approves the proposed additions, the entities of the Federal Government identified in the notice for each product or service will be required to procure the products and services listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.

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. If approved, 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. If approved, 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. 46-48c) in connection with the products and services proposed for addition to the Procurement List. Comments on this certification are invited. Commenters should identify the statement(s) underlying the certification on which they are providing additional information.

The following products and services are proposed for addition to Procurement List for production by the nonprofit agencies listed:

Section 735(a)(1) of the Tariff Act of 1930, as amended (the Act), requires the Department to issue (1) the final determination regarding sales at less than fair value (LTFV) in this investigation within 75 days after the date of its preliminary determination. However, section 735(a)(2) of the Act states that the Department may extend the time limit for the final determination until not later than 135 days after the date of publication of the preliminary determination if, in the case of a proceeding in which the preliminary determination by the administering authority under section 733(b) was affirmative, a request in writing for such a postponement is made by an exporter which accounts for a significant portion of the exports of the merchandise which is subject to the investigation. Section 351.210 of the Department's regulations further states that the exporter must also request that the Department extend the provisional measures from a four month period to a period of not more than 6 months. Alternatively, in the case of a proceeding in which the preliminary determination by the administering authority under section 733(b) was negative, the request for postponement may be made in writing by the petitioner.

On May 9, 2002, the Department published the preliminary determination regarding sales at LTFV in this investigation (67 FR 31225). We preliminarily determined that certain cold-rolled carbon steel flat products (cold-rolled steel) from Korea are being, or likely to be, sold in the United States at LTFV, as provided in section 733(b) of the Tariff Act of 1930, as amended. On May 30, 2002, both respondents in this investigation, requested that the Department postpone the final determination to 135 days after the publication of the preliminary determination and requested that the Department extend the provisional measures period from four months to a period not longer than 6 months.

Given the fact that the Department made an affirmative preliminary determination and the largest exporter/producer of imports during the period of investigation requested postponement and also asked that the Department extend the provisional measures from a four month period to a period of not more than six months, as required by the Department's regulations, we are postponing the final determination until no later than September 23, 2002 ( i.e. , 135 days after the publication of the preliminary determination).

This extension is in accordance with section 735(a)(2)(A) of the Act.

On October 1, 2001, the Department initiated this changed circumstances review.

See Stainless Steel Sheet and Strip in Coils from the Republic of Korea: Notice of Initiation of Changed Circumstances Antidumping Duty Administrative Review , 66 FR 49927 (October 1, 2001) (“ Notice of Initiation ”). On December 31, 2001, the Department published the preliminary results of its changed circumstances review in the above-named case. See Preliminary Results . We gave interested parties 21 days to comment on our preliminary results. On January 22, 2002, petitioners submitted comments and on January 28, 2002, INI submitted rebuttal comments. See Comments section below.

For purposes of this changed circumstances review, the products covered are certain stainless steel sheet and strip in coils. Stainless steel is an alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. The subject sheet and strip is a flat-rolled product in coils that is greater than 9.5 mm in width and less than 4.75 mm in thickness, and that is annealed or otherwise heat treated and pickled or otherwise descaled. The subject sheet and strip may also be further processed (e.g., cold-rolled, polished, aluminized, coated, etc.) provided that it maintains the specific dimensions of sheet and strip following such processing.

The merchandise subject to this review is classified in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7219.13.0031, 7219.13.0051, 7219.13.0071, 7219.1300.81 1 , 7219.14.0030, 7219.14.0065, 7219.14.0090, 7219.32.0005, 7219.32.0020, 7219.32.0025, 7219.32.0035, 7219.32.0036, 7219.32.0038, 7219.32.0042, 7219.32.0044, 7219.33.0005, 7219.33.0020, 7219.33.0025, 7219.33.0035, 7219.33.0036, 7219.33.0038, 7219.33.0042, 7219.33.0044, 7219.34.0005, 7219.34.0020, 7219.34.0025, 7219.34.0030, 7219.34.0035, 7219.35.0005, 7219.35.0015, 7219.35.0030, 7219.35.0035, 7219.90.0010, 7219.90.0020, 7219.90.0025, 7219.90.0060, 7219.90.0080, 7220.12.1000, 7220.12.5000, 7220.20.1010, 7220.20.1015, 7220.20.1060, 7220.20.1080, 7220.20.6005, 7220.20.6010, 7220.20.6015, 7220.20.6060, 7220.20.6080, 7220.20.7005, 7220.20.7010, 7220.20.7015, 7220.20.7060, 7220.20.7080, 7220.20.8000, 7220.20.9030, 7220.20.9060, 7220.90.0010, 7220.90.0015, 7220.90.0060, and 7220.90.0080. Although the HTSUS subheadings are provided for convenience and Customs purposes, the Department's written description of the merchandise under review is dispositive.

Excluded from the scope of this review are the following: (1) sheet and strip that is not annealed or otherwise heat treated and pickled or otherwise descaled, (2) sheet and strip that is cut to length, (3) plate ( i.e. , flat-rolled stainless steel products of a thickness of 4.75 mm or more), (4) flat wire ( i.e. , cold-rolled sections, with a prepared edge, rectangular in shape, of a width of not more than 9.5 mm), and (5) razor blade steel. Razor blade steel is a flat-rolled product of stainless steel, not further worked than cold-rolled (cold-reduced), in coils, of a width of not more than 23 mm and a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent chromium, and certified at the time of entry to be used in the manufacture of razor blades. See Chapter 72 of the HTSUS, “Additional U.S. Note” 1(d).

The Department has determined that certain additional specialty stainless steel products are also excluded from the scope of this review. These excluded products are described below.

Flapper value steel is excluded from this review. Flapper valve steel is defined as stainless steel strip in coils containing, by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent manganese. This steel also contains, by weight, phosphorus of 0.025 percent or less, silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent or less. The product is manufactured by means of vacuum arc remelting, with inclusion controls for sulphide of no more than 0.04 percent and for oxide of no more than 0.05 percent. Flapper valve steel has a tensile strength of between 210 and 300 ksi, yield strength of between 170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 460 and 590. Flapper valve steel is most commonly used to produce specialty flapper valves in compressors.

Also excluded is a product referred to as suspension foil, a specialty steel product used in the manufacture of suspension assemblies for computer disk drives. Suspension foil is described as 302/304 grade or 202 grade stainless steel of a thickness between 14 and 127 microns, with a thickness tolerance of plus-or-minus 2.01 microns, and surface glossiness of 200 to 700 percent Gs. Suspension foil must be supplied in coil widths of not more than 407 mm, and with a mass of 225 kg or less. Roll marks may only be visible on one side, with no scratches of measurable depth. The material must exhibit residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm over 685 mm length.

Certain stainless steel foil for automotive catalytic converters is also excluded from the scope of this review. This stainless steel strip in coils is a specialty foil with a thickness of between 20 and 110 microns used to produce a metallic substrate with a honeycomb structure for use in automotive catalytic converters. The steel contains, by weight, carbon of no more than 0.030 percent, silicon of no more than 1.0 percent, manganese of no more than 1.0 percent, chromium of between 19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of no more than 0.045 percent, sulfur of no more than 0.03 percent, lanthanum of less than 0.002 or greater than 0.05 percent, and total rare earth elements of more than 0.06 percent, with the balance iron.

Permanent magnet iron-chromium-cobalt alloy stainless strip is also excluded from the scope of this review. This ductile stainless steel strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 percent cobalt, with the remainder of iron, in widths 228.6 mm or less, and a thickness between 0.127 and 1.270 mm. It exhibits magnetic remanence between 9,000 and 12,000 gauss, and a coercivity of between 50 and 300 oersteds. This product is most commonly used in electronic sensors and is currently available under proprietary trade names such as “Arnokrome III.” 2

Certain electrical resistance alloy steel is also excluded from the scope of this review. This product is defined as a non-magnetic stainless steel manufactured to American Society of Testing and Materials (“ASTM”) specification B344 and containing, by weight, 36 percent nickel, 18 percent chromium, and 46 percent iron, and is most notable for its resistance to high temperature corrosion. It has a melting point of 1390 degrees Celsius and displays a creep rupture limit of 4 kilograms per square millimeter at 1000 degrees Celsius. This steel is most commonly used in the production of heating ribbons for circuit breakers and industrial furnaces, and in rheostats for railway locomotives. The product is currently available under proprietary trade names such as “Gilphy 36.” 3

Certain martensitic precipitation-hardenable stainless steel is also excluded from the scope of this review. This high-strength, ductile stainless steel product is designated under the Unified Numbering System (“UNS”) as S45500-grade steel, and contains, by weight, 11 to 13 percent chromium, and 7 to 10 percent nickel. Carbon, manganese, silicon and molybdenum each comprise, by weight, 0.05 percent or less, with phosphorus and sulfur each comprising, by weight, 0.03 percent or less. This steel has copper, niobium, and titanium added to achieve aging, and will exhibit yield strengths as high as 1700 Mpa and ultimate tensile strengths as high as 1750 Mpa after aging, with elongation percentages of 3 percent or less in 50 mm. It is generally provided in thicknesses between 0.635 and 0.787 mm, and in widths of 25.4 mm. This product is most commonly used in the manufacture of television tubes and is currently available under proprietary trade names such as “Durphynox 17.” 4

Finally, three specialty stainless steels typically used in certain industrial blades and surgical and medical instruments are also excluded from the scope of this review. These include stainless steel strip in coils used in the production of textile cutting tools ( e.g. , carpet knives). 5 This steel is similar to AISI grade 420 but containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 percent copper and between 0.20 and 0.50 percent cobalt. This steel is sold under proprietary names such as “GIN4 Mo.” The second excluded stainless steel strip in coils is similar to AISI 420-J2 and contains, by weight, carbon of between 0.62 and 0.70 percent, silicon of between 0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, phosphorus of no more than 0.025 percent and sulfur of no more than 0.020 percent. This steel has a carbide density on average of 100 carbide particles per 100 square microns. An example of this product is “GIN5” steel. The third specialty steel has a chemical composition similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, molybdenum of between 1.15 and 1.35 percent, but lower manganese of between 0.20 and 0.80 percent, phosphorus of no more than 0.025 percent, silicon ofbetween 0.20 and 0.50 percent, and sulfur of no more than 0.020 percent. This product is supplied with a hardness of more than Hv 500 guaranteed after customer processing, and is supplied as, for example, “GIN6”. 6

All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the “Issues and Decision Memorandum” (“Decision Memorandum”) from Joseph A. Spetrini, Deputy Assistant Secretary, AD/CVD Enforcement Group III, to Faryar Shirzad, Assistant Secretary for Import Administration, which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, Room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/frnhome.htm. The paper copy and electronic version of the Decision Memorandum are identical in content.

On June 1, 1990, pursuant to Title IV of the Trade Act of 1974 (the Trade Act), the Governments of the United States of America and the Union of Soviet Socialist Republics entered into the Agreement on Trade Relations Between the United States of America and the Union of Soviet Socialist Republics. On June 17, 1992, this agreement became effective between the United States of America and the Russian Federation (“the 1992 Agreement”). Article XI of the 1992 Agreement provides that the Parties will consult with a view toward finding a means of remedying or preventing actual or threatened market disruption, and authorizes the Parties to take action, including the imposition of import restrictions, to achieve this goal.

On July 12, 1999, the United States Department of Commerce and the Ministry of Trade of the Russian Federation, (now the Ministry of Economic Development and Trade of the Russian Federation), concluded the Agreement Concerning Trade in Certain Steel Products From the Russian Federation (“the 1999 Agreement”) establishing import limitations on certain Russian steel products. On July 22, 1999, the President proclaimed the imposition of restraints on imports of certain steel products from the Russian Federation consistent with the 1999 Agreement. See Proclamation 7210 of July 22, 1999, 64 Fed.Reg. 40723 (July 27, 1999). On March 5, 2001, the President of the United States signed into effect the comprehensive relief program on steel imports pursuant to section 201 of the U.S. Tariff Act of 1974 (“201 Relief Program”). Recognizing that differences exist between the Tariff Rate Quotas established by the 201 Relief Program, and the export limits contained in the 1999 Agreement, the Parties agreed, ad referendum, to an Addendum to the Agreement Concerning Trade in Certain Steel Products From the Russian Federation (“Addendum”).

The United States is considering the acceptance of the Addendum and consequent modification to Proclamation 7210 in order to modify the terms of the 1999 Agreement with regards to semifinished steel products from the Russian Federation. This Addendum would modify the export limit, export limit period and reporting periods of the 1999 Agreement to comply with the 201 Relief Program. All other provisions of the 1999 Agreement not affected by this Addendum remain in effect and unchanged.

Section 125(c) of the Trade Act (19 U.S.C. §2135(c)) provides that whenever the United States, acting in pursuance of any of its rights or obligations under any trade agreement entered into pursuant to the Trade Act, modifies any obligation with respect to the trade of any foreign country or instrumentality, the President is authorized to proclaim increased duties or other import restrictions, to the extent, at such times, and for such periods as he deems necessary or appropriate, in order to exercise the rights or fulfill the obligations of the United States.

Section 125(f) of the Trade Act (19 U.S.C. §2135(f)) requires the President to provide the opportunity for interested parties to present views at a public hearing prior to taking action pursuant to section 125(b), (c), or (d) of the Trade Act (19 U.S.C. § §2135 (b), (c), or (d). Such an opportunity is being provided by the holding of such a hearing on July 17, 2002, at 10:00am, at the United States Department of Commerce. The Department has published a copy of the Addendum on its Import Administration website (http://www.ia.ita.doc.gov/newitems.htm).

Notice of Public Hearing: Pursuant to section 125(f) of the Trade Act of 1974 (19 U.S.C. §2135(f)), the International Trade Administration of the Department of Commerce, has scheduled a public hearing beginning at 10 am, on July 17, 2002, at Room (TBA) of the Herbert C. Hoover Building, U.S. Department of Commerce, 14th and Constitution Ave., NW, Washington, DC.

Requests to Present Oral Testimony: Parties wishing to testify orally at the hearing must provide written notification of their intention not later than 5:00 p.m., July 8, 2002, to Faryar Shirzad, Assistant Secretary for Import Administration: Public Hearing on the Addendum to the Agreement Concerning Trade in Certain Steel Products from the Russian Federation, Room 3099B, Herbert C. Hoover Building, U.S. Department of Commerce, 14th and Constitution Ave., NW, Washington, DC. The notification should include (1) the name of the person presenting the testimony, their address and telephone number; (2) the organization or company they are representing, if appropriate; (3) a list of issues to be addressed; and (4), if applicable, any request for an extension of the time limitation for the oral presentation. This notification may be submitted via facsimile to Vicki Sullivan at (202) 273-0957. Those parties presenting oral testimony must also submit a written brief, in 20 copies, not later than 10:00am, July 15, 2002, to the above mentioned address. Hearing presentations should be limited to no more than five minutes to allow for possible questions from the Chairman and the panel. Additional time for oral presentations may be granted as time and the number of participants permit. Any business proprietary material must be clearly marked as such on the cover page (or letter) and succeeding pages. Such submissions must be accompanied by a public summary thereof.

Written Briefs: Those persons not wishing to participate in the hearing may submit written comments, in 20 types copies, not later than 10:00am, July 15, 2002, to Faryar Shirzad, Assistant Secretary for Import Administration: In re the Addendum to the Agreement Concerning Trade in Certain Steel Products from the Russian Federation, Room 3099B, Herbert C. Hoover Building, U.S. Department of Commerce, 14th and Constitution Ave., NW, Washington, DC. Comments should state clearly the position taken and describe with specificity, the evidence supporting that position. Any business proprietary material must be clearly marked as such on the cover page (or letter) and succeeding pages. Such submissions must be accompanied by a public summary thereof. Public submissions will be available for public inspection at the Import Administration Central Records Unit. An appointment to review the file may be made by contacting Thomas Hartley at (202) 482-1248.

The requested amendment has been granted under the authority of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.). The modification extends the permit to May 31, 2003 with no increase in take.

Issuance of this amendment, as required by the ESA was based on a finding that such permit (1) was applied for in good faith, (2) will not operate to the disadvantage of the endangered species which is the subject of this permit, and (3) is consistent with the purposes and policies set forth in section 2 of the ESA.

The subject amendment to Permit No. 1007-1629-00, issued on August 13, 2001 (66 FR 42523), is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 et seq. ), and the Regulations Governing the Taking and Importing of Marine Mammals (50 CFR part 216).

Permit No. 1007-1629-00 authorizes the take of 1,400 individual Hawaiian spinner dolphins ( Stenella longirostris ) annually by behavioral observation and photo-identification, 400 individuals annually through genetic swabbing, and an unlimited number of individuals by close approach incidental to research activities. The purpose of the research is to compare population structure, genetic flow and social behavior between groups of Hawaiian spinner dolphins in Kure Atoll, Midway Atoll and Pearl & Hermes Reef.

The current request is to amend Permit No. 1007-1629-00 to: (1) expand the geographic area of study to include both the Hawaiian northwestern and main islands; (2) increase the take numbers, based on this expanded geographic area, to 5,000 individuals annually through behavioral observation and photo-identification and 600 individuals annually through the collection of genetic samples; and (3) authorize the use of biopsy sampling through pole-spearing in addition to swabbing.

In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ), an initial determination has been made that the activity proposed is categorically excluded from the requirement to prepare an environmental assessment or environmental impact statement.

Concurrent with the publication of this notice in the Federal Register , NMFS is forwarding copies of this application to the Marine Mammal Commission and its Committee of Scientific Advisors.

The subject amendment to Permit No. 638-1519-00, originally issued on November 23, 1999 (64 FR 66903) has been granted under the authority of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 et seq. ), the Regulations Governing the Taking and Importing of Marine Mammals (50 CFR part 216), the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq. ), and the regulations governing the taking, importing, and exporting of endangered and threatened species (50 CFR 222-226).

The permit holder requested authorization to extend Permit No. 638-1519-00 for an additional 12 months. The new expiration date for the permit is November 30, 2005 and the permit number has been changed to No. 638-1519-01 to reflect that the permit has been amended.

A chemical information system having a graphical user interface that allows manipulation of multiple databases having related material and information. The system includes a server and multiple workstations communicating with the server. The databases reside on the server, which may include multiple servers.

A method of identifying and archiving a nucleic acid sequence.

John Redmond Dam was initially authorized as the Strawn Dam and Reservoir under the Flood Control Act of May 17, 1950, for flood control, water conservation, recreation, and water supply for communities along the Neosho River in southeastern Kansas. Congress subsequently changed the name in 1958 to John Redmond Dam and Reservoir.

To perform its authorized purposes, the lake contains three types of water storage pools. The upper pool provides 574,918 acre-feet of flood control storage and is reserved for flood control operations. The conservation pool provides 50,501 acre-feet of storage for water supply, water quality, and sediment. The inactive pool has filled with sediment. Water supply storage was projected to occur within the conservation pool when maintained at the surface elevation of 1039.0 feet National Geodetic Vertical Datum(NGVD). Studies have determined that sediment is accumulating in the conservation pool and is reducing the amount of water stored there. The amount of water storage reduction predicted by calendar year (CY) 2014 is approximately 25% or 8,725 acre-feet of water supply.

The USACE has been directed by Congress to conduct a study to reallocate water supply storage, an action that would fulfill the water supply agreement with the State of Kansas. This supplement addresses the proposed water supply storage reallocation project.

A Final Environmental Statement for operation and maintenance of John Redmond, Marion, and Council Grove Lakes, KS, was filed on December 17, 1976. This supplement addresses the environmental impacts of making an equitable redistribution of the storage remaining between the flood control pool and the conservation pool due to uneven sediment distribution.

Sediment in John Redmond Lake has been collecting mainly in the conservation pool, thereby reducing the conservation pool storage faster than was designed, while the flood control pool has not received as much sediment and has retained more storage than it was designed to retain. The reallocation does not guarantee the water storage volume contracted to the State of Kansas per an agreement in 1975, but makes an equitable redistribution of the remaining storage.

A total of four alternatives were identified and addressed in the DSFES. These include: no action, raise the conservation pool elevation by two feet, raise the conservation pool by two feet incrementally, and dredge the sediment from the conservation pool. The preferred alternative is to reallocate water storage in the conservation pool by two feet in a single pool raise. This would achieve the water storage obligation.

Environmental consequences of the proposed action identified in the DSFES include: (1) The loss of approximately 270 acres of wetland habitat, 40 acres of grassland, 51 acres of cropland, and 195 acres of woodland, and (2) impacts to 31 potentially significant prehistoric and historic archeology sites.

Mitigation for impacts to biological resources is proposed and is based upon recommendations of the U.S. Fish and Wildlife Service. A Memorandum of Agreement between the USACE, the Advisory Council on Historic Preservation, and the Kansas and Nebraska State Historic Preservation Offices is being drafted to determine appropriate actions and mitigation measures for cultural resources that may be discovered and/or affected during the course of the project. Appropriate mitigation measures may include preservation in place for future study, recovery or partial recovery of site data through excavation, a public interpretive display, or a combination of these measures.

The DSFES has been coordinated and approved by offices and directorates affected by or interested in the subject matter, including the Office of Counsel and Executive Offices.

The Wister Lake Project is located in southeastern Oklahoma in LeFlore County and was authorized by the Flood Control Act of 1938 and completed in 1949. The project consists of the lake, dam, and downstream stations on the lower Poteau River to its confluence with the Arkansas River. It provides substantial flood control, municipal and industrial water supply, flow augmentation, water conservation, and sediment reduction. Wister Lake and its adjacent lands are also used for recreation, hunting, and wildlife management.

A Final Environmental Statement (FES) for operation and maintenance of the project was filed on November 19, 1973, and evaluated impacts to the environment from operating the project with a conservation pool level at 471.6 feet NGVD. Since 1974, the lake's conservation pool has been raised four times, either seasonally or permanently, principally to increase water supply and enhance recreation. The Water Resources Development Act of 1996 (WRDA 1996) instructed the United States Army Corps of Engineers (USACE) to permanently raise the conservation pool to its present elevation, 478.0 feet NGVD. However, impacts to resources and the environment were never documented or analyzed. To comply with the National Environmental Policy Act (NEPA), this supplement to the 1973 FES focuses on the impacts associated with maintaining the permanent pool level at 478.0 feet, as directed by Congress, and continuing current management practices. It also examines the historical impacts associated with raising the permanent conservation pool from its original level of 471.6 to 478.0 feet NGVD.

Raising the conservation pool to 478.0 feet NGVD has resulted in the loss and/or modification of approximately 3,254 acres of wildlife habitat and approximately 300 acres of a waterfowl marsh and green tree waterfowl management unit. Raising the conservation pool has inundated at least 10 archeological sites. Pool fluctuations and wave action between 471.6 and 478.0 feet NGVD have disturbed at least 18 archeological sites and may have affected as many as 36 sites.

Mitigation measures are proposed for those resources that have been negatively impacted from raising the conservation pool to 478.0 feet NGVD. These impacts are limited to biological and cultural resources. Mitigations for biological resources are based on recommendations of the U.S. Fish and Wildlife Service and include reimbursement to the Oklahoma Department of Wildlife Conservation for the loss of a green tree waterfowl management unit and the cost of reconstructing a new waterfowl management unit.

The USACE, Tulsa District is consulting with the Advisory Council on Historic Preservation, the Oklahoma State Historic Preservation Officer, the Caddo Tribe of Oklahoma, and the Wichita and Affiliated Tribes of Oklahoma to develop mitigation measures to minimize adverse effects of the proposed action on historic properties.

The DSFES has been coordinated and approved by offices and directorates affected by or interested in the subject matter, including the Office of Counsel and Executive Offices.

a. Authorization: Section 601 of the Water Resources Development Act of 2000 (Pub. L. 106-541) authorized the implementation of the L-31N Pilot Project.

b. Study Area: The study area is along a portion of L-31N north of structure G-211, and the southern portion of L-30 just north of C-4 (Tamiami Canal), in Miami-Dade County.

c. Project Scope: The scope is to investigate seepage management technologies to control seepage from ENP and use the resulting data in the full-scale implementation of the proposed project features along the entire length of L-31N. The evaluation of alternatives and selection of a recommended plan will be documented in the PPDR and EIS.

d. Preliminary Alternatives: Technologies to be tested may include reducing levee seepage flow across L-31N via a levee cutoff wall and reducing groundwater flows during the wet season by capturing the groundwater with a series of wells adjacent to L-31N, then back-pumping the water to ENP.

e. Issues: The EIS will address the following issues; the relation between this project and related projects including Modified Water Deliveries to ENP; impacts to Miami-Dade West Wellfield and Biscayne Bay, impacts to aquatic and wetland habitats; water flows; hazardous and toxic waste; water quality; flood protection; the impacts of land acquisition on the tax base; aesthetics and recreation; fish and wildlife resources, including protected species; cultural resources; and other impacts identified through scoping, public involvement and interagency coordination.

f. Scoping: A scoping letter and public workshops will be used to invite comments on alternatives and issues from Federal, State, and local agencies, affected Indian tribes, and other interested private organizations and individuals. The next public worksop is scheduled for July 2002; more information about the workshop will be in the scoping letter.

g. DEIS Preparation: The integrated draft PPDR, including a DEIS, is currently scheduled for publication in November 2004.

The approved plan for the Dallas Floodway Extension includes construction of earthen fill levees on each side of the Trinity River downstream of the existing Dallas Floodway, construction of a chain of wetlands on the flood plain and realignment of a portion of the Trinity River underneath Interstate Highway 45. The plan would provide Standard Flood Protection for the area adjacent to the levees, and improve flood damage reduction benefits of the existing Dallas Floodway Project. In addition, the Chain of wetlands provides ecosystem restoration benefits to the study area. Recreational features in the approved project include trails and access points.

The public will be invited to participate in the scoping process, invited to attend public meetings, and given the opportunity to review the draft SEIS. A public meeting will be on Tuesday, July 16, 2002 at the Ramada Plaza Hotel, Magnolia Ballroom, 1011 South Akard Street, Dallas, Texas from 6 p.m. to 9 p.m. Subsequent public meetings, if deemed necessary, will be announced in the local news media. Release of the Draft SEIS for public comment is scheduled for late Summer 2002. The exact release date, once established, will be announced in the local news media.

Coordinated with other agencies in addition to the announced public scoping will be conducted to ensure full and open participation and aid in the development of the SEIS. All affected Federal, state, and local agencies, municipalities, affected Indian tribes, and other interested private organizations and parties are hereby invited to participate.

Affected entities: Entities potentially affected by this action are those individuals who are contacted and voluntarily agree to participate in the survey. Individuals are contacted from an established panel of respondents who have been randomly recruited from the general public by Knowledge Networks, Inc. Respondents have agreed to participate in periodic surveys administered by Knowledge Networks, Inc.

Title: Estimating the Value of Improvements to Coastal Waters (EPA ICR#2083.01).

Abstract: The purpose of this study is to estimate willingness to pay (WTP) for water quality improvements in coastal waters. The United States Environmental Protection Agency's Office of Water is responsible for regulating and monitoring national water quality. In order to make sound policy decisions, policy makers need information on the benefits, costs, and other effects of alternative options for addressing environmental problems. In the case of policies affecting water quality, estimates of the public's WTP for improvements in fresh water quality generally begin with estimates provided by Mitchell and Carson (1993); however, this study does not address salt water areas.

The coasts and estuaries comprise a substantial part of our national resource base; these coastal areas are depended upon for the aesthetic, economic, ecosystem, and recreational services they provide. However, coastal areas are also the most highly developed and populated areas in the nation. These areas are home to more than 53% of the nation's population. As coastal population has increased, the environmental quality of some of these areas has declined or is threatened. Because serious water pollution problems exist in some of these areas, many future water policies will likely focus on coastal areas. The lack of estimates of the benefits of improvements to these areas makes designing effective policies to remedy these problems particularly difficult.

This study will estimate WTP for water quality improvements in coastal waters using a stated preference survey. Currently, States, tribes, and other jurisdictions measure water quality by determining if water bodies are clean enough to support basic uses, such as swimming, fishing, and aquatic life support. In keeping with these definitions of water quality, the study will estimate WTP for more fishable and swimmable coastal and estuarine waters as well as healthier marine and estuarine aquatic environments. Respondents will be asked a series of five questions in which they compare two programs with the status quo. The programs each affect water quality for the various uses in different ways and cost varying amounts to implement. Analysis of the resulting data will yield WTP estimates for improvements to each of the attributes.

Further development of the survey cannot be completed without a pilot survey. The pilot survey will take place in California using the survey instrument described in more detail below. The survey instrument is specific to the state of California and will be used to estimate WTP for water quality improvements for three specific uses: swimming, production of fish and shellfish safe for human consumption, and support of diverse aquatic life. Once the pilot survey is complete and EPA is confident of the adequacy of the questionnaire, EPA hopes to develop parallel versions of the survey instrument for the remaining 20 coastal states in the contiguous United States as well as a version for inland states. The coastal state versions of the survey will elicit resident's WTP for coastal water improvements within the state. The inland version of the survey will elicit WTP for coastal water improvements generally. While these surveys will not be able to gauge WTP of coastal state residents for improvements outside of their state of residence, it is anticipated that the information gathered from these surveys will nevertheless provide potentially useful information for benefits analysis.

The questionnaire for the California coastal survey is comprised of four distinct parts: an introductory section, a section focusing specifically on California's coastal waters, a section containing the choice questions, and finally a section containing standard questions about labor market activity.

The first section of the survey provides respondents with background information on coastal waters and their uses. Following a welcome statement, the respondent is provided with a concise definition of coastal waters and a detailed description of their natural, commercial and recreational uses in simple tabular form. This table is followed by a map highlighting all of the coastal states in the 48 contiguous states in the U.S. The respondent's familiarity with coastal waters is then gauged through a series of questions about recent trips to coastal waters and water recreation activities. A number of these questions are borrowed from the National Survey on Recreation, allowing direct comparison of results. Similar information is collected for freshwater recreation activities.

This section delves into a respondent's familiarity with pollution sources as well as his perception of California's coastal water quality. In addition, it defines and describes the three use categories: swimming, production of fish and shellfish that are safe for human consumption, and support of diverse aquatic life (including fish, shellfish, plants, mammals, birds, etc. that live near aquatic environments). The water quality rating system used by federal and state governments is then described to the respondents and information is given on the ratings California's coastal waters have received for the three defined uses. Information on California's coastal waters is provided in pie charts. The information provided is taken directly from The National Water Quality Inventory Report to Congress (305(b) report).

Comparisons of California's water quality by use with that of other coastal states is provided in a series of three bar charts—one for each use— showing the ranking of states by reported water quality level.

The third part of the questionnaire is comprised of the choice questions. Respondents are presented with a series of five questions in which they are asked to select between two programs to improve coastal water quality. In each choice set, respondents are also able to select the status quo, should they find neither of the two programs satisfactory. Each of the two programs has an associated household tax increase to cover the cost of implementation.

Information regarding water quality across three use definitions (swimming, production of fish and shellfish deemed safe for human consumption, and the support of diverse aquatic life) under each program, including the status quo, is provided in tabular format together with the cost to each household for each program. Color is used in the table to help respondents distinguish between the three alternatives. The programs differ not only in the level of household tax, but also in the degree to which they improve water quality across the three use definitions.

The questions are structured in such a way as to facilitate comparison between the programs with at most two water quality attributes varying at different levels across the two new programs being introduced. In some instances, however, respondents are asked to choose between two programs that offer varying magnitudes of uniform changes across uses.

The fourth and final section of the survey is comprised not only of demographic questions but also a series of questions borrowed from the standard “Panel Study of Income Dynamics (PSID),” an ongoing survey examining trends in employment and income. Many of these questions ask specifically about the respondents' labor market activity as well as that of spouses. It is our intention to directly compare the responses of the PSID questions from the Knowledge Networks sample to those from the original PSID responses to determine if in fact they are similar. In so doing, we will be able to confirm the representativeness of our survey sample to the population in California.

The series of demographic questions required in our survey instrument is reduced due to the availability of this information from Knowledge Networks. As noted above, Knowledge Networks collects and routinely updates standard demographic information on each panel member and makes this information available to its clients. This reduces the burden on the panel members and shortens the length of the survey.

The pilot study will be conducted using 300 respondents. The survey is designed to collect information through an established panel of respondents using WebTV as the mode of administration. The data will be collected and stored electronically by the survey research firm. Based on previous experience and a limited number of cognitive pretest interviews, it is estimated that each survey will take approximately 30 minutes to complete.

Responses to the survey will be voluntary. Typically, panel members are free to choose whether or not to respond to any particular survey as long as they meet survey quotas set in their agreement with the research firm. The survey will fully conform to federal regulations—specifically the Privacy Act of 1974 (5 U.S.C. 552a), the Hawkins-Stafford Amendments of 1988 (Pub. L. 100-297), and the Computer Security Act of 1987.

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 numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15.

The EPA would like to solicit comments to:

(i) 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;

(ii) 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;

(iii) Enhance the quality, utility, and clarity of the information to be collected; and

(iv) 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, e.g., permitting electronic submission of responses.

Burden Statement: The proposed pilot survey will take advantage of an existing, pre-recruited panel of respondents. Thus, the only burden imposed by the pilot survey on respondents will be the time required to complete the survey. Based upon pretest interviews, the survey developers estimate that this will involve an average of 30 minutes per respondents. With a total of 300 respondents for the pilot survey this involves a total of 150 hours. Based on an average hourly rate of $22.15 (including employer costs of all employee benefits), the survey developers expect that the average per-respondent cost for the pilot survey will be $11.08 and the corresponding one-time total cost to all respondents will be $3324.00. Since this information collection is voluntary and does not involve any special equipment, respondents will not incur any capital or operation and maintenance (O&M) costs.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

Title: Reliability, Validity, and Variability in Behavior Determinants of Drinking Water Disinfection By-Product Exposure, EPA ICR No. 2030.01. This is a new collection.

Abstract: This study aims to characterize the reliability, validity, and variability of questionnaire-based information on water usage patterns collected in environmental epidemiologic studies. The study builds on a recently funded study entitled “Drinking Water Disinfectant By-products and Spontaneous Abortion” funded by the American Water Works Association Research Foundation (AWWARF) which was recently initiated. The present study will add a substudy component to the parent AWWARF study. It provides for reinterview of a 10% sample (300 women) of the parent study participants for a reliability substudy and an additional 10% sample (300 women) for a validity substudy. The human behavioral aspects, i.e., water usage patterns over time, that will affect one's coming into contact with an ambient level of a particular chemical, is an important source of variability and this has not been well characterized in previous drinking water epidemiology studies. Better characterization of the reliability, variability, and validity of this information, generally obtained through recall in a questionnaire, will decrease uncertainties related to misclassification of the exposure variables and enhance our ability to more clearly interpret the validity and accuracy of reported study findings. All participation and responses are voluntary. Confidentiality of responses will be maintained. 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 numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15. The Federal Register document required under 5 CFR 1320.8(d), soliciting comments on this collection of information was published on July 27, 2001 (FR 66 39159); No comments were received.

Burden Statement: The annual public reporting and record keeping burden for this collection of information is estimated to average 1 hour per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

Respondents/Affected Entities: Women of childbearing age who are currently voluntarily enrolled and participating in an ongoing epidemiologic study entitled “Drinking Water Disinfectant By-Products and Spontaneous Abortion.”

Estimated Number of Respondents: 600 .

Frequency of Response: Once.

Estimated Total Annual Hour Burden: 525 hours.

Estimated Total Annualized Capital, O&M Cost Burden: $0.

Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the addresses listed above. Please refer to EPA ICR No. 2030.01 in any correspondence.

Title: Outer Continental Shelf Air Regulation, OMB Control Number 2060-0249, EPA ICR Number 1601.05, expiration date June 30, 2002. This is a request for extension of a currently approved collection.

Abstract: Section 328 (Air Pollution from Outer Continental Shelf Activities) of the Clean Air Act (CAA) as amended in 1990, gives EPA responsibility for regulating air pollution from OCS sources located offshore of the States along the Pacific, Arctic, and Atlantic Coasts, and along the eastern Gulf of Mexico coast (off the coast of Florida). The U.S. Department of Interior's Minerals Management Service (MMS) retains the responsibility for regulating air pollution from sources located in the western Gulf of Mexico.

There are five types of reporting requirements for the industrial respondent: Notice of intent (NOI) to construct, Preconstruction permit application, Compliance testing, Operating permit application, and Record keeping and reporting tasks. The owner or operator must submit not more than 18 months prior to submitting a permit application, a NOI to construct to the EPA Administrator through the EPA Regional Office and the air pollution control agency of the nearest onshore area (NOA) and adjacent onshore areas. All major sources must comply with all applicable preconstruction permit requirements including the need to submit an application for a preconstruction review permit. The owner or operator of an OCS source is responsible for developing or collecting all relevant information not otherwise available to the permit reviewing authority. Within 6 months of the start of operations, each new or modified major source is required to complete initial compliance tests to demonstrate compliance with control equipment design and performance specifications in its preconstruction permit. In addition, annual compliance tests are required for existing sources in California. A second type of permit which an owner or operator of major sources must obtain is the operating permit. The operating permits contain information on the ownership and location of a source, equipment and fuel parameters which cause emissions, the amount and type of emissions from each source, control techniques used to control emissions, and record keeping and reporting requirements to ensure that control techniques are properly implemented. Sources, in addition are required to monitor emissions and operating parameters to ensure compliance with operating requirements.

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 numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15. The Federal Register document required under 5 CFR 1320.8(d), soliciting comments on this collection of information was published on November 6, 2001; no comments were received.

Burden Statement: The annual public reporting and recordkeeping burden for this collection of information is estimated to average 410 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

Respondents/Affected Entities: Owners or operators of existing or new or modified stationary sources associated with the recovery of oil and gas resources.

Estimated Number of Respondents: 49.

Frequency of Response: Annually.

Estimated Total Annual Hour Burden: 33,649.

Estimated Total Annualized Capital, O&M Cost Burden: $147,793.

Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the addresses listed above. Please refer to EPA ICR No. 1601.05 and OMB Control No. 2060-0249 in any correspondence.

This action is directed to the public in general. Although this action may be of particular interest to those persons who conduct or sponsor research on pesticides, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the information in this action, consult the designated contact person listed for the individual EUP.

You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/.

EPA has issued the following EUP:

64500-EUP-2 . Issuance. AVA Chemical Ventures, L.L.C., 80 Rochester Avenue, Suite 214, Portsmouth, NH 03801. This EUP allows the use of 274 pounds of the biochemical pesticide sucrose octanoate esters on 100 acres of non-bearing and/or post harvest citrus trees and grapes to evaluate the control of glassy-winged sharpshooter. The program is authorized only in the State of California. The EUP is effective from June 1, 2002 to June 1, 2003.

Persons wishing to review this EUP are referred to the designated contact person. Inquiries concerning this permit should be directed to the person cited above. It is suggested that interested persons call before visiting the EPA office, so that the appropriate file may be made available for inspection purposes from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays.

Notice is hereby given that, in a letter dated June 19, 2002, the President declared a major disaster under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act), as follows:

The time period prescribed for the implementation of section 310(a), Priority to Certain Applications for Public Facility and Public Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed six months after the date of this declaration.

Notice is hereby given that pursuant to the authority vested in the Director of the Federal Emergency Management Agency under Executive Order 12148, I hereby appoint Steven R. Emory of the Federal Emergency Management Agency to act as the Federal Coordinating Officer for this declared disaster.

I do hereby determine the following areas of the State of Colorado to have been affected adversely by this declared major disaster:

All counties and Indian Reservations within the State of Colorado are eligible to apply for assistance under the Hazard Mitigation Grant Program.

The notice of a major disaster declaration for the State of Illinois is hereby amended to include the following areas among those areas determined to have been adversely affected by the catastrophe declared a major disaster by the President in his declaration of May 21, 2002:

Notice is hereby given that, effective this date and pursuant to the authority vested in the Director of the Federal Emergency Management Agency under Executive Order 12148, I hereby appoint Peter J. Martinasco of the Federal Emergency Management Agency to act as the Federal Coordinating Officer for this declared disaster.

This action terminates my appointment of Scott Wells as Federal Coordinating Officer for this disaster.

Notice is hereby given that, in a letter dated June 19, 2002, the President declared a major disaster under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act), as follows:

The time period prescribed for the implementation of section 310(a), Priority to Certain Applications for Public Facility and Public Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed six months after the date of this declaration.

Notice is hereby given that pursuant to the authority vested in the Director of the Federal Emergency Management Agency under Executive Order 12148, I hereby appoint Scott Wells of the Federal Emergency Management Agency to act as the Federal Coordinating Officer for this declared disaster.

I do hereby determine the following areas of the State of Iowa to have been affected adversely by this declared major disaster:

All counties within the State of Iowa are eligible to apply for assistance under the Hazard Mitigation Grant Program.

Notice is hereby given that, in a letter dated June 14, 2002, the President declared a major disaster under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act), as follows:

The time period prescribed for the implementation of section 310(a), Priority to Certain Applications for Public Facility and Public Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed six months after the date of this declaration.

Notice is hereby given that pursuant to the authority vested in the Director of the Federal Emergency Management Agency under Executive Order 12148, I hereby appoint C. Michel Butler of the Federal Emergency Management Agency to act as the Federal Coordinating Officer for this declared disaster.

I do hereby determine the following area of the State of Minnesota to have been affected adversely by this declared major disaster:

All counties within the State of Minnesota are eligible to apply for assistance under the Hazard Mitigation Grant Program.

Section 10b of the Federal Home Loan Bank Act (Bank Act) authorizes the Federal Home Loan Banks (FHLBanks) to make advances under certain circumstances to certified nonmember mortgagees. 1 The Finance Board refers to nonmember mortgagees as housing associates. In order to be certified as a housing associate, an applicant must meet the eligibility requirements set forth in section 10b of the Bank Act. Part 926 of the Finance Board regulations implements the statutory eligibility requirements and establishes uniform review criteria an applicant must meet in order to be certified as a housing associate by an FHLBank. 2 More specifically, sections 926.3 and 926.4 of the rule implement the statutory eligibility requirements and provide guidance to an applicant on how it may satisfy such requirements. 3 Section 926.5 authorizes the FHLBanks to approve or deny all applications for certification as a housing associate, subject to the statutory and regulatory requirements. 4 Section 926.6 permits an applicant to appeal an FHLBank decision to deny certification to the Finance Board. 5

Section 950.17 of the Finance Board regulations establishes the terms and conditions under which an FHLBank may make advances to a certified housing associate. Section 950.17 also imposes a continuing obligation on a housing associate to provide information necessary to determine if it remains in compliance with applicable statutory and regulatory requirements. 6

The information collection contained in sections 926.1 through 926.6 and section 950.17 of the Finance Board regulations is necessary to enable the FHLBanks to determine whether an applicant satisfies the statutory and regulatory requirements to be certified initially and maintain its status as a housing associate eligible to receive FHLBank advances. The Finance Board requires and uses the information collection to determine whether to uphold or overrule an FHLBank decision to deny housing associate certification to an applicant.

The OMB number for the information collection is 3069-0005. The OMB clearance for the information collection expires on November 30, 2002.

The likely respondents include applicants for housing associate certification and current housing associates.

The Finance Board estimates the total annual average number of applicants at five, with one response per applicant. The estimate for the average hours per application is ten hours. The estimate for the annual hour burden for applicants is 50 hours (5 applicants × 1 response per applicant × 10 hours).

The Finance Board estimates the total annual average number of maintenance respondents, that is, certified housing associates, at 57, with 1 response per housing associate. The estimate for the average hours per maintenance response is 0.5 hours. The estimate for the annual hour burden for certified housing associates is 28.5 hours (57 certified housing associates × 1 response per associate × 0.5 hours).

The estimate for the total annual hour burden is 78.5 hours (57 housing associates × 1 response per associate × 0.5 hours + 5 applicants × 1 response per applicant × 10 hours).

The Finance Board requests written comments on the following: (1) Whether the collection of information is necessary for the proper performance of Finance Board functions, including whether the information has practical utility; (2) the accuracy of the Finance Board estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on applicants and housing associates, including through the use of automated collection techniques or other forms of information technology.

Inspection of Public Comments: Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, call (410) 786-7197.

Copies: Additional copies of the Federal Register containing this proposed notice can be made at most libraries designated as Federal Depository libraries and at many other public and academic libraries throughout the country that receive the Federal Register .

This Federal Register document is also available from the Federal Register online database through GPO Access, a service of the U.S. Government Printing Office. The web site address is: http://www.access.gpo.gov /nara/index.html.

Under the Medicare program, eligible beneficiaries may receive covered services in an ambulatory surgical center (ASC) provided the ASC meets certain requirements. Section 1832(a)(2)(F)(i) of the Social Security Act (the Act) authorizes the Secretary to establish distinct criteria for facilities seeking designation as an ASC. Under this authority, the Secretary has set forth in regulations minimum requirements that an ASC must meet to participate in Medicare. The regulations at title 42, part 416 (Ambulatory Surgical Services) of the Code of Federal Regulations (CFR) determine the basis and scope of covered services provided by an ASC, and Conditions for Medicare payment for ASCs. Applicable regulations concerning provider agreements are at part 489 (Provider Agreements and Supplier Approval) and those pertaining to the survey and certification of facilities are at part 488 (Survey Certification and Enforcement Procedures), subpart A (General Provisions) and B (Special Requirements).

In order for an ASC to be approved for participation in the Medicare program, the ASC must comply with State licensure requirements. The ASC must be certified by a State survey agency as complying with the conditions or requirements, as set forth in § 416.26(b) of our regulations. Then, the ASC is subject to regular surveys by a State survey agency to determine whether it continues to meet these requirements. There is an alternative, however, to surveys by State agencies.

Section 1865(b)(1) of the Act permits provider entities that are accredited by CMS-approved accrediting organizations to be exempt from routine surveys by State survey agencies to determine compliance with Medicare conditions of coverage. Accreditation by an accreditation organization is voluntary and is not required of ASCs for Medicare participation. Section 1865(b)(1) of the Act provides that, if an ASC demonstrates through accreditation that all applicable Medicare conditions are met or exceeded, we shall “deem” those ASCs as having met the requirements.

If an accreditation organization is recognized by the Secretary as having standards for accreditation that meet or exceed Medicare requirements, any provider entity accredited by the national accrediting body's approved program would be deemed to meet the Medicare conditions. A national accreditation organization applying for approval of deeming authority under part 488, subpart A must provide us with reasonable assurance that the accreditation organization requires the accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning renewal of an accreditation organization's deeming authority are set forth at §§ 488.4 and 488.8(d)(3). The regulations at § 488.8(d)(3) require accreditation organizations to reapply for continued approval of deeming authority every 6 years or sooner, as determined by us. Our current recognition of the Accreditation Association for Ambulatory Health Care Inc.'s (AAAHC) accreditation program for ASCs will terminate on December 19, 2002.

Section 1865(b)(2) of the Act requires that our findings concerning review of a national accrediting organization's requirements consider, among other factors, the reapplying accreditation organization's requirements for accreditation; survey procedures; resources for conducting required surveys; capacity to furnish information for use in enforcement activities; monitoring procedures for provider entities found not in compliance with the conditions or requirements; and ability to provide us with the necessary data for validation.

Section 1865(b)(3)(A) of the Act further requires that we publish, within 60 days of receipt of an organization's complete application, a notice identifying the national accreditation body making the request, describing the nature of the request, and providing at least a 30-day public comment period. We have 210 days from our receipt to publish approval or denial of the application.

The purpose of this proposed notice is to inform the public of our receipt of the AAAHC's request for renewal and continuation of its deeming authority for ASCs. This notice also solicits public comment on the ability of AAAHC requirements to meet or exceed the Medicare conditions for coverage for ASCs.

On April 18, 2002, AAAHC submitted all the necessary materials concerning its request for renewal as a deeming organization for ASCs to enable us to make a determination. Under section 1865(b)(2) of the Act and our regulations at § 488.8 (Federal review of accreditation organizations), our review and evaluation of AAAHC will be conducted in accordance with, but not necessarily limited to, the following factors:

• The equivalency of AAAHC standards for an ASC as compared with our comparable ASC conditions of coverage.

• AAAHC's survey process to determine the following:

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all public comments we receive by the date and time specified in the DATES section of this preamble, and when we proceed with a final notice, we will respond to the public comments in the preamble to the document.

Upon completion of our evaluation, including evaluation of comments received as a result of this notice, we will publish a final notice in the Federal Register announcing the result of our evaluation.

In accordance with the provisions of Executive Order 12866, the Office of Management and Budget did not review this proposed notice.

In accordance with Executive Order 13132, we have determined that this proposed notice would not have a significant effect on the rights, roles, and responsibilities of States, local, or tribal governments.

Inspection of Public Comments: Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, call (410) 786-7197.

Copies: Additional copies of the Federal Register containing this notice can be made at most libraries designated as Federal Depository libraries and at many other public and academic libraries throughout the country that receive the Federal Register .

This Federal Register document is also available from the Federal Register online database through GPO Access, a service of the U.S. Government Printing Office. The web site address is: http://www.access.gpo.gov/nara/index.html.

Under the Medicare program, eligible beneficiaries may receive covered services in an ambulatory surgical center (ASC) provided certain requirements are met. Section 1832(a)(2)(F)(i) of the Social Security Act (the Act) authorizes the Secretary to establish distinct criteria for facilities seeking designation as an ASC. Regulations concerning supplier agreements are at title 42, part 489 of the Code of Federal Regulations (CFR) and those pertaining to activities relating to the survey and certification of facilities are at 42 CFR part 488. The regulations at part 416 specify the conditions that an ASC must meet in order to participate in the Medicare program, the scope of covered services, and the conditions for Medicare payment for facility services.

Generally, in order to enter into an agreement, an ASC must first be certified by a State survey agency as complying with the conditions or requirements set forth in part 416 of our regulations. Then, the ASC is subject to regular surveys by a State survey agency to determine whether it continues to meet these requirements. There is an alternative, however, to surveys by State agencies.

Section 1865(b)(1) of the Act provides that, if a provider entity demonstrates through accreditation that all applicable Medicare conditions are met or exceeded, we shall “deem” those provider entities as having met the requirements. Accreditation by an accreditation organization is voluntary and is not required for Medicare participation.

If an accreditation organization is recognized by the Secretary as having standards for accreditation that meet or exceed Medicare requirements, any provider entity accredited by the national accrediting body's approved program would be deemed to meet the Medicare conditions. A national accreditation organization applying for approval of deeming authority under part 488, subpart A must provide us with reasonable assurance that the accreditation organization requires the accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning reapproval of accrediting organizations are set forth at §§ 488.4 and 488.8(d)(3). The regulations at § 488.8(d)(3) require accreditation organizations to reapply for continued approval of deeming authority every 6 years or sooner, as determined by us.

The Joint Commission on Accreditation of Healthcare Organizations' (JCAHO) current term of approval as a recognized accreditation program for ASCs expires December 19, 2002.

Section 1865(b)(2) of the Act and our regulations at § 488.8(a) require that our findings concerning review and reapproval of a national accrediting organization's requirements consider, among other factors, the reapplying accreditation organization's requirements for accreditation; survey procedures; resources for conducting required surveys; capacity to furnish information for use in enforcement activities; monitoring procedures for provider entities found not in compliance with the conditions or requirements; and ability to provide us with the necessary data for validation.

Section 1865(b)(3)(A) of the Act further requires that we publish, within 60 days of receipt of an organization's complete application, a notice identifying the national accreditation body making the request, describing the nature of the request, and providing at least a 30-day public comment period. We have 210 days from our receipt of a completed application to publish approval or denial of the application.

The purpose of this proposed notice is to inform the public of our receipt of JCAHO's request for approval of continued deeming authority for ASCs. This notice also solicits public comment on the ability of JCAHO requirements to meet or exceed the Medicare conditions for coverage for ASCs.

On April 15, 2002, JCAHO submitted all the necessary materials concerning its request for reapproval as a deeming organization for ASCs to enable us to make a determination. Under section 1865(b)(2) of the Act and our regulations at § 488.8 (Federal review of accreditation organizations), our review and evaluation of JCAHO will be conducted in accordance with, but not necessarily limited to, the following factors:

• The equivalency of JCAHO standards for an ASC as compared with our comparable ASC conditions of coverage.

• JCAHO's survey process to determine the following:

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble and will respond to the public comments in the preamble to that document.

Upon completion of our evaluation, including evaluation of comments received as a result of this notice, we will publish a final notice in the Federal Register announcing the result of our evaluation.

In accordance with the provisions of Executive Order 12866, the Office of Management and Budget did not review this proposed notice.

In accordance with Executive Order 13132, we have determined that this proposed notice would not have a significant effect on the rights, roles, or responsibilities of States, local, or tribal governments.

Inspection of Public Comments: Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, please call Yolanda Hayes at (410) 786-7195.

The Social Security Amendments of 1972 (Pub. L. 92-603) extended Medicare coverage to individuals with end-stage renal diseases (ESRD) that require maintenance dialysis treatments or kidney transplantation. The ESRD Amendments of 1978 (Pub. L. 95-292) amended title XVIII of the Social Security Act (the Act) by adding section 1881. Section 1881(c) of the Act authorized the establishment of, among other things, ESRD network areas and Network Organizations under the Medicare program, to ensure the effective administration of the ESRD program benefits. This amendment provided an approach for Network operation and performance as well as other quality assurance issues that relate to treatment of ESRD. Section 9335(d)(1) of the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99-509) amended section 1881(c) of the Act to require us to publish in the Federal Register criteria, standards, and procedures with which to evaluate an applicant organization's ability to perform, or actual performance of, required network functions.

Section 1881(c)(2) of the Act requires the Network Organizations to perform the following functions:

• Encourage participation in vocational rehabilitation programs, and develop criteria and standards relating to this participation.

• Evaluate the procedures used by facilities and providers in the network to assess patients for placement in appropriate treatment modalities.

• Implement a procedure for evaluating and resolving patient grievances.

• Conduct onsite reviews of facilities and providers using standards of care established by the Network Organization to ensure proper medical care, as a medical review board or as we have determined.

• Collect, analyze, and validate the data that are necessary to prepare the required annual report to the Secretary and to ensure the maintenance of a national ESRD registry.

• Identify facilities and providers that are not cooperating toward meeting network goals, and assist those facilities and providers in developing plans for correction, as well as report on those facilities and providers that are not providing appropriate care.

• Submit an annual report to the Secretary on July 1 of each year.

The criteria, standards, and procedures that we used to evaluate the performance of Network Organizations have not been revised since they were published on October 2, 1987 in the Federal Register (52 FR 37018). The criteria, standards, and procedures were based on reviewing individual cases to identify errors in treatment. To respond to the need to improve the quality of care of Medicare ESRD patients, we reshaped the role of the ESRD Networks program approach to quality assurance and improvement. This approach, implemented July 1, 1994 by the ESRD networks, has been named the ESRD Health Care Quality Improvement Program (HCQIP). HCQIP gives us, along with the Networks an opportunity to demonstrate that health care furnished to Medicare renal beneficiaries can be measurably improved. HCQIP is based on the principle that the Networks can do more to improve the quality and cost effectiveness of care by bringing typical care into line with the best practices rather than by inspecting individual cases to identify erroneous treatment. We are also planning to publish a proposed rule to update the ESRD conditions for coverage of suppliers of end-stage renal disease services (found at 42 CFR 405) in the Federal Register .

The goals for updating the ESRD conditions, which were implemented in 1976, include: Transitioning to a more patient centered focus; reflecting the current standards of practice; shifting from a procedural approach to a more outcome oriented approach; and improving the quality of care. Clinical performance measures are important in meeting these goals and will be proposed in the rule.

In its June 2000 report entitled “External Quality Review of Dialysis Facilities—A Call for Greater Accountability,” the Office of Inspector General (OIG) made two main recommendations to CMS: (1) CMS should hold individual dialysis facilities fully accountable for the quality of care they provide; and (2) CMS should hold the Networks and State survey agencies fully accountable for their performance in overseeing the quality of care furnished by dialysis facilities. Under its first recommendation, OIG suggested that CMS focus its efforts on two central areas: (1) How effectively Network Organizations draw on standardized performance data to improve the overall clinical performance of facilities in their region and ensure that poor performers meet minimum standards of care; and (2) how effectively Network Organizations use a complaint system as a quality of care safeguard.

Currently, the ESRD Network Organizations are awarded contracts for 1 base year and 2 option years. The current contracts were effective July 1, 2000. In conjunction with the ESRD Network Organizations, we have developed in-depth evaluation criteria based on contract tasks and deliverables. In addition, a score calculator was developed to score each Network Organization based on the results of the evaluation elements. The final scores are used to determine how well a Network Organization has performed and if a performance improvement plan or other action (that is, termination) is warranted. The four contract task categories to be scored are the following:

• Quality Improvement.

• Community Information and Resources.

• Administration.

• Information Management.

The tasks listed above are specified in the Network Organization's Statement of Work, which can be found on the web site at: http://www.hcfa.gov/quality/5d2.htm.

The Quality Improvement section contains performance indicators that pertain to the Network Organization's quality improvement projects, clinical performance measures, and other quality improvement activities.

The Community Information and Resources section contains elements that pertain to the Network Organization's provision of educational information and technical assistance, and its resolution of difficult situations and grievances.

The Administration section contains elements that pertain to the organizational structure of the Network, the Network staff, required administrative reports, the Network's internal quality control program, our meetings, cooperative activities with State agencies and Peer Review Organizations, and sanctions and referrals.

The Information Management section contains elements on maintaining, updating, validating, and submitting data.

The Network Organization must meet the performance standards for each of the four contract task areas to be eligible for a noncompetitive renewal in the next contract cycle. The success of the Network Organization's work in the four contract task areas will be judged on the basis of subjective, qualitative assessments.

Included in the evaluation criteria document that is assessed by the project officers are indicators to judge the performance of the Network Organization on improving current clinical performance measures. Since the regional office project officers evaluate ESRD Network Organizations on an annual basis, the intention is to compare the current year's performance to that of the past total 3-year contract. The ESRD Network Organization's work will be judged to have been successful for each of the categories only if it conducts the work in accordance with the requirements set forth in Parts 1 through 9 of the ESRD Manual and its ESRD contract.

The Network Organization must score at least 80 percent on the overall score with a minimum of 80 percent in each of the major contract category areas to meet the standards for minimum performance level. If the initial assessment suggests that the Network Organization has scored at least 80 percent on its overall score, but has not met or exceeded the 80 percent minimum criteria scoring for one or more of the four contract areas, it will have passed the evaluation, but its performance of the contract area(s) will be subject to a performance improvement plan. If the Network Organization does not achieve at least 80 percent on its overall score, it will fail the evaluation and will be subject to a performance improvement plan and a more in-depth assessment of its contract performance up to and including possible nonrenewal or contract termination.

The Network Organization is required to implement two Quality Improvement Projects (QIPs) during its 3-year contract period. We will evaluate the success of the Network Organization's work in two ways. We will assess whether the Network Organization has achieved measurable improvement on the quality indicators, particularly when the projects have employed project tools and indicators that have previously been well developed. In the event that a project fails to achieve measurable improvement, we will use as a second standard of success the amount of knowledge that has been gained through the experience of the project. We will consider these projects successful only if the Network Organization completed the proposed projects according to its narrative project plans. This includes all dimensions of the plans, including, but not limited to populations and facilities including all aspects of study design, intervention, analyses, and timelines. The project officer must have approved all significant changes to the project (deviations from the project plan) in advance. In the final evaluation of a project, contractual compliance in completion of QIPs is defined as adherence to the approved project plan, including any modifications agreed to by the Network and the project officer before their implementation, including timelines and milestones.

The Network Organization will be required to submit a plan to its regional office Project Officer that specifies what types of activities are planned for each of the targeted clinical performance outcome measures and the rationale for its decision. The project officer will assess the success of the Network Organization's efforts on the level of activity relating to attaining or maintaining these target performance levels.

The project officer will continuously review the work of the Network Organization under Community Information and Resources primarily on the required quarterly reports and through reports generated from the Standard Information Management System (SIMS) reporting system. The Network Organization's work will be judged to be successful for each of the categories and mandated activities only if it conducts the work in accordance with the requirements in its contractual statement of work and Parts 2, 6, and 7 of the ESRD Network Organization Manual.

The Network Organization must have an organizational structure, basic administrative staff, and infrastructure to operate its statutory requirements and other work activities, as required in its contract. The project officer will continuously review the work of the Network Organization under this contract task area primarily on the required administrative reports. The principal evaluation element for this task will be the timeliness and completeness of all required reports.

The project officer will continuously review the work of the Network Organization to perform data management and reporting activities using SIMS. We use the data collected by the Networks to report various dialysis facility characteristics and specific quality measures on its Dialysis Facility Compare website ( http://www.medicare.gov/Dialysis/Home.asp ). The Network Organization will be determined to be successful if it conducts the work in accordance with the requirements set forth in Part 4 of the ESRD Network Organizations Manual, and its data management system provides for collection, analyses, verification, and timely reporting.

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.

We have examined the impacts of this notice as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 16, 1980 Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 directs 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). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more annually). We have determined that this notice is not a major rule because it does not impose a significant economic impact to preferred provider organizations or the Medicare program.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. For purposes of the RFA, most preferred provider organizations are considered to be small entities, either by nonprofit status or by having revenues of $6 to $29 million or less annually. (For details, see the Small Business Administration's regulation that set forth size standards for health care industries (65 FR 69432).) The criteria described in this notice will not significantly impact the ESRD Network Organizations that are considered small entities because the notice reflects what is already being done. Individuals and States are not included in the definition of a small entity.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a notice 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.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. This notice will not mandate any requirements for State, local, or tribal governments.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a notice with comment that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have reviewed this notice under these requirements and have determined that it will not impose substantial direct requirement costs on State or local governments.

In accordance with Executive Order 12866, this notice was reviewed by the Office of Management and Budget.

Inspection of Public Comments: Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone (410) 786-7197.

Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 or by faxing to (202) 512-2250. The cost for each copy is $9. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register .

This Federal Register document is also available from the Federal Register online database through GPO Access, a service of the U.S. Government Printing Office.

The Balanced Budget Act of 1997 (BBA), Public Law 105-33, enacted on August 5, 1997, significantly changed the way Medicare pays for Medicare home health services. Until the implementation of a home health prospective payment system (HH PPS) on October 1, 2000, home health agencies (HHAs) received payment under a cost-based reimbursement system. Section 4603 of the BBA governed the development of the HH PPS by adding section 1895 to the Social Security Act (the Act).

Generally, Medicare makes payment under the home health prospective payment system on the basis of a national standardized 60-day episode payment, adjusted for case-mix and wage index. For episodes with four or fewer visits, Medicare pays on the basis of a national per-visit amount by discipline, referred to as a low utilization payment adjustment (LUPA). Medicare also adjusts the 60-day episode payment for certain intervening events that give rise to a partial episode payment (PEP) adjustment or a significant change in condition (SCIC) adjustment. For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available. For a complete and full description of the home health prospective payment system as required by the BBA and as refined by the Omnibus Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for FY 1999, Pub. L. 105-277, enacted on October 21, 1998, and the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), Public Law 106-113, enacted on November 29, 1999, see the July 3, 2000 HH PPS final rule (65 FR 41128).

Section 1895(b)(3)(A)(i)(III) of the Act, as redesignated by section 501 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), Public Law 106-554, enacted on December 21, 2000, delays until FY 2003 the application of the 15 percent reduction on the interim payment limits for home health services as applied to the home health prospective payment rates required by earlier legislation. Section 501 of BIPA also amends section 302(c) of the BBRA, to now require a report to the Congress by the Comptroller General of the United States no later than April 1, 2002 on the 15 percent reduction issue.

Section 502 of the BIPA sets forth a special rule for payment for FY 2001 based on adjustment of the published prospective payment amounts. This special payment rule has the effect of restoring the market basket reduction already incorporated into the home health prospective payment system (HH PPS) rates. The adjustment provides the effect of a full market basket adjustment to the HH PPS rates for FY 2001. The statute also requires paying episodes and national per-visit amounts for low utilization payment adjustments (LUPAs) ending on or after April 1, 2001 and before October 1, 2001 an additional 2.2 percent.

Section 508 of the BIPA also requires, for home health services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) on or after April 1, 2001 and before April 1, 2003, that the Secretary increase the payment amount otherwise made under section 1895 of the Act for the services by 10 percent. The statute waives budget neutrality for purposes of this increase since it specifically states that the Secretary not reduce the standard prospective payment amount (or amounts) under section 1895 of the Act applicable to home health services furnished during a period to offset the increase in payments resulting in the application of this section of the statute.

On June 29, 2001, we published a notice with comment period in the Federal Register (66 FR 34687) that set forth an update to the 60-day national episode rates and the national per-visit amounts under the Medicare prospective payment system for home health agencies (HHAs) for FY 2002. In this section, we respond to the two public comments that we received on the FY 2002 HH PPS:

Comment: Commenters recommended that we use the hospital wage index with consideration of statutorily established floors and administratively determined classifications. Further the commenter asked that the wage index used in determining the home health payment rate should be the same hospital wage index used and published for hospitals during the same fiscal year.

Response: As we have explained in the June 29, 2001 notice with comment period, we believe the use of the most recent available pre-floor and pre-reclassified hospital wage index data results in the appropriate adjustment to the labor portion of the costs as required by statute. By statute, the hospital wage index is adjusted to account for geographic reclassification of hospitals. The geographic reclassification applies only to hospitals. In addition, the hospital wage index has specific floors that are required by statute and apply only to hospitals. Because these reclassifications and floors do not apply to HHAs, we use the most recent available pre-floor and pre-classified hospital wage index data to adjust the home health payment rates. We recognize that the pre-floor and pre-classified hospital wage index differs slightly from the numbers published in the Medicare inpatient hospital prospective payment system (PPS) regulations but note that the wage indices published in the July 3, 2000 HH PPS final rule and subsequent annual updates reflect the most recent available pre-floor and pre-classified hospital wage index available at the time of publication.

Comment: Commenters suggested that we recalculate the base HH PPS rates to incorporate a different assumption than the published assumption of the 5 percent low utilization payment adjustment episodes in the base year of HH PPS. The commenters believe the recalculation should be characterized as an error on the face of the original calculation rather than viewed as a rebasing.

Response: In establishing the payment unit for HH PPS, including the 5 percent low utilization payment adjustment episode, we used the best available data in determining the payment rates for the base year for HH PPS. The statute provides for an annual update of the HH PPS payment rates. The statute does not contemplate a recalculation of the initial base year after the rates are established. We further note that the statute provides for a limitation on review of the HH PPS, in particular the establishment of the payment unit and the computations of the initial standardized prospective payment amounts.

Medicare HH PPS has been effective since October 1, 2000. As set forth in the final rule published July 3, 2000 in the Federal Register (65 FR 41128), the unit of payment under Medicare HH PPS is a national standardized 60-day episode rate. As set forth in the July 3, 2000 final rule at 42 CFR 484.220, we adjust the national standardized 60-day episode rate by case-mix and wage index based on the site of service for the beneficiary. The FY 2003 HH PPS rates use the same case-mix methodology and application of the wage index adjustment to the labor portion of the HH PPS rates as set forth in the July 3, 2000 final rule. We multiply the national 60-day episode rate by the patient's applicable case-mix weight. We divide the case-mix adjusted amount into a labor and nonlabor portion. We multiply the labor portion by the applicable wage index based on the site of service of the beneficiary. The labor portion of the rate continues to be .77668 and the nonlabor portion of the rate continues to be .22332. We add the wage adjusted portion to the nonlabor portion yielding the case-mix and wage adjusted 60-day episode rate subject to applicable adjustments.

For FY 2003, we use again the design and case-mix methodology described in section III.G of the July 3, 2000 HH PPS final rule (65 FR 41192 through 41203). For FY 2003, we base the wage index adjustment to the labor portion of the PPS rates on the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice, which is discussed in section III.D of this notice with comment period.

As discussed in the July 3, 2000 HH PPS final rule, for episodes with four or fewer visits, Medicare pays the national per-visit amount by discipline, referred to as a LUPA. We update the national per-visit amounts by discipline annually by the applicable home health market basket. We adjust the national per-visit amount by the appropriate wage index based on the site of service for the beneficiary as set forth in § 484.230. We adjust the labor portion of the updated national per-visit amounts by discipline used to calculate the LUPA by the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice, as discussed in section III.D of this notice with comment period.

As outlined in the July 3, 2000 HH PPS final rule, Medicare pays the 60-day case-mix and wage adjusted episode payment on a split percentage payment approach. The split percentage payment approach includes an initial percentage payment and a final percentage payment as set forth in § 484.205(b)(1) and (b)(2). We may base the initial percentage payment on the submission of a request for anticipated payment and the final percentage payment on the submission of the claim for the episode, as discussed in regulations in § 409.43. The claim for the episode that the HHA submits for the final percentage payment determines the total payment amount for the episode and whether we make an applicable adjustment to the 60-day case-mix and wage adjusted episode payment. The end date of the 60-day episode as reported on the claim determines the rate level at which Medicare will pay the claim for the fiscal period.

As discussed in the July 3, 2000 HH PPS final rule, we may adjust the 60-day case-mix and wage adjusted episode payment based on the information submitted on the claim to reflect the following:

• A low utilization payment provided on a per-visit basis as set forth in § 484.205(c) and § 484.230.

• A partial episode payment adjustment as set forth in § 484.205(d) and § 484.235.

• A significant change in condition adjustment as set forth in § 484.205(e) and § 484.237.

• An outlier payment as set forth in § 484.205(f) and § 484.240.

This notice with comment period reflects the updated national 60-day episode rate, the national per-visit amounts used to calculate the LUPA, and imputed costs for the outlier payment for FY 2003 that are effective October 1, 2002.

Section 1895(b)(3)(B)(ii) of the Act requires the standard prospective payment amounts to be increased by a factor equal to the home health market basket minus 1.1 percentage points for FY 2003. This has been codified in regulations in § 484.225.

• FY 2003 Adjustments

In calculating the annual update for the FY 2003 60-day episode rates, we first looked at the FY 2002 rates as a starting point. The FY 2002 national 60-day episode rate is $2,274.17. Second, we took into account section 501 of BIPA.

As stated in the background section of this update notice, section 501 of BIPA revised the statute to require the application of the 15 percent reduction on payment limits under the interim payment system (IPS), which is no longer in effect for home health services, for FY 2003. This statutory provision required an estimation of what Medicare spending would have been in FY 2001 if the IPS were still in effect and its limits reduced by 15 percent updated to FY 2003 in determining the HH PPS rates. It is important to note that HH PPS, not the interim payment system, has been in effect since October 1, 2000. Originally, the Balanced Budget Act of 1997 (BBA), Public Law 105-33, enacted on August 5, 1997, statutory language required the base year PPS rates to be budget neutral to what we would have paid under the IPS if the per-beneficiary and per-visit limits had been reduced by 15 percent. At the time of the BBA, when HHAs were paid the lower of their actual costs or the cost limits, most HHAs were paid at their limits. Absent any behavioral offset, lowering the IPS limits by 15 percent would have resulted in a straight reduction of 15 percent of Medicare spending for home health services.

At the time the BBA was enacted, we believed that the industry would eventually alter their behavior to avoid reaching the cost limits, and therefore upon implementation of the 15 percent reduction, not all HHAs would reach the level of the limits as reduced. We believed that the industry would respond to the reduced limits by increasing the number of low-cost beneficiaries served, thereby increasing the costs and decreasing the effect of the limits.

As a result of this anticipated behavior, we determined that the level by which actual payments would be reduced by lowering the limits would not be the same as the percent by which the limits themselves would be lowered. That is, the application of the 15 percent reduction in cost limits would lead to a 7 percent reduction in aggregate home health spending, hence, equivalently a 7 percent reduction in HH PPS payments. The statute requires us to look at the 15 percent reduction to the IPS limits updated to FY 2003. In determining how to calculate and implement the HH PPS rates using the required 15 percent reduction in cost limits, we still believe the HHAs would have altered their behavior to avoid reaching the limits. Thus, we retain our assumptions that result in the 7 percent reduction in overall payments. Based on the latest available reliable date, our best estimate is that a 15 percent reduction in cost limits would result in a 7 percent reduction in aggregate home health spending and, therefore, equivalently a 7 percent reduction on home health spending.

Accordingly, we calculate the FY 2003 HH PPS rates by first reducing the FY 2002 HH PPS rates by 7 percent. That amount is updated by the applicable home health market basket increase minus 1.1 percentage points, as required by the statute. It is important to note that Medicare home health payments are projected to continue to grow, even with the effect of the 15 percent reduction to the IPS limits. Under President Bush's FY 2003 budget, which assumes no further delays in the reduction, Medicare's total home health spending is projected to increase 12.2 percent in FY 2003, 8.3 percent in FY 2004, and 7.4 percent in FY 2005.

In order to calculate the FY 2003 national 60-day episode rate, the FY 2002 national 60-day episode rate ($2,274.17) is multiplied by .93 to take into account section 501 of BIPA. The annual update for FY 2003 is the home health market basket minus 1.1 percentage points as defined in section 1895(b)(3)(B)(ii) of the Act. The home health market basket increase for FY 2003 is 3.2 percent. The previous amount is increased by the FY 2003 home health market basket increase minus 1.1 percentage points (2.1 percent) to yield the updated FY 2003 national 60-day episode rate ($2,159.39).

• National Per-visit Amounts Used to Pay LUPAs and Compute Imputed Costs used in Outlier Calculations.

As discussed previously in this notice with comment period, the policies governing the LUPAs and outlier calculations set forth in the July 3, 2000 HH PPS final rule will continue during FY 2003. In calculating the annual update for the FY 2003 national per-visit amounts we use to pay LUPAs and to compute the imputed costs in outlier calculations, we again looked at the FY 2002 rates as a starting point. We used the same approach to implement section 501 of BIPA. The statute requires us to look at the 15 percent reduction to the IPS limits in FY 2003, 2 years after HH PPS has been implemented and the IPS has ended. As stated previously, we believe the HHAs would have altered their behavior to avoid reaching the IPS limits. We have determined that behavioral response would translate the required 15 percent reduction in cost limits into a 7 percent reduction in overall payments in FY 2003. In response to section 501 of BIPA, we reduced the national per-visit amounts by home health discipline by 7 percent. Those amounts are then increased by the FY 2003 home health market basket increase minus 1.1 percentage points to yield the updated per-visit amounts for each home health discipline for FY 2003. (See table below.)

Section 508 of the BIPA requires, for home health services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) on or after April 1, 2001 and before April 1, 2003, that the Secretary increase by 10 percent the payment amount otherwise made under section 1895 of the Act for services. The statute waives budget neutrality related to this provision as it specifically states that the Secretary shall not reduce the standard prospective payment amount (or amounts) under section 1895 of the Act applicable to home health services furnished during a period to offset the increase in payments resulting in the application of this section of the statute.

Section 508 provides for payment for the national standardized episode amounts and LUPA national per-visit amounts for the first half of FY 2003 by an additional 10 percent for home health services furnished in rural areas where the site of service for the beneficiary is a non-MSA area. By statute, the 10 percent rural add-on applies to home health services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) on or after April 1, 2001 and before April 1, 2003. Therefore, the 10 percent rural add-on ends mid-FY 2003 for episodes ending on or after April 1, 2003. The applicable case-mix and wage index adjustment is subsequently applied for the provision of home health services where the site of service is the non-Metropolitan Statistical Area (MSA) of the beneficiary. Similarly, the applicable wage index adjustment is subsequently applied to the LUPA per-visit amounts adjusted for the provision of home health services where the site of service for the beneficiary is a non-MSA area. We implemented this provision for FY 2001 on April 1, 2001 through the Program Memorandum, “Restoration of Full Home Health Market Basket Update for Home Health Services for Fiscal Year 2001 and Temporary 10 Percent Payment Increase for Home Health Services Furnished in a Rural Area for 24 Months Under the Home Health Prospective Payment System (HH PPS)” (Transmittal A-01-06 issued January 16, 2001) and for FY 2002 through the FY 2002 annual HH PPS update notice published on June 29, 2001 in the Federal Register (66 FR 34687). (See FY 2003 add-on noted in tables below.)

Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the Secretary to establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services and to provide appropriate adjustments to the episode payment amounts under HH PPS to account for area wage differences. We apply the appropriate wage index value to the labor portion of the HH PPS rates based on the geographic area in which the beneficiary received home health services. We determine each HHA's labor market area based on definitions of MSAs issued by the Office of Management and Budget (OMB).

As discussed previously and set forth in the July 3, 2000 final rule, the statute provides that the wage adjustment factors may be the factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustment factors. Again, as discussed in the July 3, 2000 final rule, we used the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice to adjust the labor portion of the HH PPS rates based on the geographic area in which the beneficiary receives the home health services. We believe the use of the most recent available pre-floor and pre-reclassified hospital wage index data results in the appropriate adjustment to the labor portion of the costs as required by statute. (See addenda A and B of this notice with comment period, respectively, for the rural and urban hospital wage indexes.)

Since the implementation of the HH PPS in 2000, we have received questions concerning the regulations governing accelerated payments under HH PPS. We wish to clarify the provisions for accelerated payments for HHAs set forth in § 484.245(a). This general rule was not meant to be restrictive, but to complement the regulations governing intermediary accelerated payments to providers in § 413.64(g). The regulations at § 413.64(g) governing the criteria for accelerated payments to providers have not changed under HH PPS. Accelerated payments are permitted under HH PPS for HHAs that meet the longstanding qualifying criteria. When a provider requests an accelerated payment, it may be made to the provider, as set forth in § 413.64(g). This provision includes an HHA that is receiving payment under the HH PPS under several conditions. For example, an HHA continues to be eligible to receive accelerated payment under § 413.64(g) if it is experiencing financial difficulties because there is a delay by the intermediary in making payments or in exceptional situations, in which the HHA has experienced a temporary delay in preparing and submitting bills to the intermediary beyond its normal billing cycle.

We ordinarily publish a proposed notice in the Federal Register to provide a period for public comment before the provisions of a notice such as this take effect. We can waive this procedure, however, if we find good cause that a notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and we incorporate a statement of finding and its reasons in the notice issued.

We believe it is unnecessary to undertake a proposed notice with comment period as the statute requires annual updates to the HH PPS rates, the methodologies used to update the rate have been previously subject to public comment, and this notice reflects the application of previously established methodologies. Further, the rural add-on and adjustments to FY 2001 HH PPS rates that were required by the BIPA before this annual update for the FY 2003 PPS rates are dictated by statute and do not require an exercise of discretion. In addition, the clarification to the accelerated payment policy reflects no substantive change in policy and practice. Therefore, for good cause, we waive prior notice and comment procedures. As indicated previously, we are, however, providing a 60-day comment period for public comment.

This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, if we proceed with a subsequent document, we will respond to the major comments in the preamble to that document.

We have examined the impacts of this notice as required by Executive Order 12866 (September 1993, Regulatory Planning and Review) and the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 96-354). Executive Order 12866 directs 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). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). The update set forth in this notice applies to Medicare payments under HH PPS in FY 2003. Accordingly, the analysis that follows describes the impact in FY 2003 only. We estimate that there will be an additional $320 million in FY 2003 expenditures attributable to the FY 2003 market basket increase of 2.1 percent. The statute requires the FY 2003 home health market basket increase of 3.2 percent to be reduced by 1.1 percentage points. Section 501 of BIPA requires the application of the 15 percent reduction on payment limits under the IPS, which is no longer in effect, for home health services updated to FY 2003. This statutory provision requires the estimation of what Medicare spending would have been if the IPS limits were reduced by 15 percent and updated to FY 2003. To achieve this level of home health spending, we will reduce the HH PPS rates by 7 percent. The impact on providers due to the implementation of the 7 percent reduction is to reduce Medicare home health spending by $821 million in FY 2003, $1,132 million in FY 2004, and $1,212 million in FY 2005. As stated above, the expenditures outlined in this notice exceed the $100 million yearly threshold for a major rule as defined in title 5, USC, section 804(2), and for a significant regulatory action as defined in E.O. 12866.

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 MSA and has fewer than 100 beds. We have determined that this notice with comment period will not have a significant economic impact on the operations of a substantial number of small rural hospitals.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $10 million or less annually. For purposes of the RFA, we consider most HHAs to be small entities. Individuals and States are not included in the definition of a small entity. This notice with comment period reflects the statutory update to the HH PPS rates published in the July 3, 2000 final rule as amended by the BIPA, but will have a significant positive effect upon small entities.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. We believe this notice with comment period will not mandate expenditures in that amount.

Executive Order 13132 establishes certain requirements that an agency must meet when it publishes a notice with comment period that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have reviewed this notice under the threshold criteria of Executive Order 13132, Federalism. We have determined that this notice will not have substantial direct effects on the rights, roles, and responsibilities of States.

In accordance with the requirements of section 1895(b)(3) of the Act, we publish an update for each subsequent fiscal year that will provide an update to the payment rates. Section 1895(b)(3) of the Act requires us, for FY 2003, to increase the prospective payment amounts by the home health market basket increase minus 1.1 percentage points. The home health market basket increase for FY 2003 is 3.2 percent. Taking into account the provisions of section 1895(b)(3) of the Act, the FY 2003 home health market basket increase of 3.2 percent is reduced by 1.1 percentage points yielding a 2.1 percent increase for FY 2003. For the sake of clarity, we have also included the amounts as increased by the rural add-on provision under section 508 of the BIPA.

Before we determine the impact of the update of the FY 2002 national 60-day episode rate by the applicable home health market basket increase, we need to review prior legislation affecting home health payment systems. Section 4602 of the BBA implemented IPS for FY 1998 through FY 1999, which was composed of both per-visit limits and a per-beneficiary limit. The per-visit limits were similar to the per-visit limits previously in place but reduced to 105 percent of the median (previous limits were set at 112 percent of the mean) and applied in the aggregate (that is, across disciplines, while the limits were specified for each of six disciplines). The per-beneficiary limit was a blend of an agency-specific rate and a national rate for agencies having a 1994 cost report and a national rate for those agencies not in existence in FY 1994. An agency was paid the lower of the following:

• Its actual costs.

• The costs from applying each of the per-discipline limits to the number of visits of that discipline, in the aggregate.

• The costs from applying the agency-specific limit to the number of beneficiaries served by that agency.

Section 4603 of BBA required that a PPS be implemented beginning with FY 2000. The implementation of PPS was, however, postponed until FY 2001 by section 5101(c) of OCESAA. BBA required that initial budget neutrality under HH PPS for FY 2000 be calculated for what expenditures would have been in FY 2000 if the IPS had continued to be in effect, but with both the per-visit and per-beneficiary limits in effect on September 30, 1999 (the last day of FY 1999) reduced by 15 percent. That is, we had to estimate what Medicare expenditures would have been if the IPS had continued for another year, but with the per-visit and per-beneficiary limits reduced by 15 percent. This further reduction of the per-visit and per-beneficiary limits was to ensure that home health spending was below the levels of the IPS.

BIPA did not delay the starting date for HH PPS. However, it did delay application of the 15-percent reduction in the IPS cost limits. The statute requires that HH PPS rates, beginning with FY 2003, be equal to the amounts that would have been effective for the IPS for FY 2001 with a 15-percent reduction in per-visit and per-beneficiary cost limits in effect on September 30, 2000, the last day of the IPS. The updates for FY 2003, as otherwise applied, would be added to the HH PPS reduced rates.

The key to the calculation is the estimation of what Medicare home health expenditures would have been in FY 2001. The determination of those expenditures requires, by statute, an estimation of those expenditures with the per-visit and per-beneficiary limits reduced by 15 percent. The estimate entails three key elements.

First, it requires an estimate of the distribution of agencies' costs relative to per-visit and per-beneficiary aggregate limits. For example, if all agencies' costs were at or above the per-visit or per-beneficiary limits, lowering the limits by 15 percent would have saved 15 percent. Similarly, if some agencies' costs were between 85 percent and 100 percent of either cost limit, lowering the cost limits by 15 percent would achieve less than 15 percent savings. Likewise, if some agencies' costs were below 85 percent of both cost limits, lowering the limits by 15 percent would not achieve savings (since agencies would be paid their actual costs).

Second, an estimation of home health expenditures for FY 2001 requires an estimate of the annual increase in the cost limits under IPS if the IPS cost limits were continued. Since IPS did not apply for FY 2001, the annual increase in cost limits that would have applied must be estimated. We also need to estimate how costs have increased relative to the cost limits. For example, the cost limits were increased by the market basket but agency costs would have most likely increased by some higher percentage.

Finally, under the statutory parameters, the estimate requires an assessment of the behavioral response of HHAs to a lowering of the per-visit and per-beneficiary limits that we estimate for FY 2001 home health expenditures. An assessment of behavioral response is particularly important given the patterns of Medicare home health spending and utilization that have fluctuated dramatically over the last 10 years. Dramatic increases in home health spending reflect very large increases in the number of visits per person served and increases in the number of persons receiving home health services. This is the behavioral response expected under a cost-based reimbursement system. Furthermore, HH PPS provides an incentive for agencies to provide fewer visits than before since they are paid a flat dollar amount to cover all services within a 60-day time period. Preliminary FY 2001 data show that the number of home health visits in the first year of HH PPS has decreased by a significant percentage compared to FY 2000, the last year of IPS. Meanwhile, reimbursement per visit is projected to increase substantially. This is the type of behavioral response that is consistent with the incentives of the new payment system.

Taking into account all these considerations and using the latest available reliable data, we have determined that at the time the BBA was passed, the 15-percent reduction in the limits would result in a 7-percent reduction in aggregate home health spending. We continue to believe that this is the best estimate of the level to which spending would have been reduced under the conditions prescribed by the BBA, namely extension of the IPS through FY 2001 (the first year of HH PPS) but with a 15-percent reduction in each of the IPS cost limits. Therefore, to achieve this level of home health spending, we will reduce the HH PPS payments by 7 percent.

At the time the BBA's enactment, the most recent settled cost report data for HHAs showed that most agencies' costs were at about the level of the existing cost limits. If the limits were lowered by 15 percent then, absent changes in the level of services provided, the resulting reduction in the HH PPS rates would be 15 percent. For example, if home health spending costs were $10 billion and all agencies were at the level of the limits, this level would also be $10 billion. If the level of the cost limits were lowered to $10 billion multiplied by (1 minus .15) it would be equal to $8.5 billion. Then savings to the Medicare program would be cost-limits divided by costs, for example, 1.5 billion divided by 10 billion or 15 percent.

CMS actuaries believed, based on past experience, that agencies would alter the nature and quantity of the services provided to achieve costs below the cost limits. Therefore, a full 15 percent reduction would not be required. The actuaries assumed that 50 percent of total HHA costs would be for agencies that reached the per beneficiary limits and 45 percent of total HHA costs would be for agencies that reached the per-visit limit. The actuaries further assumed that the remaining 5 percent of total HHA costs were under both limits before the 15 percent reduction. After the reduction, about 5 percent of their costs would now be over the limits. The actuaries assumed that 65 percent of the savings from the per beneficiary limit reduction would be lost and 50 percent of the savings from the per-visit limit reduction would be lost. For example, (.65 multiplied by .5) added to (.5 multiplied by .45) or 55 percent of the 15 percent reduction would be lost. This results in a net savings of (1-.55) multiplied by .15) added to (.05 multiplied by.05), or 7 percent. Thus, the actuaries estimate that HHAs faced with a potential 15 percent reduction would alter HHA behavior and would likely sustain a real reduction of only 7 percent. Because the real conditions under which behavior would change cannot be replicated, the actuaries continue to believe this model is the most appropriate expression of the statute's requirement for an estimate.

Both the applicable home health market basket increase of 2.1 percent for FY 2003 and the 7 percent reduction in aggregate home health PPS payments due to the required 15 percent reduction in the estimation of the IPS limits apply to all Medicare participating HHAs. We do not believe there is a differential impact due to the aggregate nature of the update.

We implemented the rural add-on amounts for FY 2002, effective on April 1, 2001 through the Program Memorandum, “Restoration of Full Home Health Market Basket Update for Home Health Services for Fiscal Year 2001 and Temporary 10 Percent Payment Increase for Home Health Services Furnished in a Rural Area for 24 Months Under the Home Health Prospective Payment System (HH PPS)” (Transmittal A-01-06, issued January 16, 2001) and the FY 2002 HH PPS Update Notice (66 FR 34687). Section 508 of the BIPA provides a 10 percent rural add-on for home health services furnished to beneficiaries whose site of service is a rural area (non-MSA) for 24 months beginning with episodes ending on or after April 1, 2001 and before April 1, 2003. The 10 percent rural add on applies to episodes ending before April 1, 2003 and, therefore, will end mid FY 2003, as required by the statute.

This notice with comment period merely provides a percentage update to all Medicare HHAs. Therefore, we have not furnished any impact tables. We increase the payment to each Medicare HHA equally by the home health market basket update for FY 2003, as required by statute. There is no differential impact among provider types. The impact is in the aggregate. We estimate that there will be an additional $320 million in FY 2003 expenditures attributable to the applicable FY 2003 market basket increase of 2.1 percent. As stated above, expenditures outlined in this notice exceed the $100 million yearly threshold for a major rule, as defined in Title 5, U.S.C., section 804(2) and for a significant regulatory action, as defined in E.O. 12866.

As discussed previously, section 501 of BIPA impacts the estimated Medicare home health expenditures in FY 2003. Section 1864(b)(3)(A)(i)(III) of the Act, as redesignated by section 501 of the BIPA, requires for FY 2003 the estimation of what would have been paid under the IPS with the IPS cost limits reduced by 15 percent, if the IPS had been updated to FY 2003. At that time of the BBA, lowering the limits by 15 percent would have resulted in a reduction of 15 percent from Medicare home health spending, without any behavioral offset. However, as explained previously, we anticipate that due to the behavioral responses, the level by which actual payments would be reduced by lowering the IPS cost limits would not be the same as the percent by which the cost limits themselves would be lowered. The full impact of Medicare savings attributable to the 15 percent reduction in the IPS limits is lower due to the behavioral responses of the industry. The total savings reflecting the behavioral responses is divided by the estimates for spending, which yields the percent at which aggregate home health spending is lowered. That is, implementation of the 15 percent reduction in IPS cost limits would lead to a 7 percent reduction in aggregate home health spending and, therefore, equivalently a 7 percent reduction in home health payments. The statute requires us to look at the 15 percent reduction to the IPS limits updated to FY 2003. We believe the HHAs would have altered their behavior to avoid the cost limits and maintain that our assumptions surrounding the 7 percent reduction in overall payments is correct. Based on the latest available data, our best estimate is that a 15 percent reduction in cost limits would result in a 7 percent reduction in aggregate home health spending and, therefore yield a 7 percent increase in home health payments. Both the home health market basket increase of 2.1 percent for FY 2003 and the 7 percent reduction in aggregate home health PPS payments due to the application of the required 15 percent reduction in estimated IPS cost limits apply to all Medicare participating HHAs. We do not believe there is a differential impact because of the aggregate nature of the update.

As discussed above, we implemented a rural add-on of a 10-percent payment increase to the episode and per-visit payment amounts under the HH PPS for Medicare home health services furnished in a rural area for a 24-month period. The 10-percent rural add-on increases estimated Medicare home health expenditures by $220 million in FY 2003.

We provide impact tables below that display projected Medicare home health spending, which includes the 15 percent reduction in the IPS cost limits, as required by statute, that translate into a 7 percent reduction in HH PPS rates in FY 2003. Under the President's FY 2003 Budget, which assumes no further delays in the reduction, Medicare's total home health spending is projected to increase 12.2 percent in FY 2003, 8.3 percent in FY 2004, and 7.4 percent in FY 2005.

The President's Budget for FY 2003 projects a 12.2 percent increase in home health spending in FY 2003. Approximately 6.8 percent of this increase is because payments for services rendered in FY 2002 will not be actually paid until FY 2003, hence a “cash lag” occurs. Per episode payments incurred in FY 2002 but not paid until FY 2003 will be at higher levels than payments for the same services both provided and paid in FY 2003 because per-episode rates will be reduced in FY 2003 to reflect the payment reduction required by BIPA. The remaining 5.4 percent is accounted for by additional assumptions concerning projected increases in utilization and case mix, a 2.1 percent inflation increase, and the 10 percent rural add-on required by BIPA. These factors interact with the rate reduction required by BIPA to produce the 5.4 percent increase in overall spending.