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Agricultural Marketing Service, USDA.
Final rule.
This final rule sets forth a process by which applicants for official grain inspection services (applicants) may request a service exception, allowing an official agency (OA) to cross boundary lines and perform services outside of its assigned geographic area. While four exception types are authorized in the United States Grain Standards Act (USGSA or Act), this final rule focuses on two: the inability to provide services in a timely manner and the nonuse of service from the OA assigned to the applicant's geographic area (assigned OA). This final rule establishes a three-tiered system under which applicants can request a one-time, 90-day, or long-term timely service exception due to untimely service issues. This rule provides that nonuse of service exception requests must be preceded by ninety days without service from the assigned OA. This final rule further amends the regulations to provide criteria the Federal Grain Inspection Service (“FGIS” or “the Service”) will use to review, validate, and determine whether to grant service exception requests. This final rule also establishes a process that allows an assigned OA to challenge requests for service exceptions. Finally, this rule provides for FGIS review to ensure the validity of requests.
Effective August 1, 2023.
Karla Whalen, Director, Quality Assurance and Compliance Division, Federal Grain Inspection Service, AMS, USDA: telephone: (202) 720-7312, email:
Under the USGSA (7 U.S.C. 71
In the past, under a nonuse of service exception, an applicant who had not obtained official inspection or weighing services from the assigned OA for a specified length of time could obtain services from another designated OA. Over time, the procedural variance on whether a request for nonuse of service exceptions was approved or not caused concern for applicants and OAs.
In 2015, Congress eliminated the nonuse of service exception from the USGSA.
The amended USGSA also provides that the nonuse of service exception may only be terminated if all parties to the exception jointly agree on the termination. This means that the applicant, the assigned OA, the gaining OA, and FGIS must agree to terminate the exception. Such provision ensures all parties are aware of the change and the assigned OA will resume providing service to the applicant.
On April 1, 2020, FGIS published an advanced notice of proposed rulemaking
Applicants may request a timely service exception when service is not timely. Service is not timely when the assigned OA cannot provide the requested official services within 6 hours of request or cannot provide the
Applicants may also request an exception for delays caused by weather events or requests for official services that are not offered by the assigned OA, as they would not be able to offer such services in a timely manner. Thus, for the inability to provide timely service, FGIS intends to grant a timely service exception when: (1) the assigned OA is unable to provide official services to an applicant within 6 hours; (2) or the assigned OA is unable to provide results and certificates in accordance with 7 CFR 800.160(c); or (3) a request for official services not offered by the assigned OA would result in an inability to receive timely service; or (4) a weather event or other short term disruption impacts the ability of an assigned OA to provide timely service; with consideration that granting an exception is in the best interest of the official system.
This final rule implements a tiered application process for requesting exceptions when an assigned OA is unable to provide timely service. The first tier is a one-time, timely service exception. In this instance, a one-time exception to use another official agency (gaining OA) may be allowed for applicants that have a pending service request that meets the timely service exception criteria. The second tier is a 90-day timely service exception due to the assigned OA's inability to provide timely service. If, after the first-tier one-time, timely service exception request is granted, a second instance occurs in which an assigned OA is not able to provide timely service within 180 days of the first instance, the applicant may request a 90-day exception. In this instance, a 90-day exception to use the gaining OA may be allowed. Lastly, the third tier is a long-term timely service exception due to the repeated inability of the assigned OA to provide timely service. If there is another occurrence within 365 days of the applicant's return to the assigned OA after their 90-day timely service exception period has expired, the applicant may request a long-term exception, extending until the termination date of the gaining OA's designation. Along with the required data to support their timely service exception request, the applicants may elect to send any supporting documentation they feel would aid in the agency's determination process. FGIS will then review and verify the accuracy and thoroughness of each package.
If the applicant has an urgent timely service exception request, outside of the Service's customary business hours, an OA from outside the geographic area may provide one-time service. When providing an urgent service, the gaining OA must provide written notification to the Service within two business days after service. Upon returning to official office hours, FGIS will review and verify the circumstances of the urgent request, as well as its consistency with the USGSA and implementing regulations.
For 90-day and long-term timely service exception requests, FGIS will have a determination review period. Once the applicant has provided all required information, FGIS will notify the applicant and begin reviewing the service exception request. FGIS will make every attempt to issue a determination within 15 business days of receipt for 90-day and long-term timely service exceptions, barring a challenge from the assigned OA. To challenge a 90-day or long-term timely exception, the assigned OA must submit the challenge and any supporting documents within 14 calendar days of the date of notification of the exception request. The challenge and supporting documentation must clearly identify the objection to the exception request and support the identified reason for the challenge. While awaiting a final decision on 90-day and long-term timely service exceptions, the applicant may receive service from the potential gaining OA.
FGIS will provide its decision in writing to the assigned OA, the applicant, and the potential gaining OA. The assigned OA may challenge a request for a timely service exception for any reason. To challenge a request for a timely service exception, the assigned OA must object, in writing, and submit the challenge and any supporting documents to FGIS within 14 calendar days.
If an applicant submits a request for a timely service exception that FGIS determines to be false or misleading, FGIS will not grant the exception and may elect to limit the applicant from submitting further requests for a period of up to 180 days. If an urgent request for a timely service exception, outside of customary business hours, was granted on the basis of a false or misleading request, FGIS may deny the applicant from future urgent timely service exceptions for a period of up to 180 days.
The applicant maintains the option of returning to the assigned OA within 60 days of notification of termination of the timely service exception to all parties. The applicant must submit a written notification requesting to terminate the exception to FGIS, the assigned OA and the gaining OA. The exception will be cancelled, and future exception requests must be considered at the beginning of successive-tiered system.
If FGIS determines that the assigned OA's inability to provide a specific service is limited due to weather events or the issue of service availability has been resolved, FGIS, in consultation with all the parties, may terminate the 90-day or long-term exception. If FGIS terminates a timely service exception, the applicant, the assigned OA, and the gaining OA, will be notified in writing, via any written form to include email or autogenerated response, and the applicant will resume service with the assigned OA within 60 days of notification. However, if the existing exception was associated with the assigned OA's inability to provide service in 6 hours or less, or with timely issuance of the results and certificate, FGIS might elect not to terminate the exception. During the duration of exceptions caused by a failure of the assigned OA to supply timely service, this exception period gives assigned OAs an opportunity to improve.
For nonuse of service exception requests, this rule defines the period of nonuse as 90-days prior to application for a nonuse of service exception. The rule defines areas of inquiry but does not limit factors FGIS will take into consideration when reviewing requests for nonuse of service exceptions. These considerations include: (1) the location of the service need(s); (2) the impact of expanding the applicant/customer base for the gaining OA; (3) the types of services requested by the applicant and offered by the assigned OA; (4) whether the applicant has ever utilized the official system (
For a nonuse of service exception request, FGIS intends to grant an exception when: (1) the applicant has
If an applicant submits a request that FGIS determines is false or misleading, FGIS will not grant the nonuse of service exception and may elect to limit the applicant from submitting further requests for a period of up to 180 days.
A nonuse of service exception will remain in place during the period of the gaining OA's designation. At the end of the designation, FGIS will review current information concerning the exception. Unless the applicant, the assigned OA, the gaining OA, and FGIS request to terminate the exception, the FGIS will renew the exception for the gaining OA's new designation period, if applicable. In the event the gaining OA is no longer designated, the exception will automatically terminate, and the applicant will return to the assigned OA. If the applicant transfers ownership of its facility, the exception will automatically terminate, and the new applicant/owner of the facility must request a new nonuse of service exception, if it wishes to receive service from an OA other than the assigned OA for that geographic area. At any point in the designation cycle, if the applicant, the assigned OA, the gaining OA, and FGIS agree to terminate the nonuse of service exception, FGIS will terminate the exception. In this case, the assigned OA must resume service within 60 days of notification.
FGIS recognizes there may be instances where granting an exception may impact the assigned OA. For example, in some cases, the cost of the equipment necessary to provide the requested service is more than the assigned OA would be able to recoup, due to the infrequency of the requests for such a special service. Therefore, as stated in the proposed rule, FGIS is establishing a challenge process for requested nonuse of service exceptions. The timeline for the challenge initiates when FGIS notifies the assigned OA of the requested nonuse of service exception. FGIS will consider factors provided by an assigned OA in such challenge. Requests for a challenge must state and support the identified reason for the challenge. FGIS may request additional documentation to support the challenge.
AMS received a total of four comments on the proposed rule, one from a State department of agriculture OA and three industry associations. While generally supportive, three of the commenters offered suggestions for improving or clarifying processes.
Further, the commenters recommended that FGIS and the assigned OA be required to acknowledge receipt of the request and determine, within 12 hours, whether services can be provided by an alternate OA. The commenters noted that although the proposed rule states that an applicant can notify FGIS verbally or in writing to request a service exception, it does not offer an alternative contact in the event the applicant cannot reach a live person. Commenters recommended FGIS provide a secondary contact option. The commenters also recommended that the point of contact at the grain handling facility requesting the service exception should be notified by verbal and written communication regarding the decision on the request.
Since urgent timely service exception requests submitted outside of business hours can proceed without prior approval, AMS determined it is not necessary to provide a second point of contact in the regulations. Further, the request template is to be submitted to a group recipient office inbox monitored by multiple staff. FGIS will make every effort to issue its determination for 90-day and long-term timely service exceptions within 15 business days, barring a challenge from the assigned OA. To ensure the applicant's receipt of service is not delayed, it may utilize the potential gaining OA while awaiting a final determination from FGIS.
Regarding exception requests for nonuse of service, AMS has determined not to include a 12-hour response time for such requests because of the 14-day challenge period that has been established for the assigned OA to challenge the exception request and the time required for the FGIS to review the matter. AMS intends to reconcile appropriate FGIS directives in conjunction with the release of this rule. However, AMS has included wording in the regulations that addresses the timeline.
Executive Orders 12866—Regulatory Planning and Review, and 13563—Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, harmonizing rules, and promoting flexibility.
This action has been determined to be not significant for the purposes of Executive Order 12866, as supplemented by Executive Order 13563. The final rule is not expected to create any new material costs for industry.
Under the USGSA, the USDA regulates the inspection of barley, canola, corn, flaxseed, mixed grain, oats, rye, sorghum, soybeans, sunflower seed, triticale, and wheat. This rule impacts the 41 OAs that provide USDA-regulated grain certification and the over 5,000 commercial entities they serve. In FY2021, OAs performed 3,150,029 grain inspections of 257.8 million metric tons of grain. Based on current data, FGIS expects fewer than one percent of the entities served by OAs to request and be granted exceptions under the two types of exceptions detailed in this rule.
Official inspection costs represent a very small percentage of the total value of grain shipments. In 2021, FGIS calculated the weighted average costs for inspections for different carriers as follows: $18.68 for a semi-truck capable of carrying 58,000 pounds, $30.75 for a railcar capable of carrying 220,000 pounds, and $316.90 for a barge capable of carrying 3,000,000 pounds of grain. For example, if the price of wheat was $8 for a 60-pound bushel, the cost of the inspection would represent 0.24% of the revenue for a truck load, 0.11% of the revenue for a railcar load, and 0.08% of the revenue for a barge load of wheat.
Federally regulated grain inspection is designed to remedy two competing sources of market failure—asymmetric information and market power—while preserving the ability of small producers to access markets. This rule increases the flexibility of the existing inspection program without affecting the program's quality standards or the ability of small sellers to access inspection services. The rule's greater flexibility in allowing producers to obtain inspection services, however, will save costs and provide them greater ability to meet potential market opportunities and inspection challenges.
Many agricultural products, including grain, vary in important quality characteristics due to both farm production decisions and idiosyncratic factors. In the absence of a quality verification process, sellers in a transaction may have more knowledge of a product's quality than buyers, a condition called asymmetric
Grain inspectors certify the protein content, kernel size, and other quality factors related to product's market value to simplify transactions. Since the outcome of grain inspections directly affects the sale price, biases and inconsistences in inspection methods might potentially redistribute the gains to trade from seller to buyer, or vice versa. Market power might exacerbate biases and inconsistencies if, for instance, large sellers or buyers can influence the outcome of quality inspections in their favor. In addition to fairness concerns, such opportunistic behavior creates economic inefficiencies by reducing the returns on investment in quality improvement and creating costs for downstream producers (
Domestic grain inspection is an optional service. When information asymmetries are a concern, inspection facilitates simpler, more rapid, and less risky transaction of final product. By allowing producers to recoup the costs of quality improvement, grain inspection also encourages investment in quality improvement.
Under its regulatory authority, the USDA approves grain inspection standards and monitors their uniform application by OAs in a variety of ways, including inspection sample review, fee schedule approvals, and periodic OA audits. To promote a competitive market for grain in which all producers have access to inspection services, FGIS requires that OAs provide inspection services to all producers in an assigned area and regulates marketing fee schedules charged by OAs for these services. FGIS approves rates to cover various labor, laboratory, and travel costs and only approves differential rates across geographic areas if the underlying costs differ across assigned regions. For this reason, FGIS does not expect this rule to impact the price paid by inspection users or the fees received by OAs. Instead, FGIS expects this rule will allow the small fraction of inspection users who need timely service and nonuse of service exceptions greater flexibility in obtaining inspections services to meet immediate business requirements.
FGIS assesses the economic benefits of this rule as being three-fold. First, the rule provides clarity to grain inspection applicants (
FGIS does not ascribe any direct compliance costs to either OAs or producers as a result of the potential increase for timely service and nonuse of service exceptions under this rule. FGIS does not expect that the inspection fees it approves will change as a result of this rule. To the extent that this rule provides greater flexibility to how applicants can obtain inspection services, it will provide improved services or reduce total costs to producers by, for instance, allowing those needing immediate inspections to get them from an OA other than the one to which they are assigned. Moreover, FGIS does not believe the rule will create significant indirect costs, aside from the minor costs to market participants learning the rule and documenting exception requests.
To the extent that some OAs conduct fewer inspections because applicants in their assigned area have requested more exceptions, other OAs will conduct more inspections. FGIS believes that any business losses to an OA will be small and that any losses will be offset by gains to other OAs. This rearrangement of business activity constitutes a transfer of benefits from one OA to another and has a neutral effect on total costs and benefits of the rule.
To summarize, FGIS believes that the total impact of the rule on the grain inspection industry is not economically significant and that the benefits of this rule exceed its costs, which are negligible.
The Regulatory Flexibility Act (5 U.S.C. 601
The AMS Administrator certifies that this rule does not have a significant economic impact on small businesses. This determination is made based on the expectation that any small entities requiring grain inspection, including grain farms and grain elevators, or entities performing grain inspection, including OAs, will see neither a change in prices paid or fees charged nor a loss in access to inspection services or change in territorial boundaries for which they can perform inspections. Further, FGIS believes the new challenge process addresses the concern that some small OAs may lose economic viability when exceptions are granted to applicants under the exceptions to geographic boundary requirement. Finally, AMS does not believe that OAs qualifying as small business will be any more likely to be subject to exception requests than those OAs not qualifying as small businesses.
This rule has been reviewed under Executive Order 12988—Civil Justice Reform. This rule is not intended to have retroactive effect. The USGSA provides in sec. 87g that no State or subdivision thereof may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the Act.
This rule will not preempt any State or local laws, regulations, or policies,
This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on: (1) Policies that have Tribal implications, including regulations, legislative comments or proposed legislation; and (2) other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
AMS has assessed the impact of this rule on Indian Tribes and determined that this rule will not have Tribal implications that require consultation under Executive Order 13175. AMS hosts a quarterly teleconference with Tribal leaders where matters of mutual interest regarding the marketing of agricultural products are discussed. Information about the proposed changes was shared during the quarterly call on July 22, 2021, and Tribal leaders were informed about the proposed revisions to the regulation and the opportunity to submit comments. AMS received no questions or requests for additional information or outreach. If requested, AMS will provide additional support and information.
Pursuant to the Congressional Review Act (5 U.S.C. 801
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), there are no information collection and record keeping requirements implications associated with this rule. Should any changes become necessary, they will be submitted to OMB for approval.
USDA is committed to complying with the E-Government Act (44 U.S.C. 3601
Administrative practice and procedure, Exports, Grains, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, AMS amends 7 CFR part 800 as follows:
7 U.S.C. 71-87k.
The additions and revisions read as follows:
(b)
(1)
(i)
(A) For one-time, timely service exception requests, if the request is made during customary business hours, the Service will provide its decision that day.
(B) If the applicant has an urgent timely service exception request, outside of the Service's customary business hours, an official agency from outside the geographic area may provide one-time service. When providing an urgent service, the gaining official agency must provide written notification to the Service within two business days after service.
(C) Upon returning to official office hours, the Service will review and verify the circumstances of the urgent request, as well as its consistency with the U.S. Grain Standards Act and implementing regulations.
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(A) Given the urgency of a one-time service request, if the assigned official agency wishes to challenge the request, it must be done in a manner which does not further delay the applicant from receiving the pending service. If the one-time timely service exception has already been granted or used, the assigned official agency may still challenge the Service's determination within 14 calendar days.
(B) To challenge a 90-day or long-term timely service exception, the assigned official agency must submit the challenge and any supporting documents within 14 calendar days of the date of notification of the timely service exception request. The documents must clearly identify the objection and support the identified reason for the challenge.
(ix)
(x)
(xi)
(xii)
(2)
(i)
(A)
(
(
(
(B)
(
(
(
(
(
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Nuclear Regulatory Commission.
Final guide; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing Revision 2 to Regulatory Guide (RG) 1.89, “Environmental Qualification of Certain Electric Equipment Important to Safety for Nuclear Power Plants.” RG 1.89, Revision 2 provides guidance that the staff of the NRC considers acceptable to meet regulatory requirements for environmental qualification (EQ) of certain electric equipment important to safety.
Revision 2 to RG 1.89 is available on May 3, 2023.
Please refer to Docket ID NRC-2020-0245 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
•
Revision 2 to RG 1.89 and the regulatory analysis may be found in ADAMS under Accession Nos. ML22272A602 and ML20192A230, respectively.
Regulatory guides are not copyrighted, and NRC approval is not required to reproduce them.
Michael Eudy, Office of Nuclear Regulatory Research, telephone: 301-415-3104; email:
The NRC is issuing a revision in the NRC's “Regulatory Guide” series. This series was developed to describe methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, to explain techniques that the staff uses in evaluating specific issues or postulated events, and to describe information that the staff needs in its review of applications for permits and licenses.
Revision 2 to RG 1.89 was issued with a temporary identification of Draft Regulatory Guide, DG-1361 (ADAMS Accession No. ML20183A423).
The staff revised RG 1.89 to endorse, with clarifications, exceptions, and supplements, International Electrotechnical Commission/Institute of Electrical and Electronic Engineers Standard 60780-323, “Nuclear Facilities—Electrical Equipment Important to Safety—Qualification,” Edition 1, 2016-02, as this standard reflects almost 40 years of experience gained in implementing regulatory requirements and industry research and testing related to environmental qualification (EQ). Nuclear plant license renewal provides additional motivation for continuing attention to equipment qualification. This revised guide contains information specific for EQ for both older plants and newer reactors licensed under parts 50 and 52 of title 10 of the
The NRC published notices of the availability of DG-1361 in the
As noted in the
This RG is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.
Issuance of RG 1.89, Revision 2, does not constitute backfitting as defined in 10 CFR 50.109, “Backfitting,” and as described in NRC Management Directive (MD) 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests”; affect the issue finality of an approval issued under 10 CFR part 52; or constitute forward fitting as defined in MD 8.4 because, as explained in this RG, licensees are not required to comply with the positions set forth in this RG.
A member of the public may, at any time, submit suggestions to the NRC for improvement of existing RGs or for the development of new RGs. Suggestions can be submitted on the NRC's public website at
For the Nuclear Regulatory Commission.
Food and Drug Administration, HHS.
Final rule; technical amendments.
The Food and Drug Administration (FDA or we) is amending the animal drug regulations to reflect application-related actions for new animal drug applications (NADAs), abbreviated new animal drug applications (ANADAs), and conditionally approved new animal drug applications (cNADAs) during January, February, and March 2023. FDA is informing the public of the availability of summaries of the basis of approval and of environmental review documents, where applicable. The animal drug regulations are also being amended to improve their accuracy and readability.
This rule is effective May 3, 2023.
George K. Haibel, Center for Veterinary Medicine (HFV-6), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 240-402-5689,
FDA is amending the animal drug regulations to reflect approval actions for NADAs, ANADAs, and cNADAs during January, February, and March 2023, as listed in table 1. In addition, FDA is informing the public of the availability, where applicable, of documentation of environmental review required under the National Environmental Policy Act (NEPA) and, for actions requiring review of safety or effectiveness data, summaries of the basis of approval (FOI Summaries) under the Freedom of Information Act (FOIA). These public documents may be seen in the office of the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday, 240-402-7500. Persons with access to the internet may obtain these documents at the CVM FOIA Electronic Reading Room:
Also, FDA is amending the animal drug regulations to reflect approval of supplemental applications, as listed in table 2, to change the marketing status of dosage form antimicrobial animal drug products from over the counter (OTC) to by veterinary prescription (Rx). These applications were submitted in voluntary compliance with the goals of the FDA Center for Veterinary Medicine's (CVM's) Judicious Use Initiative as identified by guidance for industry #263, “Recommendations for Sponsors of Medically Important Antimicrobial Drugs Approved for Use in Animals to Voluntarily Bring Under Veterinary Oversight All Products That Continue to be Available Over-the-Counter,” June 11, 2021 (
Elanco US Inc. (Elanco), 2500 Innovation Way, Greenfield, IN 46140 has requested that FDA withdraw approval of conditionally approved NADA 141-527 for BAYTRIL 100-CA1 (enrofloxacin) Injectable Solution. Pursuant to Elanco's request, approval of their application was withdrawn on March 31, 2023. As provided in the regulatory text of this document, the animal drug regulations in 21 CFR 516.812 are removed to reflect this action.
Boehringer Ingelheim Animal Health USA, Inc., 3239 Satellite Blvd., Duluth, GA 30096 has requested that FDA withdraw approval of the 49 applications listed in table 3 because the products are no longer manufactured or marketed. As provided in the regulatory text of this document, the animal drug regulations are amended where appropriate to reflect this action.
FDA is making the following amendments to improve the accuracy of the animal drug regulations.
• 21 CFR 520.48 is amended to reflect the sponsors of products containing altrenogest for use in horses and swine.
• 21 CFR 520.2380 is removed and 21 CFR 558.600 revised to characterize a free-choice block containing thiabendazole as a new animal drug for use in cattle feed.
• 21 CFR 522.1077 is amended to reflect indications for use of gonadorelin in cattle.
• 21 CFR 522.1222 is amended to reflect sponsors of approved applications for use of ketamine in cats and subhuman primates.
• 21 CFR 556.620 is removed because there are no longer any approved products containing sulfabromomethazine for use in food-producing animals.
• 21 CFR 556.730 is revised to reflect the removal of products containing thiabendazole for use in food-producing animals other than cattle.
• 21 CFR 558.311 is amended to reflect approved classes of pasture cattle for use of lasalocid medicated feeds.
• 21 CFR 558.455 is amended to reflect the approved conditions of use of medicated feeds containing oxytetracycline and neomycin in sheep.
This final rule is issued under section 512(i) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360b(i)), which requires
Although denominated a rule pursuant to the FD&C Act, this document does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a “rule of particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808. Likewise, this is not a rule subject to Executive Order 12866, which defines a rule as “an agency statement of general applicability and future effect, which the agency intends to have the force and effect of law, that is designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency.”
Administrative practice and procedure, Animal drugs, Labeling, Reporting and recordkeeping requirements.
Administrative practice and procedure, Animal drugs, Confidential business information, Reporting and recordkeeping requirements.
Animal drugs.
Animal drugs, Dairy products, Foods, Meat and meat products.
Animal drugs, Animal feeds.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 510, 516, 520, 522, 524, 526, 529, 556, and 558 are amended as follows:
21 U.S.C. 321, 331, 351, 352, 353, 360b, 371, 379e.
The additions read as follows:
(c) * * *
(1) * * *
(2) * * *
21 U.S.C. 360ccc-1, 360ccc-2, 371.
21 U.S.C. 360b.
(b)
(1) Nos. 000061 and 051072 for use as in paragraph (d) of this section.
(2) No. 061133 for use as in paragraph (d)(1) of this section.
(3) No. 013744 for use as in paragraph (d)(2) of this section.
(b) * * *
(1) Nos. 017033, 054771, 055529, 062250, and 086101 for use of products described in paragraph (a)(1) and (2) of this section as in paragraph (c) of this section.
(2) Nos. 058198 and 086117 for use of product described in paragraph (a)(2) as in paragraph (c) of this section.
(d) * * *
(2) * * *
(ii) * * * Federal law restricts this drug to use by or on the order of a licensed veterinarian.
(b) * * *
(4) No. 086097 for use of product described in paragraph (a)(2) as in paragraph (d) of this section.
(d) * * *
(2) * * *
(ii)
(c) * * *
(2) * * *
(i)
(d) * * *
(3) * * * Federal law restricts this drug to use by or on the order of a licensed veterinarian.
(a)
(b)
(1) Nos. 017033, 054771, and 086117 for use of tablets.
(2) No. 086101 for use of chewable tablets.
(b)
(b)
(a) * * *
(2) Each milliliter (mL) of suspension contains 50 milligrams (mg) of sodium sulfachlorpyridazine.
(d) * * *
(1) * * *
(i)
(2) * * *
(i)
21 U.S.C. 360b.
(d) * * *
(3) * * *
(iii) * * * Federal law restricts this drug to use by or on the order of a licensed veterinarian.
(b) * * *
(2) No. 068504 for use of the 100-µg/mL product described in paragraph (a)(2) as in paragraphs (d)(1)(i) and (iv) of this section.
(d) * * *
(1) * * *
(iv) Dinoprost injection for use as in paragraph (e)(1)(vi) of this section as provided by No. 054771 in § 510.600(c) of this chapter.
(e) * * *
(1) * * *
(i) For the treatment of ovarian follicular cysts in dairy cattle: Administer 86 µg gonadorelin (No. 000061), or 100 µg gonadorelin diacetate tetrahydrate (Nos. 000010 and 061133), or 100 µg gonadorelin (as gonadorelin acetate; No. 068504) by intramuscular or intravenous injection.
(b) * * *
(1) Nos. 000010, 016592, 055529, 058005, and 061133 for use of the product described in paragraph (a)(2) of this section as in paragraphs (e)(2) through (e)(5) of this section; and
(2) No. 000010 for use of the product described in paragraph (a)(3) of this section as in paragraphs (e)(3) and (e)(6) of this section.
(e) * * *
(2) * * *
(i)
(a)
(b)
(e)
(2)
(3)
(d) * * *
(1) * * *
(ii) * * * Federal law restricts this drug to use by or on the order of a licensed veterinarian.
(b) * * *
(2) Nos. 013744, 051311, 054771, 058198, and 068504 for use of product described in paragraph (a)(2) as in paragraphs (d)(1)(i), (d)(1)(ii)(B), (d)(1)(iii)(B), and (d)(2) of this section.
21 U.S.C. 360b.
(b)
(b)
(e) * * *
(1)
(d) * * *
(3) * * * Federal law restricts this drug to use by or on the order of a licensed veterinarian.
21 U.S.C. 360b.
(d) * * *
(3) * * * For No. 042791: Federal law restricts this drug to use by or on the order of a licensed veterinarian.
(e)
(3) * * * For No. 042791: Federal law restricts this drug to use by or on the order of a licensed veterinarian.
21 U.S.C. 360b.
21 U.S.C. 342, 360b, 371.
(a) [Reserved]
(b)
(1)
(ii) Milk: 0.05 ppm.
(2) [Reserved]
(c)
21 U.S.C. 354, 360b, 360ccc, 360ccc-1, 371.
(e) * * *
(3) * * *
(e) * * *
(5)
(ii) [Reserved]
(a)
(b)
(c)
(d)
(e)
(2)
(3)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final temporary rule.
This final temporary rule implements interim measures to reduce overfishing of gag in Federal waters of the Gulf of Mexico (Gulf). This final temporary rule reduces the 2023 commercial and recreational sector harvest levels for gag and changes the 2023 recreational fishing season for gag in Federal waters of the Gulf. This temporary rule is effective for 180 days, but NMFS may extend the interim measures for a maximum of an additional 186 days. The purpose of this temporary rule is to reduce overfishing of gag while the long-term management measures are developed.
This final temporary rule is effective from May 3, 2023, until October 30, 2023.
An electronic copy of the environmental assessment (EA) supporting these interim measures may be obtained from the Southeast Regional Office website at
Dan Luers, NMFS Southeast Regional Office, telephone: 727-824-5305, or email:
The reef fish fishery in the Gulf is managed under the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP) and includes gag and 30 other managed reef fish species. The FMP was prepared by the Gulf of Mexico Fishery Management Council (Council) and is implemented by NMFS through regulations at 50 CFR part 622 under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
On February 3, 2023, NMFS published a proposed temporary rule in the
All weights described in this temporary rule are in gutted weight.
Gulf gag is harvested by the commercial and recreational sectors, with 39 percent of the total annual catch limit (ACL) allocated to the commercial sector and 61 percent allocated to the recreational sector. The gag stock was assessed in 2021 through the Southeast Data, Assessment, and Review (SEDAR) stock assessment process (SEDAR 72), and was determined to be overfished and undergoing overfishing. SEDAR 72 incorporated several modified data inputs from the previous gag stock assessment, including recreational catch and effort data generated by the Marine Recreational Information Program (MRIP) using the Fishing Effort Survey (FES; MRIP-FES). The MRIP-FES fully replaced the MRIP Coastal Household Telephone Survey (CHTS) in 2018. MRIP-FES generally estimates higher recreational effort, and thus higher recreational landings, than MRIP-CHTS. The recreational catch limits in this temporary rule are not directly comparable to the previous recreational catch limits because of the change from MRIP-CHTS to MRIP-FES to estimate recreational landings.
SEDAR 72 also accounted for observations of red tide mortality, since gag is vulnerable to red tide events and was negatively affected by these disturbances in 2005, 2014, 2018, and projected for 2021 directly within the stock assessment model. Lastly, modeling changes were made in SEDAR 72 to better quantify commercial discards by taking into account the potential misidentification between black grouper and gag, which are similar looking species, and to improve size estimates of gag retained by commercial and for-hire fishermen, and private anglers.
In November 2021, the Council's Scientific and Statistical Committee (SSC) reviewed SEDAR 72 and found it to be the best scientific information available for informing fisheries management. On January 26, 2022, NMFS notified the Council that gag was overfished and undergoing overfishing, and that measures to rebuild the stock and end overfishing must be implemented within 2 years,
During the effectiveness of this temporary rule, the total ACL for gag is 661,901 lb (300,233 kg). This temporary rule also specifies the commercial and recreational sector ACLs and component commercial quotas using the existing sector allocations of the total ACL of 39 percent commercial and 61 percent recreational. The commercial ACL and commercial quota are 258,000 lb (117,027 kg) and 199,000 lb (90,265 kg), respectively. The recreational ACL is 403,759 lb (183,142 kg), and the recreational annual catch target (ACT) is 362,374 lb (164,370 kg).
The reduced catch limits requested by the Council are based on a rebuilding time that is equal to twice the time necessary to rebuild the stock if fishing mortality was reduced to zero, which is one of the rebuilding times considered in Amendment 56.
Although the Council requested a commercial ACL of 258,142 lb (117,091 kg) and commercial quota of 199,157 lb (90,336 kg) for 2023, the analyses conducted by NMFS supporting the implementation of interim measures use a commercial ACL and quota rounded to the nearest thousand pounds, as noted above. NMFS used the rounded numbers because they are consistent with the numerical format of the current gag commercial catch limits and the Council did not consider whether this practice should be continued for the purpose of the interim commercial catch limits. NMFS expects the Council to clearly articulate in Amendment 56 whether the commercial catch limits for gag should continue to be rounded to the nearest thousand pounds.
Because the commercial sector relies on the Individual Fishing Quota program for groupers and tilefishes (GT-IFQ program) that distributes commercial quota to shareholders for the entire fishing year, no change to the commercial fishing season would occur under this temporary rule. Further, the Council did not recommend interim modifications to the commercial sector's IFQ multi-use provision for gag and red grouper. Therefore, the gag and red grouper multi-use allocation will be available as specified in 50 CFR 622.22(a)(5).
In addition to the reduced gag catch limits, the Council requested that NMFS move the start of the gag recreational fishing season for the 2023 fishing year from June 1 to September 1. The Council also requested the season close on November 10, instead of remaining open through December 31, as it has in recent years. Therefore, the 2023 recreational fishing season will be open from September 1 through November 9, unless NMFS projects that the recreational ACL will be reached sooner and closes the recreational sector as required by the accountability measures (AM) specified in 50 CFR 622.41(r)(2).
The reduced recreational catch limits in this temporary rule will result in a shorter recreational season. However, the Council and NMFS expect that the change to the recreational season will mitigate the lower catch limits and will maximize the number of recreational fishing days for gag. If the opening date for the recreational season had remained June 1, 2023, NMFS projected that recreational landings of gag would reach the recreational ACL in only 16 days.
NMFS would implement the current AM of an in-season closure earlier if NMFS projects that recreational landings will meet or exceed the recreational ACL before the November 10 closure date.
The temporary reductions in the allowable harvest of gag will result in reduced allowable harvest for both the commercial and recreational sectors and a reduced recreational fishing season. The reduced harvest levels and shortened recreational fishing season will likely result in short-term adverse socio-economic effects. However, the temporary ACLs, commercial quota, and recreational ACT are expected to minimize future adverse socio-economic effects by potentially decreasing further reductions in the allowable harvest levels required to end overfishing of gag through Amendment 56. The temporary harvest levels in this rule will also provide biological benefits to the gag stock by reducing the past levels of fishing mortality.
NMFS received 24 comments during the public comment period on the proposed temporary rule. Most of the comments NMFS received were opposed to the interim measures for gag. NMFS acknowledges the comments in favor of the action in the proposed rule and agrees with them. Some comments were outside the scope of the proposed temporary rule, suggesting NMFS implement alternative management measures or apply restrictions to a specific fishery sector or component,
With respect to bycatch, opening the recreational season on June 1 would require recreational fishermen to discard all gag caught after the short 16-day season concludes. Although the September 1 opening may result in discards during the few weeks that the season would have been open in early June, it is also expected to eliminate targeted harvest of gag from June 1 through August 31. Many experienced fishermen have explained during public meetings that gag can be avoided when targeting other species, including red snapper. Thus, although there are uncertainties with regard to the extent of bycatch given each of the season opening dates, NMFS expects the September 1 season opening to reduce gag mortality during the peak of the red snapper recreational season, reduce overall gag mortality, and also provide economic and social benefits to the recreational sector.
NMFS does not believe the recreational season in this temporary rule will favor commercial fishermen over recreational fishermen. Because there are separate commercial and recreational catch limits, harvest by the commercial sector will not impact the recreational season. This longer recreational season will provide the greatest flexibility to recreational fishermen to avoid periods of poor weather and harvest gag, compared to the other shorter seasons that the Council considered. Further, in at least some areas, gag move closer to shore in the fall as the water cools, which may allow for safer access by anglers when compared to areas farther offshore where gag occur in the summer. The cooler, shallower water may also reduce release mortality for those gag that are caught but cannot be kept.
NMFS has determined that this temporary rule is necessary to reduce overfishing of gag. NMFS considered all public comments received within the scope of the proposed temporary rule in the determination of whether to proceed with a final temporary rule and whether any revisions to the final temporary rule were appropriate. This final temporary rule is effective for 180 days after the date of publication in the
This action is issued pursuant to section 305(c) of the Magnuson-Stevens Act, 16 U.S.C. 1855(c). The NMFS Assistant Administrator has determined that this temporary rule is consistent with the Magnuson-Stevens Act and other applicable law.
This temporary rule has been determined to be not significant for purposes of Executive Order 12866.
The Magnuson-Stevens Act provides the legal basis for this temporary rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting and record-keeping requirements are introduced by this temporary rule. This temporary rule contains no information collection requirements under the Paperwork Reduction Act of 1995.
NMFS prepared a final regulatory flexibility analysis (FRFA) for this temporary rule. The FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments in response to the IRFA, NMFS' responses to those comments, and a summary of the analyses completed to support the action. NMFS' responses to public comments regarding the IRFA and the Executive Order 12866 analysis are in the
The objective of this temporary rule is to use the best scientific information available to reduce overfishing of gag while a rebuilding plan is developed, consistent with the authority under the Magnuson-Stevens Act. All monetary estimates in the following analysis are in 2019 dollars.
This temporary rule will revise the stock ACL, sector ACLs, commercial quota, and recreational ACT for gag based on the “TMin*2” rebuilding scenario, which is twice the minimum time for the stock to rebuild with zero fishing mortality and is an alternative under consideration in Amendment 56. This temporary rule retains the existing sector allocations of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector, but will reduce the stock ACL, commercial ACL, recreational ACL, commercial quota and recreational ACT to 661,901 lb (300,233 kg), 258,000 lb (117,027 kg), 403,759 lb (183,142 kg), 199,000 lb (90,265 kg), and 362,374 lb (164,370 kg), respectively. The recreational portion of the revised stock ACL, the recreational ACL, and the recreational ACT are based on MRIP-FES data. This temporary rule will also change the recreational season start date from June 1 to September 1, and close the season on November 10 unless NMFS projects the recreational ACL to be met sooner. As a result, this temporary rule is expected to regulate commercial fishing businesses that possess shares of gag in the GT-IFQ program and for-hire fishing businesses that target gag.
The gag commercial quota is allocated annually based on the percentage of gag shares in each IFQ account. For example, if an account possesses 1 percent of the gag shares and the commercial quota is 1 million lb (0.45 million kg), then that account would receive 10,000 lb (4,536 kg) of commercial gag quota. Although it is common for a single IFQ account with gag shares to be held by a single business, some businesses have multiple IFQ accounts with gag shares. As of July 8, 2021, 506 IFQ accounts held gag shares. These accounts and gag shares were owned by 455 businesses. Thus, NMFS assumes this temporary rule would regulate 455 commercial fishing businesses.
A valid charter vessel/headboat permit for Gulf reef fish is required to legally harvest gag on a recreational for-hire fishing trip. NMFS does not possess complete ownership data regarding businesses that hold a charter vessel/headboat permit for Gulf reef fish, and thus potentially harvest gag. Therefore, it is not currently feasible to accurately determine affiliations between vessels and the businesses that own them. As a result, for purposes of this analysis, NMFS assumes each for-hire vessel is independently owned by a single business, which NMFS expects to result in an overestimate of the actual number
NMFS also does not have data indicating how many for-hire vessels actually harvest gag in a given year. However, in 2020, there were 1,289 vessels with valid charter vessel/headboat permits for Gulf reef fish. Further, gag is only targeted and almost entirely harvested in waters off the west coast of Florida. Of the 1,289 federally permitted vessels, 803 were homeported in Florida. Of these permitted vessels, 62 are primarily used for commercial fishing rather than for-hire fishing purposes, and thus are not considered for-hire fishing businesses. In addition, 46 of these permitted vessels are considered headboats, which are considered for-hire fishing businesses. However, headboats take a relatively large, diverse set of anglers to harvest a diverse range of species on a trip, and therefore do not typically target a particular species exclusively. Therefore, NMFS assumes that no headboat trips would be canceled, and thus no headboats would be directly affected as a result of this regulatory action. However, charter vessels often target gag. Of the 803 vessels with a valid charter vessel/headboat permit for Gulf reef fish that are homeported in Florida, 695 vessels are charter vessels. A recent study reported that 76 percent of charter vessels with a valid charter vessel/headboat permit in the Gulf were active in 2017,
For RFA purposes, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (50 CFR 200.2). A business primarily involved in the commercial fishing industry is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts (revenue) are not in excess of $11 million for all of its affiliated operations worldwide. NMFS does not collect revenue data specific to commercial fishing businesses that have IFQ accounts; rather, revenue data are collected for commercial fishing vessels in general. It is not possible to assign revenues earned by commercial fishing vessels back to specific IFQ accounts and the businesses that possess them because quota is often transferred across many IFQ accounts before it is used by the business on a vessel for harvesting purposes, and specific units of quota cannot be tracked. However, from 2016 through 2020, the maximum annual gross revenue earned by a single vessel during this time was about $1.73 million in 2016. The average gross revenue per vessel was about $108,000 in that year. By 2020, the maximum and average gross revenue per vessel had decreased to about $730,000 and $79,700, respectively. Based on this information, all commercial fishing businesses regulated by this temporary rule are determined to be small entities for the purpose of this analysis.
For other industries, the Small Business Administration has established size standards for all major industry sectors in the U.S., including for-hire businesses (North American Industry Classification System code 487210). A business primarily involved in for-hire fishing is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has annual receipts (revenue) not in excess of $12.5 million for all its affiliated operations worldwide. The maximum annual gross revenue for a single headboat in the Gulf was about $1.38 million in 2017. On average, annual gross revenue for headboats in the Gulf is about three times greater than annual gross revenue for charter vessels, reflecting the fact that businesses that own charter vessels are typically smaller than businesses that own headboats. Based on this information, all for-hire fishing businesses regulated by this temporary rule are determined to be small businesses for the purpose of this analysis.
If implemented, NMFS expects this temporary rule to regulate 455 of the 536 businesses with IFQ accounts, or approximately 85 percent of those commercial fishing businesses. Further, NMFS expects this temporary rule would regulate 528 of the 1,227 for-hire fishing businesses with valid charter vessel/headboat permits for Gulf reef fish, or approximately 43 percent of those for-hire fishing businesses. NMFS has determined that, for the purpose of this analysis, all regulated commercial and for-hire fishing businesses are small entities. Based on this information, NMFS expects the temporary rule to affect a substantial number of small entities.
Because revenue and cost data are not collected for the commercial fishing businesses that are expected to be regulated by this temporary rule, direct estimates of their economic profits are not available. However, economic theory suggests that annual allocation (quota) prices should reflect expected annual economic profits, which allows economic profits to be estimated indirectly. Further, the 455 businesses with gag shares also own shares in the other IFQ share categories and thus are expected to earn profits from their ownership of these shares as well,
However, economic profits will only be realized if the allocated quota is used for harvesting purposes. For example, practically all of the commercial red snapper quota has been used for harvesting in recent years, and so NMFS assumes that all of that quota will be harvested in the foreseeable future. Important management changes have occurred for red grouper, which partly resulted in 96 percent of the commercial quota being harvested in 2021. Thus, this analysis also assumes that all of the red grouper quota will be harvested in the future as well. However, based on 2017-2021 data, only 82 percent of the deep-water grouper quota, 38 percent of the shallow-water grouper quota, and 73 percent of the tilefish quota have been harvested, and that is expected to continue in the foreseeable future. For gag, the quota utilization rate from 2017-2021 was approximately 52 percent. Given these quota utilization rates in combination with average annual allocation prices from 2017-2021 and annual commercial quotas in 2021, the total expected economic profits for businesses with gag shares are estimated to be at least $29.4 million at the present time. This estimate does not account for any economic profits that may accrue to businesses with gag shares that also own commercial fishing vessels that harvest non-IFQ species. Such profits are likely to be small because harvest of IFQ species accounts for around 84 percent of commercial IFQ vessels' annual revenue and economic profits from the harvest of non-IFQ species tend to be smaller than those from IFQ species. Given that there are 455 businesses with gag shares, the average annual expected economic profit per commercial fishing business is at least $64,620.
However, most of these economic profits (82 percent) are the result of owning red snapper shares. Only approximately $502,930 (or 1.7 percent) of their expected economic profits is due to the ownership of gag shares. This temporary rule is only expected to affect economic profits from the ownership of gag shares, specifically because of the action that reduces the gag commercial
Based on the most recent information available, average annual profit is $27,948 per charter vessel. The action that revises the stock ACL changes the gag recreational ACL from 1.903 million lb (0.86 million kg) in MRIP-CHTS units to 403,759 lb (183,142 kg) in MRIP-FES units. The terms “MRIP-CHTS units” and “MRIP-FES units” signify that although the current and recreational ACLs are expressed in pounds, they are in different scales and not directly comparable. However, average recreational landings from 2017-2021 were approximately 2.538 million lb (1.151 million kg) in MRIP-FES units. Given that average recreational landings have been considerably greater than the recreational ACL, all of the recreational ACL is expected to be harvested in the future. The recreational ACL reduction would be expected to reduce the recreational season length from 214 days to 16 days, which in turn is expected to reduce the number of trips targeting gag on charter vessels by 26,542 angler trips. Net Cash Flow per Angler Trip (CFpA) is the best available estimate of economic profit per angler trip by charter vessels. CFpA on charter vessels is estimated to be $149 per angler trip. Thus, NMFS expects the estimated reduction in charter vessel economic profits from this action to be $3.955 million. The reduction in charter vessel economic profits is estimated to be $7,490 per vessel, or almost 27 percent on average per for-hire fishing business.
The action that changes the recreational season would increase the number of target trips for gag by charter vessels during this period over the number of target trips in previous years by 2,159 trips, thereby partially mitigating the reduction in target trips due to the recreational ACL reduction. Assuming the CFpA on charter vessels is $149 per angler trip, this action is expected to increase economic profits for charter vessels by $321,733, or by $609 per charter vessel. Thus, economic profits are expected to be increased by around 2.2 percent on average per for-hire fishing business.
Based on the above, the total reduction in economic profits for charter vessels from this temporary rule is expected to be about $3.634 million, or approximately $6,882 per charter vessel. Thus, economic profits are expected to be reduced by approximately 24.6 percent on average per for-hire fishing business.
Three alternatives, including the status quo, were considered for the action to revise the gag stock ACL, commercial ACL, recreational ACL, commercial quota, and recreational ACT of 3.12 million lb (1.415 million kg), 1.217 million lb (0.552 million kg), 1.903 million lb (0.863 million kg), 939,000 lb (426,000 kg), and 1.708 million lb (0.775 million kg) based on MRIP-CHTS data. The action in this temporary rule will revise the same catch levels for gag to 661,901 lb (300,233 kg), 258,000 lb (117,027 kg), 403,759 lb (183,142 kg), 199,000 lb (90,265 kg), and 362,374 lb (164,370 kg), respectively, based on the TMin*2 rebuilding scenario and MRIP-FES data. Similar to the action in this temporary rule, the status quo alternative would have retained the current allocation of the stock ACL of 39 percent to the commercial sector and 61 percent to the recreational sector. But, it also would have maintained current the stock ACL, commercial ACL, recreational ACL, commercial quota, and recreational ACT stated earlier based on MRIP-CHTS data. The status quo alternative was not selected because it would not reduce overfishing of gag while a rebuilding plan is being developed, contrary to the purpose of this temporary rule.
A second alternative would have decreased the allocation percentage of the gag stock ACL to the commercial sector from 39 percent to 20.5 percent and increased the allocation percentage to the recreational sector from 61 percent to 79.5 percent. Further, based on the TMin*2 rebuilding scenario and MRIP-FES data, this alternative would have revised the gag stock ACL, commercial ACL, recreational ACL, commercial quota, and recreational ACT from 3.12 million lb (1.415 million kg), 1.217 million lb (0.552 million kg), 1.903 million lb (0.863 million kg), 939,000 lb (426,000 kg), and 1.708 million lb (0.775 million kg) based on MRIP-CHTS data to 611,578 lb (277,407 kg), 125,000 lb (56,699 kg), 486,204 lb (220,538 kg), 98,000 lb (44,452 kg), and 436,368 lb (197,933 kg). This alternative would have reduced overfishing while a rebuilding plan is being developed. However, because this temporary rule and an extension cannot in combination be in effect for more than 366 days, this alternative was not selected because the Council advised NMFS that it would prefer to address sector allocations for gag on a longer-term basis through an amendment to the FMP.
A third alternative would have decreased the allocation percentage of the gag stock ACL to the commercial sector from 39 percent to 18 percent and increased the allocation percentage to the recreational sector from 61 percent to 82 percent. Further, based on the TMin*2 rebuilding scenario and MRIP-FES data, this alternative would have revised the gag stock ACL, commercial ACL, recreational ACL, commercial quota and recreational ACT from 3.12 million lb (1.42 million kg), 1.217 million lb (0.55 million kg), 1.903 million lb (0.86 million kg), 939,000 lb (426,000 kg), and 1.708 million lb (0.78 million kg) based on MRIP-CHTS data to 605,165 lb (274,745 kg), 109,000 lb (49,486 kg), 496,235 lb (225,291 kg), 84,000 lb (38,136 kg), and 445,370 lb (202,198 kg). Similar to the second alternative, this alternative would have reduced overfishing while a rebuilding plan is being developed. However, because this temporary rule and an extension cannot be in effect for more than 366 days, this alternative was not selected because the Council advised NMFS that it would prefer to address sector allocations for gag on a longer-term basis through an amendment to the FMP.
Three alternatives, including the status quo, were considered for the action to change the recreational start date from June 1 to September 1, and close the season on November 10, unless NMFS projects the recreational ACL will be met sooner. The status quo alternative would have maintained the recreational season start date of June 1, which was expected to result in a recreational season length of only 16
The second alternative would have changed the recreational season start date from June 1 to October 1, which would have resulted in a recreational season length of 55 days compared to 70 days under the action in this temporary rule. Although the second alternative would have mitigated some of the adverse effects from the recreational ACL reduction, this alternative was not selected because, given the shorter season length compared to the action, it would not allow for-hire fishing businesses as much flexibility in planning target trips for gag, which is particularly desirable during hurricane season, which occurs from June 1 through November 30 each year. Further, unlike the action in this temporary rule, this alternative does not have a fixed closure date, which would increase the probability of exceeding the recreational ACL relative to the action in this temporary rule.
The third alternative would have changed the recreational season start date from June 1 to November 1, which would have resulted in a recreational season length of 29 days compared to 70 days under the action in this temporary rule. Although the third alternative would have mitigated some of the adverse effects from the recreational ACL reduction, this alternative was not selected because it would not have mitigated those adverse effects as much as the action, thereby causing relatively greater adverse effects on small for-hire fishing businesses. Further, given the shorter season length compared to the action in this temporary rule, it would not allow for-hire fishing businesses as much flexibility in planning target trips for gag, which is particularly desirable during hurricane season. Also, similar to the second alternative, this alternative does not have a fixed closure date, which would increase the probability of exceeding the recreational ACL relative to the action in this temporary rule.
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS prepared a fishery bulletin that also serves as the small entity compliance guide. NMFS will send the fishery bulletin to all interested parties. A copy of this final temporary rule is available from NMFS (
There is good cause under authority contained in 5 U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness so that this final temporary rule can be effective by June 1, 2023. On December 13, 2022, NMFS published a temporary rule to withhold a portion of the commercial allocation of gag for the 2023 fishing year in anticipation of the reduction in the commercial quota in this final temporary rule (87 FR 76125). If this final temporary rule is not effective by June 1, 2023, the regulations at 50 CFR 622.22(a)(4) require NMFS to distribute the previously withheld commercial allocation, which would be contrary to the purpose of this rule to reduce overfishing for the 2023 fishing year. In addition, the current recreational fishing season opens on June 1. Therefore, this final temporary rule must be effective by that date to constrain recreational harvest to the reduced recreational catch limit while providing the maximum number of fishing days. NMFS was unable to publish this final temporary rule sooner because NMFS determined that it was important to solicit public comments on the interim measures, which substantially reduce the allowable harvest of gag for the 2023 fishing year, and it took time to complete the analyses supporting the proposed temporary rule and to respond to the comments received.
Fisheries, Fishing, Gag, Gulf of Mexico.
For the reasons set out in the preamble, NMFS amends 50 CFR part 622 as follows:
16 U.S.C. 1801
The addition reads as follows:
(i)
The addition reads as follows:
(a) * * *
(1) * * *
(iii) * * *
(D)
The addition reads as follows:
(r)
(2)
(ii) Without regard to overfished status, and in addition to the measures specified in paragraph (r)(2)(i) of this section, if gag recreational landings, as estimated by the SRD, exceed the applicable ACLs specified in paragraph (r)(2)(iv) of this section, the AA will file a notification with the Office of the Federal Register to maintain the gag ACT, specified in paragraph (r)(2)(iv) of this section, for that following fishing year at the level of the prior year's ACT, unless the best scientific information available determines that maintaining the prior year's ACT is unnecessary. In addition, the notification will reduce the length of the recreational gag fishing season the following fishing year by the amount necessary to ensure gag recreational landings do not exceed the recreational ACT in the following fishing year.
(iii) If gag are overfished, based on the most recent status of U.S. Fisheries Report to Congress, and gag recreational landings, as estimated by the SRD, exceed the applicable ACL specified in paragraph (r)(2)(iv) of this section, the following measures will apply. In addition to the measures specified in paragraphs (r)(2)(i) and (ii) of this section, the AA will file a notification with the Office of the Federal Register, at or near the beginning of the following fishing year to reduce the ACL for that following year by the amount of the ACL overage in the prior fishing year, and reduce the ACT, as determined in paragraph (r)(2)(ii) of this section, by the amount of the ACL overage in the prior fishing year, unless the best scientific information available determines that a greater, lesser, or no overage adjustment is necessary.
(iv) The recreational ACL in gutted weight is 403,759 lb (183,142 kg). The recreational ACT in gutted weight is 362,374 lb (164,370 kg).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS issues final specifications for the 2023 Atlantic spiny dogfish fishery, as recommended by the Mid-Atlantic and New England Fishery Management Councils. This action is necessary to establish allowable harvest levels for the spiny dogfish fishery to prevent overfishing while enabling optimum yield, using the best scientific information available.
Effective on May 1, 2023.
The Mid-Atlantic Fishery Management Council prepared an environmental assessment (EA) for these specifications that describes the action, other considered alternatives, and analyses of the impacts of all alternatives. Copies of the specifications document, including the EA, are available on request from Dr. Christopher M. Moore, Executive Director, Mid-Atlantic Fishery Management Council, Suite 201, 800 North State Street, Dover, DE 19901. These documents are also accessible via the internet at
Cynthia Ferrio, Fishery Policy Analyst, (978) 281-9180.
The Mid-Atlantic and New England Fishery Management Councils jointly manage the Atlantic Spiny Dogfish Fishery Management Plan (FMP), with the Mid-Atlantic Council acting as the administrative lead. Additionally, the Atlantic States Marine Fisheries Commission manages the spiny dogfish fishery in state waters from Maine to North Carolina through an interstate fishery management plan. The Federal FMP requires the specification of an acceptable biological catch (ABC), annual catch limit (ACL), annual catch target (ACT), total allowable landings (TAL), and a coastwide commercial quota. These limits and other related management measures may be set for up to 5 fishing years at a time, with each fishing year running from May 1 through April 30. This action implements Atlantic spiny dogfish specifications for fishing year 2023, as recommended by the Councils and Commission.
In response to declining trends in stock biomass and productivity shown in a 2022 data update, the Mid-Atlantic Council's Scientific and Statistical Committee (SSC) recommended a 2023 ABC of 7,788 mt, a 55-percent decrease from fishing year 2022. Preliminary indications from the December 2022 Atlantic spiny dogfish research track assessment support the SSC's recommendations. Both the Mid-Atlantic and New England Councils accepted the SSC's recommended ABC, and recommended the subsequent catch limits in accordance with the specifications process, including a coast-wide commercial quota of 5,449 mt; a 59-percent decrease from fishing year 2022. Neither Council recommended any changes to other management measures, such as trip limits.
The proposed rule for this action published in the
This action implements the Councils' recommendations for 2023 Atlantic spiny dogfish specifications (Table 1), which are consistent with the Mid-Atlantic SSC's recommendations and the best available science. These final specifications decrease the ABC by 55 percent from fishing year 2022 and coastwide commercial quota by 59 percent, based on declining trends in stock biomass and productivity. This action makes no changes to the 7,500-lb (3,402-kg) trip limit.
The reduction in commercial quota is not expected to substantially change overall fishing activity, or result in catch overages or revenue losses in the spiny dogfish fishery. In recent years, the spiny dogfish quotas have not constrained landings in the fishery, and even with a 59-percent decrease the 2023 commercial quota will still be higher than the total annual landings in fishing year 2021. There is a 2023 management track stock assessment for Atlantic spiny dogfish that is expected to inform development of the next set of specifications for fishing year 2024.
The public comment period for the proposed rule ended on March 24, 2023, and NMFS received 18 comments from the public. No changes were made to the final rule as a result of these comments.
There are no changes from the proposed rule.
Pursuant to section 304(b)(3) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Assistant Administrator, Greater Atlantic Region, has determined that these final specifications are necessary for the conservation and management of the Atlantic spiny dogfish fishery, and that they are consistent with the Atlantic Spiny Dogfish FMP, the Magnuson-Stevens Act, and other applicable law.
The need to implement these measures in a timely manner to ensure that these final specifications are in place for the start of the 2023 spiny dogfish fishing year constitutes good cause under the authority contained in 5 U.S.C. 553(d)(3) to waive the 30-day delay in the effective date of this action. The 2023 fishing year begins on May 1, 2023. A delay in the date of effectiveness beyond May 1 would be contrary to the public interest as it could create confusion in the spiny dogfish industry around current quotas, and with state agencies as they prepare their annual management measures. Furthermore, regulated parties do not require any additional time to come into compliance with this rule, and thus, a 30-day delay before the final rule becomes effective does not provide any benefit. Unlike actions that require an adjustment period, spiny dogfish fishing vessels will not have to purchase new equipment or otherwise expend time or money to comply with these management measures. Rather, complying with this final rule simply means adhering to the new catch limits set for the 2023 fishing year. Fishery stakeholders have also been involved in the development of this action and are anticipating this rule. For these reasons, there is good cause not to delay this final rule's effectiveness, consistent with 5 U.S.C. 553(d)(3), and to implement this action on May 1, 2023, for the start of the 2023 fishing year.
This final rule is not subject to review under Executive Order 12866 because the action contains no implementing regulations.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration at the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification, and the initial certification remains unchanged. As a result, a final regulatory flexibility analysis is not required and none was prepared.
This final rule does not duplicate, conflict, or overlap with any existing Federal rules.
This action contains no information collection requirements under the Paperwork Reduction Act of 1995.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific cod by vessels using jig gear in the Central Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2023 total allowable catch of Pacific cod by vessels using jig gear in the Central Regulatory Area of the GOA.
Effective 1200 hours, Alaska local time (A.l.t.), April 28, 2023, through 1200 hours, A.l.t., June 10, 2023.
Obren Davis, 907-586-7241.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The A season allowance of the 2023 Pacific cod total allowable catch (TAC) apportioned to vessels using jig gear in the Central Regulatory Area of the GOA is 67 metric tons (mt) as established by the final 2023 and 2024 harvest specifications for groundfish in the GOA (88 FR 13238, March 2, 2023).
In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the A season allowance of the 2023 Pacific cod TAC apportioned to vessels using jig gear in the Central Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 62 mt and is setting aside the remaining 5 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by vessels using jig gear in the Central Regulatory Area of the GOA.
While this closure is effective, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion, and would delay the closure of Pacific cod by vessels using jig gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of April 27, 2023.
The Assistant Administrator for Fisheries, NOAA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
16 U.S.C. 1801
Nuclear Regulatory Commission.
Proposed rule; extension of comment period.
On March 6, 2023, the U.S. Nuclear Regulatory Commission (NRC) solicited comments on proposed amendments to its regulations to incorporate by reference proposed revisions to three regulatory guides, which would approve new, revised, and reaffirmed code cases published by the American Society of Mechanical Engineers. In addition, the rulemaking proposed to extend the time periods required for licensees to update their codes of record. The public comment period was originally scheduled to close on May 5, 2023. The NRC has decided to extend the public comment period by an additional 42 days to June 16, 2023, to allow more time for members of the public to develop and submit their comments.
The due date of comments requested in the document published on March 6, 2023 (88 FR 13717) is extended. Comments should be filed no later than June 16, 2023. Comments received after this date will be considered, if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods (unless the document published on March 6, 2023, describes a different method for submitting comments on a specific subject); however, the NRC encourages electronic comment submission through the Federal rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Soly I. Soto Lugo, Office of Nuclear Material and Safeguards, telephone: 301-415-7528, email:
Please refer to Docket ID NRC-2018-0291 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
On March 6, 2023, the NRC solicited comments on proposed amendments to
On April 19, 2023, the NRC received two public comments (ADAMS Accession Nos. ML23109A141 and ML23109A142) requesting that the comment period for the proposed rule be extended by an additional 1 to 2 months. The requesters expressed that American Society of Mechanical Engineers (ASME) Code Committee meetings are scheduled for May 2023, and that these ASME meetings would be beneficial to allow discussions of the proposed rule before submission of any further public comments.
The NRC seeks to ensure that the public has a reasonable opportunity to provide the NRC with comments on this proposed action. The NRC acknowledges that discussions at the ASME Code Committee meetings may assist in the development of comments. The NRC has decided to extend the public comment period on this document until June 16, 2023, to allow more time for members of the public to submit their comments.
The NRC may post materials related to this document, including public comments, on the Federal rulemaking website at
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft guide; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment a draft regulatory guide (DG), DG-1403, “Quality Assurance Program Criteria (Design and Construction).” This DG is proposed Revision 6 of Regulatory Guide (RG) 1.28 of the same name. The proposed revision endorses Nuclear Energy Institute (NEI) 14-05A, “Guidelines for the Use of Accreditation in Lieu of Commercial Grade Surveys for Procurement of Laboratory Calibration and Test Services,” Revision 1, issued November 2020, as an acceptable approach for licensees and suppliers subject to the quality assurance (QA) requirements of NRC regulations. Also in this proposed revision, the NRC staff endorses the Part I and Part II requirements included in NQA-1-2017, NQA-1-2019, and NQA-1-2022 for the implementation of a QA program during the design and construction phases of nuclear power plants and fuel reprocessing plants.
Submit comments by June 2, 2023. Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Andrea Keim, Office of Nuclear Reactor Regulation, telephone: 301-415-1671; email:
Please refer to Docket ID NRC-2023-0054 when contacting the NRC about the availability of information regarding this action. You may obtain publicly available information related to this action, by any of the following methods:
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The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
The NRC is issuing for public comment a DG in the NRC's “Regulatory Guide” series. This series was developed to describe methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, to explain techniques that the staff uses in evaluating specific issues or postulated events, and to describe information that the staff needs in its review of applications for permits and licenses.
The DG, entitled, “Quality Assurance Program Criteria (Design and Construction)” is temporarily identified by its task number, DG-1403 (ADAMS Accession No. ML22304A054).
This DG is proposed Revision 6 of RG 1.28, “Quality Assurance Program Criteria (Design and Construction).” The proposed DG describes methods and procedures that the NRC staff considers acceptable for use in complying with the agency's regulations regarding the QA program criteria for the design and construction phases of nuclear power plants and fuel reprocessing plants. It provides an adequate basis for complying with the requirements of appendix B to part 50 of title 10 of the
The staff is also issuing for public comment a draft regulatory analysis (ADAMS Accession No. ML22304A055). The staff developed a regulatory analysis to assess the value of issuing or revising a regulatory guide as well as alternative courses of action.
As noted in the
DG-1403, if finalized, would revise RG 1.28, and provide NRC staff endorsement of the Part I and Part II requirements. This revision would apply to both production and utilization nuclear facilities. Issuance of DG-1403, if finalized, would not constitute backfitting as defined in 10 CFR 50.109, “Backfitting,” and as described in NRC Management Directive (MD) 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests”; constitute forward fitting as that term is defined and described in MD 8.4; or affect the issue finality of any approval issued under 10 CFR part 52.
A member of the public may, at any time, submit suggestions to the NRC for improvement of existing RGs or for the development of new RGs. Suggestions can be submitted on the NRC's public website at
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission
Draft guide; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment a draft regulatory guide (DG), DG-1409, “Guidelines for Lightning Protection for Production and Utilization Facilities.” This DG is the proposed Revision 1 of Regulatory Guide (RG) 1.204, “Guidelines for Lightning Protection of Nuclear Power Plants.” DG-1409 describes an approach that is acceptable to the staff of the NRC to meet regulatory requirements for adequate lightning protection of safety-related systems, structures, and components (SSCs). This DG endorses, with clarifications, the methods described in Institute of Electrical and Electronics Engineers (IEEE) Standard (Std.) 665-1995, “IEEE Standard for Generating Station Grounding”; IEEE Std. 666-2007, “IEEE Design Guide for Electrical Power Service Systems for Generating Stations”; IEEE Std. 1050-2004, “IEEE Guide for Instrumentation and Control Equipment Grounding in Generating Stations”; and IEEE Std. C62.23-2017, “IEEE Application Guide for Surge Protection of Electric Generating Plants.”
Submit comments by June 2, 2023. Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
James Steckel, telephone: 301-415-1026; email:
Please refer to Docket ID NRC-2023-0089, when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
The NRC is issuing for public comment a DG in the NRC's “Regulatory Guide” series. This series was developed to describe methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, to explain techniques that the staff uses in evaluating specific issues or postulated events, and to describe information that the staff needs in its review of applications for permits and licenses.
The DG, entitled “Guidelines for Lightning Protection for Production and Utilization Facilities,” is temporarily identified by its task number, DG-1409.
DG-1409 is proposed Revision 1 of RG 1.204. This proposed revision endorses, with clarifications, the methods described in Institute of Electrical and Electronics Engineers (IEEE) Standard (Std.) 665-1995, “IEEE Standard for Generating Station Grounding”; IEEE Std. 666-2007, “IEEE Design Guide for Electrical Power Service Systems for Generating Stations”; IEEE Std. 1050-2004, “IEEE Guide for Instrumentation and Control Equipment Grounding in Generating Stations”; and IEEE Std. C62.23-2017, “IEEE Application Guide for Surge Protection of Electric Generating Plants” as acceptable methods for demonstrating compliance with the applicable NRC regulations for adequate lightning protection of safety-related systems, structures, and components.
The staff is also issuing for public comment a draft regulatory analysis (ADAMS Accession No. ML22208A234). The staff developed a regulatory analysis to assess the value of issuing or revising a regulatory guide as well as alternative courses of action.
As noted in the
Issuance of DG-1409, if finalized, would not constitute backfitting as that term is defined in section 50.109 of title 10 of the
A member of the public may, at any time, submit suggestions to the NRC for improvement of existing RGs or for the development of new RGs. Suggestions can be submitted on the NRC's public website at
For the Nuclear Regulatory Commission.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-02-16, which applies to all The Boeing Company Model 787-8, 787-9, and 787-10 airplanes. AD 2022-02-16 requires revising the limitations and operating procedures sections of the existing airplane flight manual (AFM) to incorporate limitations prohibiting certain landings and the use of certain minimum equipment list (MEL) items, and to incorporate operating procedures for calculating landing distances, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-02-16, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations section of the existing AFM to incorporate limitations prohibiting certain landings and the use of certain MEL items, and would retain the operating procedures from AD 2022-02-16 for calculating landing distances, due to the presence of 5G C-Band interference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 787-8, 787-9, and 787-10 airplanes and issued AD 2022-02-16, Amendment 39-21913 (87 FR 2692, January 19, 2022) (AD 2022-02-16). AD 2022-02-16 was prompted by a determination that, during landings, as a result of 5G C-Band interference, certain airplane systems may not properly transition from AIR to GROUND mode when landing on certain runways, resulting in degraded deceleration performance and longer landing distance than normal due to the effect on thrust reverser deployment, speedbrake deployment, and increased idle thrust. AD 2022-02-16 mandates procedures for operators to account for this longer landing distance, for all runway conditions, when in the presence of 5G C-Band interference as identified by NOTAM. AD 2022-02-16 prohibits operators from dispatching or releasing airplanes to affected airports when certain braking and anti-skid functions on the airplane are inoperable.
Since issuing AD 2022-02-16, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
AD 2022-02-16 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations required by AD 2022-02-16 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the 5G C-Band Interference operating procedure required by AD 2022-02-16 does not reference NOTAMs, this proposed AD would retain that operating procedure requirement with no change.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-02-16 until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM revisions with limitations prohibiting the same landings and use of certain MEL items at all airports for non-radio altimeter tolerant airplanes. For radio altimeter tolerant airplanes, the prohibited operations would be allowed at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (k)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023. After June 30, 2023, operators with AMOCs approved for AD 2021-23-12 would be required to incorporate the 5G C-Band Interference operating procedure specified in paragraph (h)(2) of this proposed AD. The new AFM limitations, which would be required by paragraph (i) or (j) of this proposed AD, specify that operators must comply with this 5G C-Band Interference operating procedure.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-02-16, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 145 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-02-16, Amendment 39-21913 (87 FR 2692, January 19, 2022) (AD 2022-02-16).
This AD applies to all The Boeing Company Model 787-8, 787-9, and 787-10 airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that, during landings, as a result of this interference, certain airplane systems may not properly transition from AIR to GROUND mode when landing on certain runways, resulting in a longer landing distance than normal due to the effect on thrust reverser deployment, speedbrake deployment, and increased idle thrust. The FAA is issuing this AD to address degraded deceleration performance and longer landing distance, which could lead to a runway excursion.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
(4) Runway condition codes are defined in figure 3 to paragraph (g)(4) of this AD.
This paragraph restates the requirements of paragraph (h) of AD 2022-02-16.
(1) Within 2 days after January 19, 2022 (the effective date of AD 2022-02-16): Revise the Limitations Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 4 to paragraph (h)(1) of this AD into the existing AFM.
(2) Within 2 days after January 19, 2022 (the effective date of AD 2022-02-16): Revise the Operating Procedures Section of the existing AFM to include the information specified in figure 5 to paragraph (h)(2) of this AD. This may be done by inserting a
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 6 to paragraph (i) of this AD. This may be done by inserting a copy of figure 6 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 6 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 7 to paragraph (j) of this AD. This may be done by inserting a copy of figure 7 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 7 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-05-04, which applies to all The Boeing Company Model 737-100, -200, -200C, -300, -400, -500, -600, -700, -700C, -800, -900, and -900ER series airplanes, except for Model 737-200 and -200C series airplanes equipped with a certain flight control system. AD 2022-05-04 requires revising the limitations and operating procedures sections of the existing airplane flight manual (AFM) to incorporate specific operating procedures for instrument landing system (ILS) approaches, speedbrake deployment, go-arounds, and missed approaches, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-05-04, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations and operating procedures sections of the
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this proposed AD.
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 737-100, -200, -200C, -300, -400, -500, -600, -700, -700C, -800, -900, and -900ER series airplanes, except for Model 737-200 and -200C series airplanes equipped with a certain flight control system, and issued AD 2022-05-04, Amendment 39-21955 (87 FR 10299, February 24, 2022) (AD 2022-05-04). AD 2022-05-04 was prompted by a determination that, during approach, landings, and go-arounds, as a result of 5G C-Band interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. AD 2022-05-04 requires revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for ILS approaches, speedbrake deployment, go-arounds, and missed approaches, when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2022-05-04 to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Since issuing AD 2022-05-04, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define
2022-05-04 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations and operating procedures required by AD 2022-05-04 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the 5G C-Band Interference operating procedure required by AD 2022-05-04 references AD 2021-23-12 for certain prohibited ILS approaches, this proposed AD would require operators to replace the procedure with an operating procedure containing the same information, except it would list the specific prohibited ILS approaches.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-05-04 until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM revisions with limitations requiring the same procedures for dispatch or release to airports, and approach, landing, and go-around on runways, at all airports for non-radio altimeter tolerant airplanes. For radio altimeter tolerant airplanes, the procedures would not be required at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (l)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-05-04, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 2,328 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-05-04, Amendment 39-21955 (87 FR 10299, February 24, 2022) (AD 2022-05-04).
This AD applies to all The Boeing Company 737-100, -200, -200C, -300, -400, -500, -600, -700, -700C, -800, -900, and -900ER series airplanes, certificated in any category, except for Model 737-200 and -200C series airplanes equipped with an SP-77 flight control system.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that, during approach, landings, and go-arounds, as a result of this interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. The FAA is issuing this AD to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
This paragraph restates the requirements of paragraph (g) of AD 2022-05-04.
(1) Within 2 days after February 24, 2022 (the effective date of AD 2022-05-04): Revise the Limitations Section of the existing AFM to include the information specified in figure 3 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 3 to paragraph (h)(1) of this AD into the existing AFM.
(2) Within 2 days after February 24, 2022 (the effective date of AD 2022-05-04): Revise the Operating Procedures Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(2) of this AD or figure 5 to paragraph (h)(2) of this AD, as applicable. This may be done by inserting a copy of figure 4 to paragraph (h)(2) or figure 5 to paragraph (h)(2) of this AD, as applicable, into the Operating Procedures Section of the existing AFM.
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 6 to paragraph (i) of this AD. This may be done by inserting a copy of figure 6 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 6 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 7 to paragraph (j) of this AD. This may be done by inserting a copy of figure 7 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 7 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For all airplanes, do the actions specified in paragraphs (k)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 8 to paragraph (k) of this AD or figure 9 to paragraph (k) of this AD, as applicable. This may be done by inserting a copy of figure 8 to paragraph (k) of this AD or figure 9 to paragraph (k) of this AD, as applicable, into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(2) of this AD.
(2) Before further flight after incorporating the operating procedures specified in figure 8 to paragraph (k) of this AD or figure 9 to paragraph (k) of this AD, remove the AFM revision required by paragraph (h)(2) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-06-16, which applies to all The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, and 747-400F series airplanes. AD 2022-06-16 requires revising the limitations and operating procedures sections of the existing airplane flight manual (AFM) to incorporate specific operating procedures for takeoff, instrument landing system (ILS) approaches, non-precision approaches, and go around and missed approaches, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-06-16, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations section of the existing AFM to incorporate limitations requiring specific operating procedures, and would retain the operating procedures for takeoff, ILS approaches, non-precision approaches, and go around and missed approaches from AD 2022-06-16, due to the presence of 5G C-Band interference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, and 747-400F series airplanes and issued AD 2022-06-16, Amendment 39-21982 (87 FR 14780, March 16, 2022) (AD 2022-06-16). AD 2022-06-16 was prompted by a determination that, during takeoff, approach, landings, and go-arounds, as a result of 5G C-Band interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. AD 2022-06-16 requires revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for takeoff, ILS approaches, non-precision approaches, and go around and missed approaches, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). The agency issued AD 2022-06-16 to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Since issuing AD 2022-06-16, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
AD 2022-06-16 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations required by AD 2022-06-16 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the 5G C-Band Interference operating procedure required by AD 2022-06-16 does not reference NOTAMs, this proposed AD would retain that operating procedure requirement with no change.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-06-16, until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM revisions with limitations requiring the same procedures for dispatch or release to airports, and takeoff, approach, landing, and go-around on runways at all airports for non-radio altimeter tolerant airplanes. For radio altimeter tolerant airplanes, the procedures would not be required at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (k)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023. After June 30, 2023, operators with AMOCs approved for AD 2021-23-12 would be required to incorporate the 5G C-Band Interference operating procedure specified in paragraph (h)(2) of this proposed AD. The new AFM limitations, which would be required by paragraph (i) or (j) of this proposed AD, specify that operators must comply with this 5G C-Band Interference operating procedure.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-06-16, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 137 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-06-16, Amendment 39-21982 (87 FR 14780, March 16, 2022) (AD 2022-06-16).
This AD applies to all The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, and 747-400F series airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that during takeoff, approach, landings, and go-arounds, as a result of this interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. The FAA is issuing this AD to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
This paragraph restates the requirements of paragraph (h) of AD 2022-02-16.
(1) Within 2 days after March 16, 2022 (the effective date of AD 2022-06-16): Revise the Limitations Section of the existing AFM to include the information specified in figure 3 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 3 to paragraph (h)(1) of this AD into the existing AFM.
(2) Within 2 days after March 16, 2022 (the effective date of AD 2022-06-16): Revise the Operating Procedures Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(2) of this AD. This may be done by inserting a copy of figure 4 to paragraph (h)(2) of this AD into the existing AFM.
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 5 to paragraph (i) of this AD. This may be done by inserting a copy of figure 5 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 5 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 6 to paragraph (j) of this AD. This may be done by inserting a copy of figure 6 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 6 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-04-05, which applies to all The Boeing Company Model 757 airplanes and Model 767 airplanes. AD 2022-04-05 requires revising the limitations and operating procedures sections of the existing airplane flight manual (AFM) to incorporate specific operating procedures for landing distance calculations, instrument landing system (ILS) approaches, non-precision approaches, speedbrake deployment, and go-around and missed approaches, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-04-05, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for landing distance calculations, ILS approaches, non-precision approaches, speedbrake deployment, and go-around and missed approaches, due to the presence of 5G C-Band interference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this proposed AD.
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 757 and Model 767 airplanes and issued AD 2022-04-05, Amendment 39-21947 (87 FR 8152, February 14, 2022) (AD 2022-04-05). AD 2022-04-05 was prompted by a determination that, during approach, landings, and go-arounds, as a result of 5G C-band interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. AD 2022-04-05 requires revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for landing distance calculations, ILS approaches, non-precision approaches, speedbrake deployment, and go-around and missed approaches, when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2022-
Since issuing AD 2022-04-05, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
2022-04-05 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations and operating procedures required by AD 2022-04-05 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the 5G C-Band Interference operating procedure required by AD 2022-04-05 references AD 2021-23-12 for certain prohibited ILS approaches, this proposed AD would require operators to replace the procedure with an operating procedure containing the same information, except it would list the specific prohibited ILS approaches.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-04-05 until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM revisions with limitations requiring the same procedures for dispatch or release to airports, and approach, landing, and go-around on runways, at all airports for non-radio altimeter tolerant airplanes. For radio altimeter tolerant airplanes, the procedures would not be required at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (l)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-04-05, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 1,108 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-04-05, Amendment 39-21947 (87 FR 8152, February 14, 2022) (AD 2022-04-05).
This AD applies to all The Boeing Company airplanes identified in paragraphs (c)(1) and (2) of this AD, certificated in any category.
(1) Model 757-200, -200PF, -200CB, and -300 series airplanes.
(2) Model 767-200, -300, -300F, -400ER, and -2C series airplanes.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that, during approach, landings, and go-arounds, as a result of this interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. The FAA is issuing this AD to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
This paragraph restates the requirements of paragraph (g) of AD 2022-04-05.
(1) Within 2 days after February 14, 2022 (the effective date of AD 2022-04-05): Revise the Limitations Section of the existing AFM to include the information specified in figure 3 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 3 to paragraph (h)(1) of this AD into the existing AFM.
(2) Within 2 days after February 14, 2022 (the effective date of AD 2022-04-05): Revise the Operating Procedures Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(2) of this AD. This may be done by inserting a copy of figure 4 to paragraph (h)(2) of this AD into the Operating Procedures Section of the existing AFM.
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 5 to paragraph (i) of this AD. This may be done by inserting a copy of figure 5 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 5 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 6 to paragraph (j) of this AD. This may be done by inserting a copy of figure 6 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 6 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For all airplanes, do the actions specified in paragraphs (k)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 7 to paragraph (k) of this AD. This may be done by inserting a copy of figure 7 to paragraph (k) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(2) of this AD.
(2) Before further flight after incorporating the operating procedures specified in figure 7 to paragraph (k) of this AD, remove the AFM revision required by paragraph (h)(2) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-09-18, which applies to all The Boeing Company Model 707, 717, and 727 airplanes; Model DC-8, DC-9, and DC-10 airplanes; Model MD-10 and MD-11 airplanes; Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), DC-9-87 (MD-87), and MD-88
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 707, 717, and 727 airplanes; Model DC-8, DC-9, and DC-10 airplanes; Model MD-10 and MD-11 airplanes; Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), DC-9-87 (MD-87), and MD-88 airplanes; and Model MD-90-30 airplanes, and issued AD 2022-09-18, Amendment 39-22038 (87 FR 31097, May 23, 2022) (AD 2022-09-18). AD 2022-09-18 was prompted by a determination that, during approach, landings, and go-arounds, as a result of 5G C-Band interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. AD 2022-09-18 requires revising the limitations and operating procedures sections of the existing AFM to incorporate specific operating procedures for, depending on the airplane model, ILS approaches, non-precision approaches, ground spoiler deployment, and go-around and missed approaches, when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2022-09-18 to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Since issuing AD 2022-09-18, the FAA determined that additional
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
AD 2022-09-18 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations and operating procedures required by AD 2022-09-18 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the applicable 5G C-Band Interference operating procedures required by AD 2022-09-18 reference AD 2021-23-12 for certain prohibited ILS approaches, this proposed AD would require operators to replace the procedure with an operating procedure containing the same information, except it would list the specific prohibited ILS approaches.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-09-18 until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM revisions with limitations requiring the same procedures for ILS approaches, non-precision approaches, ground spoiler deployment, and go-around and missed approaches, at all airports for non-radio altimeter tolerant airplanes. For radio altimeter tolerant airplanes, the procedures would not be required at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (m)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-09-18, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 476 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-09-18, Amendment 39-22038 (87 FR 31097, May 23, 2022) (AD 2022-09-18).
This AD applies to all The Boeing Company airplanes identified in paragraphs (c)(1) through (9) of this AD, certificated in any category.
(1) Model 707-100 Long Body, -200, -100B Long Body, and -100B Short Body series airplanes, and Model 707-300, -300B, -300C, and -400 series airplanes.
(2) Model 717-200 airplanes.
(3) Model 727, 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes.
(4) Model DC-8-11, DC-8-12, DC-8-21, DC-8-31, DC-8-32, DC-8-33, DC-8-41, DC-8-42, DC-8-43, DC-8-51, DC-8-52, DC-8-53, DC-8-55, DC-8F-54, DC-8F-55, DC-8-61, DC-8-62, DC-8-63, DC-8-61F, DC-8-62F, DC-8-63F, DC-8-71, DC-8-72, DC-8-73, DC-8-71F, DC-8-72F, and DC-8-73F airplanes.
(5) Model DC-9-11, DC-9-12, DC-9-13, DC-9-14, DC-9-15, DC-9-15F, DC-9-21, DC-9-31, DC-9-32, DC-9-32 (VC-9C), DC-9-32F, DC-9-32F (C-9A, C-9B), DC-9-33F, DC-9-34, DC-9-34F, DC-9-41, and DC-9-51 airplanes.
(6) Model DC-10-10, DC-10-10F, DC-10-15, DC-10-30, DC-10-30F (KC-10A and KDC-10), DC-10-40, and DC-10-40F airplanes.
(7) Model MD-10-10F and MD-10-30F airplanes.
(8) Model MD-11 and MD-11F airplanes.
(9) Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), DC-9-87 (MD-87), MD-88, and MD-90-30 airplanes.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that during approach, landings, and go-arounds, as a result of this interference, certain airplane systems may not properly function, resulting in increased flightcrew workload while on approach with the flight director, autothrottle, or autopilot engaged. The FAA is issuing this AD to address 5G C-Band interference that could result in increased flightcrew workload and could lead to reduced ability of the flightcrew to maintain safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
This paragraph restates the requirements of paragraph (g) of AD 2022-09-18.
(1) For airplanes identified in paragraphs (c)(1) and (c)(3) through (6) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Limitations Section of the existing AFM to include the information specified in figure 3 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 3 to paragraph (h)(1) of this AD into the existing AFM.
(2) For airplanes identified in paragraphs (c)(2), (7), and (8) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Limitations Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(2) of this AD. This may be done by inserting a copy of figure 4 to paragraph (h)(2) of this AD into the Limitations Section of the existing AFM.
(3) For airplanes identified in paragraph (c)(9) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Limitations Section of the existing AFM to include the information specified in figure 5 to paragraph (h)(3) of this AD. This may be done by inserting a copy of figure 5 to paragraph (h)(3) of this AD into the Limitations Section of the existing AFM.
This paragraph restates the requirements of paragraph (h) of AD 2022-09-18.
(1) For airplanes identified in paragraphs (c)(1) and (3) through (6) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Operating Procedures Section of the existing AFM to include the information specified in figure 6 to paragraph (i)(1) of this AD. This may be done by inserting a copy of figure 6 to paragraph (i)(1) of this AD into the Operating Procedures Section of the existing AFM.
(2) For airplanes identified in paragraph (c)(2) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Operating Procedures Section of the existing AFM to include the information specified in figure 7 to paragraph (i)(2) of this AD. This may be done by inserting a copy of figure 7 to paragraph (i)(2) of this AD into the Operating Procedures Section of the existing AFM.
(3) For airplanes identified in paragraph (c)(7) of this AD: Within 2 days after May 23, 2022 (the effective date of AD 2022-09-18), revise the Operating Procedures Section of the existing AFM to include the information specified in figure 8 to paragraph (i)(3) of this AD. This may be done by inserting a copy of figure 8 to paragraph (i)(3) of this AD into the Operating Procedures Section of the existing AFM.
(4) For airplanes identified in paragraph (c)(8) of this AD: Within 2 days after the effective date of this AD, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 9 to paragraph (i)(4) of this AD. This may be
(5) For airplanes identified in paragraph (c)(9) of this AD: Within 2 days after the effective date of this AD, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 10 to paragraph (i)(5) of this AD. This may be done by inserting a copy of figure 10 to paragraph (i)(5) of this AD into the Operating Procedures Section of the existing AFM.
(1) For non-radio altimeter tolerant airplanes identified in paragraphs (c)(1) and (c)(3) through (6) of this AD, do the actions specified in paragraphs (j)(1)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 11 to paragraph (j)(1) of this AD. This may be done by inserting a copy of figure 11 to paragraph (j)(1) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 11 to paragraph (j)(1) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
(2) For non-radio altimeter tolerant airplanes identified in paragraphs (c)(2), (7), and (8) of this AD, do the actions specified in paragraphs (j)(2)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 12 to paragraph (j)(2) of this AD. This may be done by inserting a copy of figure 12 to paragraph (j)(2) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(2) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 12 to paragraph (j)(2) of this AD, remove the AFM revision required by paragraph (h)(2) of this AD.
(3) For non-radio altimeter tolerant airplanes identified in paragraph (c)(9) of this AD, do the actions specified in paragraphs (j)(3)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 13 to paragraph (j)(3) of this AD. This may be done by inserting a copy of figure 13 to paragraph (j)(3) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(3) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 13 to paragraph (j)(3) of this AD, remove the AFM revision required by paragraph (h)(3) of this AD.
(1) For radio altimeter tolerant airplanes identified in paragraphs (c)(1) and (c)(3) through (6) of this AD, do the actions specified in paragraphs (k)(1)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 14 to paragraph (k)(1) of this AD. This may be done by inserting a copy of figure 14 to paragraph (k)(1) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 14 to paragraph (k)(1) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
(2) For radio altimeter tolerant airplanes identified in paragraphs (c)(2), (7), and (8) of this AD, do the actions specified in paragraphs (k)(2)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 15 to paragraph (k)(2) of this AD. This may be done by inserting a copy of figure 15 to paragraph (k)(2) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(2) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 15 to paragraph (k)(2) of this AD, remove the AFM revision required by paragraph (h)(2) of this AD.
(3) For radio altimeter tolerant airplanes identified in paragraph (c)(9) of this AD, do the actions specified in paragraphs (k)(3)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 16 to paragraph (k)(3) of this AD. This may be done by inserting a copy of figure 16 to paragraph (k)(3) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(3) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 16 to paragraph (k)(3) of this AD, remove the AFM revision required by paragraph (h)(3) of this AD.
(1) For airplanes identified in paragraphs (c)(1) and (3) through (6) of this AD, do the actions specified in paragraphs (l)(1)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 17 to paragraph (l)(1) of this AD. This may be done by inserting a copy of figure 17 to paragraph (l)(1) of this AD into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (i)(1) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 17 to paragraph (l)(1) of this AD, remove the AFM revision required by paragraph (i)(1) of this AD.
(2) For airplanes identified in paragraph (c)(2) of this AD, do the actions specified in paragraphs (l)(2)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 18 to paragraph (l)(2) of this AD. This may be done by inserting a copy of figure 18 to paragraph (l)(2) of this AD into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (i)(2) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 18 to paragraph (l)(2) of this AD, remove the AFM revision required by paragraph (i)(2) of this AD.
(3) For airplanes identified in paragraph (c)(7) of this AD, do the actions specified in paragraphs (l)(3)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 19 to paragraph (l)(3) of this AD. This may be done by inserting a copy of figure 19 to paragraph (l)(3) of this AD into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (i)(3) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 19 to paragraph (l)(3) of this AD, remove the AFM revision required by paragraph (i)(3) of this AD.
(4) For airplanes identified in paragraph (c)(8) of this AD, do the actions specified in paragraphs (l)(4)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 20 to paragraph (l)(4) of this AD. This may be done by inserting a copy of figure 20 to paragraph (l)(4) of this AD into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (i)(4) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 20 to paragraph (l)(4) of this AD, remove the AFM revision required by paragraph (i)(4) of this AD.
(5) For airplanes identified in paragraph (c)(9) of this AD, do the actions specified in paragraphs (l)(5)(i) and (ii) of this AD.
(i) On or before June 30, 2023, revise the Operating Procedures Section of the existing AFM to include the information specified in figure 21 to paragraph (l)(5) of this AD. This may be done by inserting a copy of figure 21 to paragraph (l)(5) of this AD into the Operating Procedures Section of the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (i)(5) of this AD.
(ii) Before further flight after incorporating the limitations specified in figure 21 to paragraph (l)(5) of this AD, remove the AFM revision required by paragraph (i)(5) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (n) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-03-20, which applies to all The Boeing Company Model 737-8, 737-9, and 737-8200 airplanes. AD 2022-03-20 requires revising the limitations and operating procedures sections of the existing airplane flight manual (AFM) to incorporate limitations prohibiting the use of certain minimum equipment list (MEL) items, and to incorporate operating procedures for calculating takeoff and landing distances, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-03-20, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations section of the existing AFM to incorporate limitations prohibiting the use of certain MEL items, and would retain the operating procedures from AD 2022-03-20 for calculating takeoff and landing distances, due to the presence of 5G C-Band interference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137;
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 737-8, 737-9, and 737-8200 airplanes and issued AD 2022-03-20, Amendment 39-21937 (87 FR 4787, January 31, 2022) (AD 2022-03-20). AD 2022-03-20 was prompted by a determination that as a result of 5G C-Band interference, certain airplane systems may not properly function, resulting in longer than normal landing or rejected takeoff distances, due to the effect on thrust reverser deployment, spoilers, speedbrake deployment, and increased idle thrust, regardless of the approach type or weather. AD 2022-03-20 requires revising the limitations and operating procedures sections of the existing AFM to incorporate limitations prohibiting the use of certain MEL items, and to incorporate operating procedures for calculating takeoff and landing distances, when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2022-03-20 to address degraded deceleration performance, which could lead to a runway excursion.
Since issuing AD 2022-03-20, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
AD 2022-03-20 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations required by AD 2022-03-20 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the limitations with limitations prohibiting the same operations, except the prohibitions would not be tied to NOTAMs but instead would depend on whether the airplane is operated at a 5G CMA as identified by an FAA Domestic Notice. Because the 5G C-Band Interference operating procedure required by AD 2022-03-20 does not reference NOTAMs, this proposed AD would retain that operating procedure requirement with no change.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the requirements of AD 2022-03-20 until June 30, 2023. On or before June 30, 2023, this proposed AD would require
Paragraph (k)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023. After June 30, 2023 operators with AMOCs approved for AD 2021-23-12 would be required to incorporate the 5G C-Band Interference operating procedure specified in paragraph (h)(2) of this proposed AD. The new AFM limitations, which would be required by paragraph (i) or (j) of this proposed AD, specify that operators must comply with this 5G C-Band Interference operating procedure.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-03-20, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 276 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-03-20, Amendment 39-21937 (87 FR 4787, January 31, 2022) (AD 2022-03-20).
This AD applies to all The Boeing Company 737-8, 737-9, and 737-8200 airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that, during takeoffs and landings, as a result of this interference, certain airplane systems may not properly function, resulting in longer than normal landing or rejected takeoff distances due to the effect on thrust reverser deployment, spoilers, speedbrake deployment, and increased idle thrust, regardless of the approach type or weather. The FAA is issuing this AD to address degraded deceleration performance, which could lead to a runway excursion.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
(4) Runway condition codes are defined in figure 3 to paragraph (g)(4) of this AD.
This paragraph restates the requirements of paragraph (h) of AD 2022-03-20.
(1) Within 2 days after January 31, 2022 (the effective date of AD 2022-03-20): Revise the Limitations Section of the existing AFM to include the information specified in figure 4 to paragraph (h)(1) of this AD. This may be done by inserting a copy of figure 4 to paragraph (h)(1) of this AD into the existing AFM.
(2) Within 2 days after January 31, 2022 (the effective date of AD 2022-03-20): Revise the Operating Procedures Section of the existing AFM to include the information specified in figure 5 to paragraph (h)(2) of this AD. This may be done by inserting a copy of figure 5 to paragraph (h)(2) of this AD into the existing AFM.
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 6 to paragraph (i) of this AD. This may be done by inserting a copy of figure 6 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 6 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 7 to paragraph (j) of this AD. This may be done by inserting a copy of figure 7 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h)(1) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 7 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h)(1) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2022-03-05, which applies to all The Boeing Company Model 747-8F and 747-8 series airplanes and Model 777 airplanes. AD 2022-03-05 requires revising the limitations section of the existing airplane flight manual (AFM) to incorporate limitations prohibiting dispatching or releasing to airports, and approaches or landings on runways, when in the presence of 5G C-Band interference as identified by Notices to Air Missions (NOTAMs). Since the FAA issued AD 2022-03-05, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. This proposed AD would require revising the limitations section of the existing AFM to incorporate limitations prohibiting dispatching or releasing to airports, and approaches or landings on runways, due to the presence of 5G C-Band interference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 23, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this proposed AD.
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
The FAA issued AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) (AD 2021-23-12), for all transport and commuter category airplanes equipped with a radio altimeter. AD 2021-23-12 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band). AD 2021-23-12 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting certain operations requiring radio altimeter data when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2021-23-12 because radio altimeter anomalies that are undetected by the automation or pilot, particularly close to the ground (
The FAA subsequently identified an additional hazard presented by 5G C-Band interference on The Boeing Company Model 747-8F and 747-8 series airplanes and Model 777 airplanes and issued AD 2022-03-05, Amendment 39-21922 (87 FR 4150, January 27, 2022) (AD 2022-03-05). AD 2022-03-05 was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that this interference may affect multiple airplane systems using radio altimeter data, including the pitch control laws, including those that provide tail strike protection, regardless of the approach type or weather. AD 2022-03-05 requires revising the limitations section of the existing AFM to incorporate limitations prohibiting dispatching or releasing to airports, and approaches or landings on runways, when in the presence of 5G C-Band interference as identified by NOTAMs. The agency issued AD 2022-03-05 to address missing or erroneous radio altimeter data, which, in combination with multiple flight deck effects, could lead to loss of continued safe flight and landing.
Since issuing AD 2022-03-05, the FAA determined that additional limitations are needed due to the continued deployment of new 5G C-Band base stations whose signals are expected to cover most of the contiguous United States at transmission frequencies between 3.7-3.98 GHz. Therefore, the FAA issued an NPRM, Docket No. FAA-2022-1647 (88 FR 1520, January 11, 2023) (the NPRM), proposing to supersede AD 2021-23-12. In the NPRM, the FAA proposed to retain most of the operational prohibitions required by AD 2021-23-12 until June 30, 2023; on or before June 30, 2023, operators would be required to revise their existing AFM to prohibit these operations unless the airplane has a radio altimeter meeting proposed minimum performance levels (a defined power spectral density (PSD) curve as well as a defined aggregate spurious emission level) and is operating at a 5G C-Band mitigated airport (5G CMA). In the NPRM, the FAA also proposed to require all airplanes operating under 14 CFR part 121 to have a radio altimeter meeting the proposed minimum performance standards by February 1, 2024.
Since the NPRM was published, the FAA has determined that a PSD curve is a more appropriate method to define performance than a single fixed emission level. The proposed PSD curve more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels. The FAA plans to issue guidance on how to show compliance with both the fundamental PSD curve and spurious PSD curve, including the data to be submitted, for the FAA to approve the method used.
AD 2022-03-05 relies on the FAA's use of NOTAMs to identify 5G C-band interference at certain airports in the U.S. airspace. As explained in more detail in the NPRM, those NOTAMs are no longer the best means of communicating the location of the 5G C-Band environment. Therefore, this proposed AD would retain the AFM limitations required by AD 2022-03-05 until June 30, 2023. On or before June 30, 2023, this proposed AD would require operators to replace the
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would retain the AFM revisions required by AD 2022-03-05 until June 30, 2023. On or before June 30, 2023, this proposed AD would require replacing those AFM limitations prohibiting the same dispatching or releasing to airports, and approaches or landings on runways. For radio altimeter tolerant airplanes, the prohibited operations would be allowed at 5G CMAs as identified in an FAA Domestic Notice. The minimum performance levels in this proposed AD for determining whether an airplane is radio altimeter tolerant are the same minimum performance levels proposed in the NPRM, except the FAA has replaced the proposed fixed emission level with a proposed PSD curve emission threshold that more accurately reflects differences in radio altimeter susceptibility to interfering emissions at different altitude levels.
Paragraph (k)(3) of this proposed AD specifies that AMOCs approved for AD 2021-23-12 providing relief for specific radio altimeter installations would be approved as AMOCs for the requirements specified in paragraph (h) of this proposed AD until June 30, 2023.
The FAA considers that this AD, if adopted as proposed, would be an interim action. Once the Technical Standard Order (TSO) standard for radio altimeters is established, which will follow the existing international technical consensus on the establishment of the minimum operational performance standards (MOPS), the FAA anticipates that the MOPS will be incorporated into the TSO. The FAA also anticipates that aircraft incorporating equipment approved under the new Radio Altimeter TSO will be able to operate in both 5G CMAs and non-5G CMAs with no 5G C-Band-related AFM limitations. Once a new radio altimeter TSO is developed, approved, and available, the FAA might consider additional rulemaking.
The cost information below describes the costs to change the AFM. Although this proposed AD would largely maintain the AFM limitations currently required by AD 2022-03-05, the FAA acknowledges that this proposed AD may also impose costs on some aircraft operators from having to change their conduct to comply with the amended AFM. However, the FAA lacks the data necessary to quantify the costs associated with aircraft operators changing their conduct. The FAA is seeking public comment on these costs so the agency can more fully account for the impact of this regulatory action.
The FAA estimates that this AD, if adopted as proposed, would affect 347 airplanes of U.S. registry.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 23, 2023.
This AD replaces AD 2022-03-05, Amendment 39-21922 (87 FR 4150, January 27, 2022) (AD 2022-03-05).
This AD applies to all The Boeing Company airplanes identified in paragraphs (c)(1) and (2) of this AD, certificated in any category.
(1) Model 747-8F and 747-8 series airplanes.
(2) Model 777-200, -200LR, -300, -300ER, and 777F series airplanes.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a determination that radio altimeters cannot be relied upon to perform their intended function if they experience interference from wireless broadband operations in the 3.7-3.98 GHz frequency band (5G C-Band), and a determination that this interference may affect other airplane systems using radio altimeter data, including the pitch control laws, including those that provide tail strike protection, regardless of the approach type or weather. The FAA is issuing this AD to address missing or erroneous radio altimeter data, which, in combination with multiple flight deck effects, could lead to loss of continued safe flight and landing.
Comply with this AD within the compliance times specified, unless already done.
(1) For purposes of this AD, a “5G C-Band mitigated airport” (5G CMA) is an airport at which the telecommunications companies have agreed to voluntarily limit their 5G deployment at the request of the FAA, as identified by an FAA Domestic Notice.
(2) For purposes of this AD, a “radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, demonstrates the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD, using a method approved by the FAA.
(i) Tolerance to radio altimeter interference, for the fundamental emissions (3.7-3.98 GHz), at or above the power spectral density (PSD) curve threshold specified in figure 1 to paragraph (g)(2)(i) of this AD.
(ii) Tolerance to radio altimeter interference, for the spurious emissions (4.2-4.4 GHz), at or above the PSD curve threshold specified in figure 2 to paragraph (g)(2)(ii) of this AD.
(3) For purposes of this AD, a “non-radio altimeter tolerant airplane” is one for which the radio altimeter, as installed, does not demonstrate the tolerances specified in paragraphs (g)(2)(i) and (ii) of this AD.
This paragraph restates the requirements of paragraph (g) of AD 2022-03-05. Within 2 days after January 27, 2022 (the effective date of AD 2022-03-05): Revise the Limitations Section of the existing AFM to include the information specified in figure 3 to paragraph (h) of this AD. This may be done by inserting a copy of figure 3 to paragraph (h) of this AD into the existing AFM.
For non-radio altimeter tolerant airplanes, do the actions specified in paragraphs (i)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 4 to paragraph (i) of this AD. This may be done by inserting a copy of figure 4 to paragraph (i) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 4 to paragraph (i) of this AD, remove the AFM revision required by paragraph (h) of this AD.
For radio altimeter tolerant airplanes, do the actions specified in paragraphs (j)(1) and (2) of this AD.
(1) On or before June 30, 2023, revise the Limitations Section of the existing AFM to include the information specified in figure 5 to paragraph (j) of this AD. This may be done by inserting a copy of figure 5 to paragraph (j) of this AD into the existing AFM. Incorporating the AFM revision required by this paragraph terminates the AFM revision required by paragraph (h) of this AD.
(2) Before further flight after incorporating the limitations specified in figure 5 to paragraph (j) of this AD, remove the AFM revision required by paragraph (h) of this AD.
(1) The Manager, Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the Operational Safety Branch, send it to the attention of the person identified in paragraph (l) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) AMOCs approved for AD 2021-23-12, Amendment 39-21810 (86 FR 69984, December 9, 2021) providing relief for specific radio altimeter installations are approved as AMOCs for the requirements specified in paragraph (h) of this AD until June 30, 2023.
For more information about this AD, contact Brett Portwood, Continued Operational Safety Technical Advisor, COS Program Management Section, Operational Safety Branch, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 817-222-5390; email:
None.
National Aeronautics and Space Administration.
Notice of proposed rulemaking.
The National Aeronautics and Space Administration (NASA) is proposing to amend and update its regulations for implementing the National Environmental Policy Act of 1969 (NEPA). The proposed amendments would update NASA's regulations to better align with the Agency's current and near future actions, adjust the level of NEPA review and documentation required for certain
Submit comments on or before July 3, 2023.
You may send comments, identified by 2700-AE56 to the Federal e-Rulemaking Portal:
Tina Norwood, (202) 358-7324,
The National Environmental Policy Act, as amended, 42 U.S.C. 4321-4347, requires all Federal agencies to assess the environmental impact of their actions pursuant to 42 U.S.C. 4332(2)(C). The Council on Environmental Quality (CEQ) has issued regulations at 40 CFR parts 1500 through 1508 (CEQ regulations) implementing NEPA that are binding on Federal agencies. On July 16, 2020, CEQ issued a final rule comprehensively updating its regulations implementing NEPA, 85 FR 43304 (July 16, 2020). The CEQ regulations require Federal agencies to develop or revise their procedures for implementing NEPA, as necessary, for consistency with CEQ's regulations or for efficiency (40 CFR 1507.3(b), (c)). However, CEQ has extended the deadline for agencies to propose conforming adjustments to their agency NEPA procedures until September 14, 2023, 86 FR 34154 (June 29, 2021). Moreover, consistent with Executive Orders (E.O.) 13990 of January 20, 2021, Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis, and E.O. 14008 of January 27, 2021, Tackling the Climate Crisis at Home and Abroad, CEQ is conducting a comprehensive review of the 2020 revisions to the CEQ regulations and is taking a phased approach to reconsider the regulations.
NASA's NEPA regulations are codified in 14 CFR 1216.3 (Procedures for Implementing the National Environmental Policy Act). NASA consulted with CEQ during the development of these proposed updated procedures and prior to their publication in the
In addition to NASA's implementing regulations, NASA provides specific instructions pertaining to NEPA program responsibilities internally through NASA Procedural Requirements (NPR) 8580.1, Implementing the National Environmental Policy Act and Executive Order 12114, available at NASA's NEPA website
Since NASA's last NEPA regulatory revision in 2012, NASA's mission, programs, and strategic goals have evolved with a key focus on leading a new era of human space exploration, performing transformative aeronautics technology research, and continuing to study our planet and the solar system. This proposed rule builds upon decades of NASA's experience and seeks to better align with NASA's evolving technology and mission demands. NASA's NEPA regulations and policy will continue to be available on NASA's Public Portal at
NASA is proposing to amend its regulations for implementing the requirements of NEPA to (1) better align with the Agency's current and near-future actions, (2) adjust the level of NEPA review and documentation required for certain NASA actions that have become routine over the past decade for which NASA has determined they do not have significant environmental effects, (3) provide more concise descriptions of NASA actions and more specific CatExs to ensure appropriate application and tracking by NASA, and 4) ensure consistency with EOs and Presidential Memoranda (
The proposed amendments would update existing CatExs and add nine new CatExs, amend existing actions normally requiring an EA and add a new action normally requiring an EA, amend existing actions normally requiring an environmental impact statement (EIS), and include other amendments. These changes are described later in this notice.
These proposed amendments to NASA's NEPA procedures incorporate and supplement CEQ's NEPA implementing regulations at 40 CFR parts 1500 through 1508. NASA drafted these procedures to minimize repetition with CEQ regulations and with the understanding that these NASA-specific regulations would be applied in tandem with the CEQ regulations. The terminology used in this Preamble and the proposed amendments include
In 2018, NASA Environmental Management Division (HQ/EMD) formed a working group to review 14 CFR part 1216, subpart 1216.3, including listed CatExs. The members comprising the working group were current NASA professionals with numerous years of NEPA planning and compliance history. Several of the members served on the working group for the 2012 revision of NASA's NEPA regulations. A summary of the working group members' qualifications is available on the NASA NEPA Library website:
In accordance with CEQ's regulations and its 2010 CatEx guidance, “Establishing, Applying, and Revising Categorical Exclusions under the National Environmental Policy Act,” the working group reviewed each existing CatEx against NASA's existing policies, procedures, programs, and mission to determine if they were current and appropriate. The working group also reviewed the 2018 CEQ comprehensive list of Federal agencies' CatExs and identified other agencies' CatExs for activities that are similar in nature, scope, and impact on the human environment to those activities conducted by NASA. Based on this benchmarking of other Federal agencies' CatExs and review of their administrative records, the working group recommended NASA add three CatExs to § 1216.304(d). The working group also recommended amending several existing NASA CatExs to clarify and better define the actions and to ensure NASA consistently applies and tracks CatEx use. Concurrently, the working group reviewed NASA's existing extraordinary circumstances to ensure that they adequately account for those situations and settings in which a proposed new or revised CatEx may not be applied, and NASA must prepare an EA or EIS to support Agency action.
In addition to reviewing NASA's CatExs and extraordinary circumstances, the working group reviewed NASA actions normally requiring an EA or EIS to determine if the level of analysis is appropriate and if additional actions should be added. The review considered NASA's current mission and routinely implemented actions, past experiences, and past NEPA reviews (EAs and EISs). The working group recommended adjusting the level of analysis for several actions from EIS to EA and from EA to CatEx because NASA has reviewed the environmental effects of each of the actions and found them not to be significant.
The working group developed a draft proposed rule, then distributed the draft to the NEPA Managers at the ten NASA Centers and component facilities, and to other environmental professionals and stakeholders within NASA, for review and feedback. NASA also consulted with CEQ during the development process to ensure the proposed changes to 14 CFR part 1216, subpart 1216.3, would meet NEPA requirements.
NASA proposes to designate the Assistant Administrator, Office of Strategic Infrastructure, within the Mission Support Directorate (MSD), as the NASA Senior Agency Official (SAO). The SAO would be responsible for establishing overall Agency NEPA compliance policy and implementing regulations for NASA, including resolving implementation issues and generally providing oversight of NASA's NEPA program. The proposed updates would incorporate the designation of NASA's SAO and would articulate the SAO's roles and responsibilities.
The NASA Senior Environmental Official (SEO) would be responsible for implementing NASA's NEPA compliance program; including all regulations, policy directives, and procedural requirements; and maintaining up-to-date Agency-wide NEPA program guidance that fully integrates NEPA analysis into Agency planning and decision-making processes. The SEO is the Director, Environmental Management Division, within the Office of Strategic Infrastructure. The NASA NEPA Manager, HQ/EMD would be delegated the responsibility for overseeing the implementation of NEPA by providing guidance and support to the Mission Directorates and NEPA Managers at ten NASA Centers and component facilities that oversee field-level NEPA compliance at their facilities. The responsibility for NEPA compliance resides with the applicable mission's, program's, or project's Responsible Official (decision maker) at NASA who may reside in a Mission Directorate for HQ-led missions/programs or at the Center level for Center-led missions/programs.
Most NASA actions occur at the Center level and the program or project manager (owner of the action requiring NEPA review) coordinates with the respective Center NEPA Manager in completing an environmental checklist for all levels of the NEPA review, reviewing the list of extraordinary circumstances for CatExs, preparing additional NEPA documentation as required, and coordinating with the Responsible Official on planning and decision making. For those actions in which principal responsibility has not been assigned to a Center or Centers (
For the past 20 years, HQ/EMD has maintained and supplemented the internal NASA Environmental Tracking System (NETS), which contains separate modules for NASA's environmental resource areas (
Projects for which NASA expects to use these NEPA procedures during the upcoming years include airborne science campaigns, construction of facilities projects, International Space Station resupply launches, sample return and other space flight missions, and research field campaigns.
Section 1216.304 of 14 CFR includes NASA's general provisions for compliance with NEPA through the use of CatExs and identifies actions categorically excluded from EA and EIS review. Within § 1216.304(d), NASA groups similar CatExs under five category headings: Administrative, Operations and Management, Research and Development (R&D), Real and Personal Property, and Aircraft and Airfield Activities. The heading “Research and Development Activities”
The rationale supporting the amended and new CatExs is set forth in NASA's Administrative Record for Updates to the National Aeronautics and Space Administration Categorical Exclusions (administrative record). The administrative record is summarized below and may be accessed in full via the online docket and at
Under paragraph (b), which lists NASA actions normally requiring an EA, NASA is proposing to remove two actions, add one new action, and amend three actions. Where actions normally requiring EAs are removed, added, or amended, the supporting rationale is explained. As noted above, NASA's NEPA procedures incorporate and supplement CEQ's NEPA implementing regulations at 40 CFR parts 1500 through 1508, but do not restate those regulations. NASA relies on the procedural and processing requirements of CEQ's regulations for EAs. To the extent that additional guidance is needed for case-by-case application of a particular requirement, for example selecting the appropriate method of public involvement, NASA will provide specific instructions in NASA NEPA policy (NPR 8580.1). In considering whether a proposed NASA action does, or does not, have significant effects, NASA will consider the effects of connected actions and whether mitigation measures may be implemented which avoid, minimize, or compensate for significant effects caused by a proposed action. If, after consideration of the applicable criteria, NASA determines that a Finding of No Significant Impact (FONSI) cannot be reached, NASA will prepare an EIS using the EA's analysis as a starting point for preparation of the EIS.
The proposal would renumber the existing example under paragraph (b)(2) to paragraph (b)(1), incorporate consistent grammar, and streamline the description.
Center Master Plans outline NASA's infrastructure plans to support Center operations projected over a 20-year period. An example of a major change would be a proposal for a new facility that was not envisioned in the Center Master Plan. It could also include a new facility that is included in the Center Master Plan that NASA wishes to consider as a new construction site within the Center that could impact natural resources. NASA may determine that the new site would not propose a change in environmental effect, such as construction on a site where a building has recently been demolished. Should NASA determine through EA analysis that a FONSI cannot be reached, NASA will prepare an EIS. This amended EA category also reflects a change in numbering from paragraph (b)(3) to paragraph (b)(2).
The DOE served as a cooperating agency in the preparation of each EIS because of its technical expertise and jurisdiction by law over the special nuclear material used in the spacecraft. In addition to extensive study of the safety features of the RPS, the DOE conducted radiological consequence analyses for each mission. This analysis has consistently demonstrated the low probabilities of a launch or post-launch mishap that would result in damage to the nuclear material's containment systems that would result in a release into the human environment with associated environmental impacts. None of the safety consequences and environmental analyses prepared over the 30-year span of these EISs conclude a significant environmental effect would be likely.
To date, all NASA nuclear-enabled missions have launched from Kennedy Space Center (KSC) in Cape Canaveral, FL. Prior to the launch of the Mars 2020 mission in August 2020, the NASA-KSC completed consultation with the United States Fish and Wildlife Service (USFWS) under Section 7 of the Endangered Species Act. The USFWS concurred with NASA's determination that the proposed action (Mars 2020 launch) may affect, but is not likely to adversely affect, threatened or endangered species or result in the destruction of designated critical habitat. In its consultation, NASA and USFWS agreed that in the event of a launch mishap, NASA would enter into emergency consultation to assess and remediate potential effects, if any, on listed species located in the affected area. NASA's long history in evaluating the safety, reliability, and potential environmental impacts of the use of nuclear-enabled spacecraft leads the Agency to conclude that the environmental effects of the use of nuclear-enabled spacecraft, even in the highly unlikely event of a launch or post-launch mishap, would not be significant. This conclusion leads the Agency to propose that for future nuclear-enabled missions, the appropriate starting level of its NEPA analysis is an EA, which, as is required by NEPA, would allow for the preparation of an EIS if the environmental effects were assessed to be significant. This change in the starting level of the NEPA analysis does not change NASA's long-standing commitment to conduct a rigorous, risk-informed safety analysis and launch authorization process as detailed in the new Presidential Memorandum signed August 20, 2019,
Under the heading “NASA actions normally requiring an environmental impact statement (EIS),” NASA is proposing to amend the headings to reflect categories under § 1216.306(b) that were identified as § 1216.306(c), (d), (e), and (f) (
Additional amendments are proposed in sections of the rule, other than §§ 1216.304, 1216.305, and 1216.306. These proposed edits are described below.
E.O.s 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This proposed rule has been designated a “significant regulatory action” although not economically significant, under section 3(f) of E.O. 12866. Accordingly, the proposed rule has been reviewed by the Office of Management and Budget.
The Regulatory Flexibility Act (5 U.S.C. 601
This proposed rule does not contain any information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The proposed rule would revise agency procedures and guidance for implementing NEPA. NASA NEPA procedures are procedural guidance to assist in the fulfillment of agency responsibilities under NEPA but are not the agency's final determination of what level of NEPA analysis is required for a particular proposed action. The CEQ sets forth the requirements for establishing agency NEPA procedures in its regulations at 40 CFR 1507.3. The CEQ regulations do not require agencies to conduct NEPA analyses or prepare NEPA documentation when establishing their NEPA procedures. The determination that establishing agency NEPA procedures does not require supporting NEPA analysis and documentation has been upheld in
NASA has considered this proposed rule under the requirements of E.O. 13132, Federalism. The Agency has concluded that the rule conforms with the federalism principles set out in this E.O. will not impose any compliance costs on the states and will not have substantial direct effects on the states or the relationship between the National Government and the states or on the distribution of power and responsibilities among the various levels of government. Therefore, the Agency has determined that no further assessment of federalism implications is necessary.
Pursuant to Title II of the Unfunded Mandates Reform Act (UMRA) of 1995 (2 U.S.C. 1531-1538), NASA has assessed the effects of the proposed rule on state, local, and Tribal governments, and the private sector. This proposed rule would not compel the expenditure of $100 million or more by any state, local, or Tribal government, or anyone in the private sector. Therefore, this proposed rule is not subject to the requirements of section 202 and 205 of the UMRA.
NASA does not expect this proposed rule to have any economic impact on the overall economy of the United States; state, local, or Tribal governments or communities; or any private party involved in commercial space launch activities at NASA facilities. Given the most recent data NASA has available, most NASA actions fall within the scope of a CatEx (98 percent categorically excluded, 1.4 percent had an EA/Finding of No Significant Impact, and 0.16 percent had an EIS/Record of Decision). By expanding the list of actions covered by a CatEx, NASA would promote more efficient NEPA compliance without sacrificing the integrity of the environmental impact review process for those actions which may require an EA or EIS.
The proposed updates to several existing NASA CatExs and the addition of nine new CatExs are intended to further streamline NASA NEPA compliance for actions that, individually or cumulatively, do not have a significant impact on the quality of the human environment. The proposed rule does not materially alter the budgetary impact of entitlements, grants, NASA loan programs, or the rights and obligations of recipients thereof. The proposed rule does not raise novel legal or policy issues; rather it promotes consistency with the CEQ's NEPA implementing regulations, thereby providing more regulatory certainty concerning NEPA compliance obligations to both NASA programs and commercial space operators who may propose actions that would occur on NASA jurisdictional facilities. Therefore, this proposed rule is not expected to have any adverse effect, economically or otherwise, on NASA, any other Federal, state, local, or Tribal entity or any private party who may propose an action that would occur at a NASA jurisdictional facility.
Environmental impact statements, Flood plains, Foreign relations.
For the reasons given in the preamble, NASA proposes to amend 14 CFR part 1216 as follows:
51 U.S.C. 20101
42 U.S.C. 2451
(b) Through this subpart, NASA adopts the Council on Environmental Quality (CEQ regulations implementing NEPA (40 CFR parts 1500 through 1508) and supplements those regulations with this subpart, for actions proposed by NASA that are subject to NEPA. This subpart and NASA's NEPA policy are available on NASA's Public Portal at
(a) The NASA Senior Agency Official (SAO), is the Associate Administrator, Mission Support Directorate. The SAO is responsible for overall Agency NEPA compliance, including integration of NEPA into the Agency's planning and decision making and resolving implementation issues.
(1) The NASA Senior Environmental Official (SEO) is the Assistant Administrator, Office of Strategic Infrastructure (OSI). The SEO, in consultation with the SAO, is responsible for development and implementation of NASA NEPA policy requirements and guidance which fully integrate NEPA compliance into Agency planning and decision-making processes. To the extent the CEQ's implementing regulations at 40 CFR parts 1500 through 1508 reserve a specific authority to the SAO, the SAO is the responsible NASA official for resolving matters related to that specific authority.
(2) The NASA Headquarters/Environmental Management Division (HQ/EMD), in consultation with the SEO, is responsible for implementing NEPA functions and guiding NASA's integration of NEPA into the Agency's planning and decision making. HQ/EMD provides oversight of all NASA entities in implementing their assigned responsibilities under NEPA. HQ/EMD, in coordination with the Center Environmental Management Office, is responsible for determining the appropriate level of NEPA documentation and maintaining a publicly accessible internet portal which includes information on the status of environmental impact statements (EISs) and other elements of NASA's NEPA program (
(3) Each NASA Center has an environmental management office that directs and implements the NEPA process, such as evaluating proposed actions; developing, reviewing, and approving required documentation; and advising Center-level program and project managers.
(b) The “Responsible Official” is the NASA official who will ensure that planning and decision making for each proposed Agency action complies with the regulations in this subpart and with Agency NEPA policy and guidance provided by the SAO, SEO, HQ/EMD, and the Center's environmental management office as applicable.
(c) NASA must comply with this subpart when considering issuance of a permit, lease, easement, or grant to a non-Federal party and may seek such non-Federal party's assistance in obtaining necessary information and completing the NEPA process.
(a) NEPA is a procedural statute intended to ensure Federal agencies consider the environmental impacts of their proposed actions in the decision-making process. Full integration of the NEPA process with NASA project and program planning improves Agency decisions and ensures:
(1) Consideration of sustainability, environmental stewardship, and compliance with applicable environmental statutes, regulations, and policies.
(2) NASA's analyses and documentation are prepared using a process that is transparent to the public, including opportunities for receipt and consideration of public comment, when appropriate.
(3) Potential program and project risks and delays are minimized.
(b) In considering whether the effects of a proposed action are significant and determining the appropriate level of NEPA review and documentation (
(c) NASA shall consider the reasonably foreseeable environmental impacts of a proposed Agency action, along with technical, economic, public health and safety, security, and other factors that are reasonably foreseeable, beginning in the early planning stage of a proposed action. NASA will not take any action that would have an adverse environmental impact or limit the choice of reasonable alternatives prior to completing NEPA review except as provided in 40 CFR 1506.1.
(d) Records of Environmental Consideration (RECs) will be used to document:
(1) Application of specific categorical exclusions to proposed actions;
(2) Adoption of a Federal draft or final NEPA documents;
(3) Reevaluation of an existing NEPA document; and
(4) Determination of whether an action fits within an existing NEPA document, including a programmatic NEPA document.
The revisions and additions read as follows:
(a) Categorical exclusions (CatExs) are categories of Agency actions that normally do not have a significant effect on the human environment and therefore do not require preparation of an EA or EIS. CatExs reduce paperwork, improve Government efficiency, and eliminate delays in initiating and completing proposed actions having no significant environmental impact. For some CatExs, as indicated in paragraph (d) of this section, a REC is required.
(b) Application of CatExs and presence of extraordinary circumstances:
(1) A proposed action may be categorically excluded if the action fits
(2) If an extraordinary circumstance as described in paragraph (c) of this section is present, NASA may nevertheless categorically exclude the proposed action if the action fits within the categories listed in paragraph (d) of this section and NASA determines that implementation of mitigation measures, such as relocation of the proposed action to an alternative site or limiting construction activities to certain seasonal periods of the year to avoid the extraordinary circumstance(s) in question, are sufficient to allow the proposed action to be categorically excluded.
(c) Extraordinary circumstances include situations where the proposed action:
(1) Has a reasonable likelihood of having a significant effect on public health and safety or the human environment.
(3) Is of significantly greater scope or size than is normal for the particular category of action.
(4) Has a reasonable likelihood of having effects that would violate Federal, state, Tribal, or local laws, or other enforceable requirements applicable to environmental protection.
(5) May adversely affect sensitive resources, such as, but not limited to, federally listed threatened or endangered species, their designated critical habitat, wilderness areas, floodplains, wetlands, aquifer recharge areas, coastal zones, wild and scenic rivers, and significant fish or wildlife habitat, unless the impact has been resolved through another environmental review process;
(6) May adversely affect national natural landmarks or cultural or historic resources, including, but not limited to, property listed on or eligible for listing on the National Register of Historic Places, unless the impact has been resolved through another review process;
(d) The following actions normally do not have a significant effect on the human environment and are categorically excluded from the requirement to prepare an EA or EIS:
(1) * * *
(ii) Issuing procedural rules, manuals, directives, and requirements.
(iv) Preparing documents, including design and feasibility studies, analytical supply and demand studies, reports and recommendations, master and strategic plans, and other advisory documents.
(v) Information-gathering exercises, such as inventories, audits, and studies.
(vi) Preparing and disseminating information, including document mailings, publications, classroom materials, conferences, speaking engagements, websites, and other educational/informational activities.
(ix) Field studies, including water sampling, monitoring wells, cultural resources surveys, biological surveys, geologic surveys, modeling or simulations, routine data collection and analysis, and/or temporary equipment.
(2) * * *
(i) Routine maintenance, minor construction or rehabilitation, minor demolition, minor modification, minor repair, and continuing or altered operations at, or of, existing NASA or NASA-funded or -approved facilities and equipment, such as buildings, roads, grounds, utilities, communication systems, and ground support systems (
(ii) Installing or removing equipment, including component parts, at existing Government or private facilities.
(iii) Contributing equipment, software, technical advice, exchanging data, and consulting with other agencies and public and private entities.
(v) Routine packaging, labeling, storage, transportation, and disposal of materials and wastes, in accordance with applicable Federal, state, Tribal, or local laws or requirements. Examples include but are not limited to hazardous, non-hazardous, and other regulated materials and wastes.
(vi) Habitat and species management activities conducted within the boundaries of NASA-controlled properties in accordance with applicable Federal, state, or local requirements. Examples include but are not limited to restoration of unique or critical habitat; thinning or brush control to improve growth of natural habitat, reduce invasive species, or reduce fire hazard; prescribed burning to reduce natural fuel build-up, reduce invasive species, or improve native plant vigor; planting appropriate vegetation that does not include noxious weeds or invasive plants; or wildlife management activities (REC required).
(vii) Small-scale, short-term cleanup actions under the Resource Conservation and Recovery Act or other authorities to reduce risk to human health or the environment from the release or imminent and substantial threat of release of a hazardous substance other than high-level radioactive waste and spent nuclear fuel, including treatment (such as incineration, encapsulation, physical or chemical separation, and compaction), recovery, storage, or disposal of wastes at existing facilities currently handling the type of waste involved in the action.
(viii) Replacement of existing energy sources with alternative or renewable energy sources that comply with existing permit conditions.
(ix) Routine maintenance, repair, and operation of vessels (including unmanned autonomous surface vessels), aircraft (including unmanned aircraft systems), overland/surface transportation vehicles, and other transportation systems as applicable. Examples include but are not limited to transportation or relocation of NASA equipment and hardware by barge, aircraft, or surface transportation system (
(3) Research, Development, and Science Activities including:
(i) Research, development, testing, and evaluation in compliance with all applicable Federal, state, Tribal, or local laws or requirements and Executive orders. This includes the research, development, testing, and evaluation of scientific instruments proposed for use on spacecraft, aircraft (including unmanned aircraft systems), sounding rockets, balloons, laboratories, watercraft, or other outdoor activities.
(ii) Use of small quantities of radioactive materials used for instrument detectors, calibration, and other purposes. Materials may be associated with the proposed use on spacecraft, aircraft (including unmanned aircraft systems), sounding rockets, balloons, laboratories, watercraft, or other outdoor activities.
(iii) Use of lasers for research and development, scientific instruments and measurements, and distance and ranging, where such use meets all applicable Federal, state, Tribal, or local laws or requirements and Executive orders. This includes lasers associated with spacecraft, aircraft (including unmanned aircraft systems), sounding rockets, balloons, laboratories, watercraft, or other outdoor activities.
(iv) Use of non-space nuclear system payloads on various platforms (
(v) Return of samples from solar system bodies (
(4) * * *
(ii) Granting or accepting easements, leases, licenses, rights-of-entry, and permits to use NASA property, or any non-NASA property, for activities that would be categorically excluded in accordance with this section (REC required).
(iii) Transfer or disposal of real property, property rights, or interests if a resulting change in use is a use that would be categorically excluded under this section (REC required).
(iv) Transferring real property administrative control to another Federal agency, including the return of public domain lands to the Department of the Interior (DoI) or other Federal agencies, and reporting of property as excess and surplus to the General Services Administration (GSA) for disposal, when the agency receiving administrative control (or GSA, following receipt of a report of excess) shall complete any necessary NEPA review prior to any change in land use (REC required).
(vi) Change in the facility status of real property assets (
(vii) Reductions, realignments, or relocation of personnel into existing federally owned or commercially leased space that does not involve a substantial change affecting the supporting infrastructure (
(5) * * *
(i) Periodic aircraft (including unmanned aircraft systems) flight activities, including training and research and development, which are routine and comply with applicable Federal, state, Tribal, or local laws or requirements, and Executive orders.
(ii) Relocation of similar aircraft (including unmanned aircraft systems) not resulting in a substantial increase in total flying hours, number of aircraft operations, operational parameters (
(e) The Responsible Official shall review the proposed action in its early planning stage and consider the scope of the action, the potentially affected environment, and the degree of the reasonably foreseeable effects of the action to determine whether extraordinary circumstances exist that could result, either individually or cumulatively, in significant environmental impacts. If extraordinary circumstances exist, the Responsible Official must determine whether application of the categorical exclusion to the proposed action is appropriate or whether preparation of an EA or EIS is required.
(a) NASA shall prepare an EA, which complies with 40 CFR 1501.5, when a proposed action is not categorically excluded and is not likely to have significant effects or when the significance of the effects is unknown. NASA shall consider the potentially affected environment and degree of the effects of the action when determining whether to prepare an EA.
(b) NASA actions normally requiring an EA include:
(1) Altering the ongoing operations at a NASA Center where the significance of the environmental effect(s) is unknown.
(2) Construction or modifications of facilities that represent a major change to an existing master plan and could result in a change in the environmental effect(s).
(3) Actions that are expected to result in major changes to established land use.
(4) Launching a spacecraft containing a space nuclear system. Space nuclear systems include radioisotope power systems, such as radioisotope thermoelectric generators and radioisotope heater units, and fission systems used for surface power and spacecraft propulsion.
(a) NASA shall prepare an EIS for actions that are likely to significantly impact the quality of the human environment, including actions for which an EA demonstrates that significant environmental impacts will potentially occur which will not be reduced or eliminated by changes to the proposed action or mitigation of its potentially significant environmental impacts. An EIS shall be prepared and published in accordance with CEQ's implementing regulations (40 CFR part 1502).
(b) NASA actions normally requiring an EIS include:
(1) Development and operation of new NASA-developed launch vehicles or space transportation systems.
(2) Management, including recovery, transport, and curation, of sample returns to Earth from solar system bodies (such as asteroids, comets, planets, dwarf planets, and planetary moons) that would receive a Restricted Earth Return categorization. NASA requires such a mission to include additional measures to ensure any potential indigenous life form would be contained so it could not adversely impact humans or Earth's environment.
(3) Substantial construction projects expected to result in significant effect(s) on the quality of the human and natural environment, when such construction and its effects are not within the scope of an existing master plan.
(a) For actions that require EAs or EISs, NASA encourages programmatic-level analysis for actions that are similar in nature, broad in scope, or likely to have similar environmental effects. Programmatic NEPA analyses may take place in the form of an EA or EIS.
(b) Tiering from previously prepared EISs or EAs is appropriate when it would eliminate repetitive discussions of the same issues and exclude from consideration issues already decided. Tiering from a programmatic-level NEPA document is appropriate for site- or project-specific actions that are included within the scope of the programmatic-level analysis.
(a) In cases where a major Federal action remains to occur, supplemental documentation may be required for previously prepared EAs or EISs under the following circumstances:
(1) If substantial changes are made to the proposed action that are relevant to environmental concerns; or
(2) There are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action and its impacts; or
(3) NASA determines that the purposes of NEPA will be furthered by doing so.
(b) The preparation of a supplemental EA or EIS shall be undertaken using the same procedural requirements set forth in 40 CFR 1501.5 or 40 CFR part 1502, as applicable; however, in the event a supplement to an EIS is required, scoping shall not be required unless, at NASA's discretion and in consideration of the factors and requirements of 40 CFR 1501.9, it is determined to be necessary or would otherwise further the purposes of NEPA.
(c) When it is unclear if an EA or EIS supplement is required, NASA may prepare a Supplement Analysis.
(1) The Supplement Analysis will discuss the circumstances that are pertinent to deciding whether to prepare a supplemental EA or EIS.
(2) The Supplement Analysis will contain sufficient information for NASA to determine whether:
(i) An existing EA or EIS should be supplemented;
(ii) A new EA or EIS should be prepared; or
(iii) No further NEPA documentation is required.
(3) NASA shall make the determination and the related Supplement Analysis available to the public for information.
(d) When applicable, NASA shall incorporate the determination and supporting Supplement Analysis made under paragraph (b) of this section, into the administrative record related to the action that is the subject of the EA or EIS supplement or determination.
When the analysis proceeds to an EA or EIS and mitigation measures are adopted for the purpose of avoiding or reducing the significance of environmental impacts, such mitigation measures will be identified in the EA Finding of No Significant Impact (FONSI) or the EIS Record of Decision (ROD). NASA shall implement mitigation measures (including adaptive management strategies, where appropriate) consistent with applicable FONSIs and/or RODs and shall monitor their implementation and effectiveness. The Responsible Official shall ensure that funding for such mitigation measures is included in the program or project budget.
(a) The classified status of a proposed action does not relieve NASA of the requirement to assess, document, and consider the environmental impacts of a proposed action.
(a) When the Responsible Official determines that emergency circumstances exist which make it necessary to take immediate response and/or recovery action(s) before preparing a NEPA analysis, then the following provisions apply:
(1) The Responsible Official may undertake immediate emergency response and/or recovery action(s) necessary to protect life, property, or valuable resources. When taking such action(s), the Responsible Official shall, to the extent practicable, mitigate foreseeable adverse environmental impacts.
(2) At the earliest practicable time, the Responsible Official shall notify the SAO of the emergency and any past, ongoing, or future NASA emergency response and/or recovery action(s). The SAO shall determine if NEPA applies and the appropriate level of NEPA analysis to document the emergency. If the emergency response and/or recovery action(s) will reasonably result in significant environmental impacts, the SAO shall consult with the CEQ about alternative arrangements for compliance with NEPA.
(b) If the Responsible Official proposes emergency response and/or recovery actions that will continue beyond those needed to immediately protect life, property, and valuable resources, the Responsible Official shall consult with the SAO to determine the appropriate level of NEPA compliance. If continuation of the emergency actions will reasonably result in significant environmental impacts, the SAO shall consult with the CEQ about alternative arrangements for compliance.
Census Bureau, Commerce Department.
Notice of proposed rulemaking.
The Census Bureau is proposing to amend its regulations to reflect new export reporting requirements related to the State Department, Directorate of Defense Trade Controls (DDTC) Category XXI Determination Number. Specifically, the Census Bureau is proposing to add a conditional data element, DDTC Category XXI Determination Number, when “21” is selected in the DDTC USML Category Code field in the Automated Export System (AES) to represent United States Munitions List (USML) Category XXI. In addition to the new export reporting requirement, the proposed rule would make remedial changes to the Foreign Trade Regulations (FTR) to update International Traffic in Arms Regulations (ITAR) references in existing data elements: DDTC Significant Military Equipment Indicator and DDTC Eligible Party Certification Indicator. The proposed rule also makes remedial changes to the FTR that were proposed in the Notice of Proposed Rulemaking published December 15, 2021.
Written comments must be received on or before July 3, 2023.
You may submit comments by any of the following methods:
•
• By email directly to
All comments received are part of the public record. No comments will be posted to
Lisa E. Donaldson, Chief, Economic Management Division, Census Bureau by phone (301) 763-7296 or by email
The Census Bureau is responsible for collecting, compiling, and publishing export trade statistics for the United States under the provisions of title 13, United States Code (U.S.C.), chapter 9, section 301. Additionally, the Census Bureau is responsible for publishing the Foreign Trade Regulations (FTR) that set the export reporting requirements for Electronic Export Information (EEI). The EEI is made up of mandatory, conditional, and optional data elements. The purpose of this rulemaking is to add a conditional data element, Directorate of Defense Trade Controls (DDTC) Category XXI Determination Number, when “21” (see Appendix L of the Automated Export System Trade Interface Requirements (AESTIR)) is selected in the DDTC United States Munitions List (USML) Category Code field in the EEI. The FTR defines the DDTC USML Category Code as the USML category of the article being exported (22 CFR part 121).
The Congressional mandate in Public Law 106-113 that amended section 301, of title 13 of the U.S. Code authorized the Secretary of Commerce to require the mandatory electronic filing of export information through the Automated Export System (AES) for items identified in the Commerce Control List (CCL) and the USML. Under the authorities in chapter 9 of title 13, the Secretary of Commerce proposes to collect additional data on the export of items under DDTC USML Category Code “21” to identify and validate which commodities DDTC USML Category Code “21” was cited for.
The DDTC Category XXI Determination Number is a unique number issued by DDTC in conjunction with a notification that a specific commodity is described in USML Category XXI. Information on valid USML Category XXI determinations and the prospective AES error code may be found in the Frequently Asked Questions section of DDTC's website (
The Census Bureau is seeking public comments from data users, businesses and others to assess this proposed change. Below are considerations when providing feedback to this proposed rule; however, any pertinent feedback not captured by these considerations is welcome.
1. Describe the potential value of adding the DDTC Category XXI Determination Number to the EEI.
2. How long would a company that utilizes or manages proprietary software need to make programming changes to potentially add the DDTC Category XXI Determination Number field to its interface to the AES?
3. Are there business practices that a company would need to implement in order to come into compliance with the reporting of the DDTC Category XXI Determination Number field? If so, how long would a company need to implement new business practices?
The proposed rule also makes remedial changes to the FTR that were proposed in the Notice of Proposed Rulemaking published December 15, 2021 in the
Finally, the U.S. Department of Homeland Security and the U.S. Department of State concur with the revisions to the FTR as required by 13 U.S.C. 302, and Public Law 107-228, division B, title XIV, section 1404.
Pursuant to the Foreign Relations Act, Public Law 107-228 and 13 U.S.C. 301 302, the Census Bureau is amending relevant sections of the FTR to revise or clarify export reporting requirements. Therefore, the Census Bureau is proposing to amend 15 CFR part 30 by making the following amendments:
• Revise § 30.2(d)(3) to remove the language, “(See subpart B of this part for export control requirements for these types of transactions.),” as the exclusion overrides the export control requirements.
• Revise § 30.6(a)(1)(iii) to clarify that when the Dun and Bradstreet Number (DUNS) is reported as the U.S. Principal Party in Interest (USPPI) Identification Number, the Employer Identification Number (EIN) of the USPPI also is required to be reported in the Automated Export System.
• Revise § 30.6(b)(3) to amend the Foreign Trade Zone (FTZ) identifier to allow for 9-digits. The increased number of digits is required because of the increase in the number of subzones.
• Revise § 30.6(b)(16)(ii) to amend the DDTC Significant Military Equipment (SME) indicator by updating the ITAR references as a result of DDTC relocating certain ITAR provisions to improve the overall structure of the ITAR.
• Revise § 30.6(b)(16)(iii) to amend the DDTC eligible party certification indicator by updating the ITAR references as a result of DDTC relocating certain ITAR provisions to improve the overall structure of the ITAR.
• Revise § 30.6(b)(16)(ix) to add the conditional data element “DDTC Category XXI Determination Number.” The “DDTC Category XXI Determination Number” will be the unique number issued by DDTC to a member of the regulated community (usually the original equipment manufacturer) in conjunction with a notification that a specific commodity is described in USML Category XXI. This number is required only when citing Category XXI as an export classification and is used to confirm that an authoritative DDTC USML Category XXI determination is being referenced to do so.
• Revise § 30.37(u) to remove and reserve the exemption for technical data. This exemption is covered under § 30.2(d)(3), making the exemption redundant.
• Revise § 30.55 to remove the citation “19 CFR 103.5” and add in its place “19 CFR part 103.”
• Revise § 30.71 to amend the Note to paragraph (b) to address the yearly adjustments for civil penalties as a result of inflation.
• Revise § 30.74 to amend paragraph (c)(5) to remove information that may become outdated and referencing the Census Bureau website to obtain the most current method for submitting a Voluntary Self-Disclosure.
The Chief Council for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy, Small Business Administration that this proposed rule will not have a significant economic impact on a substantial number of small entities.
In the current Foreign Trade Regulations, the Electronic Export Information (EEI) shall be filed through the Automated Export System (AES) for all exports of physical goods. The AES is the electronic system for collecting Shipper's Export Declaration (SED) (or any successor document) information from persons exporting goods from the United States, Puerto Rico, Foreign Trade Zones located in the United States and Puerto Rico, the U.S. Virgin Islands, between the U.S. and Puerto Rico, and to the U.S. Virgin Islands from the United States or Puerto Rico. In the proposed revisions, export shipments with “21” in the DDTC USML Category Code field will be required to report the DDTC Category XXI Determination Number.
In calendar year 2022, authorized agents and U.S. Principal Parties in Interest reported the DDTC USML Category Code of “21” on 0.6% of EEI records. A large majority of the EEI records involved export shipments of defense articles from branches of the Department of Defense. Based on these statistics, the Census Bureau believes this proposed rule will not create any economic impact on all companies including a substantial number of small entities.
This proposed rule has been determined to not be significant for purposes of Executive Order 12866. This proposed rule does not contain policies with federalism implications sufficient to warrant preparation of a federalism assessment under Executive Order 13132.
Notwithstanding any other provisions of law, no person is required to respond to, nor shall a person be subject to, a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act (PRA) unless that collection of information displays a valid Office of Management and Budget (OMB) control number.
This proposed rule covers collections of information subject to the provisions of the PRA, which are cleared by OMB under OMB Control Number 0607-0152—AES Program.
This proposed rule will not impact the current reporting-hour burden requirements as approved under OMB Control Number 0607-0152 under provisions of the PRA. The proposed rule will not require any revisions to the information sought under OMB Control Number 0607-0152. Robert L. Santos, Director, Census Bureau, approved the publication of this notification in the
Economic statistics, Exports, Foreign trade, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, the Census Bureau is proposing to amend 15 CFR part 30 as follows:
5 U.S.C. 301; 13 U.S.C. 301-307; Reorganization plan No. 5 of 1990 (3 CFR 1949-1953 Comp., p.1004); Department of Commerce Organization Order No. 35-2A, July 22, 1987, as amended, and No. 35-2B, December 20, 1996, as amended; Public Law 107-228, 116 Stat. 1350.
(d) * * *
(3) Electronic transmissions and intangible transfers.
(e) * * *
(1) * * *
(ii) USPPI's EIN or DUNS.
(a) * * *
(1) * * *
(iii)
(b) * * *
(3)
(16) * * *
(ii)
(iii)
(ix)
The contents of the statistical copies of import entries and withdrawals on file with the Census Bureau are treated as confidential and will not be released without authorization by CBP, in accordance with 19 CFR part 103
The civil monetary penalties are adjusted for inflation annually based on The Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410; 28 U.S.C. 2461), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-134) and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701 of Pub. L. 114-74). In accordance with this Act, as amended, the penalties in title 13, chapter 9, sections 304 and 305(b), United States Code are adjusted and published each year in the
(c) * * *
(5)
Food and Drug Administration, HHS.
Notification of petition.
The Food and Drug Administration (FDA or we) is announcing that we have filed a color additive petition, submitted by Environmental Defense Fund, et al., proposing that FDA repeal the color additive regulation providing for the use of titanium dioxide in foods.
The color additive petition was filed on April 14, 2023. Either electronic or written comments must be submitted by July 3, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper instructions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your objection, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comment only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Paulette M. Gaynor, Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1192.
Under section 721(d)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 379e(d)(1)), we are giving notice that we have filed a color additive petition (CAP 3C0325), submitted by Environmental Defense Fund, Center for Environmental Health, Center for Food Safety, Center for Science in the Public Interest, and Environmental Working Group, c/o Tom Neltner, 1875 Connecticut Ave. NW, Washington, DC 20009. The petition proposes that we repeal the color additive regulation for titanium dioxide in § 73.575 (21 CFR 73.575), which permits the use of titanium dioxide in foods.
In accordance with the procedure in section 721(d) of the FD&C Act for issuance, amendment, or repeal of regulations, the petition asks us to repeal section 73.575 to no longer provide for the use of titanium dioxide in foods. The petitioners assert that the intended use of this color additive no longer meets the safety standard under 21 CFR 70.3(i), and cite, as evidence, an opinion by the European Food Safety Authority (EFSA) entitled “Safety assessment of titanium dioxide (E171) as a food additive” that was published in May 2021 (we are using EFSA's title for this document, rather than the one cited by the petitioners), and other publications.
We invite comments, additional scientific data, and other information related to the issues raised by this petition. If we determine that the available data justify repealing section 73.575 to no longer provide for the safe use of titanium dioxide in foods, we will publish our decision in the
The petitioners have claimed that this action is categorically excluded under 21 CFR 25.32(m), which applies to an action to prohibit or otherwise restrict or reduce the use of a substance in food, food packaging, or cosmetics. In addition, the petitioners have stated that, to their knowledge, no extraordinary circumstances exist (see 21 CFR 25.21). If FDA determines a categorical exclusion applies, neither an environmental assessment nor an environmental impact statement is required. If FDA determines a categorical exclusion does not apply, we will request an environmental assessment and make it available for public inspection.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking.
This document contains proposed regulations that, in certain cases, would terminate the continued application of certain tax provisions arising from a previous transfer of intangible property to a foreign corporation when the intangible property is repatriated to certain United States persons. The proposed regulations would affect certain United States persons that previously transferred intangible property to a foreign corporation.
Written or electronic comments and requests for a public hearing must be received by July 3, 2023. Requests for a public hearing must be submitted as prescribed in the “Comments and Requests for a Public Hearing” section.
Commenters are strongly encouraged to submit public comments electronically. Submit electronic submissions via the Federal eRulemaking Portal at
Concerning the proposed regulations other than § 1.904-4, Chadwick Rowland and L. Ulysses Chatman, (202) 317-6937; concerning § 1.904-4, Jeffrey L. Parry, (202) 317-6936; concerning submissions of comments and requests for a public hearing, Vivian Hayes at (202) 317-6901 (not toll-free numbers) or by sending an email to
Section 367(d) of the Internal Revenue Code (the “Code”) provides rules for outbound transfers of intangible property (as defined in section 367(d)(4)) by a United States person (a “U.S. person”) to a foreign corporation.
Specifically, the U.S. transferor is treated as receiving amounts that reasonably reflect the amounts that would have been received annually in the form of such payments over the useful life of the intangible property (an “annual inclusion”), or, in the case of a
Section 6038B(a)(1)(A) grants the Secretary regulatory authority to require information reporting related to certain outbound transfers of property by a U.S. person to a foreign corporation, including rules related to outbound transfers of intangible property. Section 6038B(c) generally provides rules for failures to furnish the required information.
Congress enacted section 367(d) in substantially its present form to address “specific and unique problems” that exist with respect to outbound transfers of intangible property.
[T]ransferor U.S. companies hope to reduce their U.S. taxable income by deducting substantial research and experimentation expenses associated with the development of the transferred intangible and, by transferring the intangible to a foreign corporation at the point of profitability, to ensure deferral of U.S. tax on the profits generated by the intangible.
Congress also explained that, after the initial outbound transfer of intangible property, these problems could arise by reason of certain subsequent direct or indirect dispositions of the intangible property.
Temporary regulations were published under sections 367(d) and 6038B(a)(1)(A) on May 16, 1986 (51 FR 17936). Proposed regulations were also published under these sections on September 16, 2015 (80 FR 55568), and the related final regulations were published on December 16, 2016 (81 FR 91012) (these final regulations and the temporary regulations, together, the “section 367(d) regulations”).
Consistent with section 367(d) and its legislative history, the section 367(d) regulations provide rules for determining a U.S. transferor's section 367(d) inclusion and a transferee foreign corporation's required adjustments for its deemed payment to the U.S. transferor. In general, the U.S. transferor takes into account an annual inclusion over the useful life of the intangible property, as determined in accordance with the provisions of section 482 and regulations thereunder.
Additionally, for purposes of chapter 1 of subtitle A of the Code, the transferee foreign corporation reduces its E&P by the amount of the deemed payment to the U.S. transferor, and, for purposes of subpart F of part III of subchapter N of chapter 1 (“subpart F”), the transferee foreign corporation may treat the deemed payment as, in relevant part, an expense properly allocated and apportioned to gross income subject to subpart F in accordance with the provisions of §§ 1.954-1(c) and 1.861-8.
If the U.S. transferor subsequently transfers the stock of the transferee foreign corporation it received in exchange for the intangible property, or if the transferee foreign corporation subsequently transfers the intangible property it received in exchange for its stock, the section 367(d) regulations provide different rules based on whether the transferee in the subsequent transfer is a U.S. person or a foreign person and whether the transferee is a related person or an unrelated person as to the U.S. transferor.
If the U.S. transferor subsequently transfers stock of the transferee foreign corporation to a related U.S. person (a “successor U.S. transferor”), the transfer is not treated as a disposition of the intangible property, and the successor U.S. transferor is treated as receiving a right to receive a proportionate share (determined under § 1.367(d)-1T(e)(4)) of the annual inclusion that would otherwise be taken into account by the U.S. transferor under § 1.367(d)-1T(c). Therefore, the successor U.S. transferor is required to take into account that proportionate share of the annual section 367(d) inclusion over the remaining useful life of the intangible property, and the transferee foreign corporation takes into account any adjustments from the successor U.S. transferor's annual section 367(d) inclusion.
Alternatively, if a U.S. transferor subsequently transfers stock of the transferee foreign corporation to an unrelated person (U.S. or foreign), the transfer is treated as an indirect disposition of the transferred intangible property that triggers a lump-sum section 367(d) inclusion. As a result, the U.S. transferor recognizes gain immediately (determined based on the fair market value of the intangible
If the transferee foreign corporation subsequently transfers the intangible property to a related person, notwithstanding that such subsequent transfer is a direct disposition of the intangible property, the section 367(d) regulations do not trigger a lump-sum inclusion but rather provide that “the requirement that the U.S. transferor recognize gain under [§ 1.367(d)-1T(c)(1) or (e)(1)] shall not be affected” by such transfer.
Conversely, if the transferee foreign corporation subsequently transfers the intangible property to an unrelated person (U.S. or foreign), the U.S. transferor recognizes gain immediately (in the form of a lump-sum inclusion determined using the U.S. transferor's former adjusted basis in the intangible property immediately before the transfer to the transferee foreign corporation and a partial annual inclusion), and the transferee foreign corporation makes corresponding adjustments.
As described in the preceding paragraphs of this part I.C.2 of the Background, the consequences of a direct or indirect transfer of the intangible property following an initial outbound transfer of that property depend, in relevant part, on whether the transferee in the subsequent transfer is a related or unrelated person. In determining relatedness, the section 367(d) regulations lower certain thresholds that normally apply in determining whether persons are related, to preserve the application of section 367(d) for cases in which a U.S. transferor retains a sufficient nexus to the intangible property after the subsequent transfer.
The Treasury Department and the IRS are aware that some taxpayers are evaluating whether to repatriate to the United States intangible property that was previously transferred to a foreign corporation in a transaction subject to section 367(d).
Because, in relevant part, the section 367(d) regulations do not distinguish between subsequent transfers of intangible property made to a related U.S. or foreign person, as described in part I.C.2 of this Background, there is a concern that, in certain cases, the section 367(d) regulations can inappropriately require the U.S. transferor to continue recognizing an annual section 367(d) inclusion even if the subsequent transfer is to a related U.S. person that will recognize the income derived from the intangible property. Specifically, the section 367(d) regulations do not terminate the required annual section 367(d) inclusion even if the intangible property is transferred to a related U.S. person that is subject to U.S. taxation on income earned from the intangible property. As a result, if the section 367(d) inclusion stream continues, the income earned from the intangible property would be subject to excessive U.S. taxation. Because the continued application of section 367(d) in these situations could result in excessive U.S. taxation and may disincentivize certain repatriations of intangible property, the Treasury Department and the IRS are proposing, in certain cases, to terminate the application of section 367(d) if the intangible property is repatriated to certain U.S. persons that are subject to U.S. taxation with respect to the income derived from the intangible property. The term “repatriation” is, unless otherwise noted, used in this Preamble to generally denote a subsequent transfer of the intangible property to the U.S. transferor or a U.S. person related to the U.S. transferor.
Where the U.S. transferor is a member of a consolidated group, and the intangible property is repatriated to another member of the same consolidated group (“transferee member”), some taxpayers have asked whether the U.S. transferor's annual inclusions could be redetermined to be excluded from gross income under § 1.1502-13(c)(6)(ii)(A) (the “Automatic Relief Rule”). For that to occur, the transferee member's corresponding item must be a deduction or loss that is “permanently and explicitly disallowed” under another provision of the Code or regulations.
To address repatriations of intangible property more generally, and not just those where the related U.S. person is a member of the same consolidated group as the U.S. transferor (and to avoid the need to obtain a ruling in such a case), these proposed regulations provide rules that more broadly apply section 367(d) to the repatriation of intangible property, including the circumstances in which the application of section 367(d) is terminated (these rules, collectively, the “section 367(d) repatriation rules”).
Section 904 provides for the application of separate foreign tax credit limitations to certain categories of income under section 904(d). One of those categories is the separate category for foreign branch income under section 904(d)(1)(B). Section 1.904-4(f)(1)(i) provides that foreign branch category income means the gross income of a United States person (as defined in section 7701(a)(30), other than a pass-through entity) that is attributable to foreign branches (as defined in § 1.904-4(f)(3)(vii)) held directly or indirectly through disregarded entities by the United States person.
In general, § 1.904-4(f)(2)(vi)(A) adjusts the attribution of gross income when disregarded payments are made between a foreign branch and a foreign branch owner, or between foreign branches. Disregarded remittances or contributions, however, do not result in the reattribution of gross income. Accordingly, when a disregarded transaction with a foreign branch may
To address these concerns § 1.904-4(f)(2)(vi)(D) provides that the amount of gross income attributable to a foreign branch (and the amount of gross income attributable to its foreign branch owner) that is not passive category income must be adjusted to reflect all transactions that are disregarded for U.S. tax purposes in which property described in section 367(d)(4) is transferred to or from a foreign branch or between foreign branches, whether or not a disregarded payment is made in connection with the transfer. In determining the amount of gross income that is attributable to a foreign branch that must be adjusted, the principles of sections 367(d) and 482 apply. For example, if a foreign branch owner transfers property described in section 367(d)(4) to a foreign branch, the principles of section 367(d) are applied by treating the foreign branch as a separate foreign corporation to which the property is transferred in exchange for stock of the corporation in a transaction described in section 351. Similarly, if a foreign branch remits property described in section 367(d)(4) to its foreign branch owner, the foreign branch is treated as having sold the transferred property to the foreign branch owner in exchange for annual payments contingent on the productivity or use of the property, the amounts of which are determined under the principles of sections 367(d) and 482.
As described in part II of the Background of this Preamble, § 1.367(d)-1T(f)(3) provides that a subsequent disposition of intangible property by the transferee foreign corporation to a related person does not affect a U.S. transferor's annual inclusion under § 1.367(d)-1T(c) or (e). This provision further provides that the related person that receives the intangible property is treated as the new transferee foreign corporation for purposes of any required adjustments and any accounts receivable created under § 1.367(d)-1T(g). Accordingly, the section 367(d) regulations require the U.S. transferor to recognize annual inclusions even if the income earned from the intangible property is subject to current U.S. taxation in the hands of the U.S. person holding the intangible property. In addition, the deemed (substituted) transferee foreign corporation is not allowed a deduction that could reduce taxable income, even though that deemed transferee foreign corporation is the U.S. transferor or a related U.S. person.
Continuing to apply section 367(d) in such cases could give rise to excessive U.S. taxation and disincentivize taxpayers from repatriating that property. To address these concerns, proposed § 1.367(d)-1(f)(4) generally terminates the application of section 367(d) if the transferee foreign corporation repatriates the intangible property to a “qualified domestic person” and certain reporting requirements are satisfied.
As noted in part I.A of this Explanation of Provisions, the proposed regulations terminate the continued application of section 367(d) when a transferee foreign corporation repatriates intangible property to a qualified domestic person and the U.S. transferor provides the relevant information described in proposed § 1.6038B-1(d)(2) and, when those requirements are met, the proposed regulations require the U.S. transferor to include in gross income a partial annual inclusion attributable to the part of its taxable year that the transferee foreign corporation held the intangible property, after which the intangible property is no longer subject to section 367(d) (thus, for example, the annual inclusion stream terminates).
The manner in which the repatriation occurs will determine whether the U.S. transferor must recognize gain in connection with the repatriation transaction, with corresponding adjustments being made as to the transferee foreign corporation. For example, the U.S. transferor would not recognize gain in the case of a repatriation occurring by reason of a nonrecognition transaction pursuant to which no gain or loss is recognized as to the transferee foreign corporation.
Consistent with section 367(d)(2)(A)(ii)(II), proposed § 1.367(d)-1(f)(4)(i)(A) (the “gain recognition rule”) requires the U.S. transferor to recognize gain equal to the amount described in proposed § 1.367(d)-1(f)(4)(ii). The gain recognition rule, in conjunction with the rules described in parts I.B.3 (Required adjustments for certain gain recognized) and I.D (Qualified domestic person's adjusted basis in repatriated intangible property) of this Explanation of Provisions, generally ensures that a qualified domestic person does not receive a tax-free increase to the adjusted basis in the repatriated intangible property.
Thus, as noted in part I.B.1 of this Explanation of Provisions, whether the U.S. transferor recognizes gain under the gain recognition rule depends on the form of the repatriation transaction. Specifically, the gain recognition rule focuses on whether the intangible property is transferred basis property (as defined in section 7701(a)(43)) by reason of the repatriation, without regard to the application of section 367(d) and the section 367(d)
If the intangible property is transferred basis property as described in the preceding paragraph, the amount of gain the U.S. transferor will recognize pursuant to the gain recognition rule is the amount of gain the transferee foreign corporation would recognize, if any, upon the repatriation under general subchapter C rules if its adjusted basis in the intangible property were equal to the U.S. transferor's former adjusted basis in the property.
If the intangible property is not transferred basis property by reason of the repatriation, the amount of gain a U.S. transferor will recognize pursuant to the gain recognition rule is the excess, if any, of the fair market value of the intangible property on the date of the repatriation over the U.S. transferor's former adjusted basis in the property.
Current § 1.367(d)-1T(f)(2)(i) provides that a transferee foreign corporation's E&P are reduced, in relevant part, by the amount of gain recognized by a U.S. transferor under § 1.367(d)-1T(f)(1). Because a U.S. transferor recognizes gain in these cases in the form of a lump-sum inclusion, the corresponding adjustment to the transferee foreign corporation's E&P is generally intended to reduce the E&P that arises for the transferee foreign corporation by reason of the disposition (and, in so doing, the adjustment prevents potential excessive E&P arising from that disposition). To achieve this goal, § 1.367(d)-1T(f)(2) necessarily implies a preceding increase to the transferee foreign corporation's E&P by reason of the disposition that is then offset by the corresponding reduction. For example, consider a case in which a U.S. transferor contributed intangible property with an adjusted basis of $0 to a wholly owned transferee foreign corporation in an exchange described in section 351(a) that was subject to section 367(d). In a later year, the transferee foreign corporation disposes of the intangible property to an unrelated person when the fair market value of the intangible property is $100x, which causes the U.S. transferor to recognize $100x of gain under § 1.367(d)-1T(f)(1); also, assume the transferee foreign corporation has $50x of other E&P unrelated to the subsequent disposition of the intangible property. Section 1.367(d)-1T(f)(2) does not simply reduce the transferee foreign corporation's E&P by $100x, but rather the corresponding reduction would offset the $100x of E&P that arises as to the transferee foreign corporation by reason of the disposition, thereby preventing potential excessive E&P and leaving the transferee foreign corporation's other E&P unaffected.
Similarly, and in order to prevent excessive E&P and gross income as to the transferee foreign corporation because of the gain recognition rule or § 1.367(d)-1T(f)(1), proposed § 1.367(d)-1(f)(2)(i) provides certain adjustments to the transferee foreign corporation's E&P and gross income that arise by reason of any gain the U.S. transferor recognizes under the gain recognition rule or § 1.367(d)-1T(f)(1). Specifically, for purposes of chapter 1 of the Code—that is, chapter 1 (relating to normal taxes and surtaxes) of subtitle A (relating to income taxes) of the Code—the transferee foreign corporation reduces (but not below zero) the portion of its E&P and gross income arising from the transaction to take into account the gain recognized by the U.S. transferor.
Because section 367(d) effectively shifts certain gain a transferee foreign corporation would recognize as to intangible property directly to a U.S. transferor under the gain recognition rule or § 1.367(d)-1T(f)(1) (as applicable), these rules are intended to provide appropriate reductions to offset, as to the transferee foreign corporation, the impact of a U.S. transferor's recognition of gain under section 367(d). In most cases, the proper reduction described in proposed § 1.367(d)-1(f)(2)(i) will equal the amount of gain recognized by the U.S. transferor under the provisions described in the preceding sentence. But the proper reduction may diverge from the amount of gain recognized by the U.S. transferor in certain cases, depending on the position taken with respect to the transferee foreign corporation's basis in the intangible property during the time the intangible property is subject to section 367(d).
Proposed § 1.367(d)-1(f)(4)(v) provides a special rule that applies if the intangible property is transferred in two or more related transactions. If this special rule applies, whether and how the proposed regulations apply depends on the ultimate recipient of the intangible property.
Proposed § 1.367(d)-1(f)(4)(iii) defines a qualified domestic person for purposes of the proposed regulations. First, a qualified domestic person includes the U.S. transferor that initially transferred the intangible property subject to section 367(d) that is
The proposed regulations define a qualified domestic person in this manner based on the principle that it is generally appropriate to terminate the continued application of section 367(d) only when all the income produced by the intangible property, as well as gain recognized on a disposition of the intangible property, will be subject to current tax in the United States as to the qualified domestic person while that person holds the property. It is also appropriate to terminate the continued application of section 367(d) for a repatriation to an initial U.S. transferor because such a transfer merely restores the circumstances that existed at the time of the original outbound transfer subject to section 367(d).
A qualified domestic person, as noted above, also includes certain U.S. persons (individuals and qualified corporations) related to either the initial U.S. transferor or qualified successor, as applicable.
In the case of a domestic partnership, § 1.367(d)-1T(h) defines a related person for purposes of the section 367(d) regulations by reference to certain relationships described in section 267 or 707(b)(1). Thus, if a U.S. transferor owns more than 50 percent of the capital or profits interest in a domestic partnership, the U.S. transferor and the domestic partnership are related within the meaning of section 707(b)(1) and, therefore, the U.S. transferor and the domestic partnership are related for purposes of § 1.367(d)-1T(h), even if the domestic partnership has one or more foreign partners. The proposed regulations, however, do not treat the domestic partnership as a qualified domestic person. The Treasury Department and the IRS considered addressing such cases by including rules in the proposed regulations treating a partnership as an aggregate of its partners (an “aggregate approach”), with the analysis for qualified domestic person status occurring under such an aggregate approach.
Proposed § 1.367(d)-1(f)(4)(iv) provides rules regarding a qualified domestic person's basis in the intangible property it receives in a repatriation. Specifically, the proposed regulations provide that, in the case of repatriation pursuant to which the intangible property qualifies as transferred basis property, a qualified domestic person's adjusted basis in the intangible property will equal, subject to any applicable limitations that may apply under the Code, the lesser of the U.S. transferor's former adjusted basis in the intangible property or the transferee foreign corporation's adjusted basis in that property (immediately before the repatriation), increased by the greater of the amount of gain recognized by the U.S. transferor under the proposed regulations upon the repatriation (if any) or the amount of gain recognized by the transferee foreign corporation upon the repatriation (if any).
The Treasury Department and the IRS are aware of the uncertainty regarding the treatment of adjusted basis in intangible property subject to section 367(d) while section 367(d) applies, particularly when the U.S. transferor's former adjusted basis is greater than zero. The proposed regulations are intended to address basis consequences solely when intangible property is repatriated in a transaction that eliminates the continued application of section 367(d). In this manner, the effect of proposed § 1.367(d)-1(f)(4)(iv) is prospective insofar as it provides for a qualified domestic person's adjusted basis in the intangible property after the property is no longer subject to section 367(d). Thus, the proposed regulations do not address, nor is any implication intended as to, the appropriate treatment of adjusted basis as to the
As noted in part I.A of this Explanation of Provisions, the transferee foreign corporation makes the required adjustments currently described in § 1.367(d)-1T(c)(2) for cases in which the section 367(d) repatriation rules apply (that is, the adjustments with respect to the U.S. transferor's partial annual inclusion for the year of the repatriation). Current § 1.367(d)-1T(c)(2)(ii) provides that, as to a U.S. transferor's annual inclusion, the transferee foreign corporation may treat that deemed payment as an expense (whether or not paid) properly allocated and apportioned against gross income subject to subpart F, in accordance with §§ 1.954-1(c) and 1.861-8.
The proposed regulations provide that the deemed payment by the transferee foreign corporation is treated as an allowable deduction that must be allocated and apportioned to such corporation's classes of gross income in accordance with §§ 1.882-4(b)(1), 1.954-1(c), and 1.960-1(c) and (d) (as appropriate).
As noted in part I.C of the Background section of this Preamble, there may be multiple U.S. transferors with respect to the same intangible property, which may occur, for example, if a U.S. transferor subsequently transfers a portion of its stock in the transferee foreign corporation to a successor U.S. transferor. In these cases, because the section 367(d) regulations apply separately as to each U.S. transferor, the requirements of proposed § 1.367(d)-1(f)(4)(i) also apply separately with respect to each U.S. transferor. That is, to terminate the continued application of section 367(d) with respect to a particular U.S. transferor, the recipient of the transferred intangible property must be a qualified domestic person with respect to that U.S. transferor and the information described in proposed § 1.6038B-1(d)(2)(iv) must be provided.
To illustrate, assume that a transferee foreign corporation (“TFC”) holds intangible property that is subject to section 367(d), and TFC repatriates that intangible property on date X. Also assume that two domestic corporations (“US1” and “US2”) are treated as U.S. transferors under the section 367(d) regulations by reason of owning stock of TFC (US1 was the original U.S. transferor and US2 is a successor U.S. transferor by reason of its acquisition of a portion of the stock of TFC from US1). Therefore, if the recipient of the transferred intangible property on date X is a qualified domestic person (for example, a related domestic corporation) with respect to US1, but is an unrelated person with respect to US2, the following occurs: proposed § 1.367(d)-1(f)(4)(i) would apply with respect to US1, if the information described in proposed § 1.6038B-1(d)(2)(iv) is provided, and US2 would recognize gain under § 1.367(d)-1T(f)(1) by reason of the transaction.
The proposed regulations update the references to section 936(h)(3)(B) that appear in the applicable regulations under section 367 with references to section 367(d)(4), which was added as part of the Consolidated Appropriations Act in 2018.
The proposed regulations provide that proposed § 1.367(d)-1(f)(3) would not apply as to a repatriation meeting the requirements of proposed § 1.367(d)-1(f)(4)(i)(B); instead, proposed § 1.367(d)-1(f)(4)(i) applies, and, thereafter, the intangible property is no longer subject to section 367(d). The language in proposed § 1.367(d)-1(f)(3) also reflects minor editorial differences from the language currently in § 1.367(d)-1T(f)(3) that are not intended to be substantive. See proposed § 1.367(d)-1(f)(3).
The proposed regulations fix a longstanding typographical error by replacing the reference to “section 267(d)” in current § 1.367(d)-1T(h)(2)(ii) with a reference to “267(f).”
Finally, the proposed regulations eliminate § 1.951A-2(c)(2)(ii), which provides that deductions taken into account in determining a CFC's tested income and tested loss under section 951A include the amount of a deemed payment under section 367(d)(2)(A). This rule is no longer necessary because the proposed regulations provide that such deemed payments are treated as allowable deductions in accordance with, in relevant part, § 1.951A-2(c)(3).
As noted in part III of the Background section of this Preamble, the provisions in § 1.904-4(f)(2)(vi)(D) provide that, in relevant part, the principles of section 367(d) apply for determining the amount of gross income that is attributable to a foreign branch that must be adjusted under § 1.904-4(f)(2)(vi)(D). But those provisions do not elaborate on how the principles of section 367(d) apply for that purpose; in particular, there is no mention of how or whether current § 1.367(d)-1T(f) applies in the foreign branch income context.
The Treasury Department and the IRS believe that due to the differing scopes and purposes of section 367(d) and § 1.904-4(f)(2)(vi)(D), the consequences of a subsequent transfer for purposes of determining a U.S. transferor's section 367(d) inclusion do not necessarily inform the appropriate treatment for purposes of the section 904(d) branch income rules. Section 367(d), as a threshold matter, applies only in the case of certain outbound transfers of intangible property by a U.S. person to a foreign corporation, whereas § 1.904-4(f)(2)(vi)(D) applies to outbound transfers by a U.S. foreign branch owner to a foreign branch, inbound transfers by a foreign branch to a U.S. foreign branch owner, as well as transfers between foreign branches with the same U.S. foreign branch owner. If there are multiple transfers of an item of intangible property over time, each transfer must be separately evaluated and could result in differing amounts of
As described in part I.A of this Explanation of Provisions, proposed § 1.367(d)-1(f)(4)(i) requires a U.S. transferor to provide the information described in proposed § 1.6038B-1(d)(2)(iv) with respect to the repatriation. In general, §§ 1.6038B-1 and 1.6038B-1T provide information reporting rules that apply with respect to transfers of property to foreign corporations, including transfers of property described in sections 367(a) and (d).
These proposed regulations make two conforming changes to the reporting requirements for subsequent transfers under § 1.6038B-1T(d)(2) (the “proposed information reporting rules”). The first change provides that, to the extent a qualified domestic person receives intangible property in a subsequent transfer, the subsequent transfer information described in proposed § 1.6038B-1(d)(2)(iv) instead of the subsequent transfer information described in § 1.6038B-1T(d)(2)(iii) must be provided.
The second change adds information reporting requirements for a subsequent transfer of intangible property to a qualified domestic person.
In general, as a condition for terminating the application of section 367(d) with respect to the transferred intangible property, proposed § 1.367(d)-1(f)(4)(i)(B) requires a U.S. transferor to provide the information described in proposed § 1.6038B-1(d)(2)(iv). If a U.S. transferor fails to provide that information, the repatriation is subject to proposed § 1.367(d)-1(f)(3) such that the section 367(d) regulations, including the requirement to take an annual inclusion into account over the useful life of the intangible property, continue to apply. However, a U.S. transferor is eligible for relief under the proposed regulations if proposed § 1.367(d)-1(f)(4)(i)(B) would have applied to the subsequent transfer of intangible property but for the fact that the required information was not provided and the U.S. transferor, upon becoming aware of the failure, promptly provides the required information and explains its failure to comply.
The proposed regulations generally apply to subsequent dispositions of intangible property occurring on or after the date of publication of the Treasury decision adopting these rules as final regulations in the
The Administrator of the Office of Information and Regulatory Affairs (“OIRA”), Office of Management and Budget (“OMB”), has determined that this proposed rule is not a significant regulatory action, as that term is defined in section 3(f) of Executive Order 12866. Therefore, OIRA has not reviewed this proposed rule pursuant to section 6(a)(3)(A) of Executive Order 12866 and the April 11, 2018, Memorandum of Agreement between the Treasury Department and OMB.
The collection of information contained in this notice of proposed rulemaking has been submitted to OMB for review in accordance with the Paperwork Reduction Act under control number 1545-0026. Commenters are strongly encouraged to submit public comments electronically. Written comments and recommendations for the proposed information collection should be sent to
Whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility;
The accuracy of the estimated burden associated with the proposed collection of information;
How the quality, utility, and clarity of the information to be collected may be enhanced;
How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
The collection of information in this proposed regulation is in § 1.6038B-1(d)(2)(iv). This information is necessary to ensure that proposed § 1.367(d)-1(f)(4) is appropriately applied to the subsequent transfer.
The collection of information is required to comply with section 367(d). The likely respondents are domestic corporations. Burdens associated with these requirements will be reflected in the burden for Form 926,
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.
When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (5 U.S.C. chapter 6) (“RFA”) requires the agency “to prepare and make available for public comment an initial regulatory flexibility analysis” that will “describe the impact of the proposed rule on small entities.”
The Treasury Department and the IRS do not have detailed data readily available to assess the exact number of small entities potentially affected by the proposed regulations. Based on the limited data available, it is estimated that there will be less than 700 taxpayers potentially affected by the proposed regulations. But, among those taxpayers, an even smaller portion will likely be affected by the proposed regulations as these rules apply to a specific type of transaction—repatriations of intangible property subject to section 367(d). Moreover, the entities potentially affected by these proposed regulations are generally not small entities, because of the resources and investment necessary to develop intangible property and, once so developed, transfer the intangible property to a foreign corporation. Therefore, the Treasury Department and the IRS certify that the proposed regulations will not have a significant economic impact on a substantial number of small entities. The IRS invites the public to comment on the impact of these regulations on small entities.
Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule does not have federalism implications, does not impose substantial direct compliance costs on State and local governments, and does not preempt State law within the meaning of the Executive order.
Before these proposed amendments to the regulations are adopted as final regulations, consideration will be given to comments that are submitted timely to the IRS as prescribed in the Preamble under the
A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written comments. Requests for a public hearing are encouraged to be made electronically. If a public hearing is scheduled, notice of the date and time for the public hearing will be published in the
IRS Revenue Procedures, Revenue Rulings, and Notices cited in this Preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at
The principal authors of these regulations are Chadwick Rowland and L. Ulysses Chatman, Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, the Treasury Department and the IRS propose to amend 26 CFR part 1 as follows:
6 U.S.C. 7805 * * *
Section 1.367(d)-1 also issued under 26 U.S.C. 367(d).
The additions and revision read as follows:
(c)
(2)
(i) [Reserved]
(ii) The deemed payment is treated as an allowable deduction (whether or not that amount is paid) of the transferee foreign corporation properly allocated and apportioned to the appropriate classes of gross income in accordance with §§ 1.882-4(b)(1), 1.951A-2(c)(3), 1.954-1(c), 1.960-1(c), and 1.960-1(d), as applicable.
(4)
(d)
(e)
(2)
(i) [Reserved]
(ii) The deemed payment is treated as an allowable deduction (whether or not that amount is paid) of the transferee foreign corporation properly allocated and apportioned to the appropriate classes of gross income in accordance with §§ 1.882-4(b)(1), 1.951A-2(c)(3), 1.954-1(c), 1.960-1(c), and 1.960-1(d), as applicable.
(iii) For further guidance, see § 1.367(d)-1T(e)(2)(iii) through (e)(4).
(iv) [Reserved]
(3) through (4) [Reserved]
(f)
(2)
(i) For purposes of chapter 1 of the Code, the transferee foreign corporation reduces (but not below zero) the portion of its earnings and profits and gross income arising by reason of the subsequent disposition of the intangible property by the amount of gain recognized by the U.S. transferor under paragraph (f)(4)(i)(A) of this section or § 1.367(d)-1T(f)(1); and
(ii) The U.S. transferor may establish an account receivable from the transferee foreign corporation equal to the amount of gain recognized under paragraph (f)(4)(i)(A) of this section or § 1.367(d)-1T(f)(1) in accordance with § 1.367(d)-1T(g)(1).
(3) Subsequent transfer of intangible property to related person. Except as provided in paragraph (f)(4)(i)(B) of this section, a U.S. person's requirement to recognize income under § 1.367(d)-1T(c) or (e) is not affected by the transferee foreign corporation's subsequent disposition of the transferred intangible property to a related person. For purposes of any required adjustments, and of any accounts receivable created under § 1.367(d)-1T(g)(1), the related person that receives the intangible property is treated as the transferee foreign corporation.
(4) Subsequent transfer of intangible property to qualified domestic person—(i) In general. Except as provided in paragraph (f)(4)(v) of this section, if a U.S. person transfers intangible property subject to section 367(d) and the rules of this section and § 1.367(d)-1T to a foreign corporation in an exchange described in section 351 or 361 and, within the useful life of the intangible property, that transferee foreign corporation subsequently disposes of the intangible property to a qualified domestic person, then—
(A) The U.S. transferor of the intangible property (or any person treated as such pursuant to § 1.367(d)-1T(e)(1)) is required to recognize gain, as applicable, equal to the amount described in paragraph (f)(4)(ii) of this section; and
(B) If the U.S. transferor provides the information described in § 1.6038B-1(d)(2)(iv), then—
(
(
(ii)
(A) If the intangible property is transferred basis property (as defined in section 7701(a)(43)) by reason of the subsequent disposition (determined without regard to section 367(d), this section, and § 1.367(d)-1T), the amount of gain, if any, the transferee foreign corporation would recognize if its adjusted basis in the intangible property were equal to the U.S. transferor's former adjusted basis in the property; or
(B) If the intangible property is not transferred basis property by reason of the subsequent disposition (determined without regard to section 367(d), this section, and § 1.367(d)-1T), the excess, if any, of the fair market value of the intangible property on the date of the subsequent disposition and the U.S. transferor's former adjusted basis in that property.
(iii)
(A) The U.S. transferor that initially transferred intangible property subject to section 367(d);
(B) A U.S. person treated as a U.S. transferor under § 1.367(d)-1T(e)(1), provided such person is an individual or a corporation other than a corporation exempt from tax under section 501(a), a regulated investment company (as defined in section 851(a)), a real estate investment trust (as defined in section 856(a)), a domestic international sales corporation (DISC) (as defined in section 992(a)(1)), or an S corporation (as defined in section 1361(a));
(C) A U.S. person that is an individual related, within the meaning of paragraph (h)(2)(ii) of this section and § 1.367(d)-1T(h), to the person described in paragraph (f)(4)(iii)(A) or (B) of this section; or
(D) A U.S. person that is a corporation related, within the meaning of paragraph (h)(2)(ii) of this section and § 1.367(d)-1T(h), to the person described in paragraph (f)(4)(iii)(A) or (B) of this section, other than a corporation exempt from tax under section 501(a), a regulated investment company (as defined in section 851(a)), a real estate investment trust (as defined in section 856(a)), a DISC (as defined in section 992(a)(1)), or an S corporation (as defined in section 1361(a)).
(iv)
(A) In the case of a subsequent disposition of intangible property described in paragraph (f)(4)(ii)(A) of this section, and subject to any applicable limitations that may apply
(B) In the case of a subsequent disposition of intangible property described in paragraph (f)(4)(ii)(B) of this section, the fair market value of the intangible property (as determined on the date of the subsequent disposition).
(v)
(5)
(6)
(A) USP and USS are domestic corporations that each use a calendar taxable year.
(B) TFC is a foreign corporation whose functional currency is the U.S. dollar.
(C) In year 1, USP transfers intangible property, as defined in section 367(d)(4), with a $0 adjusted basis, to TFC in a section 351 exchange (the “transferred IP”), and such transfer is subject to section 367(d).
(D) Each annual inclusion (including any amount described in § 1.367(d)-1T(f)(1)(ii)) is taken into account under section 367(d)(2)(A)(ii)(I) and § 1.367(d)-1T(c)(1).
(E) Any subsequent transfer or disposition of stock of TFC or the transferred IP occurs within the useful life of the transferred IP.
(F) All transactions are respected under general principles of tax law.
(ii)
(A)
(
(
(B)
(
(C)
(
(D)
(
(E)
(
(g)
(2)
(ii) For further guidance, see § 1.367-1T(g)(2)(ii) through (g)(2)(iii)(D).
(iii) [Reserved]
(A) through (D) [Reserved]
(4)
(5)
(6)
(h)
(1) [Reserved]
(2) For further guidance, see § 1.367(d)-1T(h)(2) introductory text and (h)(2)(i).
(i) [Reserved]
(ii) Section 1563 applies (for purposes of section 267(f)) without regard to section 1563(b)(2).
(i)
(j)
(2)
(f) * * *
(2) * * *
(vi) * * *
(D) * * *
(4)
(q) * * *
(3) Except as provided in the following sentence, paragraph (f) of this section applies to taxable years that begin after December 31, 2019, and end on or after November 2, 2020. Paragraph (f)(vi)(D)(
(c) * * *
(2)
(e)
The additions read as follows:
(d)
(i) through (iii) [Reserved]
(viii)
(2)
(i) through (ii) [Reserved]
(iii)
(A) For further guidance, see § 1.6038B-1T(d)(2)(iii)(A) through (C).
(B) through (C) [Reserved]
(iv)
(A) A statement providing that § 1.367(d)-1(f)(4)(i)(B) applies to the subsequent transfer;
(B) A general description of the subsequent transfer and any wider transaction of which it forms a part, including the U.S. transferor's former adjusted basis in the intangible property and the transferee foreign corporation's adjusted basis in the intangible property (as determined immediately before the subsequent transfer), the amount and computation of any gain recognized by the U.S. transferor under § 1.367(d)-1(f)(4)(i)(A), and a description of whether the intangible property was, or is expected to be, subsequently transferred to one or more other persons (as described in § 1.367(d)-1(f)(4)(v));
(C) A description of the intangible property;
(D) A copy of the Form 926 with respect to the original transfer of the intangible property and any attachments identifying the intangible property as within the scope of section 367(d);
(E) The name, address, and taxpayer identification number of the qualified domestic person that receives the intangible property, including a statement describing the relationship between the U.S. transferor and the qualified domestic person, and, if applicable, such information regarding any other persons described in § 1.367(d)-1(f)(4)(v); and
(F) Any other information as may be prescribed by the Commissioner in publications, forms, instructions, or other guidance.
(g) * * *
(8) Paragraphs (d)(2)(iii) introductory text and (d)(2)(iv) of this section apply to transfers occurring on or after [date of publication of final regulations in the
(d) * * *
(2) * * *
(iii)
Office of the DoD Chief Information Officer, Department of Defense (DoD).
Proposed rule.
The DoD is proposing revisions to the eligibility criteria for the voluntary Defense Industrial Base (DIB) Cybersecurity (CS) Program. These revisions will allow a broader community of defense contractors to benefit from bilateral information sharing as when this proposed rule is finalized all defense contractors who are subject to mandatory cyber incident reporting will be able to participate. DoD is also proposing changes to definitions and some technical corrections for readability.
Comments must be received by June 20, 2023.
Please submit comments on this proposed rule, identified by 32 CFR part 236, Docket ID: DOD-2019-OS-0112 and/or by Regulatory Information Number (RIN) 0790-AK86, by any of the following methods:
•
•
• Stacy Bostjanick, Chief Defense Industrial Base Cybersecurity, Office: 703-604-3167.
•
The Defense Industrial Base (DIB) means the Department of Defense, Government, and private sector worldwide industrial complex with capabilities to perform research and development, design, produce, and maintain military weapon systems, subsystems, components, or parts to satisfy military requirements. The DIB Cybersecurity Program is a voluntary program to enhance and supplement participants' capabilities to safeguard DoD information that resides on, or transits, DIB unclassified information systems. The program encourages greater threat information sharing to complement mandatory aspects of DoD's DIB cybersecurity activities which are contractually mandated through Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting.
Currently, the DIB CS Program has the following objectives:
• Establish a voluntary, mutually acceptable framework to protect information from unauthorized access.
• Protect the confidentiality of information exchanged to the maximum extent authorized by law.
• Create a trusted environment to maximize network defense and remediation efforts by:
1. Sharing cyber threat information and incident reports.
2. Providing mitigation/remediation strategies and malware analysis.
This program is part of DoD's larger portfolio of work to protect DoD information handled by the DIB by understanding and sharing information, building security partnerships, implementing long-term risk management programs, and maximizing efficient use of resources. It supports two-way information sharing and maintains meaningful relationships and frequent dialogue across the diverse array of eligible defense contractors. For eligible defense contractors, the program maintains a capability for companies to access classified government cyber threat information providing additional context to better understand the cyber threats targeting their networks and information systems.
In May 2012, DoD published an interim final rule establishing the voluntary DIB CS Program and the bilateral information sharing model still used today.
With this rule, the Department proposes to expand eligibility requirements to allow greater program participation and increase the benefits of bilateral information sharing, which helps protect DoD controlled unclassified information from cyberattack, as well as to better align the voluntary DIB CS Program with DoD's mandatory cyber incident reporting requirements. The current eligibility requirements, based on the October 2016 rule, requires a company to be a cleared defense contractor
• Has DoD-approved medium assurance certificates;
• Has an existing facility clearance
• Can execute the standardized Framework Agreement
The program has experienced steady growth, with the annual number of applications tripling since 2016 (80 total applications received in 2016, 266 total applications received in 2022). It has also seen a steady increase in the percentage of defense contractors who are interested in participating but do not meet current eligibility requirements. The percentage of applications received from ineligible defense contractors has risen at an average rate of 5% per year since 2016; 10% of applications received in 2016 were from ineligible defense contractors, while 45% of applicants in 2022 were ineligible. This steady increase in ineligible applicants indicates an increasing desire amongst defense contractors to participate in a cyber threat information sharing program.
In addition, the Department has actively engaged defense associations, universities, and companies in the DIB, as well as participated in many public forums discussing cyber threats and the way forward. The overwhelming feedback was for the Department to facilitate engagement with the broader community of defense contractors beyond just the cleared defense community. In general, smaller defense contractors have fewer resources to devote to cybersecurity, which may provide a vector for adversaries to access information critical to national security. In addition, the Department is working on providing more tailored threat information to support the needs of a broader community of defense contractors with varying cybersecurity capabilities. The gap in eligibility in the current program, feedback from interested but ineligible contractors, a vulnerable DoD supply chain, and a pervasive cyber threat have prompted DoD to propose revising the eligibility requirements of the DIB CS Program to allow participation by non-cleared defense contractors.
The maximum number of defense contractors estimated to be subject to mandatory cyber incident reporting under DFARS clause 252.204-7012 is 80,000. The presence of the clause in a contract does not establish that covered defense information is shared. DoD is working on reporting mechanisms to better assess contractors managing covered defense information. The population of defense contractors in possession of covered defense information and subject to mandatory incident reporting requirements far exceeds the population of defense contractors currently eligible to participate in the voluntary DIB CS Program. With the proposed changes to the eligibility criteria, an estimated additional 68,000 defense contractors will be eligible to participate in the voluntary DIB CS Program. Based on prior participation statistics, it is estimated that about 10% of the eligible contractors (12,000 + 68,000 = 80,000) will actually apply to join the voluntary DIB CS Program (80,000 × 0.10 = 8,000).
Currently, the DIB CS Program has approximately 1,000 cleared defense contractors participating in the program. Program participants have access to technical exchange meetings, a collaborative web platform (DIBNet-U), and threat products and services through the DoD Cyber Crime Center (DC3). DC3 implements the program's operations by sharing cyber threat information and intelligence with the DIB, and offering a variety of products, tools, services, and events. DC3 serves as the single clearinghouse for unclassified Mandatory Incident Reports (MIRs) and voluntary threat information sharing reports.
In addition to the program eligibility changes described above, DoD is also proposing the following changes.
1. Access to media—This definition is being removed as it is no longer used in the rule text.
3. DIB CS Program participant—This definition has been revised to align with the revised eligibility requirements set forth in this proposed rule.
4. Government furnished information (GFI)—This definition was revised to adopt the convention of referring to the DIB CS Program with a capital `P'.
DoD is amending § 236.5 (DoD's DIB CS program) in order to align the program description with the revised eligibility requirements. As a result, references to cleared defense contractors have been replaced with contractors that own or operate a covered contractor information system. Security clearance information is only collected, when applicable, if a company elects to participate in classified information sharing. In addition, the language stating participation is typically three to ten company-designated points of contact (POC) has been removed, to avoid confusion regarding the number of POCs, as some larger companies may wish to nominate a larger number of
DoD is amending § 236.7 (DoD's DIB CS program requirements) to remove the requirement that a company have an existing active facility clearance (FCL) to at least the Secret level granted under 32 CFR part 117, National Industrial Security Program Operating Manual (NISPOM),
A foundational element of the activities described in this part is the recognition that the information shared between DoD and DIB CS Program participants pursuant to the DIB CS Program includes extremely sensitive information that requires protection. For additional information regarding the Government's safeguarding of information received from contractors that requires protection, see the Privacy Impact Assessment (PIA) for the DIB Cybersecurity Activities located at:
DoD believes the cost impact of the proposed changes to this proposed rule is not significant, as the changes primarily expand the availability of the established DIB CS Program to additional defense contractors. The newly eligible population of defense contractors may incur costs to familiarize themselves with the rule and those who elect to participate in the program will incur costs related to program participation. The Government will continue to incur costs related to operating the program. The DIB CS Program conducts outreach activities to defense contractors through press releases, participation in defense-oriented conferences, speaking engagements, and through digital media. The program will leverage pre-established channels to message changes to the program and engage with the eligible population of defense contractors. Based on the program growth experienced that during the last phase of program expansion the program is forecasting annual growth at just over 1% of the eligible population. At a growth rate of 1% per year it will take the program approximately 10 years to achieve the estimated 10% participation rate of the eligible DIB.
In order to join the DIB CS Program there is an initial labor burden for a defense contractor to familiarize themselves with the rule and subsequently apply to the program and provide POC information. In total, if it takes each contractor 30 minutes to read and familiarize him/herself with the rule, it will take contractors 4,000 hours to familiarize themselves with the rule (8,000 participants × .5 = 4,000 hours). At an hourly wage of $108.92, the total cost incurred by contractors for rule familiarization will amount to $108,920 dollars ($108.92 × .5 hours = $54.46 × 4,000 hours = $217,840). The hourly labor cost is based on the mean wage estimate from the Bureau of Labor Statistics for an Information Security Analysts, Occupational Employment and Wages, May 2021 and is covered under information collection 0704-0490. This hourly wage is adjusted upward by 100% to account for overhead and benefits, which implies a value of $108.92 per hour.
The estimated annual burden for a company to apply to the program or for a participating company to update POC information is $36.31, with a total annual cost to all participants of $319,498.67 at peak program participation. This calculation is based on 8,000 participants submitting an average of one application per year and 10% of the population (800 participants) submitting an update each year, with 20 minutes of labor per submission, at a cost of $108.92 per hour ($36.31 ($108.92 ×
There is an estimated annual burden projected at $544.60 for defense contractors voluntarily sharing cyber threat information. This is based on a defense contractor electing to submit an average of five informational reports per year with two hours of labor per voluntary submission, at a cost of $108.92 per hour ($108.92 × 2 hours each = $217.84 × 5 reports = $1,089.20). It is estimated that 1% of the newly eligible population will elect to join the DIB CS Program annually, which currently has approximately 1,000 participants, with program growth plateauing at 10% of the population by Year 9. The table below shows the costs to industry to voluntarily sharing cyber threat information over a 9-year period. If, in the first year of the program expanding there are 980 participants and 800 new participants join the program, there will be a total of 1,780 participants. Assuming each participant responds five times, this totals 8,900 annual responses times $217.84 per response and will equal $1,938,776 in total annual cost to participants, which is covered in information collection 0704-0489.
In addition, DIB CS Program participants may choose to attend meetings in conjunction with the DIB CS Program. All new participants are invited to attend an orientation session and all existing participants are invited to attend meetings on a quarterly basis. If a defense contractor chooses to send an employee to a day-long meeting each quarter, the defense contractor would incur a cost of $1,742 ($108.92 × 8 hours = $871.36 × 4 meetings = $3,485.44).
The DoD has identified general areas of costs related to the operation of this program. First, DoD incurs costs to implement this program operationally by responding to inquiries, processing application submissions and collecting, sharing, and managing POC information for program administration and management purposes. Second, DoD incurs costs to collect, analyze, and disseminate threat information.
DoD responds to an average of 2,000 questions each year and these responses are estimated to take 20 minutes per response. If it takes 20 minutes to respond to each question, it will take 667 hours to respond to questions. At an hourly wage of $51.16,
In addition, there is a cost incurred by the DoD to receive cyber threat information submitted by defense contractors to have it analyzed by cyber threat experts at DC3. By year 9 of the expanded program, it is estimated DC3 will receive 40,000 responses per year, based on the estimate that each participating company elects to submit 5 informational reports (8,000 participants × 5 reports). Each product takes approximately two hours to create and incurs an hourly labor cost of $51.16 per hour. This equals $102.32 (2 hours × 51.16) per response. The labor cost to the government is forecasted to be $4,092,800 annually after 9 years of growth. In addition to processing cyber threat information, the DoD incurs operational and maintenance costs for the system receiving and storing cyber threat information. This system costs the DoD $5,100,000 annually to maintain (covered under information collection 0704-0489).
This program benefits the Department by increasing awareness and improving assessments of cyber incidents that may affect mission critical capabilities and services. It continues to be an important element of the Department's comprehensive effort to defend DoD information, protect U.S. national interests against cyber-attacks, and support military operations and contingency plans worldwide. Once a defense contractor joins the program, they are encouraged to share information, including cyber threat indicators, that they believe may be of value in alerting the Government and others, as appropriate, of adversary activity to enable the development of mitigation strategies and proactively counter threat actor activity. DC3 develops written products that include analysis of the threat, mitigations, and indicators of adversary activity. Even cyber incidents that are not compromises of covered defense information may be of interest to DoD for situational awareness purposes. This information is disseminated as anonymized threat products that are shared with authorized DoD personnel, other Federal agencies, and company-designated POCs participating in the DIB CS Program. With the revisions to the eligibility criteria, the Department will be able to reduce the impact of cyber threat activity on DIB networks and information systems and, in turn, preserve its technological advantage and protect DoD information and warfighting capabilities. The mitigation of the cyber threat targeting defense contractors reinforces the nation's national security and economic vitality.
For DIB participants, this program provides valuable cyber threat information they cannot obtain from anywhere else and technical assistance through analyst-to-analyst exchanges, mitigation and remediation strategies, and cybersecurity best practices in a collaborative environment. The shared unclassified and classified cyber threat information is used to bolster a company's cybersecurity posture and mitigate the growing cyber threat. The program's tailored support for small, mid-size, and large companies with varying cybersecurity maturity levels is an asset for participants. The program remains a key element of DoD's cybersecurity efforts by providing services to help protect DIB CS Program participants and the sensitive DoD information they handle.
Maintain status quo with the ongoing voluntary cybersecurity program for cleared defense contractors.
This option is not selected as it does not allow DoD to increase bilateral information sharing to bolster DIB cybersecurity and safeguard DoD information transiting on DIB networks. In addition, the population of defense contractors with mandatory reporting requirements would continue to exceed those eligible to participate in the DIB CS Program. Companies that submit mandatory reports but are not eligible for the DIB CS Program would continue to be excluded from receiving cyber threat information and technical assistance.
DoD posts generic cyber threat information and cybersecurity best practices on a publicly accessible website without directly engaging participating companies.
This alternative was not selected as companies already have access to open-source cyber threat information and best practices from multiple sources in the public sector. This alternative does not afford access by defense contractors to government-furnished cyber threat information, specifically tailored for the DIB. In addition, this alternative does not enable defense contractor interaction with DC3.
Revise eligibility requirements to permit all defense contractors who own or operate a covered contractor information system (approximately 80,000 defense contractors) to participate in the DIB CS Program. Using the 10% estimation used for past program participation, the program is forecasted to grow to approximately 8,000 defense contractors.
The revised eligibility criteria allow DoD to perform outreach to a broader DIB community. Being able to share pertinent cyber threat information with the DIB will increase both the DoD and defense contractors' knowledge of the cyber threat landscape. Giving DoD the ability to have greater visibility over issues affecting unclassified networks will allow DoD to share pertinent alerts and threat information with a larger number of DIB organizations. DoD believes that revising the eligibility criteria to apply to contractors that own or operate covered contractor information systems is an important step in managing DoD's operational risk because it will allow additional companies to begin receiving cyber
Executive Order 12866 direct agencies to assess all costs, benefits, and available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This proposed rule has been designated “significant,” under Executive Order 12866.
Pursuant to the Congressional Review Act, this proposed rule has not been designated a major rule, as defined by 5 U.S.C. 804(2). This proposed rule will not have an economic effect above the $100 million threshold defined in 5 U.S.C. 804(2) or spur a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
The Office of the DoD Chief Information Officer certifies that this proposed rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. This proposed rule will have a significant positive impact on small entities that will become eligible to participate in and receive benefits through the DIB CS Program. For DIB participants, this program provides cyber threat information and technical assistance through analyst-to-analyst exchanges, mitigation and remediation strategies, and cybersecurity best practices in a collaborative environment. The shared threat information is used to bolster a company's cybersecurity posture and mitigate the growing cyber threat. The program's tailored support for small, mid-size, and large companies with varying cybersecurity maturity levels is an asset for participants.
Participation in the DIB CS Program is voluntary. Program application and participation costs are described in the cost analysis section of this proposed rule. These costs are voluntarily incurred and associated with the labor and resource costs to complete the required program paperwork, including execution of the Framework Agreement, to submit information to the Government, and to receive information from the Government. The costs associated with applying to the DIB CS Program are associated exclusively with labor costs and estimated to be $18.15 per company. None of the program's offering come at an additional fee to DIB participants and additional costs related to participation are estimated based on the time investment (labor hours) required to obtain the benefits as described in the cost analysis of this preamble. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.
Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. When the Federal Government passes legislation requiring a State, local, or tribal government to perform certain actions or offer certain programs but does not include any funds for the actions or programs in the law, an unfunded mandate results. This proposed rule will not mandate any requirements for State, local, or tribal governments, and will not mandate private sector incurred costs above the $100 million threshold defined in 2 U.S.C. 1532.
This proposed rule contains the following information collection requirements under the Paperwork Reduction Act (PRA) of 1995.
• 0704-0489, “DoD's Defense Industrial Base (DIB) Cybersecurity (CS) Activities Cyber Incident Reporting,”
• 0704-0490, “DoD's Defense Industrial Base (DIB) Cybersecurity (CS) Points of Contact (POC) Information.”
With the revisions in eligibility criteria, DoD expects the burden associated with both collections to increase as additional defense contractors join the DIB CS Program and additional cyber threat information is reported. DOD is requesting comments on both collections as part of this proposed rule. Additional information regarding these collections of information—including all background materials—can be found at
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has federalism implications. This proposed rule will not have a substantial effect on State and local governments.
Executive Order 13175 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct compliance costs on one or more Indian tribes, preempts tribal law, or effects the distribution of power and responsibilities between the Federal Government and Indian tribes. This proposed rule will not have a substantial effect on Indian tribal governments.
Government contracts, Security measures.
Accordingly, DoD proposes to amend 32 CFR part 236 as follows:
10 U.S.C. 391, 393, and 2224; 44 U.S.C. 3506 and 3544; 50 U.S.C. 3330.
The revisions read as follows:
(f)
(p)
The revisions and addition read as follows:
(a) All defense contractors that meet the requirements set forth in § 236.7 are eligible to join the DIB CS Program as a DIB CS Program participant. Defense contractors meeting the additional eligibility requirements in § 236.7 can elect to access and receive classified information electronically.
(f) As participants of the DIB CS Program, defense contractors are encouraged to share cyber threat indicators and information that they believe are valuable in alerting the Government and other DIB CS Program participants to better counter threat actor activity. Cyber activity that is not covered under § 236.4 may be of interest to DIB CS Program participants and DoD.
(h) Prior to receiving GFI, each DIB CS Program participant shall provide the requisite points of contact information, to include U.S. citizenship and security clearance information, as applicable, for the designated personnel within their company in order to facilitate the DoD-DIB interaction in the DIB CS Program. The Government will confirm the accuracy of the information provided as a condition of that point of contact being authorized to act on behalf of the DIB CS Program participant for this program.
(i) GFI will be issued via both unclassified and classified means. DIB CS Program participants handling and safeguarding of classified information shall be in compliance with 32 CFR part 117. The Government shall specify transmission and distribution procedures for all GFI, and shall inform DIB CS Program participants of any revisions to previously specified transmission or procedures.
(a) To participate in the DIB CS Program, a contractor must own or operate a covered contractor information system and shall execute
(b) In order for DIB CS Program participants to receive classified cyber threat information electronically, the company must be a cleared defense contractor and must:
(1) Have an existing active facility clearance level (FCL) to at least the Secret level in accordance with 32 CFR part 117;
(2) Have or acquire a Communication Security (COMSEC) account in accordance with 32 CFR part 117, which provides procedures and requirements for COMSEC activities;
(3) Have or acquire approved safeguarding for at least Secret information, and continue to qualify under 32 CFR part 117 for retention of its FCL and approved safeguarding; and
(4) Obtain access to DoD's secure voice and data transmission systems supporting the voluntary DIB CS Program.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is proposing to establish 63 temporary 500-meter safety zones around the construction of 62 wind turbine generators (WTGs) and one electrical service platform (ESP) located in the Vineyard Wind 1 Wind Farm (VW1WF) project area within federal waters on the Outer Continental Shelf (OCS), specifically in the northern portion of Bureau of Ocean Energy Management (BOEM) Renewable Energy Lease Area OCS-A 0501, approximately 12 nautical miles (NM) offshore of Martha's Vineyard, Massachusetts and 12 NM offshore Nantucket, Massachusetts. This action is necessary to provide for the safety of life, property, and the environment during the planned construction of each facility's monopile type foundation and subsequent installation of the WTGs turbines and ESP platform from June 15, 2023, to May 31, 2024. When enforced, only attending vessels and those vessels specifically authorized by the First Coast Guard District Commander, or a designated representative, are permitted to enter or remain in the temporary safety zones. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before June 2, 2023.
You may submit comments identified by docket number USCG-2023-0277 using the Federal Decision-Making Portal at
If you have questions about this proposed rulemaking, call or email Mr. Craig Lapiejko, Waterways Management, at Coast Guard First District, telephone 617-603-8592, email
On March 15, 2023, Vineyard Wind, LLC, an offshore wind farm developer, notified the Coast Guard that they plan to begin construction of facilities in the VW1WF project area within federal waters on the OCS, specifically in the northern portion of BOEM Renewable Energy Lease Area OCS-A 0501, approximately 12 NM offshore Martha's Vineyard, Massachusetts and 12 NM offshore Nantucket, Massachusetts in June 2023.
The extremely complex offshore construction of these OCS facilities presents many unusually hazardous conditions including hydraulic pile driving hammer operations, heavy lift operations, overhead cutting operations, potential falling debris, increased vessel traffic, and stationary barges in close proximity to the facilities and each other.
Based on these circumstances, the First Coast Guard District Commander has determined that establishment of 63 temporary safety zones through rulemaking is warranted to ensure the safety of life, property, and the environment within a 500-meter radius of each of the 63 facilities during their construction.
The Coast Guard is proposing this rule under the authorities provided in 14 U.S.C. 544, 43 U.S.C. 1333, and Department of Homeland Security (DHS) Delegation No. 00170.1, Revision No. 01.3. As an implementing regulation of this authority, 33 CFR part 147 permits the establishment of safety zones for non-mineral energy resource permanent or temporary structures located on the OCS for the purpose of protecting life and property on the facilities, appurtenances and attending vessels, and on the adjacent waters within the safety zone (see 33 CFR 147.10). Accordingly, a safety zone established under 33 CFR part 147 may also include provisions to restrict, prevent, or control certain activities, including access by vessels or persons to maintain safety of life, property, and the environment. If, as we anticipate, we issue a temporary final rule and make it effective less than 30 days after publication in the
The District Commander is proposing to establish 63 temporary 500-meter safety zones around the construction of 62 WTGs and one ESP on the OCS from June 15, 2023, through 11:59 p.m. on May 31, 2024.
The construction of these facilities is expected to take place in mixed phases alternating between the installation of several monopile type foundations followed by the installation of the upper structures then repeating this process throughout the project area until all 63 facilities have been completed. The 63 temporary safety zones would be enforced individually as construction progresses from one structure location to the next throughout the entire process for a period lasting approximately 48 hours. The Coast Guard would make
Additional information about the construction process of the VW1WF can be found at
The 63 temporary 500-meter safety zones around the construction of 62 WTGs and one ESP are in the VW1WF project area, specifically in the northern portion of BOEM Renewable Energy Lease Area OCS-A 0501, approximately 12 NM offshore of Martha's Vineyard, Massachusetts and 12 NM offshore Nantucket, Massachusetts, within federal waters on the OCS.
The positions of each individual safety zone proposed by this rulemaking will be referred to using a unique alpha-numeric naming convention outlined in the “Rhode Island and Massachusetts Structure Labeling Plot (West).”
Aligning with authorities under 33 CFR 147.15, the proposed safety zones would include the area within 500-meters of the center point of the positions provided in the following table expressed in Decimal Degrees (DD) based on North American Datum 1983 (NAD 83).
The positions of the 63 proposed safety zones are shown on the following chartlets. For scaling purposes, there is approximately one NM spacing between each position.
Navigation in the vicinity of the proposed safety zones consists of large commercial shipping vessels, fishing vessels, cruise ships, tugs with tows, and recreational vessels.
When enforced, no unauthorized vessel or person would be permitted to enter the safety zone without obtaining permission from the First Coast Guard District Commander or a designated representative. Requests for entry into the safety zone would be considered and reviewed on a case-by-case basis. Persons or vessels seeking to enter the safety zone must request authorization from the First Coast Guard District Commander or designated representative via VHF-FM channel 16 or by phone at 617-603-1560 (First Coast Guard District Command Center). If permission is granted, all persons and vessels shall comply with the instructions of the First Coast Guard District Commander or designated representative.
The proposed regulatory text appears at the end of this document.
We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. A summary of our analyses based on these statutes and Executive Orders follows.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).
Aligning with 33 CFR 147.15, the safety zones established would extend to a maximum distance of 500-meters around the OCS facility measured from its center point. Vessel traffic would be able to safely transit around the proposed safety zones, which would impact a small, designated area in the Atlantic Ocean, without significant impediment to their voyage. This safety zone would provide for the safety of life, property, and the environment during the construction of each structure, in accordance with Coast Guard maritime safety missions.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
This rule may affect owners or operators of vessels intending to transit or anchor in the VW1WF, some of which might be small entities. However, these safety zones would not have a significant economic impact on a substantial number of these entities because they are temporarily enforced, allow for deviation requests, and do not impact vessel transit significantly. Regarding the enforcement period, although these safety zones would be in effect from June 15, 2023, through May 31, 2024, vessels would only be prohibited from the regulated zone during periods of actual construction activity in correspondence to the period of enforcement. We expect the enforcement period at each location to last approximately 48 hours as construction progresses from one structure location to the next throughout the mixed phases. Additionally, vessel traffic could pass safely around each safety zone using an alternate route. Use of an alternate route likely will cause minimal delay for the vessel in reaching their destination depending on other traffic in the area and vessel speed. Vessels would also be able to request deviation from this rule to transit through a safety zone. Such requests would be considered on a case by-case basis and may be authorized by the First Coast Guard District Commander or a designated representative. For these reasons, the Coast Guard expects any impact of this rulemaking establishing a temporary safety zone around these OCS facilities to be minimal and have no significant economic impact on small entities.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves the establishment of a safety zone around an OCS facility to protect life, property, and the marine environment. Normally such actions are categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
Continental shelf, Marine safety, Navigation (waters).
For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 147 as follows:
14 U.S.C. 544; 43 U.S.C. 1333; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(1) An attending vessel as defined in 33 CFR 147.20;
(2) A vessel authorized by the First Coast Guard District Commander or a designated representative.
(d)
(e)
U.S. Copyright Office, Library of Congress.
Notice of proposed rulemaking; request for comments.
The U.S. Copyright Office is amending its regulations governing
Written comments must be received no later than 11:59 p.m. Eastern Time on June 20, 2023.
For reasons of Government efficiency, the Copyright Office is using the
Rhea Efthimiadis, Assistant to the General Counsel, by email at
The Copyright Alternative in Small-Claims Enforcement (“CASE”) Act of 2020
Following the NOI, the Office published multiple notices of proposed rulemaking governing the conduct of proceedings before the CCB, including filing claims and counterclaims, responses to claims and counterclaims, and discovery.
After reviewing its regulations, the Office is proposing to add rules specifically governing agreement-based counterclaims.
The CASE Act provides that the CCB may hear only certain types of counterclaims: those that arise “under section 106 or section 512(f) and out of the same transaction or occurrence that is the subject of a claim of infringement[,] . . . a claim of noninfringement[,] . . . or a claim of misrepresentation” and those that “arise[ ] under an agreement pertaining to the same transaction or occurrence that is the subject of a claim of infringement . . . if the agreement could affect the relief awarded to the claimant.”
In an earlier rulemaking, “the Office propose[d] that the information required to assert a counterclaim should closely mirror the information required to assert a claim” for counterclaims that arise under section 106 or section 512(f).
After reviewing its regulations, the Office has concluded that such counterclaims should have their own content requirements. Specifically, the Office proposes that agreement-based counterclaims should include the identification of the agreement that the agreement-based counterclaim is based upon, a brief statement describing how the agreement pertains to the same transaction or occurrence that is the subject of the infringement claim against the counterclaimant, and a brief statement describing how the agreement could affect the relief awarded to the claimant.
The Office also believes that regulations are necessary to specify the required contents of a counterclaim respondent's
The proposed rule also addresses standard interrogatories for agreement-based counterclaims that supplement the standard interrogatories common to all claim types. The additional standard interrogatories will include: identification and a description of the specific terms or provisions of the agreement, written or oral, that the counterclaimant alleges have been violated; the basis for the counterclaimant's belief that the agreement was both valid and violated; the reasons why the counterclaimant believes the agreement could affect the relief that might be awarded; a description of the counterclaimant's performance under the agreement, as relevant to the counterclaim; and identification of any alleged failure in the counterclaim respondent's performance under the agreement.
In turn, the additional standard interrogatories that an agreement-based counterclaim respondent must answer will address the following: all applicable defenses to the counterclaim and the facts supporting those defenses; any other reasons the counterclaim respondent believes that it did not violate the agreement or that the agreement was not valid; the basis for any belief by the counterclaim respondent that the agreement does not affect the relief that might be awarded; a description of the counterclaim respondent's performance under the agreement, as relevant to the counterclaim; and any inadequacies in performance under the agreement by the counterclaimant.
In addition to the standard document requests that all parties must satisfy, the Office proposes that both agreement-
The Office remains committed to ensuring that “the discovery regulations strike the right balance between allowing necessary access to information and being too burdensome.”
Claims, Copyright.
For the reasons stated in the preamble, the U.S. Copyright Office amends 37 CFR parts 222 and 225 as follows:
17 U.S.C. 702, 1510.
(c) * * *
(6) For a counterclaim arising under an agreement asserted under paragraph (c)(2)(iv) of this section—
(i) A description of the agreement that the counterclaim is based upon;
(ii) A brief statement describing how the agreement pertains to the same transaction or occurrence that is the subject of the infringement claim against the counterclaimant; and
(iii) A brief statement describing how the agreement could affect the relief awarded to the claimant;
(b) * * *
(6) For counterclaims arising under an agreement, as set forth in 37 CFR 222.9(c)(2)(iv), a statement describing in detail the dispute regarding the contractual counterclaim, including any defenses as well as an explanation of why the counterclaim respondent believes the counterclaimant's position regarding the agreement lacks merit; and
17 U.S.C. 702, 1510.
(f)
(1) Identification and a description of the specific terms or provisions of the agreement the counterclaim respondent is alleged to have violated;
(2) The basis for the counterclaimant's belief that the agreement was valid;
(3) The basis for the counterclaimant's belief that the agreement was violated;
(4) The basis for the counterclaimant's belief that the agreement could affect the relief that might be awarded to the claimant;
(5) A description of the counterclaimant's performance under the agreement, as relevant to the counterclaim;
(6) Identification and a description of any inadequacies in performance under the agreement by the counterclaim respondent; and
(7) If the agreement at issue in the counterclaim is oral, a description of the terms and provisions of the agreement.
(g)
(1) All defenses asserted to the counterclaim arising under an agreement and the basis for those assertions. Defenses listed in timely answers and timely updated answers to the
(2) The basis for any other reasons the counterclaim respondent believes that it did not violate the agreement or that the agreement was not valid;
(3) The basis for any belief by the counterclaim respondent that the agreement does not affect the relief that might be awarded to the claimant;
(4) A description of the counterclaim respondent's performance under the agreement, as relevant to the counterclaim; and
(5) Identification and a description of any inadequacies in performance under the agreement by the counterclaimant.
(f)
(1) The agreement at issue in the counterclaim arising under an agreement, including any amendments or revisions;
(2) Documents related to the agreement at issue, including any amendments or revisions and documents related to the validity of and the parties' performance under the agreement; and
(3) Documents relevant to damages arising out of the counterclaim, including documents sufficient to show the damages suffered by the counterclaimant related to violation of the agreement in question.
(g)
(1) The agreement at issue in the counterclaim arising under an agreement, including any amendments or revisions;
(2) Documents related to the agreement at issue, including any amendments or revisions and documents related to the validity of and the parties' performance under the agreement; and
(3) Documents relevant to damages, including documents sufficient to show the lack of damages suffered by the counterclaimant related to the counterclaim respondent's alleged violation of the agreement in question.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed rule; extension of comment period.
On March 13, 2023, the Committee for Purchase from People Who Are Blind or Severely Disabled (Committee), operating as the U.S. AbilityOne Commission (Commission), published a proposed rule, Supporting Competition in the AbilityOne Program, with a 60-day comment period ending on May 11, 2023. The Commission has determined that a 30-day extension of the comment period, until June 12, 2023, is appropriate. The Commission is taking this action in response to requests for an extension to allow interested persons additional time to submit comments.
The comment period for the proposed rule, Supporting Competition in the AbilityOne Program, published March 13, 2023, at 88 FR 15360, is extended. Electronic comments should be received no later than 11:59 p.m. Eastern Time on June 12, 2023.
Interested persons may submit comments by using the following method: internet—Federal eRulemaking Portal. Electronic comments may be submitted through
Cassandra Assefa, Regulation and Policy Counsel, by telephone at 202-430-9886 or by email at
On March 13, 2023, the Commission published a proposed rule, Supporting Competition in the AbilityOne Program. The proposed rule would clarify the Commission's authority to consider different pricing methodologies in establishing the Fair Market Price (FMP) for Procurement List (PL) additions and changes to the FMP; better define the parameters for conducting fair and equitable competitive allocations amongst multiple qualified Nonprofit Agencies (NPAs); and clarify the responsibilities and procedures associated with authorizing and deauthorizing NPA.
The Commission has received requests for an extension of the 60-day comment period. The Commission has considered the requests and is extending the comment period for the proposed rule until June 12, 2023. The Commission believes that this extension allows adequate time for interested persons to submit comments.
National Endowment for the Arts, National Endowment for the Humanities, Institute of Museum and Library Services, National Foundation on the Arts and the Humanities.
Notice of proposed rulemaking.
This rulemaking rescinds the National Foundation on the Arts and the Humanities' (the “Foundation”) regulations implementing the Freedom of Information Act (“FOIA”). These regulations are obsolete because each of the Foundation's constituent agencies—the National Endowment for the Arts (“NEA”), the National Endowment for the Humanities (“NEH”), the Institute of Museum and Library Services (“IMLS”), and the Federal Council on the Arts and the Humanities (“FCAH”)—either have adopted their own, agency-specific regulations, or are not required to implement Freedom of Information Act regulations.
The public comment period for the proposed rule opens on May 3, 2023. Written comments must be received on or before June 2, 2023.
You may submit comments, identified by RIN 3135-AA26, by any of the following methods:
(a)
(b)
(c)
(d)
Daniel Fishman, Assistant General Counsel, National Endowment for the Arts, 400 7th St. SW, Washington, DC 20506, Telephone: 202-682-5418.
The Foundation operates under the National Foundation on the Arts and the Humanities Act of 1965, as amended (20 U.S.C. 951
The Foundation's FOIA regulations located at 45 CFR 1100 are now obsolete. The NEA, NEH, and IMLS have each adopted their own, agency-specific regulations. On February 27, 2019, the NEA promulgated FOIA regulations to 45 CFR Chapter XI, Subchapter B (45 CFR part 1148), which only apply to the NEA, effectively superseding the Foundation's FOIA regulations and rendering them duplicative. NEH and IMLS had previously added NEH- and IMLS-specific FOIA regulations to 45 CFR, Subchapters D and E (45 CFR parts 1171 & 1184), respectively, which replaced the Foundation's FOIA regulations with respect to NEH and IMLS. FCAH relies upon the NEA and NEH for its administration and does not maintain any systems of records of its own; thus, any requests for information or documents would be better directed to the other two constituent agencies of the Foundation to obtain the same information.
Accordingly, the Foundation's constituent agencies propose rescinding the Foundation's regulations located at 45 CFR 1100.
Executive Order 12866 (E.O. 12866) established a process for review of rules by the Office of Information and Regulatory Affairs, which is within the Office of Management and Budget (OMB). Only “significant” proposed and final rules are subject to review under this Executive Order. “Significant,” as used in E.O. 12866, means “economically significant.” It refers to rules (1) with an impact on the economy of $100 million or more or that adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public safety or health, or State, local or tribal Governments or communities; or that (2) were inconsistent or interfered with an action taken or planned by another agency; (3) materially altered the budgetary impact of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients; or (4) raised novel legal or policy issues.
This proposed rule would not be a significant policy change, and OMB has not reviewed this proposed rule under E.O. 12866. We have made the assessments required by E.O. 12866 and determined that this proposed rulemaking: (1) will not have an effect of $100 million or more on the economy and will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; (2) will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) does not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients; and (4) does not raise novel legal or policy issues.
This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988. Specifically, this proposed rule is written in clear language designed to help reduce litigation.
This proposed rule does not impose an information collection burden under the PRA. This proposed rule contains no provisions constituting a collection of information under the PRA.
This proposed rule will not have a significant adverse impact on a substantial number of small entities, including small businesses, small governmental jurisdictions, or certain small not-for-profit organizations.
This proposed rule does not contain a Federal mandate that will result in the expenditure by State, local, and tribal Governments, in the aggregate, or by the private sector of $100 million or more in any one year.
This proposed rulemaking does not have federalism implications, as set forth in E.O. 13132. As used in this order, federalism implications mean “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” The NEA has determined that this proposed rulemaking will not have federalism implications within the meaning of E.O. 13132.
Under the criteria in E.O. 13175, we have evaluated this proposed rule and determined that it would have no potential effects on Federally recognized Indian Tribes.
Under the criteria in E.O. 12630, this proposed rule does not have significant takings implications. Therefore, a takings implication assessment is not required.
Administrative practice and procedure, Archives and records, Freedom of information.
For the reasons stated in the preamble, and under the authority of 5 U.S.C. 552, the NEA, NEH (for itself and on behalf of FCAH, for which NEH provides legal counsel), and IMLS propose to amend 45 CFR Chapter XI Subchapter A as follows:
Federal Communications Commission.
Proposed rule; solicitation of comments.
The Federal Communications Commission (Commission) seeks comment on the contours and specific requirements of the proposed 2023 Mandatory Data Collection for incarcerated people's communications services. The Commission has drafted proposed instructions, templates, and a certification form for the proposed 2023 Mandatory Data Collection. The Commission seeks comment on all aspects of these documents.
Comments are due June 2, 2023. Reply comments are due June 20, 2023.
You may submit comments, identified by WC Docket Nos. 12-375 and 23-62, by either of the following methods:
•
•
The Commission adopted a new Protective Order in this proceeding which incorporates all materials previously designated by the parties as confidential. Filings that contain confidential information should be appropriately redacted and filed pursuant to the procedure described in that Order.
Ahuva Battams, Pricing Policy Division of the Wireline Competition Bureau, at (202) 418-1565 or via email at
This is a summary of a document that the Federal Communications Commission's Wireline Competition Bureau released on April 28, 2023. A full-text version of the document is available at the following internet address:
1. By this document, the Wireline Competition Bureau (WCB) and Office of Economics and Analytics (OEA) (collectively, WCB/OEA) seek comment on the contours and specific requirements of the proposed 2023 Mandatory Data Collection for incarcerated people's communications services (IPCS). In issuing this document, they act pursuant to the Federal Communications Commission's (Commission) directive so that it is able to implement the Martha Wright-Reed Just and Reasonable Communications Act of 2022 (Martha Wright-Reed Act or Act).
2. The Martha Wright-Reed Act directs the Commission to “promulgate any regulations necessary to implement” the Act, including its mandate that the Commission establish a “compensation plan” ensuring that all rates and charges for IPCS “are just and reasonable,” not earlier than 18 months and not later than 24 months after the Act's January 5, 2023 enactment. The Act requires the Commission to consider, as part of its implementation, the costs of “necessary” safety and security measures, as well as “differences in costs” based on facility size, or “other characteristics.” It also allows the Commission to “use industry-wide average costs of telephone service and advanced communications services and the average costs of service of a communications service provider” in determining just and reasonable rates.
3. In recent years, the Commission has collected data from providers of calling services for incarcerated people as part of its ongoing efforts to establish just and reasonable rates for those services that reduce the financial burdens imposed on incarcerated people and their loved ones, while ensuring that providers are fairly compensated for their services. In requiring or allowing the Commission to consider certain types of costs, the new Act contemplates that the Commission would undertake an additional data collection. To ensure that it has the data it needs to meet its substantive and procedural responsibilities under the Act, in the
4. In seeking comment on their proposals for the proposed 2023 Mandatory Data Collection, WCB/OEA do not seek additional comment on the questions and other issues previously raised in other relevant Commission notices. Such comment is more appropriately submitted during the comment period specifically established for those notices. Thus, comments in response to this document need not include advocacy regarding issues raised in those notices, including how the Commission should interpret the language of the Martha Wright-Reed Act to ensure that it implements the statute in a manner that fulfills Congress's intent, the extent to which particular types of safety and security measures are necessary to provide IPCS, or the appropriate treatment of site commissions.
5. Pursuant to their delegated authority, WCB/OEA propose updated
6. WCB/OEA propose to retain the overall structure of the Third Mandatory Data Collection, while revising and supplementing the definitions, instructions, and template to accommodate the Commission's expanded authority. To a large extent, the specific information they propose to collect, and the related instructions (including those relating to cost allocation), parallel the information collected by, and the instructions for, the Third Mandatory Data Collection. WCB/OEA invite comment on this approach. They ask that any commenter supporting an alternative approach, either with regard to the data collection as a whole or a particular aspect, explain in detail how that alternative approach would enable the Commission to discharge its responsibilities under the Martha Wright-Reed Act and the Communications Act of 1934, as amended (the Communications Act).
7.
8.
9. WCB/OEA propose to require providers to allocate their investments and expenses among audio IPCS, video IPCS, safety and security measures, various types of ancillary services, and other services and products, on both a company-wide and a facility-specific basis for 2022 (the types of ancillary services are automated payment services, live agent service, paper bill/statement service, single-call and related services, third-party financial transaction services, and other ancillary services). WCB/OEA invite comment on this proposal. Should any additional categories be specified for providers to use? Alternatively, would a more limited group of cost categories still allow the Commission to discharge its ratemaking responsibilities?
10. Are separate cost data for audio IPCS and video IPCS services necessary, or sufficient, for the Commission to ensure just and reasonable rates for those services? If not, what alternative approach should be used? What are the challenges of allocating IPCS costs between audio and video services? Do IPCS providers maintain sufficient records to directly assign or directly attribute significant percentages of their costs to audio IPCS and video IPCS? If not, how should providers allocate their IPCS costs between these two categories of services?
11. The proposed instructions and template would not require providers to subdivide their audio IPCS costs or their video IPCS costs into more discrete categories. WCB/OEA seek comment on this approach. What different types of audio and video services do IPCS providers offer to incarcerated people? Do the costs of providing audio IPCS vary depending on whether it is a traditional voice service, an interconnected VoIP service, a non-interconnected VoIP service, or another type of audio service used by incarcerated people to communicate with the non-incarcerated? For example, do providers pay intercarrier compensation charges for some types of IPCS but not for others? Do non-interconnected voice services have their own unique costs? Are the net cost differences among types of video IPCS sufficiently significant and measurable in a meaningful way to justify the additional burden of separate reporting? If separate reporting is justified, how should the proposed instructions and template be revised to capture those cost differences? Similarly, do the costs of providing video IPCS vary depending on the nature of the video service? To the extent there are such variations, how should WCB/OEA revise the instructions and templates to capture them?
12.
13. The proposed instructions also require providers to separately report expenses related to routing and completing communications to international destinations as operating expenses. Will the proposed instructions yield accurate and usable data sufficient for the Commission to evaluate these expenses? Why or why not? Are there changes WCB/OEA should consider to the proposed instructions in this regard? If so, what are they?
14.
15. First, the proposed instructions would require providers to allocate a portion of their total-company investments and expenses to a company-wide “safety and security measures” category and to exclude those investments and expenses from all other cost categories. This allocation would be done in accordance with the detailed cost allocation hierarchy set forth in the instructions. The “safety and security measures” category thus would encompass all safety and security services and products that the companies provide, regardless of whether they are provided in connection with audio, video, or nonregulated services, or in connection with traditional telephone or advanced communications services. Do commenters agree with this approach? Instead, should providers be required to report their costs of safety and security measures separately for different categories of services? Why or why not? If safety and security costs are not treated as a separate service or as multiple separate services, then how should the Commission organize the data collection to be able to consider the costs of necessary safety and security measures?
16. Second, the proposed instructions would require each provider to allocate their annual total expenses incurred in providing safety and security measures among seven company-level categories using the provider's best estimate of the percentage of those expenses attributable to each category. As set out in the proposed instructions, annual total expenses are the sum of annual operating expenses and annual capital expenses. The seven company-level categories are: (1) expenses related to Communications Assistance for Law Enforcement Act, (2) law enforcement support services, (3) communication security services, (4) communication recording services, (5) communication monitoring services, (6) voice biometrics services, and (7) other safety and security measures. WCB/OEA seek comment on the benefits and burdens of this approach. They invite comment on the categories of safety and security measures in the proposed instructions. How, if at all, should these categories be changed? Are there other examples of specific safety and security measures that should be included in the illustrative lists included in each of the categories? If so, what are these measures and how should they be categorized? Are there other categories of safety and security measures that should be included? If so, which ones? Alternatively, are there categories that should be removed? If so, which ones should be removed and why? Do commenters agree with the proposed approach of requiring providers to allocate annual total expenses on an estimated percentage basis or should WCB/OEA instead require providers to perform a detailed allocation of actual investments and expenses among the seven categories? To the extent commenters argue that a more detailed cost allocation would be more appropriate, commenters should explain and justify in detail the cost allocation method they propose and the benefits and burdens of their approach.
17. Third, after reporting the best estimate of the percentage of the company's annual total expenses of providing safety and security measures for each category, the proposed instructions would direct providers to report for each of those same categories the company's best estimate of the percentage of safety and security expenses attributable to audio IPCS, video IPCS, ancillary services, and other services and products. Would this approach provide reasonably accurate data on the portions of each category of providers' safety and security costs that are attributable to audio IPCS, video IPCS, ancillary services, and other services and products? Why or why not? If not, is there another allocation method WCB/OEA should consider? If so, what do commenters propose and why would it be preferable to the allocation set forth in the proposed instructions?
18. Providers would also report facility-level safety and security costs for each facility. The proposed instructions would require providers to first identify whether they provide safety and security measures at each facility they serve. Providers would do so by indicating “Yes” or “No” in the appropriate cell on the Excel template for each of the seven identified categories of safety and security measures at each facility. Wherever providers offer a given safety and security measure, the proposed instructions would then require the provider to allocate its company-wide safety and security annual total expenses for that category among the individual facilities at which that service is offered. Providers would then further allocate those amounts at each facility between audio IPCS, video IPCS, ancillary services, and other services and products. WCB/OEA seek comment on this approach. Would it accurately capture the costs of providing the seven identified categories of safety and security measures at each facility? Why or why not? If not, how could the facility-level reporting be changed to identify the safety and security measures providers offer at the facilities they serve and the cost of providing those measures? Will the subsequent allocation between audio IPCS, video IPCS, ancillary services, and other services and products be sufficiently accurate to capture the costs of providing those safety and security measures in connection with these other services? Why or why not? Are there other methods WCB/OEA should consider that would allow the Commission to evaluate the costs of safety and security measures offered in connection with audio IPCS, video IPCS, ancillary services and other services and products, to the extent cost differences exist? If so, what do commenters propose and why?
19.
20. To assist the Commission in obtaining the broadest possible view of the costs that facilities incur, the proposed instructions also ask providers to indicate whether they have any verifiable, reliable, and accurate information on other facility-incurred costs that are not safety and security costs. To the extent providers have such information, the proposed instructions require that providers be able to reproduce, on request, documentation sufficient to fully explain and justify the accuracy and reliability of any data they report regarding the expenses incurred by facilities that are not safety and security costs.
21. WCB/OEA seek comment on the proposed instructions and whether they provide sufficient guidance to ensure that providers use uniform methodologies and report the required information in a consistent manner. Are there any changes that would clarify the proposed instructions or increase uniformity across providers' responses, particularly regarding how to report and allocate their costs? If so, what specific changes should be made? Is there alternative or additional language that would minimize ambiguity in any instruction? Commenters should explain the potential benefits and burdens of alternative or additional language they propose.
22. The proposed instructions also address many data requests that are not specifically described below. WCB/OEA seek comment on all aspects of the proposed instructions, including on requests that they do not specifically seek comment on in this document.
23.
24.
25.
26.
27.
28.
29.
30. WCB/OEA propose to require providers to submit the requisite data using a reporting template, to be filed through the Commission's Electronic Comment Filing System (ECFS). The proposed template consists of a Word document (Appendix A to the instructions) for responses requiring narrative information and Excel spreadsheets (Appendix B to the instructions) for responses that require numeric or other information. WCB/OEA seek comment on proposed modifications in the template seeking data relevant to the Commission's expanded jurisdiction, including modifications to collect data on video IPCS and safety and security measures. WCB/OEA also seek suggestions for improvements they can make to the template. Is there an alternative organization that would reduce any perceived burdens, without compromising the reliability and accuracy of the data WCB/OEA are able to collect? Are there other organizational or substantive improvements they can make to the reporting template? Do any questions require clarification?
31. WCB/OEA invite comment on the timeframe for provider responses to the data collection. In the
32. As part of the Commission's continuing effort to advance communications equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality, WCB/OEA invite comment on any equity-related considerations and benefits that may be associated with the upcoming data collection. Specifically, WCB/OEA seek comment on how their proposals for that collection may promote or inhibit advances in diversity, equity, inclusion, and accessibility. WCB/OEA define the term “equity” consistent with Executive Order 13985 as the consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities that have been denied such treatment, such as Black, Latino, and Indigenous and Native American persons, Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender, and queer (LGBTQ+) persons; persons with disabilities; persons who live in rural areas; and persons otherwise adversely affected by persistent poverty or inequality. Exec. Order No. 13985, 86 FR 7009, Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (Jan. 20, 2021).
33.
34.
35.
36. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), WCB/OEA have prepared this Supplemental IRFA of the possible significant economic impact on small entities by the policies and rules proposed in this document to supplement the Commission's Regulatory Flexibility Analyses completed in the
37. In this document, WCB/OEA seek comment on the contours and specific requirements of the proposed 2023 Mandatory Data Collection for IPCS. In issuing this document, WCB/OEA act pursuant to the Commission's directive so that it will be able to implement the Martha Wright-Reed Act. The Commission determined that this data collection would enable it to “meet both [its] procedural obligations (to consider certain types of data) and [its] substantive responsibilities (to set just and reasonable rates and charges)” under the Martha Wright-Reed Act and the Communications Act. Likewise, it directed WCB/OEA “to update and restructure the most recent data collection as appropriate to implement the Martha Wright-Reed Act.”
38. Pursuant to their delegated authority, WCB/OEA have drafted instructions, a template, and a certification form for the proposed 2023 Mandatory Data Collection and are issuing this document to seek comment on all aspects of these proposed documents.
39. The proposed action is pursuant sections 1, 2, 4(i)-(j), 5(c), 201(b), 218, 220, 225, 255, 276, 403 and 716 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j), 155(c), 201(b), 218, 220, 225, 255, 276, 403, and 617, and the Martha Wright-Reed Act, Public Law 117-338, 136 Stat. 6156 (2022).
40. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed 2023 Mandatory Data Collection. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
41. As noted above, an IRFA was incorporated in the
42. This document seeks comment on the specifics of the proposed 2023 Mandatory Data Collection to ensure that the Commission receives the data it needs to meet its substantive and procedural responsibilities under the Act. The proposed 2023 Mandatory Data Collection would require IPCS providers to submit, among other things, data and other information on calls, demand, operations, company and contract information, information about facilities served, revenues, site commission payments, the costs of safety and security measures, video IPCS, and ancillary fees. The proposed 2023 Mandatory Data Collection may require entities, including small entities and IPCS providers of all sizes, currently subject to the Commission's inmate calling services rules to be subject to modified or new reporting or other compliance obligations. This may also be the case for providers newly subject to the Commission's expanded regulatory authority, such as providers
43. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.” WCB/OEA will consider all of these factors when they receive substantive comment from the public and potentially affected entities.
44. The proposed 2023 Mandatory Data Collection is a one-time request and does not impose a recurring obligation on providers. Because the Commission's
45. WCB/OEA will consider the economic impact on small entities, as identified in comments filed in response to this document and this Supplemental IRFA, in reaching their final conclusions and finalizing the instructions, the template, and certification form for the proposed 2023 Mandatory Data Collection.
46. None.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by June 2, 2023 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Food and Nutrition Service (FNS), USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on this proposed information collection. This collection is a revision of a currently approved collection for awarding local agencies for excellence in WIC breastfeeding services and support.
Written comments must be received on or before July 3, 2023.
The Food and Nutrition Service, USDA, invites interested persons to submit written comment.
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All responses to this notice will be summarized and included in the request for Office of Management and Budget approval. All comments will be a matter of public record.
Requests for additional information or copies of this information collection should be directed to Valery Soto, Chief, Nutrition Services and Promotion Branch, Food Safety and Nutrition Division, FNS, USDA, 1320 Braddock
Section 231 of the Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296, requires that the Department of Agriculture (USDA) establish a program to recognize WIC local agencies and clinics that demonstrate exemplary breastfeeding promotion and support activities.
In recognizing exemplary local agencies and clinics, the HHFKA requires the Secretary to consider the following criteria: (1) performance measurements of breastfeeding; (2) the effectiveness of a peer counselor program; (3) the extent to which the agency or clinic has partnered with other entities to build a supportive breastfeeding environment for women participating in WIC; and (4) other criteria the Secretary considers appropriate after consultation with State and local program agencies. The information will be submitted voluntarily by WIC local agencies who will be applying for an award. FNS will use the information collected to evaluate the components of existing breastfeeding programs and support in WIC local agencies and make decisions about awards. This program is expected to provide models and motivate local agencies and clinics to strengthen their breastfeeding promotion and support activities.
A notable improvement from past collection requests is that FNS hosts the application process for local agencies fully online. The State agencies continue to conduct their evaluation on PartnerWeb. FNS plans to explore ways to streamline the evaluation for State agencies to improve their user experience. The total estimated time to complete the application is not expected to change.
WIC Peer Counseling is an FNS initiative that equips WIC programs with an implementation and management model—the “WIC Breastfeeding Model for Peer Counseling”—to serve as a framework for designing, building, and sustaining peer counseling programs, a requirement for award eligibility. Since the inception of the program in 2015, a total of 728 awards have been given. In fiscal year (FY) 2020, 138 eligible local agencies applied for an award; in FY 2021, 130 eligible local agencies applied for an award; in FY 2022, 127 eligible local agencies applied for an award; and in FY 2023, 143 eligible local agencies applied for awards. FNS estimates the annual submitted applications will range from 130-150 applications submitted annually. For small entities WIC estimates that 7-8% (11 applications) of local agency applications do not come from health departments. The estimated number of respondents for the State agency application verification is derived from the total number of State WIC agencies.
See the Burden table below for estimated total annual burden for each type of respondent.
U.S. Commission on Civil Rights.
Announcement of virtual briefing.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a briefing of the Arizona Advisory Committee (Committee) to the Commission will convene via
The briefing will take place on:
Kayla Fajota, DFO, at
Committee meetings are available to the public through the videoconference link above. Any interested member of the public may listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. Per the Federal Advisory Committee Act, public minutes of the meeting will include a list of persons who are present at the meeting. If joining via phone, callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Closed captioning will be available for individuals who are deaf, hard of hearing, or who have certain cognitive or learning impairments. To request additional accommodations, please email
Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the Western Regional Office, U.S. Commission on Civil Rights, 300 North Los Angeles Street, Suite 2010, Los Angeles, CA 90012 or email Kayla Fajota (DFO) at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meetings at
Please click on the “Committee Meetings” tab. Records generated from these meetings may also be inspected and reproduced at the Regional Programs Unit, as they become available, both before and after the meetings. Persons interested in the work of this Committee are directed to the Commission's website,
Commission on Civil Rights.
Notice of public meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act, that the Minnesota Advisory Committee (Committee) to the U.S. Commission on Civil Rights will hold a public meeting via Zoom at 12:30 p.m. CT on Thursday, May 25, 2023, to discuss the Committee's draft project proposal on housing affordability in the state.
Thursday, May 25, 2023, from 12:30 p.m.-1:30 p.m. Central Time.
The meeting will be held via Zoom.
David Barreras, Designated Federal Officer, at
This committee meeting is available to the public through the registration link above. Any interested member of the public may listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. Per the Federal Advisory Committee Act, public minutes of the meeting will include a list of persons who are present at the
Members of the public are entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be emailed to David Barreras at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Coordination Unit Office, as they become available, both before and after the meeting. Records of the meetings will be available via
Commission on Civil Rights.
Notice of public meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act, that the Minnesota Advisory Committee (Committee) to the U.S. Commission on Civil Rights will hold a public meeting via Zoom at 12:30 p.m. CT on Thursday, June 8, 2023, to discuss the Committee's project on housing affordability in the state.
Thursday, June 8, 2023, from 12:30 p.m.-1:30 p.m. Central Time.
The meeting will be held via Zoom.
David Barreras, Designated Federal Officer, at
This committee meeting is available to the public through the registration link above. Any interested member of the public may listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. Per the Federal Advisory Committee Act, public minutes of the meeting will include a list of persons who are present at the meeting. If joining via phone, callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Closed captioning will be available for individuals who are deaf, hard of hearing, or who have certain cognitive or learning impairments. To request additional accommodations, please email Liliana Schiller, Support Services Specialist, at
Members of the public are entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be emailed to David Barreras at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Coordination Unit Office, as they become available, both before and after the meeting. Records of the meetings will be available via
AbbVie Ltd., submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Barceloneta, Puerto Rico within Subzone 7I. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on April 25, 2023.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished product is vraylar (cariprazine) capsules (duty-free).
The proposed foreign-status material is cariprazine hydrochloride active pharmaceutical ingredient (duty rate 6.5%).
Public comment is invited from interested parties. Submissions shall be
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Christopher Wedderburn at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is rescinding the administrative review of the countervailing duty (CVD) order on silicon metal from the Republic of Kazakhstan (Kazakhstan) for the period of review (POR) December 3, 2020, through December 31, 2021.
Applicable May 3, 2023.
Genevieve Coen, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3251.
On April 1, 2022, Commerce published in the
It is Commerce's practice to rescind an administrative review of a CVD order, pursuant to 19 CFR 351.213(d)(3), when there are no reviewable entries of subject merchandise during the POR for which liquidation is suspended.
This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily determines that the sole mandatory respondent under review sold subject merchandise at less than normal value (NV) during the period of review (POR) April 1, 2021, through March 31, 2022. Additionally, Commerce preliminarily finds that one company had no shipments of subject merchandise during the POR and that it is appropriate to rescind this review with
Applicable May 3, 2023.
Patrick Barton, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0012.
On April 19, 2017, Commerce published in the
For events that occurred since the
The product covered by the
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if a party who requested the review withdraws the request within 90 days of the date of publication of the notice of initiation of the requested review. On September 7, 2022, the American HFC Coalition (the petitioner) timely withdrew its review request for 22 companies listed in the
We preliminarily determine that TTI had no shipments of subject merchandise during the POR. Consistent with our practice in non-market economy (NME) cases, Commerce is not rescinding this review with respect to TTI but, rather, we intend to complete the review and issue appropriate instructions to U.S. Customs and Border Protection (CBP) based on the final results of the review.
We preliminarily determine that the Zhejiang Sanmei single entity is entitled to separate rate status. Moreover, because Zhejiang Quhua did not submit a separate rate application or certification, we preliminarily find that the company has not established its eligibility for a separate rate.
Commerce's policy regarding conditional review of the China-wide entity applies to this administrative review.
We are conducting this administrative review in accordance with section 751(a)(1)(B) of the Act and 19 CFR 351.213. We calculated export prices for Zhejiang Sanmei in accordance with section 772(a) of the Act. Because China is an NME within the meaning of section 771(18) of the Act, we calculated NV in accordance with section 773(c) of the Act. For a full description of the methodology underlying the preliminary results of this review,
We preliminarily determine that the following weighted-average dumping margin exists for the period April 1, 2021, through March 31, 2022:
We intend to disclose to interested parties the calculations performed for these preliminary results in accordance with 19 CFR 351.224(b). Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, filed electronically via Commerce's electric records system, ACCESS. An electronically-filed request must be received successfully in its entirety by 5:00 p.m. Eastern Time within 30 days after the date of publication of this notice.
Unless otherwise extended, we intend to issue the final results of this administrative review, which will include the results of our analysis of the issues raised in the case and rebuttal briefs, within 120 days of publication of these preliminary results in the
Upon issuance of the final results, Commerce will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review, in accordance with 19 CFR 351.212(b)(1). Commerce intends to issue assessment instructions to CBP 35 days after the publication of the final results of this review. If a timely summons is filed at the U.S. Court of International Trade, the assessment instructions will direct CBP not to liquidate relevant entries until the time for parties to file a request for a statutory injunction has expired (
If the
In addition, if in the final results we continue to find no shipments of subject merchandise for TTI, any suspended entries of subject merchandise associated with TTI will be liquidated at the China-wide rate.
For the companies for which the administrative review is rescinded, antidumping duties shall be assessed at a rate equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). We intend to issue appropriate assessment instructions to CBP with respect to the companies for which this administrative review is rescinded 35 days after the publication of this notice in the
The following cash deposit requirements will be effective upon publication of the final results of this review for all shipments of the subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for the Zhejiang Sanmei, Jiangsu Sanmei, and Fujian Qingliu single entity will be that rate established in the final results of this review (except, if the rate is
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing the preliminary results of this review in accordance with sections 751(a)(l) and 777(i)(l) of the Act, and 19 CFR 351.213(d)(4), 19 CFR 351.213(h)(1), and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily determines that certain freight rail couplers and parts thereof (freight rail couplers) from Mexico are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation (POI) is July 1, 2021, through June 30, 2022. Interested parties are invited to comment on this preliminary determination.
Applicable May 3, 2023.
Jonathan Hall-Eastman, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1468.
This preliminary determination is made in accordance with section 733(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on October 25, 2022.
For a complete description of the events that followed the initiation of this investigation,
The products covered by this investigation are freight rail couplers from Mexico. For a complete description of the scope of this investigation,
In accordance with the preamble to Commerce's regulations,
Commerce is conducting this investigation in accordance with section 731 of the Act. Constructed export prices have been calculated in accordance with section 772(b) of the Act. Normal value is calculated in accordance with section 773 of the Act. For a full description of the methodology underlying the preliminary determination,
In accordance with section 733(e) of the Act and 19 CFR 351.206, Commerce preliminarily finds that critical circumstances do not exist for ASF-K de Mexico S. de R.L. de C.V. (ASF-K). For a full description of the methodology and results of Commerce's critical circumstances analysis,
Sections 733(d)(1)(ii) and 735(c)(5)(A) of the Act provide that in the preliminary determination Commerce shall determine an estimated all-others rate for all exporters and producers not individually examined. This rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and
Commerce calculated an individual estimated weighted-average dumping margin for ASF-K, the only individually examined exporter/producer in this investigation. Because the only individually calculated dumping margin is not zero,
Commerce preliminarily determines that the following estimated weighted-average dumping margins exist:
In accordance with section 733(d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise, as described in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the
Commerce intends to disclose its calculations and analysis performed to interested parties in this preliminary determination within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).
As provided in section 782(i)(1) of the Act, Commerce intends to verify the information relied upon in making its final determination.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation. Note that Commerce has temporarily modified certain of its requirements for serving documents containing business proprietary information, until further notice.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party's name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioner. Section 351.210(e)(2) of Commerce's regulations requires that a request by exporters for postponement of the final determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.
On April 20, 2023, pursuant to 19 CFR 351.210(e), ASF-K requested that Commerce postpone the final determination and that provisional measures be extended to a period not to exceed six months.
In accordance with section 733(f) of the Act, Commerce will notify the U.S. International Trade Commission (ITC) of its preliminary determination. If the
This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).
The scope of this investigation covers certain freight railcar couplers (also known as “fits” or “assemblies”) and parts thereof. Freight railcar couplers are composed of two main parts, namely knuckles and coupler bodies but may also include other items (
Subject freight railcar couplers and parts are included within the scope whether finished or unfinished, whether imported individually or with other subject or nonsubject parts, whether assembled or unassembled, whether mounted or unmounted, or if joined with nonsubject merchandise, such as other nonsubject parts or a completed railcar. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various parts. When a subject coupler or subject parts are mounted on or to other nonsubject merchandise, such as a railcar, only the coupler or subject parts are covered by the scope.
The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M-211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” and/or AAR M-215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)).
The country of origin for subject couplers and parts thereof, whether fully assembled, unfinished or finished, or attached to a railcar, is the country where the subject coupler parts were cast or forged. Subject merchandise includes coupler parts as defined above that have been further processed or further assembled, including those coupler parts attached to a railcar in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various parts. The inclusion, attachment, joining, or assembly of nonsubject parts with subject parts or couplers either in the country of manufacture of the in-scope product or in a third country does not remove the subject parts or couplers from the scope.
The couplers that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished railcars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.50. Subject merchandise may also be imported under HTSUS statistical reporting number 7325.99.5000. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is rescinding the administrative review of the antidumping duty order on common alloy aluminum sheet (CAAS) from Taiwan, covering the period of review (POR) October 15, 2020, through March 31, 2022.
Applicable May 3, 2023.
Mark Hoadley, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3148.
On April 1, 2022, Commerce published in the
On February 17, 2023, Commerce issued a memorandum stating its intent to rescind the administrative review of the antidumping duty order on CAAS
The products covered by the order are CAAS. For a complete description of the scope of the order,
Commerce addressed the issue raised in the case and rebuttal briefs in the Issues and Decision Memorandum. This issue is identified in the appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Pursuant to 19 CFR 351.213(d)(3), it is Commerce's practice to rescind an administrative review of an antidumping duty order where it concludes there were no suspended entries of subject merchandise during the POR for an exporter or producer. Normally, upon completion of an administrative review, the suspended entries are liquidated at the antidumping duty assessment rate(s) based on the final results for the review period. Therefore, for an administrative review to be conducted, there must be a suspended entry that Commerce can instruct U.S. Customs and Border Protection to liquidate at the calculated antidumping duty assessment rate for the review period. As explained in detail in the Issues and Decision Memorandum, there were no suspended entries of subject merchandise from CSAC during the POR. Accordingly, in the absence of suspended entries of subject merchandise during the POR, we are rescinding this administrative review in accordance with 19 CFR 351.213(d)(3).
As Commerce is rescinding this administrative review, cash deposit rates will not change. Accordingly, the current cash deposit requirements shall remain in effect until further notice.
This notice also serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice is published in accordance with section 751 of the Act and 19 CFR 351.213(d)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Western Pacific Stock Assessment Review (WPSAR) Steering Committee will convene a public meeting to discuss and approve the 5-year calendar for stock assessments, and to address any other concerns related to the WPSAR process.
The Steering Committee will meet from 1 p.m. to 3 p.m. on May 15, 2023.
The meetings will be held by web conference. Specific information on joining the meeting, connecting to the web conference and providing oral public comments will be posted on the Council website at
Kitty Simonds; telephone: (808) 522-8220, or email:
The WPSAR Steering Committee consists of the Council's Executive Director, the Acting Science Director of the NMFS Pacific Islands Fisheries Science Center, and the Acting Regional Administrator of the NMFS Pacific Islands Regional Office. You may read more about WPSAR at
The public will have an opportunity to comment during the meeting. The agenda order may change. The meeting will run as late as necessary to complete scheduled business.
The meeting is accessible to people with disabilities. Make direct requests for sign language interpretation or other auxiliary aids to Mark Fitchett, (808) 522-8141, or
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council's (Pacific Council) Ad Hoc Marine Planning Committee (MPC) will hold an online public meeting.
The online meeting will be held Thursday, May 18, 2023, from 10 a.m. to 4 p.m. Pacific Daylight Time or until business for the day has been completed.
This meeting will be held online. Specific meeting information, including a proposed agenda and directions on how to join the meeting and system requirements will be provided in the meeting announcement on the Pacific Council's website (see
Kerry Griffin, Staff Officer, Pacific Council; telephone: (503) 820-2409.
The purpose of this online meeting is for the MPC to consider current offshore wind energy issues and to provide information and advice to the Pacific Council for consideration at its June 2023 meeting. Topics may include discussion of pending draft Wind Energy Areas (WEAs) off the Oregon Coast, an update on California offshore wind energy lease sales, and other related topics.
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (
Department of the Air Force, Department of Defense.
Notice of intent.
Pursuant to the Bayh-Dole Act and implementing regulations, the Department of the Air Force hereby gives notice of its intent to grant an exclusive license with a joint ownership agreement to Tensor Networks, an Inc. duly organized, validly existing, and in good standing in the State of California having a place of business at 1289 Reamwood Ave., Ste. G, Sunnyvale, CA 94089.
Written objections must be filed no later than fifteen (15) calendar days after the date of publication of this Notice.
Submit written objections to Stephen Colenzo, AFRL/RI, 525 Brooks Road, Rome, New York 13441; or email:
Stephen Colenzo, AFRL/RI, 525 Brooks Road, Rome, New York 13441; (315) 330-7665 or e mail:
In accordance with various embodiments of the disclosed subject matter, a method and framework configured for modeling a pattern of life (POL) by processing both categorical data and non-categorical data (
—POTTENGER ET AL, U.S. Patent No. 11,308,384, issued on 19 April 2022, and entitled “
The Department of the Air Force may grant the prospective license unless a timely objection is received that sufficiently shows the grant of the license would be inconsistent with the Bayh-Dole Act or implementing regulations. A competing application for a patent license agreement, completed in compliance with 37 CFR 404.8 and received by the Air Force within the period for timely objections, will be treated as an objection and may be considered as an alternative to the proposed license.
Department of the Air Force, Department of Defense.
Notice of intent.
Pursuant to the Bayh-Dole Act and implementing regulations, the Department of the Air Force hereby gives notice of its intent to grant a partially exclusive patent license (in the fields of commercial and defense composite manufacturing using structural bonding; load bearing bonding; and electrical bonding) to Unmanned Systems Incorporated—DBA Albers Aerospace, a C Corporation duly organized, validly existing, and in good standing in the State of Nevada, having a place of business at 1476 Industrial Blvd., McKinney TX.
Written objections must be filed no later than fifteen (15) calendar days after the date of publication of this Notice.
Submit written objections to Jeremy Gratsch, AFRL/RXOP, 2977 Hobson Way, Building 653, Wright-Patterson AFB, OH 45433; Phone: 937-255-0017; or Email:
Jeremy Gratsch, AFRL/RXOP, 2977 Hobson Way, Building 653, Wright-Patterson AFB, OH 45433; Phone: 937-255-0017; or Email:
The present invention discloses cured composites having improved surfaces and processes of making and methods of using same. Such processes use ultra-short pulse lasers, for example, a femto-second laser to ablate material without the detrimental heat affected zones of other laser processes. Such process can not only increases surface roughness and clean contaminates, but can also selectively remove the matrix material and expose the surface fibers of cured composites. The treated cured composites have improved thermal and electrical pathways that can dissipate unwanted heat and electricity when two or more prepregs and/or cured composites are bonded or cured to form a single article.
U.S. Application Publication No. 2022/0274369, published on 1 September 2022, and entitled
The Department of the Air Force may grant the prospective license unless a timely objection is received that sufficiently shows the grant of the license would be inconsistent with the Bayh-Dole Act or implementing regulations. A competing application for a patent license agreement, completed in compliance with 37 CFR 404.8 and received by the Air Force within the period for timely objections, will be treated as an objection and may be considered as an alternative to the proposed license.
Under Secretary of Defense for Research and Engineering, Defense Science Board, Department of Defense (DoD).
Notice of Federal advisory committee meeting.
The DoD is publishing this notice to announce that the following Federal advisory committee meeting of the Defense Science Board (DSB) will take place.
Closed to the public Wednesday, May 3, 2023 from 8 a.m. to 4 p.m.
The address of the closed meeting is conference room 3A912A at the Pentagon, Washington, DC 20301.
Mr. Kevin Doxey, Designated Federal Officer (DFO), (703) 571-0081 (Voice), (703) 697-1860 (Facsimile),
This meeting is being held under the provisions of chapter 10 of title 5, United States Code (U.S.C.) (commonly known as the “Federal Advisory Committee Act (FACA)”); 5 U.S.C. 552b(c) (commonly known as the “Government in the Sunshine Act”); and sections 102-3.140 and 102-3.150 of title 41, Code of Federal Regulations (CFR).
Due to circumstances beyond the control of the Designated Federal Officer, the Defense Science Board was unable to provide public notification required by 41 CFR 102-3.150(a) concerning its May 3, 2023 meeting. Accordingly, the Advisory Committee Management Officer for the Department of Defense, pursuant to 41 CFR 102-3.150(b), waives the 15-calendar day notification requirement.
Office of Elementary and Secondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for fiscal year (FY) 2023 for the Mental Health Personnel Technical Assistance Center (MHP TA Center), Assistance Listing Number 84.184U. This notice relates to the approved information collection under OMB control number 1894-0006.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Carlette Kyser Pegram, U.S. Department of Education, 400 Maryland Avenue SW, Room 3E257, Washington, DC 20202. Telephone: 202-453-6732. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
To help address the need for additional school-based mental health services providers, the MHSP program provides competitive grants to support and demonstrate innovative partnerships among SEAs, LEAs, and consortia of LEAs and IHEs to train school-based mental health services providers for employment in schools and LEAs, with the goal of increasing the number and diversity of high-quality, trained providers available to address the shortages of school-based mental health services providers in high-need LEAs. The SBMH program provides competitive grants to SEAs, LEAs, and consortia of LEAs to increase the number of credentialed school-based mental health services providers providing mental health services to students in LEAs with demonstrated need. Collectively, both programs aim to significantly increase the ability of schools to address the mental health needs of students and staff and help ensure safer, healthier, more inclusive, and positive school environments.
The MHP TA Center will support MHSP and SBMH grantees in meeting the goals and objectives of their respective grants. The Center will also identify, develop, and disseminate resources to enhance the efforts of IHEs, SEAs, LEAs, and schools to address the social, emotional, and mental health needs of PK-12 students and staff.
This priority is:
A project to—
(1) Provide technical assistance to fiscal years 2022 and 2023 MHSP and SBMH grantees (grantees) through a tiered approach that includes universal support to all grantees, targeted support on select topics for subsets of grantees, and intensive support for individual grantees, as directed by the Office of Elementary and Secondary Education;
(2) Support high-quality grantee data through—
(a) Developing a system for collecting, reviewing, and analyzing specific performance data (
(b) Assisting MHSP and SBMH grantees in submitting valid and reliable data in the annual and final performance reports; and
(c) Conducting a review and analysis of the annual and final performance reports, aggregating the data, and preparing a report for the Department describing successes, challenges, exemplars, and noteworthy trends; and
(3) Disseminate best practices in credentialing, recruiting, training and developing, and retaining school-based mental health services providers, including best practices on establishing and sustaining partnerships with IHEs to create and provide innovative high-quality training and credentialing options and maintain a robust pipeline of school-based mental health services providers.
(a) Include at least one partnership with a Historically Black College and University (HBCU), Tribal College and University (TCU), or other Minority Serving Institution (MSI) in order to address a key focus of the MHSP and SBMH programs, specifically ensuring a pipeline of school-based mental health services providers from diverse backgrounds or from the communities that they serve;
(b) Develop and maintain a 508-compliant website to assist the MHP TA Center to (1) disseminate best practices in credentialing, recruiting, training and developing, and retaining school-based mental health services providers, including mental health service providers from diverse backgrounds or from the communities that they serve; and (2) disseminate free, online open educational resources (OER) that can be used to (i) meet ongoing training and professional development requirements for school-based mental health services providers and other school staff and (ii) provide training alternatives, such as micro-credentials, professional development certificates, and online courses, for new students pursuing a credential to provide mental health services in schools that States may choose to incorporate as part of their credentialing process, including OERs that address school climate (
(c) Provide technical assistance (such as webinars or virtual meetings) for preparing, collecting, and submitting valid and reliable data to be included in annual and final performance reports; annually review and analyze annual and final reports; and annually prepare a report for the Department aggregating the data from annual and final performance reports and describing successes, challenges, exemplars, and noteworthy trends;
(d) Disseminate information (
(e) Annually provide forums (such as communities of practice) for grantees to share resources and experiences related to specific areas of MHSP and SBMH grant implementation. Specific areas should include creating culturally and linguistically inclusive and identity-safe environments for all students and other areas to be identified based on input from grantees, the Department, and other stakeholders, obtained through focus groups, for example; and
(f) Develop, identify, and disseminate information regarding evaluation of the implementation and impact of MHSP and SBMH grants, including providing webinars or other convenings focused specifically on conducting such evaluations and using ongoing data yielded from such evaluations to engage in continuous improvement of grant programs.
(a) Explain how the applicant's program design will create high-quality technical assistance for MHSP and SBMH grantees, including by providing a logic model that articulates a tiered approach to providing support to MHSP and SBMH grantees, a cycle of continuous improvement, and a process for program adjustments based on ongoing and emergent grantee needs;
(b) Demonstrate expert knowledge in credentialing, recruiting, training, developing, and retaining school-based mental health services providers;
(c) Demonstrate expert knowledge in—
(1) The statutory and regulatory requirements related to the MHSP and SBMH grant programs;
(2) Best practices in supporting school-based mental health services providers along the continuum from credentialing to retention in high-need schools; and
(3) Evidence-based approaches to supporting student and staff social, emotional, and mental health and well-being;
(d) Describe their experience in providing training, information, and support to IHEs, SEAs, LEAs, schools, and other organizations on evidence-based strategies to support pre- and in-service training that enhance the skills and knowledge of school-based mental health services providers and contribute to creating and maintaining supportive, positive, identity-safe, and inclusive school climates;
(e) Describe their experience providing training and resources to IHEs, LEAs, schools, and school-based mental health services providers regarding evidence-based practices, to ensure access to services for student groups not limited to but including students with disabilities, students experiencing homelessness, LGBTQ+ students, and English learners; and
(f) Describe their expertise in approaches to supporting valid and reliable data, conducting data quality reviews, collecting and analyzing data, and evaluating the effectiveness of programs intended to support student social, emotional, and mental health and well-being.
(i) A randomized controlled trial employs random assignment of, for example, students, teachers, classrooms, or schools to receive the project component being evaluated (the treatment group) or not to receive the project component (the control group).
(ii) A regression discontinuity design study assigns the project component being evaluated using a measured variable (
(iii) A single-case design study uses observations of a single case (
(a) In General. A public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary schools or secondary schools in a city, county, township, school district, or other political subdivision of a State, or of or for a combination of school districts or counties that is recognized in a State as an administrative agency for its public elementary schools or secondary schools.
(b) Administrative Control and Direction. The term includes any other public institution or agency having administrative control and direction of a public elementary school or secondary school.
(c) Bureau of Indian Education Schools. The term includes an elementary school or secondary school funded by the Bureau of Indian Education but only to the extent that including the school makes the school eligible for programs for which specific eligibility is not provided to the school in another provision of law and the school does not have a student population that is smaller than the student population of the LEA receiving assistance under the ESEA with the smallest student population, except that the school shall not be subject to the jurisdiction of any SEA (as defined in this notice) other than the Bureau of Indian Education.
(d) Educational Service Agencies. The term includes educational service agencies and consortia of those agencies.
(e) State Educational Agency. The term includes the SEA in a State in which the SEA is the sole educational agency for all public schools.
(i) A practice guide prepared by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks reporting a “strong evidence base” or “moderate evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks reporting a “positive effect” or “potentially positive effect” on a relevant outcome based on a “medium to large” extent of evidence, with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study or quasi-experimental design study reviewed and reported by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks, or otherwise assessed by the Department using version 4.1 of the WWC Handbooks, as appropriate, and that—
(A) Meets WWC standards with or without reservations;
(B) Includes at least one statistically significant and positive (
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks; and
(D) Is based on a sample from more than one site (
(i) A practice guide prepared by WWC reporting a “strong evidence base” or “moderate evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC reporting a “positive effect” or “potentially positive effect” on a relevant outcome with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single study assessed by the Department, as appropriate, that—
(A) Is an experimental study, a quasi-experimental design study, or a well-designed and well-implemented correlational study with statistical controls for selection bias (
(B) Includes at least one statistically significant and positive (
(i) A practice guide prepared by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks reporting a “strong evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks reporting a “positive effect” on a relevant outcome based on a “medium to large” extent of evidence, with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study reviewed and reported by the WWC using version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks, or otherwise assessed by the Department using version 4.1 of the WWC Handbooks, as appropriate, and that—
(A) Meets WWC standards without reservations;
(B) Includes at least one statistically significant and positive (
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1, 3.0, 4.0, or 4.1 of the WWC Handbooks; and
(D) Is based on a sample from more than one site (
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2. a.
b.
c.
3.
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2.
Because we plan to make successful applications available to the public, you may wish to request confidentiality of business information.
Consistent with Executive Order 12600, please designate in your application any information that you believe is exempt from disclosure under Exemption 4. In the appropriate appendix section of your application, under “Other Attachments Form,” please list the page number or numbers on which we can find this information. For additional information please see 34 CFR 5.11(c).
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4.
5.
• A “page” is 8.5” x 11”, on one side only, with 1” margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the one-page abstract, the resumes, the bibliography, or the letters of support. However, the recommended page limit does apply to all of the application narrative.
6.
1.
The selection criteria are as follows:
(a)
The Secretary considers the quality of the design of the proposed project. In determining the quality of the design of the proposed project, the Secretary considers the following factors:
(1) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs. (up to 8 points)
(2) The extent to which the proposed project demonstrates a rationale (as defined in this notice). (up to 8 points)
(3) The extent to which performance feedback and continuous improvement are integral to the design of the proposed project. (up to 9 points)
(b)
The Secretary considers the quality of the project services. In determining the quality of the project services of the proposed project, the Secretary considers the following factors:
(1) The extent to which the services to be provided by the proposed project are appropriate to the needs of the intended recipients or beneficiaries of those services. (up to 15 points)
(2) The quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability. (up to 5 points)
(3) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to lead to improvements in practice among the recipients of those services. (up to 10 points)
(c)
The Secretary considers the quality of the personnel who will carry out the proposed project.
(1) In determining the quality of project personnel, the Secretary considers the extent to which the applicant encourages applications for employment from persons who are members of groups that have been traditionally underrepresented based on race, color, national origin, gender, age, or disability. (up to 10 points)
(2) In addition, the Secretary considers the qualifications, including relevant training and experience, of key project personnel. (up to 10 points)
(d)
The Secretary considers the quality of the management plan for the proposed project. In determining the quality of the management plan for the proposed project, the Secretary considers the following factors:
(1) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks. (up to 5 points)
(2) The adequacy of procedures for ensuring feedback and continuous
(3) The adequacy of mechanisms for ensuring high-quality products and services from the proposed project. (up to 5 points)
(4) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project. (up to 5 points)
(e)
The Secretary considers the quality of the evaluation to be conducted of the proposed project. In determining the quality of the evaluation, the Secretary considers the following factors:
(1) The extent to which the methods of evaluation will provide valid and reliable performance data on relevant outcomes. (up to 2 points)
(2) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible. (up to 3 points)
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
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Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award applications (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115-232) (2 CFR 200.216);
(c) Providing a preference, to the extent permitted by law, to maximize use of goods, products, and materials produced in the United States (2 CFR 200.322); and
(d) Terminating agreements in whole or in part to the greatest extent authorized by law if an award no longer effectuates the program goals or agency priorities (2 CFR 200.340).
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If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
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4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure
(c) Under 34 CFR 75.250(b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
Accreditation Group, Office of Postsecondary Education, U.S. Department of Education.
Call for written third-party comments.
This notice provides information to members of the public on submitting written comments for accrediting agencies currently undergoing review for the purpose of recognition by the U.S. Secretary of Education.
Herman Bounds, Director, Accreditation Group, Office of Postsecondary Education, U.S. Department of Education, 400 Maryland Avenue SW, fifth floor, Washington, DC 20202, telephone: (202) 453-7615, or email:
This request for written third-party comments concerning the performance of accrediting agencies under review by the Secretary of Education is required by 496(n)(1)(A) of the Higher Education Act (HEA) of 1965, as amended, and pertains to the summer 2024 meeting of the National Advisory Committee on Institutional Quality and Integrity (NACIQI). The meeting date and location have not been determined but will be announced in a later
The agencies are listed by the type of application each agency has submitted. Please note, each agency's current scope of recognition is indicated below. If any agency requested to expand its scope of recognition, identified are both the current scope of recognition and the requested scope of recognition.
1. WASC Accrediting Commission for Community and Junior Colleges. Scope of Recognition: The accreditation and pre-accreditation (“Candidate for Accreditation”) of community and other colleges which have as a primary mission the granting of associate degrees, but which may also award certificates and other credentials, not to exceed the bachelor degree level, where the provision of such credentials is within the institution's mission and, if applicable, is authorized by their governmental authorities, and the accreditation of such programs offered via distance education and correspondence education at these colleges. This recognition also extends to the Committee on Substantive Change of the Commission, for decisions on substantive changes, and the Appeals Panel. Geographic Area of Accrediting Activities: Throughout the United States.
2. American Veterinary Medical Association, Council on Education. Scope of Recognition: The accreditation and preaccreditation (“Provisional Accreditation”) in the United States of
3. Accrediting Council for Continuing Education and Training. Scope of Recognition: The accreditation throughout the United States of institutions of higher education that offer continuing education and vocational programs that confer certificates or occupational associate degrees, including those programs offered via distance education. Geographic Area of Accrediting Activities: Throughout the United States.
4. Council on Education for Public Health. Scope of Recognition: The accreditation of schools of public health and public health programs outside schools of public health, at the baccalaureate and graduate degree levels, including those offered via distance education. Geographic Area of Accrediting Activities: Throughout the United States.
5. National Association of Schools of Dance, Commission on Accreditation. Scope of Recognition: The accreditation throughout the United States of freestanding institutions that offer dance and dance-related programs (both degree and non-degree-granting), including those offered via distance education. Geographic Area of Accrediting Activities: Throughout the United States.
6. National Association of Schools of Music, Commission on Accreditation. Scope of Recognition: The accreditation throughout the United States of freestanding institutions that offer music and music related programs (both degree and non-degree-granting) including those offered via distance. This recognition also extends to the Commission on Community College Accreditation. Geographic Area of Accrediting Activities: Throughout the United States.
7. National Association of Schools of Theatre, Commission on Accreditation. Scope of Recognition: The accreditation throughout the United States of freestanding institutions that offer theatre and theatre-related programs (both degree and non-degree-granting), including those offered via distance education. Geographic Area of Accrediting Activities: Throughout the United States.
8. Puerto Rico State Agency for the Approval of Public Postsecondary Vocational, Technical Institutions and Programs. Scope of Recognition: State agency for the approval of vocational education.
9. Maryland State Board of Nursing. Scope of Recognition: State agency for the approval of nursing education.
10.New York State Board of Regents (nursing education).
Scope of Recognition: State approval agency for nursing education.
Written comments about the recognition of any of the accrediting agencies listed above must be received by June 5, 2023, in the
Only written materials submitted by the deadline to the email address listed in this notice, and in accordance with these instructions, become part of the official record concerning agencies scheduled for review and are considered by the Department and NACIQI in their deliberations. Written comments about the specific agencies identified in this
Take notice that on April 18, 2023, Texas Eastern Transmission, LP (Texas Eastern), 915 North Eldridge Parkway, Suite 1000, Houston, Texas 77079, filed a prior notice request in accordance with 18 CFR 157.205 and 157.216 of the Federal Energy Regulatory Commission's (Commission) regulations under the Natural Gas Act and Texas Eastern's blanket certificate issued in Docket No. CP82-535-000. Texas Eastern requests authorization to: (1) abandon in-place approximately 5.3 miles of its 12-inch-diameter Line 14-K, (2) abandon by removal the related meter and regulating station 72258, and (3) abandon by removal related ancillary facilities, all located in Pointe Coupee Parish, Louisiana. Texas Eastern states the facilities to be abandoned have not been used to provide service in over a decade.
In addition to publishing the full text of this document in the
Any questions concerning this application should be directed to Estela D. Lozano, Director, Regulatory, Texas Eastern Transmission, LP, P.O. Box 1642, Houston, Texas 77251-1642, by phone at (713) 627-4522 or by email to
Pursuant to section 157.9 of the Commission's Rules of Practice and Procedure,
There are three ways to become involved in the Commission's review of this project: you can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on June 26, 2023. How to file protests, motions to intervene, and comments is explained below.
Pursuant to section 157.205 of the Commission's regulations under the NGA,
Protests must comply with the requirements specified in section 157.205(e) of the Commission's regulations,
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before June 26, 2023. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP23-163-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission by mailing it to the address below. Your submission must reference the Project docket number CP23-163-000.
The Commission encourages electronic filing of submissions (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail or email (with a link to the document) at: Estela D. Lozano, Director, Regulatory, Texas Eastern Transmission, LP, P.O. Box 1642, Houston, Texas 77251-1642, or by email to
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Take notice that the Commission has received the following Natural Gas & Oil Pipeline Rate and Refund Report filings:
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following public utility holding company filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing
Environmental Protection Agency (EPA).
Notice.
In accordance with the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), EPA is issuing a notice of receipt of requests by registrants to voluntarily cancel their registrations of certain products containing the pesticide chlorpyrifos, or to amend their chlorpyrifos registrations to terminate one or more uses. EPA intends to grant these requests at the close of the comment period for this announcement, unless the Agency receives substantive comments within the comment period that would merit its further review, or the registrant withdraws their request. If these requests are granted, any sale, distribution, or use of products listed in this notice will be permitted after the registrations have been cancelled or the uses terminated only if such sale, distribution, or use is consistent with the terms as described in the final order.
Comments must be received on or before June 2, 2023, whichever occurs later.
The docket for this action, identified under docket identification (ID) number EPA-HQ-OPP-2022-0223, is available online at
Patricia Biggio, Pesticide Re-Evaluation Division (7508M), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (202) 566-0700; email address:
This action is directed to the public in general and may be of interest to a wide range of stakeholders including environmental, human health, and agricultural advocates; the chemical industry; pesticide users; and members of the public interested in the sale, distribution, or use of pesticides. Since others also may be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.
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This notice announces receipt by the Agency of requests from registrants to cancel certain pesticide product registrations or terminate certain uses of product registrations. These affected registrations are listed in sequence by registration number in Tables 1 and 2 of this Unit. Table 3 of this Unit includes the names and addresses of record for the registrants of the products listed in Tables 1 and 2 of this Unit, in sequence by EPA company number. This number corresponds to the first part of the EPA registration numbers of the products listed in Tables 1 and 2 of this Unit.
Unless the Agency determines that there are substantive comments that warrant further review of the requests or the registrants withdraw their requests, EPA intends to issue a final order in the
Section 6(f)(1) of FIFRA (7 U.S.C. 136d(f)(1)) provides that a registrant of a pesticide product may at any time request that any of its pesticide registrations be cancelled or amended to terminate one or more registered uses. FIFRA further provides that, before acting on the request, EPA must publish a notice of receipt of any such request in the
Section 6(f)(1)(B) of FIFRA (7 U.S.C. 136d(f)(1)(B)) requires that before acting on a request for voluntary cancellation, EPA must provide a 30-day public comment period on the request for voluntary cancellation or use termination. In addition, FIFRA section 6(f)(1)(C) (7 U.S.C. 136d(f)(1)(C)) requires that EPA provide a 180-day comment period on a request for voluntary cancellation or termination of any minor agricultural use before granting the request, unless:
1. The registrant requests a waiver of the comment period, or
2. The EPA Administrator determines that continued use of the pesticide would pose an unreasonable adverse effect on the environment.
The registrants in Table 3 of Unit II have requested that EPA waive the 180-day comment period. Accordingly, EPA will provide a 30-day comment period on the proposed requests.
Registrants who choose to withdraw a request for cancellation or withdraw a request for a use termination should submit such withdrawal in writing to the person listed under
Existing stocks are those stocks of registered pesticide products that are currently in the United States and that were packaged, labeled, and released for shipment prior to the effective date of the cancellation action.
If the requests for voluntary cancellation and amendments to terminate uses are granted, the Agency intends to publish a final cancellation order in the
All chlorpyrifos tolerances expired in the
Environmental protection, Pesticide and pests, Cancellation.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) Science Advisory Board (SAB) Staff Office a public meeting of the Science Advisory Board CASTNet Review Panel. The purpose of the public meeting is to receive briefings from EPA on the CASTNet monitoring network, hear public comments, ask any clarifying questions, and deliberate publicly on charge questions regarding the Panel's review of the network and a report from EPA's Office of Air and Radiation. Additional information, materials, background, meeting agendas, and activities will be posted on SAB's website at:
The public meeting will be held at AC Hotel by Marriott Bethesda Downtown at 4646 Montgomery Ave., Bethesda, MD 20814. Please refer to the SAB website at
Any member of the public who wants further information concerning this notice may contact Dr. Bryan Bloomer, Designated Federal Officer (DFO), via telephone (202) 564-4222, or email at
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before July 3, 2023. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
The Act directs the Commission to “promulgate any regulations necessary to implement” the statutory provisions, including its mandate that the Commission establish a “compensation plan” ensuring that all rates and charges for IPCS “are just and reasonable,” not earlier than 18 months and not later than 24 months after its January 5, 2023 enactment. The Act also requires the Commission to consider, as part of its implementation, the costs of “necessary” safety and security measures, as well as “differences in costs” based on facility size, or “other characteristics.” It allows the Commission to “use industry-wide average costs of telephone service and advanced communications services and the average costs of service of a communications service provider” in determining just and reasonable rates.
To ensure that it has the data needed to meet its substantive and procedural responsibilities under the Act, the Commission delegated to the Wireline Competition Bureau (WCB) and the Office of Economics and Analytics (OEA) (collectively, WCB/OEA) authority to “update and restructure” the Commission's latest mandatory data collection, the Third Mandatory Data Collection (OMB Control No. 3060-1300, Inmate Calling Services (ICS) 2022 One-Time Mandatory Data Collection), “as appropriate in light of the requirements of the new statute.” This delegation requires WCB/OEA to collect “data on all incarcerated people's communications services from all providers of those services now subject to” the Commission's expanded ratemaking authority, including, but not limited to, requesting “more recent data for additional years not covered by the most recent data collection.”
Pursuant to their delegated authority, WCB/OEA drafted proposed
On April 28, 2023, WCB/OEA released a Public Notice seeking comment on all aspects of the proposed instructions, template, and certification form. See Proposed 2023 IPCS Mandatory Data Collection Public Notice, available for download at
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The Commission may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before June 2, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Commission invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
The Commission is requesting emergency OMB processing of the information collection requirement(s) contained in this notice and has requested OMB approval no later than 37 days after the collection is received at OMB. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
(1) Reportable Foreign.
(2) Ownership—Foreign Adversary—China (including Hong Kong), Cuba, Iran, North Korea, Russia, Maduro Regime. Where there are interest holders that are entities and individuals that are a government organization or citizen of a “foreign adversary” country, an authorization holder must identify its 10% or greater direct or indirect foreign interest holders, including any 10% or greater direct or indirect foreign interest holders outside the foregoing “foreign adversary” countries. A “foreign adversary” country is defined in the Department of Commerce's rule, 15 CFR 7.4. The authorization holder must:
• identify each interest holder and the foreign country or countries, including countries that are not foreign adversary countries;
• disclose whether any interest holder has dual or more citizenships and identify all countries where citizenship is held; and
• certify to the truth and accuracy of all information.
(3) Reportable Foreign Ownership—No Foreign Adversary. Where there are no interest holders that are entities or individuals that are a government organization or citizen of any foreign country that is a “foreign adversary” country defined in the Department of Commerce's rule, 15 CFR 7.4, an authorization holder must identify its 10% or greater direct or indirect foreign interest holders. The authorization holder must:
• identify each interest holder and the foreign country or countries;
• disclose whether any interest holder has dual or more citizenships and identify all the countries where citizenship is held; and
• certify to the truth and accuracy of all information.
(4) No Reportable Foreign Ownership. An authorization holder that has no reportable foreign ownership must certify to the truth and accuracy of this information.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before June 2, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how
The Commission is requesting the Office of Management and Budget (OMB) approval for this revised information collection. On November 18, 2011, the Commission released the
In the CAF Phase II auction, service providers competed to receive support of up to $1.98 billion over 10 years to offer voice and broadband service in unserved high-cost areas. The information collection requirements reported under this collection are the result of several Commission decisions to implement the reform adopted in the
On January 30, 2018, the Commission adopted a public notice that established the final procedures for the CAF Phase II auction, including the long-form application disclosure and certification requirements for winning bidders seeking to become authorized to receive CAF Phase II auction support.
The Commission proposes to eliminate the information collection requirements related to the CAF Phase II auction FCC Form 683 now that the Commission's review of CAF Phase II auction long-form applications has concluded. All other information collection requirements remain unchanged.
On February 7, 2020 the Commission released the
To implement the Rural Digital Opportunity Fund auction (or Auction 904), the Commission adopted new rules for the Rural Digital Opportunity Fund auction, including the adoption of a two-stage application process. Like with the CAF Phase II auction, this process includes a pre-auction short-form application to be submitted by parties interested in bidding in the Rural Digital Opportunity Fund auction (FCC Form 183) and a post-auction long-form application that must be submitted by winning bidders (or their designees) seeking to become authorized to receive Rural Digital Opportunity Fund support (FCC Form 683). The Commission received approval for the short-form application (FCC Form 183) in a separate collection under the OMB control number 3060-1252.
This information collection includes the disclosures and certifications adopted by the Commission that must be made by winning bidders seeking to become authorized for Rural Digital Opportunity Fund support and the requirement that Rural Digital Opportunity Fund support recipients maintain a letter of credit. Any additional revisions or new collections for OMB review that address other reforms adopted in the Order will be submitted at a later date.
The Commission therefore proposes to revise this information collection to maintain these Rural Digital Opportunity Fund requirements.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before July 3, 2023. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
FCC staff uses the data to determine whether an applicant meets basic statutory and regulatory requirements to become a Commission licensee and to ensure that the public interest would be served by grant of the application. In addition, the information contained within this information collection ensures that (1) the integrity of the FM spectrum is not compromised, (2) unacceptable interference will not be caused to existing radio services, (3) statutory requirements are met, and (4) the stations operate in the public interest.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before June 2, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Respondents can request records at any time. The request must describe each requested record in sufficient detail to enable the FCC staff to locate the record. The online form is used to collect requester's information (address, contact information, etc.) and a detailed description of the records sought. The FOIA requester is asked to provide information that would assist the FCC in locating responsive records (if they exist). This information is essential to the accurate search and retrieval of records responsive to FOIA/PA requests. Additionally, the requester may include information, if applicable, about fee categories, fee waivers, and expedited processing.
This form will enhance the quality, utility, and clarity of the information to be collected; and minimize the burden of the collection of information on those responding.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's
Written PRA comments should be submitted on or before July 3, 2023. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
47 CFR 74.165 requires that the instrument of authorization for an experimental broadcast station be available at the transmitter site.
47 CFR 74.432(j) requires that the license of a remote pickup broadcast/low power auxiliary station shall be retained in the licensee's files and the address shown on the authorization.
47 CFR 74.832(j) (low power auxiliary stations) requires that the license shall be retained in the licensee's files at the address shown on the authorization.
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to take this opportunity to comment on the renewal of the existing information collections described below (OMB Control No. 3064-0057; -0061; -0087).
Comments must be submitted on or before July 3, 2023.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
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All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.
Manny Cabeza, Regulatory Counsel, 202-898-3767,
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Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by Bed Bath & Beyond Inc., hereinafter “Complainant,” against Orient Overseas Container Line Limited and OOCL (Europe) Limited (hereinafter “Respondents.”) Complainant states that it is a corporation existing under the laws of New York with a principal place of business in New Jersey. Complainant identifies Orient Overseas Container Line Limited as an ocean common carrier existing under the laws of Hong Kong with a principal place of business in Hong Kong, as well as a “controlled carrier” of the People's Republic of China. Complainant identifies OOCL (Europe) Limited as an ocean common carrier existing under the laws of United Kingdom with a principal place of business in the United Kingdom, as well as a “controlled carrier” of the People's Republic of China. Complainant further alleges that both companies act in the United States by and through their agent, OOCL (USA) Inc. (“OOCL (USA)”), a company existing under the laws of the State of New York with its principal place of business located in Utah.
Complainant alleges that Respondent violated 46 U.S.C. 41102(c), 41104(a)(2), and 41104(a)(10), as well as 46 CFR 545.5, regarding its practices and the billing and payment of costs and charges on the shipments of cargo, including demurrage and detention, as well as systematically failing to meet its service commitments to Complainant under Service Contracts, and by coercing Complainant to pay Peak Season Surcharges (PSS) and enter into premium rate contracts. An answer to the complaint is due to be filed with the Commission within twenty-five (25) days after the date of service. The full text of the complaint can be found in the Commission's Electronic Reading Room at
The Commission hereby gives notice of filing of the following agreements under the Shipping Act of 1984. Interested parties may submit comments, relevant information, or documents regarding the agreements to the Secretary by email at
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than May 18, 2023.
A. Federal Reserve Bank of Kansas City (Jeffrey Imgarten, Assistant Vice President) One Memorial Drive, Kansas City, Missouri 64198. Comments can also be electronically to
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Board of Governors of the Federal Reserve System.
Federal Trade Commission.
Notice of Horseracing Integrity and Safety Authority (HISA) final rule; delay of effectiveness.
The Federal Trade Commission modifies the Horseracing Integrity and Safety Authority's Anti-Doping and Medication Control Rule by extending its date of effectiveness until May 22, 2023.
As of May 3, 2023, the date of effectiveness for the Horseracing Integrity and Safety Authority's Anti-Doping and Medication Control Rule is delayed to May 22, 2023.
John H. Seesel (202-326-2702), Attorney, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
The Horseracing Integrity and Safety Act of 2020, 15 U.S.C. 3051-3060 (“Act”), tasks a self-regulatory nonprofit organization, the Horseracing Integrity and Safety Authority (“Authority”), with developing proposed rules on a variety of subjects.
On March 27, 2023, the Commission issued an Order (“Order”) approving the Authority's proposed Anti-Doping and Medication Control (“ADMC”) Rule. Pursuant to that Order, the ADMC Rule took effect immediately upon the Commission's approval,
On March 31, 2023, however, the United States District Court for the Northern District of Texas determined that the Commission had violated the Administrative Procedure Act by declaring the ADMC Rule effective immediately upon the issuance of the Commission's Order approving the Rule. Viewing the Commission's March 27 Order as tantamount to an agency's issuance of a substantive rule, the court found that the Commission should have delayed the date of effectiveness for the ADMC Rule for 30 days following approval. The court accordingly enjoined implementation or enforcement of the ADMC Rule until May 1, 2023.
The district court's March 31 order has given rise to substantial uncertainty regarding the criteria and procedures under which anti-doping and medication control protocols will be implemented as the Thoroughbred horseracing industry nears the Triple Crown events of May 6 (Kentucky Derby), May 20 (Preakness Stakes), and June 10 (Belmont Stakes). With the date of effectiveness for the Authority's nationally applicable ADMC Rule
In light of these policy concerns, the Commission finds it necessary to modify HISA's ADMC Rule, pursuant to the recently revised 15 U.S.C. 3053(e), to ensure the “fair administration of the Authority” and otherwise in furtherance of the Act's purposes. Accordingly, pursuant to the authority granted to the Commission by 15 U.S.C. 3053(e), the Commission issues this document delaying the date of effectiveness for the Horseracing Integrity and Safety Authority's Anti-Doping and Medication Control Rule until May 22, 2023.
As noted above, the Act authorizes the Commission to abrogate, add to, or modify the Authority's rules for specified reasons, including “to ensure the fair administration of the Authority.” 15 U.S.C. 3053(e). This provision authorizes Commission rulemaking pursuant to section 553 of Title 5, the Administrative Procedure Act (APA). The APA typically provides for notice-and-comment rulemaking, but under section 553(b)(3)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”
Here, the Commission finds, for good cause, that notice and comment is impracticable and unnecessary with respect to the document. Given the short time remaining before commencement of the Triple Crown races, providing advance notice would delay the effect of HISA's final rule until after the Kentucky Derby, defeating the rule's purpose. Obtaining comments after issuance of the rule is unnecessary because the full effect of the Commission's rule—which merely provides for a brief delay in the date of effectiveness for the ADMC Rule—will have occurred prior to the Commission's collection and consideration of any comments.
For these reasons, the Commission finds that there is good cause consistent with the public interest to issue the document without notice and comment.
The APA also requires a 30-day delayed effective date, except for “(1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.”
In accordance with the requirements of the Paperwork Reduction Act (PRA), an agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget control number. This document issued by the Commission—which addresses solely the date of effectiveness for the Authority's ADMC Rule—does not involve any collection of information pursuant to the PRA.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires that the Commission provide an Initial Regulatory Flexibility Analysis (IRFA) with a proposed rule and a Final Regulatory Flexibility Analysis (FRFA), if any, with a final rule. However, this obligation does not apply when an agency for good cause determines that a rulemaking is not subject to notice and comment.
Pursuant to the Congressional Review Act (5 U.S.C. 801 through 808), the Office of Information and Regulatory Affairs has said that it would presumptively treat the type of rulemaking that the Commission announces today as not a “major rule” (as defined in 5 U.S.C. 804(2)). The Commission occasionally extends a compliance date for a new rule or rule amendment to give entities additional time to prepare for compliance. For example, in 2010, the FTC extended the compliance date for its Energy Labeling Rule (16 CFR part 305) (formerly, Appliance Labeling Rule) to give regulated entities additional time to incorporate new labeling requirements for light bulbs into product packaging.
For the reasons stated above, the Federal Trade Commission extends the date of effectiveness for the Horseracing Integrity and Safety Authority's Anti-Doping and Medication Control Rule to May 22, 2023.
By direction of the Commission.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by July 3, 2023.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
The information users will be pharmacy benefit managers (PBMs), third party administrators and pharmacies, and the PDPs, MA-PDs, Fallbacks, and other plans that offer coverage of outpatient prescription drugs under the Medicare Part D benefit to Medicare beneficiaries. The statutorily required data is used primarily for payment and is used for claim validation as well as for other legislated functions such as quality monitoring, program integrity and oversight. In addition, the PDE data are used to support operations and program development.
CMS has used PDE data to create summarized dashboards and tools, including the Medicare Part D Drug Spending Dashboard & Data, the Part D Manufacturer Rebate Summary Report, and the Medicare Part D Opioid Prescribing Mapping Tool. The data are also used in the Medicare Trustees Report. Due to the market sensitive nature of PDE data, external uses of the data are subject to significant limitations. However, CMS does analyze the data on a regular basis to determine drug cost and utilization patterns in order to inform programmatic changes and to develop informed policy in the Part D program.
Food and Drug Administration, HHS.
Notice; establishment of a public docket; request for comments.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Antimicrobial Drugs Advisory Committee. The general function of the committee is to provide advice and recommendations to FDA on regulatory issues. The meeting will be open to the public. FDA is establishing a docket for public comment on this document.
The meeting will be held virtually on June 8, 2023, from 9:30 a.m. to 5 p.m. Eastern Time.
Please note that due to the impact of COVID-19, all meeting participants will be joining this advisory committee meeting via an online teleconferencing platform. Answers to commonly asked questions about FDA advisory committee meetings may be accessed at:
FDA is establishing a docket for public comment on this meeting. The docket number is FDA-2023-N-0623. Please note that late, untimely filed comments will not be considered. The docket will close on June 7, 2023. The
Comments received on or before May 24, 2023, will be provided to the committee. Comments received after that date will be taken into consideration by FDA. In the event that the meeting is cancelled, FDA will continue to evaluate any relevant applications or information, and consider any comments submitted to the docket, as appropriate.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” FDA will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
She-Chia Jankowski, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993-0002, 240-402-5343, email:
• Neonates and infants born during or entering their first RSV season.
• Children up to 24 months of age who remain vulnerable to severe RSV
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available on FDA's website at the time of the advisory committee meeting. Background material and the link to the online teleconference meeting room will be available at
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact She-Chia Jankowski (see
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Submit written comments (including recommendations) on the collection of information by June 2, 2023.
To ensure that comments on the information collection are received, OMB recommends that written comments be submitted to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The Dietary Supplement Health and Education Act (Pub. L. 103-417) added section 402(g) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 342(g)), which provides, in part, that the Secretary of Health and Human Services may, by regulation, prescribe good manufacturing practice for dietary supplements. Section 402(g) of the FD&C Act also stipulates that such regulations will be modeled after Current Good Manufacturing Practice (CGMP) regulations for food and may not impose standards for which there are no current, and generally available, analytical methodology. Section 402(g)(1) of the FD&C Act states that a dietary supplement is adulterated if it has been prepared, packed, or held under conditions that do not meet current good manufacturing practice regulations.
Accordingly, we have issued regulations in part 111 (21 CFR part 111) establishing minimum CGMP requirements pertaining to the manufacturing, packaging, labeling, or holding of dietary supplements to ensure their quality. Included among the requirements is recordkeeping, documenting, planning, control, and improvement processes of a quality control system. Implementation of these processes in a manufacturing operation serves as the backbone to CGMP. The records must show what is being manufactured and whether the controls in place ensure the product's identity, purity, strength, and composition and that limits on contaminants and measures to prevent adulteration are effective. Further, records must show whether and what deviations from control processes occurred, facilitate evaluation and corrective action concerning these deviations (including, where necessary, whether associated batches of product should be recalled from the marketplace), and enable a manufacturer to assure that the corrective action was effective. We believe the regulations in part 111 establish the minimum manufacturing practices necessary to ensure that dietary supplements are manufactured, packaged, labeled, or held in a manner
Specifically, the recordkeeping requirements of the regulations in part 111 include establishing written procedures and maintaining records pertaining to: (1) personnel; (2) sanitation; (3) calibration of instruments and controls; (4) calibration, inspection, or checks of automated, mechanical, or electronic equipment; (5) maintaining, cleaning, and sanitizing equipment and utensils and other contact surfaces; (6) water used that may become a component of the dietary supplement; (7) production and process controls; (8) quality control; (9) components, packaging, labels, and product received for packaging and labeling; (10) master manufacturing and batch production; (11) laboratory operations; (12) manufacturing operations; (13) packaging and labeling operations; (14) holding and distributing operations; (15) returned dietary supplements; and (16) product complaints.
Section 111.75(a)(1) (21 CFR 111.75(a)(1)) reflects FDA's determination that manufacturers that test or examine 100 percent of the incoming dietary ingredients for identity can be assured of the identity of the ingredient. However, we recognize that it may be possible for a manufacturer to demonstrate, through various methods and processes in use over time for its particular operation, that a system of less than 100 percent identity testing would result in no material diminution of assurance of the identity of the dietary ingredient as compared to the assurance provided by 100 percent identity testing. Section 111.75(a)(1) provides an opportunity for a manufacturer to make such a showing and reduce the frequency of identity testing of components that are dietary ingredients from 100 percent to some lower frequency. Section 111.75(a)(1) also sets forth the information a manufacturer is required to submit for an exemption from the requirement of 100 percent identity testing when a manufacturer petitions the Agency for such an exemption to 100 percent identity testing under 21 CFR 10.30 and the Agency grants such exemption.
In the
We estimate the burden of this collection of information as follows:
Based on a review of the information collection since our last request for OMB approval, we have made no adjustments to our burden estimate. We base our estimates for the recordkeeping and reporting burdens on our experience with the recordkeeping and petition activities.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry, investigators, and other stakeholders entitled “Decentralized Clinical Trials for Drugs, Biological Products, and Devices.” This draft guidance provides recommendations for sponsors, investigators, and other stakeholders regarding the implementation of decentralized clinical trials (DCTs) for drugs, biological products, and devices. In this draft guidance, a DCT refers to a clinical trial where some or all of the trial-related activities occur at locations other than traditional clinical trial sites.
Submit either electronic or written comments on the draft guidance by August 1, 2023 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002; or the Office of Policy, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Ryan Robinson, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 3342, Silver Spring, MD 20993, 240-402-9756; Diane Maloney, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993, 240-402-7911; Soma Kalb, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. G318, Silver Spring, MD 20993-0002, 301-796-6359; or Paul Kluetz, Oncology Center of Excellence, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 2223, Silver Spring, MD 20993, 301-796-9567.
FDA is announcing the availability of a draft guidance for industry, investigators, and other stakeholders entitled “Decentralized Clinical Trials for Drugs, Biological Products, and Devices.” This guidance fulfills the requirements set forth in section
DCTs may involve different levels of decentralization. In fully decentralized clinical trials, all activities take place at locations other than traditional trial sites. In hybrid DCTs, some activities involve in-person visits by trial participants to traditional clinical trial sites, and other visits or activities are conducted at locations other than traditional clinical trial sites. FDA's regulatory requirements are the same for DCTs and traditional site-based clinical trials.
DCTs may include the use of local healthcare providers and local clinical laboratory facilities in the management of trial participants and the use of telehealth and digital health technologies to remotely acquire data. By allowing remote participation and reducing the need to travel for face-to-face visits, DCTs may enhance convenience for study participants, facilitate research on diseases affecting populations with limited mobility, and reduce the burden on caregivers.
The investigator in a DCT is responsible for the conduct of the DCT and oversight of individuals delegated to perform trial-related activities. In a DCT, the investigator still ensures that appropriate informed consent is obtained, the investigational product is appropriately administered in accordance with the protocol, and other required safety and efficacy assessments are done with appropriate documentation. Specific issues related to the feasibility, design, implementation, or analysis of a DCT should be discussed with the relevant FDA review division.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Decentralized Clinical Trials for Drugs, Biological Products, and Devices.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required for this guidance. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information in 21 CFR part 11 have been approved under OMB control number 0910-0303; the collections of information in 21 CFR part 312, including Form FDA 1572, have been approved under OMB control number 0910-0014; the collections of information in 21 CFR part 812 and 812.140 have been approved under OMB control number 0910-0078; and the collections of information in 21 CFR parts 50 and 56 have been approved under OMB control number 0910-0130.
Persons with access to the internet may obtain the draft guidance at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) has determined that Levitra (vardenafil hydrochloride) oral tablets, 5 milligrams (mg), 10 mg, and 20 mg, were not withdrawn from sale for reasons of safety or effectiveness. This determination means that FDA will not begin procedures to withdraw approval of abbreviated new drug applications (ANDAs) that refer to these drug products, and it will allow FDA to continue to approve ANDAs that refer to these products as long as they meet relevant legal and regulatory requirements.
Daniel Ritterbeck, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6219, Silver Spring, MD 20993-0002, 301-796-4673,
Section 505(j) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(j)) allows the submission of an ANDA to market a generic version of a previously approved drug product. To obtain approval, the ANDA applicant must show, among other things, that the generic drug product: (1) has the same active ingredient(s), dosage form, route of administration, strength, conditions of use, and (with certain exceptions) labeling as the listed drug, which is a version of the drug that was previously approved, and (2) is bioequivalent to the listed drug. ANDA applicants do not have to repeat the extensive clinical testing otherwise necessary to gain approval of a new drug application (NDA).
Section 505(j)(7) of the FD&C Act requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products With Therapeutic Equivalence Evaluations,” which is known generally as the “Orange Book.” Under FDA regulations, drugs are removed from the list if the Agency withdraws or suspends approval of the drug's NDA or ANDA for reasons of safety or effectiveness or if FDA determines that the listed drug was withdrawn from sale for reasons of safety or effectiveness (21 CFR 314.162).
A person may petition the Agency to determine, or the Agency may determine on its own initiative, whether a listed drug was withdrawn from sale for reasons of safety or effectiveness. This determination may be made at any time after the drug has been withdrawn from sale, but must be made prior to approving an ANDA that refers to the listed drug (§ 314.161 (21 CFR 314.161)). FDA may not approve an ANDA that does not refer to a listed drug.
Levitra (vardenafil hydrochloride) oral tablets, 5 mg, 10 mg and 20 mg, are
In letters dated September 26, 2019, September 24, 2020, and September 20, 2021, Bayer HealthCare Pharmaceuticals, Inc. notified FDA that Levitra (vardenafil hydrochloride) oral tablets, 5 mg, 10 mg and 20 mg, respectively, were being discontinued, and FDA moved the drug products to the “Discontinued Drug Product List” section of the Orange Book.
Respira Therapeutics, Inc. submitted a citizen petition dated August 29, 2022 (Docket No. FDA-2022-P-2060), under 21 CFR 10.30, requesting that the Agency determine whether Levitra (vardenafil hydrochloride) oral tablets, 20 mg, were withdrawn from sale for reasons of safety or effectiveness. Although the citizen petition did not address the 5 mg and 10 mg strengths, those strengths have also been discontinued. On our own initiative, we have also determined whether those strengths were withdrawn for safety or effectiveness reasons.
After considering the citizen petition and reviewing Agency records and based on the information we have at this time, FDA has determined under § 314.161 that Levitra (vardenafil hydrochloride) oral tablets, 5 mg, 10 mg, and 20 mg, were not withdrawn for reasons of safety or effectiveness. The petitioner has identified no data or other information suggesting that these drug products were withdrawn for reasons of safety or effectiveness. We have carefully reviewed our files for records concerning the withdrawal of Levitra (vardenafil hydrochloride) oral tablets, 5 mg, 10 mg, and 20 mg, from sale. We have also independently evaluated relevant literature and data for possible postmarketing adverse events. We have reviewed the available evidence and determined that these drug products were not withdrawn from sale for reasons of safety or effectiveness.
Accordingly, the Agency will continue to list Levitra (vardenafil hydrochloride) oral tablets, 5 mg, 10 mg, and 20 mg, in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product List” delineates, among other items, drug products that have been discontinued from marketing for reasons other than safety or effectiveness. FDA will not begin procedures to withdraw approval of approved ANDAs that refer to these drug products. Additional ANDAs for these drug products may also be approved by the Agency as long as they meet all other legal and regulatory requirements for the approval of ANDAs. If FDA determines that labeling for these drug products should be revised to meet current standards, the Agency will advise ANDA applicants to submit such labeling.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the Paperwork Reduction Act of 1995, HRSA submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period. OMB may act on HRSA's ICR only after the 30-day comment period for this notice has closed.
Comments on this ICR should be received no later than June 2, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request a copy of the clearance requests submitted to OMB for review, email Samantha Miller, the Acting HRSA Information Collection Clearance Officer, at
Although some program forms vary from program to program (see program-specific burden charts below), required forms generally include: a program application, academic and non-academic letters of recommendation, the authorization to release information, and the acceptance/verification of good academic standing report. The NHHSP is not seeking to change or add any forms or documentation.
A 60-day notice published in the
Office of the Secretary, HHS.
Notice.
Findings of research misconduct have been made against Johnny J. He, Ph.D. (Respondent), who is a Professor, Department of Microbiology and Immunology, Rosalind Franklin University of Medicine and Science (RFUMS). Respondent engaged in research misconduct in research reported in grant applications submitted for U.S. Public Health Service (PHS) funds, specifically U01 DA056010-01 and DP1 DA056160-01 submitted to the National Institute on Drug Abuse (NIDA), National Institutes of Health (NIH), R01 AG078019-01 submitted to the National Institute on Aging (NIA), NIH, and R35 NS127233-01 submitted to the National Institute of Neurological Disorders and Stroke (NINDS), NIH. The administrative actions, including supervision for a period of three (3) years, were implemented beginning on April 17, 2023, and are detailed below.
Sheila Garrity, JD, MPH, MBA, Director, Office of Research Integrity, 1101 Wootton Parkway, Suite 240, Rockville, MD 20852, (240) 453-8200.
Notice is hereby given that the Office of Research Integrity (ORI) has taken final action in the following case:
ORI found that Respondent engaged in research misconduct by intentionally, knowingly, or recklessly falsifying, fabricating, and plagiarizing experimental data and text that described the research from one (1) pre-print and four (4) published papers and represented the data and/or ideas as his own under different experimental conditions in four (4) NIH grant applications and in one research record. The falsified, fabricated, and plagiarized research data and text appeared in the following NIH grant applications:
The sources of the plagiarized images and text were:
Specifically, ORI found that Respondent knowingly, intentionally, or recklessly:
• falsified, fabricated, and plagiarized research data and the text that described the research by:
• fabricated and plagiarized research data and text that described the research by:
• plagiarized text by:
Dr. He entered into a Voluntary Settlement Agreement (Agreement) and voluntarily agreed to the following:
(1) Respondent will have his research supervised for a period of three (3) years beginning on April 17, 2023 (the “Supervision Period”). Prior to the submission of an application for PHS support for a research project on which Respondent's participation is proposed and prior to Respondent's participation in any capacity in PHS-supported research, Respondent will submit a plan for supervision of Respondent's duties to ORI for approval. The supervision plan must be designed to ensure the integrity of Respondent's research. Respondent will not participate in any PHS-supported research until such a supervision plan is approved by ORI. Respondent will comply with the agreed-upon supervision plan.
(2) The requirements for Respondent's supervision plan are as follows:
i. A committee of 2-3 senior faculty members at the institution who are familiar with Respondent's field of research, but not including Respondent's supervisor or collaborators, will provide oversight and guidance for a period of three (3) years from the effective date of the Agreement. The committee will review primary data from Respondent's laboratory on a quarterly basis and submit a report to ORI at six (6)-month intervals setting forth the committee meeting dates and Respondent's compliance with appropriate research standards and confirming the integrity of Respondent's research.
ii. The committee will conduct an advance review of each application for PHS funds, or report, manuscript, or abstract involving PHS-supported research in which Respondent is involved. The review will include a discussion with Respondent of the primary data represented in those documents and will include a certification to ORI that the data presented in the proposed application, report, manuscript, or abstract are supported by the research record.
(3) During the Supervision Period, Respondent will ensure that any institution employing him submits, in conjunction with each application for PHS funds, or report, manuscript, or abstract involving PHS-supported research in which Respondent is involved, a certification to ORI that the data provided by Respondent are based on actual experiments or are otherwise legitimately derived and that the data, procedures, and methodology are accurately reported and not plagiarized in the application, report, manuscript, or abstract.
(4) If no supervision plan is provided to ORI, Respondent will provide certification to ORI at the conclusion of the Supervision Period that his participation was not proposed on a research project for which an application for PHS support was submitted and that he has not participated in any capacity in PHS-supported research.
(5) During the Supervision Period, Respondent will exclude himself voluntarily from serving in any advisory or consultant capacity to PHS including, but not limited to, service on any PHS advisory committee, board, and/or peer review committee.
The Indian Health Service (IHS) is accepting applications for grants for the Community Health Aide Program (CHAP) Tribal Planning and Implementation (TPI) program. The CHAP is authorized under the Snyder Act, 25 U.S.C. 13; the Transfer Act, 42 U.S.C. 2001(a); and the Indian Health Care Improvement Act, 25 U.S.C. 1616l. The Assistance Listings section of SAM.gov (
The national CHAP will provide a network of health aides trained to support licensed health professionals while providing direct health care, health promotion, and disease prevention services. These providers will work within a referral relationship under the supervision of licensed clinical providers that includes clinics, service units, and hospitals. The program will increase access to direct health services, including inpatient and outpatient visits.
The Alaska CHAP has become a model for efficient and high quality health care delivery in rural Alaska providing approximately 300,000 patient encounters per year and responding to emergencies 24 hours a day, 7 days a week. Specialized providers in dental and behavioral health were later introduced to respond to the needs of patients and address the health disparities in oral health and mental health amongst American Indians and Alaska Natives.
The national CHAP is a workforce model that includes three different provider types that act as extenders of licensed clinical supervisors. The national CHAP currently includes a behavioral health aide, community health aide, and dental health aide. Each of the health aide categories operate in a tiered level practice system. The national CHAP model provides an opportunity for increased access to care through the extension of primary care, dental, and behavioral health clinicians.
In 2010, under the permanent reauthorization of the Indian Health Care Improvement Act (IHCIA), Congress provided the Secretary of Health and Human Services, acting through the IHS, the authority to expand the Alaska CHAP program. In 2016, the IHS initiated Tribal Consultation on expanding the CHAP to the contiguous 48 states. In 2018, the IHS formed the CHAP Tribal Advisory Group (TAG) and began developing the program. In 2020, the IHS announced the national CHAP policy, which formally created the national CHAP.
The purpose of the TPI program is to support the planning and implementation for Tribes and Tribal Organizations (T/TO) positioned to begin operating a CHAP or support a growing CHAP in the contiguous 48 states. The program is designed to support the regional flexibility required to implement a CHAP unique to the needs of individual Tribal communities across the country through the identification of feasibility factors. The focus of the program is to:
1. Develop clinical supervisor support for primary care, behavioral health, and dental health clinicians providing both direct and indirect supervision of prospective health aides;
2. Identify area and community-specific health care needs of patients that can be addressed by the health aides;
3. Identify and develop a technology infrastructure plan for the mobility and success of health aides in anticipation of providing services;
4. Develop a training plan to include partners across the T/TO's geographic region to enhance the training opportunities available to prospective health aides to include continuing education and clinical practice;
5. Identify best practices for integrating a CHAP workforce into an existing Tribal health system;
6. Address social determinants of health that impact the recruitment and retention of prospective health aides; and
7. Identify the total cost of full implementation of a CHAP within an existing Tribal health system.
The total funding identified for fiscal year (FY) 2023 is approximately $3,000,000. Individual award amounts are anticipated to be between $900,000 and $1,000,000. The funding available for competing and subsequent continuation awards issued under this announcement is subject to the availability of appropriations and budgetary priorities of the Agency. The IHS is under no obligation to make awards that are selected for funding under this announcement.
Approximately three to five awards will be issued under this program announcement. The IHS intends to award no more than one grant per IHS area.
The period of performance is 2 years.
To be eligible for this funding opportunity, an applicant must be one of the following as defined under 25 U.S.C. 1603:
• A federally recognized Indian Tribe as defined by 25 U.S.C. 1603(14). The term “Indian Tribe” means any Indian Tribe, band, nation, or other organized group or community, including any Alaska Native village or group, or regional or village corporation, as defined in or established pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) [43 U.S.C. 1601
• A Tribal organization as defined by 25 U.S.C. 1603(26). The term “Tribal organization” has the meaning given the term in Section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304(l)): “Tribal organization” means the recognized governing body of any Indian Tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: provided that, in any case where a contract is let or grant made to an organization to perform services benefiting more than one Indian Tribe, the approval of each such Indian Tribe shall be a prerequisite to the letting or making of such contract or grant. Applicant shall submit letters of support and/or Tribal Resolutions from the Tribes to be served.
The Division of Grants Management (DGM) will notify any applicants deemed ineligible.
The IHS does not fund concurrent projects. If an applicant is successful under this announcement, any subsequent applications in response to other TPI announcements from the same applicant will not be funded. Applications on behalf of individuals (including sole proprietorships) and foreign organizations are not eligible and will be disqualified from competitive review and funding under this funding opportunity.
Specifically, an applicant may not apply to both this opportunity, TPI, and the CHAP Tribal Assessment and Planning (TAP) opportunity (number HHS-2023-IHS-TAP-0001).
An organization currently carrying out a CHAP in the U.S. in accordance with 25 U.S.C. 1616l through an Indian Self-Determination and Education Assistance Act (ISDEAA) agreement is eligible to apply, but may not utilize the funds to carry out a CHAP.
Please refer to Section IV.2 (Application and Submission Information/Subsection 2, Content and Form of Application Submission) for additional proof of applicant status documents required, such as Tribal Resolutions, proof of non-profit status, etc.
The IHS does not require matching funds or cost sharing for grants or cooperative agreements.
Applications with budget requests that exceed the highest dollar amount outlined under Section II Award Information, Estimated Funds Available, or exceed the period of performance outlined under Section II Award Information, Period of Performance, are considered not responsive and will not be reviewed. The DGM will notify the applicant.
The DGM must receive an official, signed Tribal Resolution prior to issuing a Notice of Award (NoA) to any T/O selected for funding. An applicant that is proposing a project affecting another Indian Tribe must include resolutions from all affected Tribes to be served. However, if an official signed Tribal Resolution cannot be submitted with the application prior to the application deadline date, a draft Tribal Resolution must be submitted with the application by the deadline date in order for the application to be considered complete and eligible for review. The draft Tribal Resolution is not in lieu of the required signed resolution but is acceptable until a signed resolution is received. If an application without a signed Tribal Resolution is selected for funding, the applicant will be contacted by the Grants Management Specialist (GMS) listed in this funding announcement and given 90 days to submit an official signed Tribal Resolution to the GMS. If the signed Tribal Resolution is not received within 90 days, the award will be forfeited.
Applicants organized with a governing structure other than a Tribal council may submit an equivalent document commensurate with their governing organization.
Organizations claiming nonprofit status must submit a current copy of the 501(c)(3) Certificate with the application.
The application package and detailed instructions for this announcement are available on
Please direct questions regarding the application process to
Mandatory documents for all applicants include:
• Application forms:
1. SF-424, Application for Federal Assistance.
2. SF-424A, Budget Information—Non-Construction Programs.
3. SF-424B, Assurances—Non-Construction Programs.
4. Project Abstract Summary form.
• Project Narrative (not to exceed 15 pages). See Section IV.2.A Project Narrative for instructions.
1. Background information on the organization.
2. Proposed scope of work, objectives, and activities that provide a description of what the applicant plans to accomplish.
• Budget Justification and Narrative (not to exceed 5 pages). See Section IV.2.B Budget Narrative for instructions.
• One-page Timeframe Chart.
• Tribal Resolution(s).
• Letters of Support from organization's Board of Directors (if applicable).
• 501(c)(3) Certificate.
• Biographical sketches for all Key Personnel.
• Contractor/Consultant resumes or qualifications and scope of work.
• Disclosure of Lobbying Activities (SF-LLL), if applicant conducts reportable lobbying.
• Certification Regarding Lobbying (GG-Lobbying Form).
• Copy of current Negotiated Indirect Cost rate (IDC) agreement (required in order to receive IDC).
• Organizational Chart (optional).
• Documentation of current Office of Management and Budget (OMB) Financial Audit (if applicable).
Acceptable forms of documentation include:
1. Email confirmation from Federal Audit Clearinghouse (FAC) that audits were submitted; or
2. Face sheets from audit reports. Applicants can find these on the FAC website at
All Federal public policies apply to IHS grants and cooperative agreements. Pursuant to 45 CFR 80.3(d), an individual shall not be deemed subjected to discrimination by reason of their exclusion from benefits limited by Federal law to individuals eligible for benefits and services from the IHS. See
A.
Be sure to succinctly answer all questions listed under the evaluation criteria (refer to Section V.1, Evaluation Criteria) and place all responses and required information in the correct section noted below or they will not be considered or scored. If the narrative exceeds the page limit, the reviewers will be directed to ignore any content beyond the page limit. The 15-page limit for the project narrative does not include the work plan, standard forms, Tribal Resolutions, budget, budget narratives, and/or other items. Page limits for each section within the project narrative are guidelines, not hard limits.
There are three parts to the project narrative: Part 1—Program Information; Part 2—Program Planning; Part 3—Program Evaluation; and Part 4—Program Report. See below for additional details about what must be included in the narrative.
The page limits below are for each narrative and budget submitted.
Describe the demographics of the community including but not limited to geography, languages, age, and socioeconomic status. The community profile should include data specific to the community that would benefit from the implementation of the CHAP. Include a brief summary of information obtained through use of a Tribal and Assessment Planning Grant if applicable.
Describe the community's current health disparities related to primary, behavioral, and oral health care. The needs section should provide facts and evidence related to infrastructure barriers (
Describe the T/TO's current health program activities, how long it has been operating, and what programs or services are currently being provided. Describe in full the organization's infrastructure and its ability to assess the feasibility of implementing a CHAP and identifying significant barriers that could prohibit the implementation. Include a brief summary of any information obtained through use of a Tribal Assessment and Planning Grant.
Describe in full the direction the T/TO plans to take in the CHAP TPI. The program plan should identify the plan, including how all aspects of the implementation will be based in Tribal culture and how the program plan will address Tribal infrastructure needs specific to:
• Clinical infrastructure and clinical operations.
• Workforce development including supervision plans for CHAP providers that address community and region specific needs.
• Training infrastructure (including continuing education).
• Technology infrastructure.
• System integration.
• Implementation cost.
Describe in full how the applicant will develop a robust clinical infrastructure to support clinical operations specific to CHAP providers. The activities should include how the applicant will correlate the community health needs with the CHAP program needs, including specific cultural elements. Include how the applicant will develop position descriptions, the scope of work of health aides, policy development, and a detailed plan of how to adjust the clinical operations to incorporate CHAP providers. Describe how CHAP providers will be trained, specific to the regional resources, include continuing education training plans. Describe how the CHAP providers will be supervised including staffing plans for CHAP provider supervision. List the available technology and detail how the current technology infrastructure will be utilized to support the CHAP providers, including aiding in provider mobility or how it will be built specific to the needs of the CHAP program, both at the provider and the clinic level. Detail how the CHAP program will be integrated with the current system to provide maximization of provider and program to improve community health, including cultural components the program is uniquely positioned or
Describe key staff tasked with carrying out the program activities carried out in Section 2. Applicants are highly encouraged to partner with other key stakeholders within the T/TO's region for a robust understanding of the needs and implications of implementing a CHAP into their respective communities.
Describe a timeline not to exceed 2 years for the completion of the program plan, activities, and evaluation plan. Provide a timeline chart depicting a realistic timeline that details all major activities, milestones, and applicable staffing plans. The timeline should include the projected progress report due at the midpoint of the project period. The timeline chart should not exceed one page.
Please identify and describe significant program activities and achievements associated with the delivery of quality health services. Provide a plan to provide a comparison of the actual accomplishments to the goals established for the project period, or if applicable, provide justification for the lack of progress. The evaluation plan should address major categories related to (See Logic Model in Appendix):
• Clinical infrastructure and clinical operations. Describe how clinical infrastructure and operations have changed to incorporate and integrate the CHAP program. Include any data on referrals to CHAP providers, number of clinic providers making referrals to CHAP providers and demonstrated increases in health promotion and disease prevention efforts.
• Workforce development including supervision plans for CHAP providers that address community and region specific needs. Include data on outreach and recruiting activities, number of CHAP applications received, supervisors trained for each provider type.
• Training infrastructure (including continuing education). Describe where the training for each CHAP discipline will be provided and whether it will be delivered in person, virtually or hybrid. Summarize how oversight will be maintained to assure a high-quality training is achieved. Detail how each aspiring or advancing CHAP provider will be supported and supervised throughout any hands-on training. Include data on each item if available.
• Technology infrastructure. Describe what technology will be used and how it supports the CHAP program. Detail any changes made to existing technology infrastructure to incorporate CHAP providers. Include how CHAP provider charting will be integrated into electronic health records. List specific technology purchased or transferred to the CHAP program to support CHAP providers. Include information on network accessibility, specifically any barriers to accessibility and how this can be overcome.
• System integration. Describe in detail what barriers to integration have been overcome and how. List patient outreach and education, trainings provided to clinic staff, trainings specific to providers on how CHAP providers will integrate and extend licensed providers to achieve best practices and health benefits. Describe specific populations where CHAP may be focused such as prenatal, child vaccination, dental sealant placement, substance abuse screening, hospital discharge follow up, etc., and how the CHAP providers integrate their visits with existing clinic systems. Include any data that supports system integration changes.
• Implementation cost. Provide details on budgeted items, explaining any overages and what happened that created overages. Explain how any excess funds were re-allocated to fully utilize all grant funds.
Provide a budget narrative that explains the amounts requested for each line item of the budget from the SF-424A (Budget Information for Non-Construction Programs) for the first year of the project. The applicant can submit with the budget narrative a more detailed spreadsheet than is provided by the SF-424A (the spreadsheet will not be considered part of the budget narrative). The budget narrative should specifically describe how each item would support the achievement of proposed objectives. Be very careful about showing how each item in the “Other” category is justified. Do NOT use the budget narrative to expand the project narrative.
Applications must be submitted through
If technical challenges arise and assistance is required with the application process, contact
The IHS will not acknowledge receipt of applications.
Executive Order 12372 requiring intergovernmental review is not applicable to this program.
• Pre-award costs are allowable up to 90 days before the start date of the award provided the costs are otherwise allowable if awarded. Pre-award costs are incurred at the risk of the applicant.
• The available funds are inclusive of direct and indirect costs.
• Only one grant may be awarded per applicant.
All applications must be submitted via
If you cannot submit an application through
If the DGM approves your waiver request, you will receive a confirmation of approval email containing submission instructions. You must include a copy of the written approval with the application submitted to the DGM. Applications that do not include a copy of the waiver approval from the DGM will not be reviewed. The Grants Management Officer of the DGM will notify the applicant via email of this decision. Applications submitted under waiver must be received by the DGM no later than 5:00 p.m. Eastern Time on the Application Deadline Date. Late applications will not be accepted for processing. Applicants that do not register for both the System for Award Management (SAM) and
Please be aware of the following:
• Please search for the application package in
• If you experience technical challenges while submitting your application, please contact
• Upon contacting
• Applicants are strongly encouraged not to wait until the deadline date to begin the application process through
• Please follow the instructions on
• Applicants must comply with any page limits described in this funding announcement.
• After submitting the application, you will receive an automatic acknowledgment from
Organizations that are not registered with the System for Award Management (SAM) must access the SAM online registration through the SAM home page at
Your
Check your organization's
Check your
The Federal Funding Accountability and Transparency Act of 2006, as amended (“Transparency Act”), requires all HHS awardees to report information on sub-awards. Accordingly, all IHS awardees must notify potential first-tier sub-awardees that no entity may receive a first-tier sub-award unless the entity has provided its UEI number to the prime awardee organization. This requirement ensures the use of a universal identifier to enhance the quality of information available to the public pursuant to the Transparency Act.
Additional information on implementing the Transparency Act, including the specific requirements for SAM, are available on the DGM Grants Management, Policy Topics web page at
Possible points assigned to each section are noted in parentheses. The project narrative and budget narrative should include only the first year of activities. The project narrative should be written in a manner that is clear to outside reviewers unfamiliar with prior related activities of the applicant. It should be well organized, succinct, and contain all information necessary for reviewers to fully understand the project. Attachments requested in the criteria do not count toward the page limit for the narratives. Points will be assigned to each evaluation criteria adding up to a total of 100 possible points. Points are assigned as follows:
Identify the proposed project and plans to fully implement a CHAP within their community. The needs should clearly identify the existing health system and how the CHAP will be integrated to meet the health needs of the community in the fields of behavioral, oral, and primary health care.
The work plan should be comprised of two key parts: Program Information and Program Plan. Provide information related to three key sections: community profile; health and infrastructure; and organizational capacity. The Program Information part should demonstrate a robust community profile that highlights the existing health system, demographical data of community members and user population, and a detailed description of the T/TO carrying out the proposed activity. An acceptable Program Plan expecting to receive full points should include details of the applicants plan to address the program objective. The Program Plan should address at a minimum key activities related to clinical supervisor support, scope of work, technology infrastructure, training infrastructure, integration best practices, and auxiliary support to health aides that address social determinants.
The program evaluation should be comprised of two key sections: evaluation plan and outcome report. The evaluation plan should address major categories related to clinical supervisor support, enhanced scope of work, technology infrastructure, training infrastructure, integration best practices, auxiliary support, and full implementation costs (See Sample Logic Model in Appendix). The evaluation plan should identify how the T/TO plans to fully integrate CHAP. The evaluation should include total implementation costs based on the implementation plan and program plan identified including any significant
1. Clinical infrastructure and clinical operations.
2. Workforce development including supervision plans for CHAP providers that address community and region specific needs.
3. Training infrastructure (including continuing education).
4. Technology infrastructure.
5. System integration.
6. Implementation cost.
Applicants are encouraged to identify additional categories above these six and may choose to develop subcategories that best fit the program plan.
Provide a detailed biographical sketch of each member of key personnel assigned to carry out the objectives of the program plan. The sketches should detail the qualifications and expertise of identified staff.
Provide a detailed budget of each expenditure directly related to the identified program activities.
Additional documents can be uploaded as Other Attachments in
• Work plan, logic model, and/or timeline for proposed objectives.
• Position descriptions for key staff.
• Resumes of key staff that reflect current duties.
• Consultant or contractor proposed scope of work and letter of commitment (if applicable).
• Current Indirect Cost Rate Agreement.
• Organizational chart.
• Map of area identifying project location(s).
• Additional documents to support narrative (
Each application will be prescreened for eligibility and completeness as outlined in this funding announcement. Applications that meet the eligibility criteria shall be reviewed for merit by the Review Committee (RC) based on the evaluation criteria. Incomplete applications and applications that are not responsive to the administrative thresholds (budget limit, period of performance limit) will not be referred to the RC and will not be funded. The DGM will notify the applicant of this determination.
Applicants must address all program requirements and provide all required documentation.
All applicants will receive an Executive Summary Statement from the IHS Office of Clinical and Preventive Services within 30 days of the conclusion of the RC outlining the strengths and weaknesses of their application. The summary statement will be sent to the Authorizing Official identified on the face page (SF-424) of the application.
The NoA is the authorizing document for which funds are dispersed to the approved entities and reflects the amount of Federal funds awarded, the purpose of the award, the terms and conditions of the award, the effective date of the award, the budget period, and period of performance. Each entity approved for funding must have a user account in GrantSolutions in order to retrieve the NoA. Please see the Agency Contacts list in Section VII for the systems contact information.
Approved applications not funded due to lack of available funds will be held for 1 year. If funding becomes available during the course of the year, the application may be reconsidered.
Any correspondence other than the official NoA executed by an IHS grants management official announcing to the project director that an award has been made to their organization is not an authorization to implement their program on behalf of the IHS.
Awards issued under this announcement are subject to, and are administered in accordance with, the following regulations and policies:
A. The criteria as outlined in this program announcement.
B.
• Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards currently in effect or implemented during the period of award, other Department regulations and policies in effect at the time of award, and applicable statutory provisions. At the time of publication, this includes 45 CFR part 75, at
• Please review all HHS regulatory provisions for Termination at 45 CFR 75.372, at the time of this publication located at
C.
• HHS Grants Policy Statement, Revised January 2007, at
D.
• Uniform Administrative Requirements for HHS Awards, “Cost Principles,” at 45 CFR part 75 subpart E, at the time of this publication located at
E.
• Uniform Administrative Requirements for HHS Awards, “Audit Requirements,” at 45 CFR part 75 subpart F, at the time of this publication located at
F. As of August 13, 2020, 2 CFR part 200 was updated to include a prohibition on certain telecommunications and video surveillance services or equipment. This prohibition is described in 2 CFR part 200.216. This will also be described in the terms and conditions of every IHS grant and cooperative agreement awarded on or after August 13, 2020.
This section applies to all recipients that request reimbursement of IDC in their application budget. In accordance with HHS Grants Policy Statement, Part II-27, the IHS requires applicants to obtain a current IDC rate agreement and submit it to the DGM prior to the DGM issuing an award. The rate agreement must be prepared in accordance with the applicable cost principles and guidance as provided by the cognizant agency or office. A current rate covers the applicable award activities under the current award's budget period. If the current rate agreement is not on file with the DGM at the time of award, the IDC portion of the budget will be restricted. The restrictions remain in
Per 2 CFR 200.414(f) Indirect (F&A) costs,
Electing to charge a de minimis rate of 10 percent can be used by applicants that have received an approved negotiated indirect cost rate from HHS or another cognizant Federal agency. Applicants awaiting approval of their indirect cost proposal may request the 10 percent de minimis rate. When the applicant chooses this method, costs included in the indirect cost pool must not be charged as direct costs to the award.
Available funds are inclusive of direct and appropriate indirect costs. Approved indirect funds are awarded as part of the award amount, and no additional funds will be provided.
Generally, IDC rates for IHS recipients are negotiated with the Division of Cost Allocation at
The recipient must submit required reports consistent with the applicable deadlines. Failure to submit required reports within the time allowed may result in suspension or termination of an active award, withholding of additional awards for the project, or other enforcement actions such as withholding of payments or converting to the reimbursement method of payment. Continued failure to submit required reports may result in the imposition of special award provisions and/or the non-funding or non-award of other eligible projects or activities. This requirement applies whether the delinquency is attributable to the failure of the recipient organization or the individual responsible for preparation of the reports. Per DGM policy, all reports must be submitted electronically by attaching them as a “Grant Note” in GrantSolutions. Personnel responsible for submitting reports will be required to obtain a login and password for GrantSolutions. Please use the form under the Recipient User section of
The reporting requirements for this program are noted below.
Program progress reports are required annually. The progress reports are due within 90 days after the budget period ends (specific dates will be listed in the NoA Terms and Conditions). These reports must include a brief comparison of actual accomplishments to the goals established for the period, a summary of progress to date or, if applicable, provide sound justification for the lack of progress, and other pertinent information as required. A final report must be submitted within 120 days of expiration of the period of performance.
Federal Financial Reports are due 90 days after the end of each budget period, and a final report is due 120 days after the end of the period of performance. Recipients are responsible and accountable for reporting accurate information on all required reports: the Progress Reports and the Federal Financial Report.
Failure to submit timely reports may result in adverse award actions blocking access to funds.
At the conclusion of the program period, the outcome report should detail how the T/TO plans to completely integrate CHAP into their Tribal health system and list major barriers that could potentially impact full integration. The Outcome Report should describe in full the findings of the program plan and evaluation, and plans for implementation. The outcome report should organize the findings of the key categories:
1. Clinical Supervisor Support.
2. Scope of Practice.
3. Technology Infrastructure.
4. Training Plan.
5. System Integration.
6. Auxiliary Support to Address Social Determinants.
Based on the findings and measureable outcomes of the categories, the applicant should explicitly identify the implementation plan and projected cost associated with full implementation.
This award may be subject to the Transparency Act sub-award and executive compensation reporting requirements of 2 CFR part 170.
The Transparency Act requires the OMB to establish a single searchable database, accessible to the public, with information on financial assistance awards made by Federal agencies. The Transparency Act also includes a requirement for recipients of Federal awards to report information about first-tier sub-awards and executive compensation under Federal assistance awards.
The IHS has implemented a Term of Award into all IHS Standard Terms and Conditions, NoAs, and funding announcements regarding the FSRS reporting requirement. This IHS Term of Award is applicable to all IHS grant and cooperative agreements issued on or after October 1, 2010, with a $25,000 sub-award obligation threshold met for any specific reporting period.
For the full IHS award term implementing this requirement and additional award applicability information, visit the DGM Grants Management website at
The recipient must administer the project in compliance with Federal civil rights laws, where applicable, that prohibit discrimination on the basis of race, color, national origin, disability, age, and comply with applicable conscience protections. The recipient must comply with applicable laws that prohibit discrimination on the basis of sex, which includes discrimination on the basis of gender identity, sexual orientation, and pregnancy. Compliance with these laws requires taking reasonable steps to provide meaningful access to persons with limited English proficiency and providing programs that are accessible to and usable by persons with disabilities. The HHS Office for Civil Rights provides guidance on complying with civil rights laws enforced by HHS. See
• Recipients of FFA must ensure that their programs are accessible to persons with limited English proficiency. For guidance on meeting your legal obligation to take reasonable steps to
• For information on your specific legal obligations for serving qualified individuals with disabilities, including reasonable modifications and making services accessible to them, see
• HHS funded health and education programs must be administered in an environment free of sexual harassment. See
• For guidance on administering your program in compliance with applicable Federal religious nondiscrimination laws and applicable Federal conscience protection and associated anti-discrimination laws, see
• Pursuant to 45 CFR 80.3(d), an individual shall not be deemed subjected to discrimination by reason of their exclusion from benefits limited by Federal law to individuals eligible for benefits and services from the IHS.
The IHS is required to review and consider any information about the applicant that is in the FAPIIS at
As required by 45 CFR part 75 Appendix XII of the Uniform Guidance, NFEs are required to disclose in FAPIIS any information about criminal, civil, and administrative proceedings, and/or affirm that there is no new information to provide. This applies to NFEs that receive Federal awards (currently active grants, cooperative agreements, and procurement contracts) greater than $10 million for any period of time during the period of performance of an award/project.
As required by 2 CFR part 200 of the Uniform Guidance, and the HHS implementing regulations at 45 CFR part 75, the IHS must require an NFE or an applicant for a Federal award to disclose, in a timely manner, in writing to the IHS or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. All applicants and recipients must disclose in writing, in a timely manner, to the IHS and to the HHS Office of Inspector General all information related to violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. 45 CFR 75.113.
Disclosures must be sent in writing to:
U.S. Department of Health and Human Services, Indian Health Service, Division of Grants Management, ATTN: Marsha Brookins, Director, 5600 Fishers Lane, Mail Stop: 09E70, Rockville, MD 20857, (Include “Mandatory Grant Disclosures” in subject line), Office: (301) 443-5204, Fax: (301) 594-0899, Email:
and
U.S. Department of Health and Human Services, Office of Inspector General, ATTN: Mandatory Grant Disclosures, Intake Coordinator, 330 Independence Avenue SW, Cohen Building, Room 5527, Washington, DC 20201, URL:
Failure to make required disclosures can result in any of the remedies described in 45 CFR 75.371. Remedies for noncompliance, including suspension or debarment (see 2 CFR part 180 and 2 CFR part 376).
1. Questions on the programmatic issues may be directed to: Donna E. Enfield, Public Health Advisor, Office of Clinical and Preventive Services, 5600 Fishers Lane, Mail Stop: 08N34A, Rockville, MD 20857, Phone: (301) 526-6966, Fax: (301) 594-6213, Email:
2. Questions on grants management and fiscal matters may be directed to: Indian Health Service, Division of Grants Management, 5600 Fishers Lane, Mail Stop: 09E70, Rockville, MD 20857, Email:
3. For technical assistance with
4. For technical assistance with GrantSolutions, please contact the GrantSolutions help desk at (866) 577-0771, or by email at
The Public Health Service strongly encourages all grant, cooperative agreement, and contract recipients to provide a smoke-free workplace and promote the non-use of all tobacco products. In addition, Public Law 103-227, the Pro-Children Act of 1994, prohibits smoking in certain facilities (or in some cases, any portion of the facility) in which regular or routine education, library, day care, health care, or early childhood development services are provided to children. This is consistent with the HHS mission to protect and advance the physical and mental health of the American people.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Information is also available on the Institute's/Center's home page:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
In compliance with the Paperwork Reduction Act of 1995, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
Comments regarding this information collection are best assured of having their full effect if received within 30 days of the date of this publication.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request more information on the proposed project or to obtain a copy of the data collection plans and instruments, contact: Dr. Hope Cummings, Project Clearance Liaison, Center for Scientific Review, NIH, Room 907-M, 6701 Rockledge Drive, Bethesda, Maryland 20892 or call non-toll-free number (301) 402-4706 or Email your request, including your address to:
This proposed information collection was previously published in the
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
The CSR Early Career Reviewer program was developed to identify and train qualified scientists who are early in their scientific careers and who have not had prior CSR review experience. The goals of the program are to expose these early career scientists to the peer review experience so that they become more competitive as applicants as well as to enrich the existing pool of NIH reviewers. Currently, the online application software, the Early Career Reviewer Application and Vetting System, is accessed online by applicants to the Early Career Reviewer Program who provide information such as their name, contact information, a description of their areas of expertise, their study section preferences, and their professional Curriculum Vitae. This Information Collection Request (ICR) is to revise the Early Career Reviewer Application and Vetting System by removing several optional socio-demographic questions.
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 555.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Substance Abuse and Mental Health Services Administration, Department of Health and Human Services (HHS).
Notice of intent to award supplemental funding.
This notice is to inform the public the Substance Abuse and Mental Health Services Administration (SAMHSA) is supporting a supplement in scope of the original award for the one grant recipient funded in fiscal year (FY) 2018 under the Clinical Support System for Serious Mental Illness (CSS-SMI) Notice of Funding Opportunity (NOFO) SM-18-020. The grant recipient may receive up to $2,846,283. The grant recipient's project period will be extended by 12 months until July 8, 2024. The supplemental funding will be used to maintain a national center that provides technical assistance to providers, programs, and communities across the nation to address evidence-based treatment and recovery support programs for individuals living with serious mental illness (SMI).
Kimberly E. Reynolds, MPA, MEd, Public Health Advisor and Project Officer, Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, MD 20857, telephone (240) 276-2825; email:
This is not a formal request for application. Assistance will only be provided to the sole CSS-SMI grant recipient funded in FY2018 under the Clinical Support System for Serious Mental Illness (CSS-SMI) SM-18-020 based on the receipt of a satisfactory application and associated budget that is approved by a review group.
Coast Guard, DHS.
Notice of availability of committee vacancy; solicitation for membership.
The Coast Guard requests individuals interested in serving on the Area Maritime Security Committee, Eastern Great Lakes, Northwest Pennsylvania Region sub-committee submit their applications for membership to the U.S. Coast Guard Captain of the Port, Buffalo. The Committee assists the Captain of the Port as the Federal Maritime Security Coordinator, Buffalo, in developing, reviewing, and updating the Area Maritime Security Plan for their area of responsibility.
Requests for membership should reach the Captain of the Port, Buffalo, by 22 May 2023.
Applications for membership should be submitted to the Captain of the Port at the following address: Captain of the Port, Buffalo, Attention: LCDR Katherine Peet, 1 Fuhrmann Boulevard, Buffalo, NY 14203-3189.
For questions about submitting an application, or about the AMSC in general, contact Mr. John Kelly, Northwest Pennsylvania Region Sub-Committee Executive Coordinator, at 716-843-9574 or
Section 102 of the Maritime Transportation Security Act (MTSA) of 2002 (Pub. L. 107-295) added section 70112 to Title 46 of the U.S. Code and authorized the Secretary of the Department in which the Coast Guard is operating to establish Area Maritime Security Advisory Committees (ASMC) for any port area of the United States. (See 33 U.S.C. 1226; 46 U.S.C.; 33 CFR 1.05-1, 6.01; Department of Homeland Security Delegation No. 0170.1). The MTSA includes a provision exempting these AMSCs from the Federal Advisory Committee Act (FACA), Public Law 92-436, 86 Stat. 470 (5 U.S.C. App. 2). The AMSCs shall assist the Federal Maritime Security Coordinator (FMSC) in the development, review, update, and exercising of the Area Maritime Security Plan (AMSP) for their area of responsibility. Such matters may include, but are not limited to, the following:
(1) Identifying critical port infrastructure and operations; Identifying risks (threats, vulnerabilities, and consequences).
(2) Determining mitigation strategies and implementation methods.
(3) Developing strategies to facilitate the recovery of the Maritime Transportation System after a Transportation Security Incident.
(4) Developing and describing the process to continually evaluate overall port security by considering consequences and vulnerabilities, how they may change over time, and what additional mitigation strategies can be applied; and
(5) Providing advice to and assisting the Federal Maritime Security Coordinator in developing and maintaining the Area Maritime Security Plan.
Members of the AMSC should have at least five years of experience related to maritime or port security operations. We are seeking to fill one (1) Sub-Committee vacancies with this solicitation, an Executive Board member to serve as Vice-Chairperson; the position will serve concurrently as a member of the Eastern Great Lakes AMSC when so convened by the FMSC.
Applicants may be required to pass an appropriate security background check prior to appointment to the committee. Applicants must register with and remain active as a Coast Guard Homeport user if appointed. Member's term of office will be for five years; however, a member is eligible to serve
The Department of Homeland Security does not discriminate in selection of committee members on the basis of race, color, religion, sex, national origin, political affiliation, sexual orientation, gender identity, marital status, disability, and genetic information, age, membership in an employee organization, or any other non-merit factor. The Department of Homeland Security strives to achieve a widely diverse candidate pool for all of its recruitment actions.
Those seeking membership are not required to submit formal applications to the local Captain of the Port, however, because we do have an obligation to ensure that a specific number of members have the prerequisite maritime security experience, we encourage the submission of resumes highlighting experience in the maritime and security industries.
Office of the Secretary, Interior.
Notice to reopen a call for nominations.
A request for nominations was published by the Department of the Interior in the
The nomination period for the notice published on January 26, 2023, at 88 FR 5035, is reopened. Nominations for the vacant positions are due by June 20, 2023.
Send nomination packages by hard copy or via email to Shiway Wang, Executive Director,
Grace Cochon, Department of the Interior, Office of Environmental Policy and Compliance, telephone number: (907) 786-3620; email:
The Committee was created pursuant to Paragraph V.A.4 of the Memorandum of Agreement and Consent Decree entered into by the United States of America and the State of Alaska on August 27, 1991, and approved by the United States District Court for the District of Alaska in settlement of
The Committee consists of 10 members to reflect balanced representation from each of the following principal interests: aquaculture/mariculture, commercial tourism, conservation/environmental, recreation, subsistence use, commercial fishing, native landownership, sport hunting/fishing, science/technology, and public-at-large.
We are soliciting nominations for three positions that represent sport hunting/fishing, conservation/environmental, and science/technology interests. The Committee members will be selected and appointed by the Secretary of the Interior to serve a four-year term.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation nos. 701-TA-689 and 731-TA-1618 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of non-refillable steel cylinders from India, provided for in heading 7311.00.00 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Government of India. Unless the Department of Commerce (“Commerce”) extends the time for initiation, the Commission must reach a preliminary determination in antidumping and countervailing duty investigations in 45 days, or in this case by June 9, 2023. The Commission's views must be transmitted to Commerce within five business days thereafter, or by June 20, 2023.
April 27, 2023.
Peter Stebbins (205-2039), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these investigations and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation Nos. 701-TA-686-688 and 731-TA-1612-1617 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with
April 27, 2023.
Julie Duffy ((202) 708-2579), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these investigations and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
International Trade Commission.
Notice.
April 28, 2023.
Jordan Harriman (202-205-2610), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
On April 26, 2023, the Commission established a schedule for the conduct of the preliminary phase of the subject investigations, which included an in-person staff conference. The Commission will now hold its staff conference via video conference beginning 9:30 a.m. on May 16, 2023. Requests to appear at the conference should be emailed to
For further information concerning this proceeding, see the Commission's notice cited above and the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
By order of the Commission.
In accordance with the provisions of the Federal Advisory Committee Act, Title 5, United States Code, section 10, and Title 41, Code of Federal Regulations, section 102-3.65, with the concurrence of the Attorney General, I have determined that the reestablishment of the Criminal Justice Information Services (CJIS) Advisory Policy Board (APB) is in the public interest. In connection with the performance of duties imposed upon the FBI by law, I hereby give notice of the reestablishment of the APB Charter.
The APB provides me with general policy recommendations with respect to the philosophy, concept, and operational principles of the various criminal justice information systems managed by the FBI's CJIS Division.
The APB includes representatives from state and local criminal justice agencies; tribal law enforcement representatives; members of the judicial, prosecutorial, and correctional sectors of the criminal justice community, as well as one individual representing a national security agency; a representative of the National Crime Prevention and Privacy Compact Council; a representative of federal agencies participating in the CJIS Division Systems; and representatives of criminal justice professional associations (
The APB functions solely as an advisory body in compliance with the provisions of the Federal Advisory Committee Act. The Charter has been filed in accordance with the provisions of the Act.
On April 27, 2023, the Department of Justice lodged a proposed First Material Modification to the Consent Decree entered by the United States District Court for the Western District of Texas on September 28, 2016, in the lawsuit entitled
The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined
Please enclose a check or money order for $71.75 (25 cents per page reproduction cost) payable to the United States Treasury.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314 (Zoom Videoconference).
Attendance information for the meeting will be forthcoming on the advisory committee's website:
Nuclear Regulatory Commission.
Exemption; issuance.
The U.S. Nuclear Regulatory Commission (NRC) has issued an exemption in response to an April 13, 2023, request, as supplemented (replaced in its entirety) by letter dated April 17, 2023, from STP Nuclear Operating Company that requested a one-time exemption that would allow for the reporting of Radiation Exposure Information and Reporting System data from South Texas Project, Units 1 and 2 (STP) to be extended from the required date of April 30, 2023, until August 31, 2023.
The exemption was issued on April 27, 2023.
Please refer to Docket ID NRC-2023-0095 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
•
Dennis Galvin, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone: 301-415-6256; email:
The text of the exemption is attached.
For the Nuclear Regulatory Commission.
STP Nuclear Operating Company (STPNOC, the licensee) is the holder of Renewed Facility Operating License Nos. NPF-76 and NPF-80, which authorize operation of South Texas Project, Units 1 and 2 (STP), respectively. The licenses provide, among other things, that the facility is subject to all rules, regulations, and orders of the U.S. Nuclear Regulatory Commission (NRC, the Commission) now or hereafter in effect. The facility consists of two pressurized-water reactors located in Matagorda County, Texas.
By application dated April 13, 2023 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML23103A432), as supplemented (replaced in its entirety) on April 17, 2023 (ML23107A251), STPNOC requested an exemption from the reporting requirement in Title 10 of the
The regulation in 10 CFR 20.2206, “Reports of individual monitoring,” requires the annual submittal to the NRC of a report of the results of radiation dose monitoring conducted by licensees under the provisions of 10 CFR 20.1502, “Conditions requiring individual monitoring of external and internal occupational dose,” covering the preceding year; the report is to be submitted on or before April 30 of each year. The regulations in 10 CFR 20.1502 provide the conditions that require individual monitoring of external and internal occupational radiation doses. The regulations in 10 CFR 20.2106, “Records of individual monitoring results,” require, in part, that each licensee maintain records of radiation doses received by all individuals for whom radiation dose monitoring was required by 10 CFR 20.1502, and records of doses received during planned special exposures, accidents, and emergency conditions.
Pursuant to 10 CFR 20.2301 “Applications for exemptions,” the Commission may, upon application by a licensee or upon its own initiative, grant exemptions from the requirements of 10 CFR part 20, “Standards for Protection Against Radiation,” if it determines that the exemptions are authorized by law and would not result in undue hazard to life or property.
There are no provisions in the Atomic Energy Act of 1954, as amended (or in any other Federal statute) that impose a requirement for submitting reports of the results of required radiation dose monitoring by April 30 of each year to the NRC; rather, this requirement appears in 10 CFR part 20, which also allows the NRC to issue exemptions from those requirements. Therefore, the NRC staff concludes that there is no statutory or regulatory prohibition on the issuance of the requested exemption and the NRC is authorized to grant the exemption by law, upon finding that the exemption is otherwise acceptable.
In determining that granting the exemption would not result in undue hazard to life,
It is the purpose of the regulations in this part to control the receipt, possession, use, transfer, and disposal of licensed material by any licensee in such a manner that the total dose to an individual (including doses resulting from licensed and unlicensed radioactive material and from radiation sources other than background radiation) does not exceed the standards for protection against radiation prescribed in the regulations in this part.
This risk-informed assessment considered the impact of the exemption on reports of exposure information to individuals and the NRC.
The regulation in 10 CFR 19.13, “Notifications and reports to individuals,” provides requirements for notifications and reports of radiation dose data to individuals. For example, 10 CFR 19.13(b) requires licensees to make records maintained under the provisions of 10 CFR 20.2106 available to workers and to provide an annual report to each individual monitored under the provisions of 10 CFR 20.1502 if the individual's occupational dose exceeds a total effective dose equivalent (TEDE) of 100 millirem (mrem) (1 millisievert (mSv)), or 100 mrem (1 mSv) to any individual organ or tissue, or upon request of the individual.
As stated in 10 CFR 20.1001, the ultimate purpose of the requirements in 10 CFR part 20 are to ensure that doses to individuals do not exceed the NRC's radiation protection standards. The monitoring, recording, and reporting of radiation dose data for occupationally exposed individuals as required by 10 CFR part 20 is essential in ensuring that radiation protection standards are not exceeded for any individual worker, because it allows licensees to track doses and, if necessary, take action before applicable limits are exceeded. The recording of this information is also necessary to ensure that workers who transition from one employer to another are adequately protected in that the total annual dose to workers from all employers is kept within applicable limits.
In its exemption request, the licensee described three methods of obtaining personnel radiation dose data. First, doses from radiation exposures can be estimated using information collected from electronic dosimeters that are issued to workers. Second, the dose data can be determined by conducting exposure investigations. Lastly, data from individually issued thermoluminescent dosimeters (TLDs) can be obtained from the licensee's contracted dosimetry service provider. The first and second methods are currently available to the licensee; however, the licensee prefers to submit TLD-based data in part to remain consistent with previous years' reports. This is consistent with long-standing industry practice that passive dosimetry, like TLDs, are used as dosimetry of legal record. However, the licensee states that the TLD-based data has not yet been provided to the licensee by its contracted dosimetry service provider and the licensee does not have confidence that it will obtain the data in time to meet the April 30 reporting deadline.
The licensee states that it is awaiting TLD-based data for over 800 personnel. Conducting exposure investigations and reconciling electronic dosimeter data to establish a final record of doses for this magnitude of individuals is a resource intensive activity that would impose an undue burden on the licensee to achieve before April 30. Nor does there appear to be any safety benefit in assembling those data before the contractor provides the dosimetry results. In this regard, the licensee reviewed the electronic dosimeter data and determined that no individual's annual dose reached regulatory limits, and no irregularities are expected between the electronic dosimeter data and the final record data that is to be submitted.
The NRC staff expects that the reports required per 10 CFR 19.13(b)(1) will be provided by the licensee to the applicable individuals, after the licensee establishes its final record of doses, which is expected on or before August 31, 2023. However, because the licensee maintains electronic dosimeter data and can perform exposure investigations, it is able to satisfy the purpose of 10 CFR part 20, to ensure that the annual doses to individuals do not exceed the NRC's radiation protection standards. Additionally, the licensee is able to meet its obligations per 10 CFR 19.13, to provide exposure information to individuals upon request.
The regulation in 10 CFR 20.2206(a) provides a list of categories of NRC licensees that are required to provide reports of individual radiation dose monitoring to the NRC. The regulation in 10 CFR 20.2206(b) states that licensees who fit a category listed in 10 CFR 20.2206(a), such as STPNOC, shall submit to the NRC reports of the results of individual radiation dose monitoring carried out by the licensee during the prior year for individuals for whom monitoring was required by 10 CFR 20.1502. Additionally, the regulation in 10 CFR 20.2206(c) requires that these reports, covering the preceding year, be submitted on or before April 30 each year. The NRC collects radiation dose data to support decision-making in its oversight of radiation protection performance of its licensees. The preface to NUREG-0713, Volume 42, “Occupational Radiation Exposure at Commercial Nuclear Power Reactors and Other Facilities 2020,” dated September 2022 (ML22276A269), states that the NRC uses these data, in combination with other information, to provide facts regarding routine occupational exposures to radiation and radioactive material that occur in connection with certain NRC-licensed activities, for use in making decisions that impact public health and safety. The Preface to NUREG-0713 provides examples of how the NRC uses these data, including:
1. The evaluation of trends, both favorable and unfavorable, from the viewpoint of the effectiveness of overall NRC/licensee radiation protection and as low as is reasonably achievable (ALARA) efforts by licensees.
2. The evaluation of the radiological risk associated with certain categories of NRC-licensed activities and the comparative analysis of radiation protection performance by country, reactor type, civilian/military, facility, and industry.
3. Use of the data in the NRC Reactor Oversight Process for inspection planning and in the Significance Determination Process.
4. Use of the data in making evidence-based decisions regarding the radiation exposure to transient individuals.
5. Use of the data to establish priorities for the use of NRC health physics resources: research, standards development, regulatory program development, and inspections conducted at NRC-licensed facilities.
6. Use of the data in answering Congressional and administrative inquiries as well as responding to questions raised by the public.
7. Use of the data to provide radiation exposure histories to individuals who were exposed to radiation at NRC-licensed facilities.
8. Use of the data in conducting epidemiologic studies.
As may be seen in the above description, the NRC's use of radiation dose data for occupationally exposed individuals serves various long-term initiatives that necessarily depend on data spanning multiple years in broad categories of licensees. Therefore, while the continued collection of this data is essential to the NRC's mission as it pertains to radiation protection, a licensee's delay by several months in reporting the data for its facility would have minimal impact on the NRC's ability to ensure adequate protection of public health and safety, and would not impact individual worker safety since the data pertaining to each worker would be readily available at the facility despite the requested delay in reporting to the NRC. Therefore, the NRC staff concludes that granting the exemption would not result in undue hazard to life or property.
The NRC staff determined that the exemption discussed herein meets the eligibility criteria for the categorical exclusion set forth in 10 CFR 51.22(c)(25), and there are no extraordinary circumstances present that would preclude reliance on this exclusion. The NRC staff determined, per 10 CFR 51.22(c)(25)(vi)(B), that the requirements from which the exemption is sought involve reporting requirements.
The NRC staff also determined that approval of this one-time exemption involves no significant hazards consideration because it does not authorize any physical changes to the facility or any of its safety systems and does not involve modifications that could alter the manner in which facility structures, systems, and components are operated and maintained.
There is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite because this exemption does not affect the types, characteristics, or quantities of effluents discharged to the environment. There is no significant increase in individual or cumulative public or occupational radiation exposure because this exemption does not affect limits on the release of any radioactive material, or the limits provided in 10 CFR part 20 for radiation exposure to workers or members of the public. There is no significant construction impact because this exemption does not involve any physical changes to the facility. There is no significant increase in the potential for or consequences from radiological accidents because the exemption does not alter any of the assumptions or limits in the licensee's safety analysis. In addition, the NRC staff determined that there would be no significant impacts to biota, water resources, historic properties, cultural resources, or socioeconomic conditions in the region. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the approval of the requested exemption.
Accordingly, the Commission has determined that, pursuant to 10 CFR 20.2301, the exemption is authorized by law, and will not present an undue hazard to life and property. Therefore, the Commission hereby grants STPNOC a one-time exemption from 10 CFR 20.2206 to delay the reporting of its REIRS data as required on April 30, 2023, until August 31, 2023.
Dated at Rockville, Maryland, this 27th day of April 2023.
For the Nuclear Regulatory Commission.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an existing information collection request (ICR), without change, Reinstatement of Disability Annuity Previously Terminated Because of Restoration to Earning Capacity, RI 30-9.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0138). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
RI 30-9, Reinstatement of Disability Annuity Previously Terminated Because of Restoration to Earning Capacity, informs former annuitants of their right to request reconsideration. It also specifies the conditions to be met and the documentation that must be submitted with a request for reinstatement.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an expiring information collection request (ICR), without change, It's Time to Sign Up for Direct Deposit or Direct Express, RI 38-128.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0226). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
RI 38-128, It's Time to Sign Up for Direct Deposit or Direct Express, provides the opportunity for the annuitant to elect Direct Deposit or Direct Express. This election is required only once: when a person is first put on our rolls.
Office of Personnel Management.
30-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on a revised information collection request (ICR) with minor edits, Application for Deferred Retirement (for persons separated on or after October 1, 1956), OPM 1496A. The revisions include (1) Revised instructions for hearing impaired users to utilize the Federal Relay Service by dialing 711 or their local communications provider to reach a Communications Assistant (2) Included instructions to attach Internal Revenue Service (IRS) Form W-4P (version 2022 or later). (3) Updated Retirement Information Office hours of operation.
Comments are encouraged and will be accepted until June 2, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
A copy of this information collection, with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 OPM is soliciting comments for this collection. The information collection (OMB No. 3206-0121) was previously published in the
The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
OPM Form 1496A is used by eligible former Federal employees to apply for a deferred Civil Service annuity.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an existing information collection request (ICR), without change, Request to Disability Annuitant for Information on Physical Condition and Employment, RI 30-1.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0143). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
RI 30-1, Request to Disability Annuitant for Information on Physical Condition and Employment, is used by persons who are not yet age 60 and who are receiving a disability annuity and are subject to inquiry regarding their medical condition as OPM deems reasonably necessary.
Office of Personnel Management.
60-Day notice and request for comments.
The Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on a new information collection request (ICR) 3206-NEW,
Comments are encouraged and will be accepted until July 3, 2023. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection by one of the following means:
A copy of this information collection request, with applicable supporting documentation, may be obtained by contacting Jeffrey Cain at
As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. ICR 3206-NEW
This effort will help enable USA Hire to continually implement improvements to the assessment process for applicants and agency stakeholders. As this is a new collection, we invite comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an expiring information collection, without change, RI 25-41, Initial Certification of Full-Time School Attendance.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and title, via the Federal eRulemaking Portal:
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-AC, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via email to
As required by the Paperwork Reduction
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
RI 25-41, Initial Certification of Full-Time School Attendance is used to determine whether a child is unmarried and a full-time student in a recognized school. OPM must determine this in order to pay survivor annuity benefits to children who are age 18 or older under 5 U.S.C Sections 8341(A)(4) and 8441 (4)(C).
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an expiring information collection request (ICR), without change, Information and Instruction on Your Reconsideration Rights, RI 38-47.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0237). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
RI 38-47 outlines the procedures required to request reconsideration of an initial OPM decision about Civil Service or Federal Employees retirement, Federal or Retired Federal Employees Health Benefits requests to enroll or change enrollment or Federal Employees' Group Life Insurance coverage. This form lists the procedures and time periods required for requesting reconsideration.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an expiring information collection request (ICR), without change, Report of Medical Examination of Person Electing Survivor Benefits, OPM 1530.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0162). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
OPM Form 1530 is used to collect information regarding an annuitant's health so that OPM can determine whether the insurable interest survivor benefit election can be allowed.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an expiring information collection request (ICR), without change, Application for Refund of Retirement Deductions Under the Civil Service Retirement System, SF 2802 and Current/Former Spouse's Notification of Application for Refund of Retirement Deductions Under the Civil Service Retirement System, SF 2802A.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0128). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Standard Form 2802 is used to support the payment of monies from the Retirement Fund. It identifies the applicant for refund of retirement deductions. Standard Form 2802A is used to comply with the legal requirement that any spouse or former spouse of the applicant has been notified that the former employee is applying for a refund.
Office of Personnel Management.
60-Day notice and request for comments.
Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an existing information collection request (ICR), without change, CSRS/FERS Documentation in Support of Disability Retirement Application, Standard Form 3112.
Comments are encouraged and will be accepted until July 3, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0228). The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. 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;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Standard Form 3112, CSRS/FERS Documentation in Support of Disability Retirement Application, collects information from applicants for disability retirement so that OPM can determine whether to approve a disability retirement under 5 U.S.C. 8337 and 8455. The applicant will only complete Standard Forms 3112A and 3112C. Standard Forms 3112B, 3112D, and 3112E will be completed by the immediate supervisor and the employing agency of the applicant.
Office of Science and Technology Policy (OSTP).
Notice of request for information (RFI).
Employers are increasingly using automated systems to monitor, manage, and evaluate their workers. These systems may allow employers to manage supply chains, improve health and safety, or make other informed business decisions. At the same time, applications of surveillance and monitoring systems can also pose risks to workers, including to their health and safety, equal employment opportunities, privacy, ability to meet critical needs, access to workplace accommodations, and exercise of workplace and labor rights, including their rights to form or join a labor union. The White House Office of Science and Technology Policy (OSTP) seeks comments from the public to better understand automated surveillance and management of workers, including its prevalence, purposes, deployment, and impacts, as well as opportunities for Federal agencies to work with employers, workers, and other stakeholders to ensure that these systems do not undermine workers' rights, opportunities, access, health, or safety.
Interested persons and organizations are invited to submit comments on or before 5 p.m. ET, June 15, 2023.
Comments must be submitted via the Federal eRulemaking Portal at
Alan Mislove, Assistant Director for Data and Democracy,
Automated worker surveillance and management systems may track workers' location, pace or quality of work, communications (
Examples of applications of automated surveillance and management of workers that have been reported in the press include:
These systems may allow employers to more closely monitor worker performance; protect public health and safety; make decisions about promotion, discipline, or termination; or manage work assignments, schedules, and supply chains. At the same time, applications of automated surveillance and management systems can also pose risks to workers and even violate labor and employment laws.
Automated worker surveillance and management can also cause and exacerbate disabilities and interfere with legal protections for those with disabilities. Automated worker surveillance and management systems can potentially put workers at risk for physical injury and mental health distress that can cause or exacerbate anxiety, depression, cognitive disability, and trauma responses; interfere with legally-protected workplace accommodations that enable individuals with disabilities to participate in the workforce; and reveal workers' otherwise-undisclosed disabilities to employers.
In 2022, the White House Office of Science and Technology Policy released the
This focus on automated surveillance and management in the workplace is also consistent with the Administration's commitment to ensuring that all workers have access to high-quality, well-paying jobs, including jobs with opportunities to organize and bargain collectively with their employers through labor unions, as articulated in the Executive Order 14025 (
This RFI focuses on automated surveillance and management by employers that may track workers' locations, pace of work, performance or output, compliance with policy or regulations, or social media activity; their emails, texts, chats, phone calls, and other communications; or other similar measures. Such surveillance may take place during or outside of work hours, and on or off the worksite. This request for information also covers workers in traditional employment relationships (
OSTP is particularly interested in hearing from:
• Workers who have experienced automated surveillance and management (including workers of color, low-paid workers, immigrant workers, and workers with disabilities);
• Worker organizations (including worker advocacy groups, worker centers, labor unions, and workplace legal services providers);
• Civil rights and privacy organizations;
• Employers (including for-profit, non-profit, and government employers) that are using automated surveillance and management systems or considering using such systems;
• Platforms, crowdsourcing websites, transportation network companies, ride-hailing services, and other entities that match workers with opportunities to generate income;
• Trade and business associations representing employers;
• Developers and vendors developing or selling automated surveillance or management systems;
• Researchers (including researchers using both qualitative and quantitative methods to understand the use, prevalence, benefits and risks, and impacts of automated surveillance and management systems on individuals and society); and
• State, Tribal, local, and territorial governments.
To assist commenters in developing responses, OSTP has crafted the questions below that commenters may answer. Respondents may provide information for one or more of the topics below, as desired.
1. If you are a
a. The type of work you do (
b. Whether you are a member of a labor union;
c. The type of automated surveillance or management you have experienced, including the location of the monitoring technology (such as an app you had to use or download; a device you had to use, carry, or wear; or a camera that monitors you);
d. Whether the automated surveillance or management was used during a labor organizing drive;
e. Whether and when your employer informed you about their use of automated worker surveillance and management systems;
f. Whether you (or, if relevant, your representative, like a labor union) have any input or control over how, where, and over what automated surveillance occurs;
g. Whether you know how the data generated by surveillance is used for management or other purposes (including purposes related to employment or labor market competition);
h. Whether you (or, if relevant, your representative, like a labor union) have any visibility into the data collected on you or how it is used, including whether data on you collected by surveillance can be shared with other companies, trade groups, or third parties;
i. How the use of automated surveillance and management systems has changed how you do your job or how your employer treated you at your job;
j. Whether your employer has used information from an automated surveillance and management system in support of any discipline against you—and if so, what the action was, how and when you were informed, and what information was provided to you or your representative (such as a labor union);
k. How automated surveillance and management has affected you—whether positively or negatively—including any economic, safety, physical, mental, and emotional impacts;
l. How automated surveillance and management systems have affected your workplace rights, including rights around collective action, labor
m. How these systems have impacted your non-working hours, personal time, or the privacy of other members of your household;
n. If you are disabled or have a health condition, how automated surveillance and management systems have impacted or may impact your use of reasonable accommodations; such as assistive technology or accessibility features of software or breaks, or affected your ability to keep information about your condition private from your employer, supervisor, or coworkers;
o. If you are disabled or have a health condition, how automated surveillance and management systems have affected performance reviews or other management activities, or concerns about how these systems may affect performance reviews or how your management treats you; and
p. Whether you work for an employer that receives Federal funds (for instance, as a Federal contractor).
2. If you are an employer or organization representing employers, please tell us about your experiences implementing or using automated worker surveillance and management systems, including:
a. The type of business you are in, or represent, including your industry and roughly how many workers you employ;
b. Whether any of your employees are represented by a labor union;
c. The types of automated worker surveillance and management systems your business has implemented or is considering implementing;
d. The purposes for which your business decided to implement automated worker surveillance and management systems, such as safety and health, productivity, competition, liability or insurance, compliance, or resource and worker management;
e. How your business decided to use specific automated worker surveillance and management systems, including decisions not to use particular products or types of systems, to limit their scope, and relevant training;
f. In what ways your business uses the information collected through automated surveillance and management systems, such as for management, human resources, and business operations, including whether the information is sold or shared with other businesses or otherwise influenced by other businesses' activities;
g. Any steps your business has taken to solicit or incorporate worker input into how automated worker surveillance and management systems are adopted, implemented, and used; whether workers may opt out of such systems (and any consequences for doing so); and how generated data is used or shared with other parties;
h. Any involvement of third parties (such as vendors) in collecting or maintaining information on workers and any control retained by the employer;
i. Any steps you have taken to ensure that the use or sharing of automated worker surveillance and management systems does not infringe on workers' rights;
j. How you decide the categories of workers for whom you deploy automated worker surveillance and management systems (
k. Any policies or protocols adopted to govern the use of automated worker surveillance and management systems or the data they produce; and Whether your organization receives Federal funds.
3. If you are a technology developer or vendor, please tell us about your experience developing or distributing automated worker surveillance and management systems, including:
a. The purposes for which employers adopt your products and how they deploy these products;
b. How the impact, performance, and efficacy of your products is audited and validated by you, employers, and workers;
c. How you and the users of your products manage data collection, storage, and maintenance, including access to data by third parties;
d. Whether you provide guidance to employers on your products and their appropriate use, including guidance on notifying workers about the use of technology, and offering opportunities for workers to consent to or opt out of data collection;
e. Whether you engage with employers to help them implement your products in ways that protect workers' rights, health, and safety—or otherwise take steps to help protect workers who will engage with your products; and
f. Any steps you have taken to ensure that the use of automated worker surveillance and management systems does not infringe on workers' rights.
4. Data and research-related questions we are interested in include:
a. What data and evidence exist on the prevalence of automated worker surveillance and management systems across different industries, occupations, and regions, including changes over time?
b. What data and evidence exist on the impact of automated worker surveillance and management systems on workers, including workers' pay, benefits, and employment, physical and mental health, and ability to exercise workplace rights?
c. What data and evidence exist on the impact of automated worker surveillance and management systems on labor rights, including workers' abilities to form and join unions and bargain collectively with their employers?
d. What data and evidence exist on how the impact of automated worker surveillance and management systems differs across groups of workers, including based on characteristics such as race, national origin, sex, age, disability, religion, or health status?
e. What data or evidence exists on whether automated worker surveillance and management systems are being used for discriminatory purposes or resulting in discrimination?
f. What data and evidence exist on whether automated workers surveillance and management systems impact employers' ability to recruit and retain workers?
g. What data or evidence exists on how the provision of reasonable accommodations is accounted for in the design and operation of automated worker surveillance and management systems?
h. What data and evidence exist on why employers decide to adopt automated worker surveillance and management systems?
i. Are there any existing or new systems that aggregate worker surveillance data across multiple employers?
j. What are new or emergent automated worker surveillance and management systems—or new and emergent uses of existing technologies—that Federal agencies should be tracking?
k. Where might further research, including by the Federal government, be helpful in understanding the prevalence and impact of automated worker surveillance and management systems?
5. Last, we are especially interested in the following questions about policies, practices, or standards that could protect workers:
a. What guidelines, standards, or best practices might inform the design of automated worker surveillance and management systems to protect workers' rights?
b. Are there policy approaches to regulating automated worker
c. What policies or actions should Federal agencies consider to protect workers' rights and wellbeing as automated worker surveillance and management systems are developed and deployed, including through regulations, enforcement, contracting, and grantmaking?
Securities and Exchange Commission (“Commission” or “SEC”)
Notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940.
The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of April 2023. A copy of each application may be obtained via the Commission's website by searching for the applicable file number listed below, or for an applicant using the Company name search field, on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
The Commission:
Shawn Davis, Assistant Director, at (202) 551-6413 or Chief Counsel's Office at (202) 551-6821; SEC, Division of Investment Management, Chief Counsel's Office, 100 F Street NE, Washington, DC 20549-8010.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
On February 28, 2023, NYSE American LLC (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX” or “BZX Equities”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the
The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (“BZX Equities”) as follows: (1) modify Step-Up Tier 1; and (2) modify the Non-Displayed Step-Up Tier. The Exchange proposes to implement the proposed changes to its fee schedule on April 3, 2023.
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly available information,
Pursuant to footnote 2 of the Fee Schedule, the Exchange currently offers Step Up Tiers (tiers 1 through 4) that provide Members an opportunity to receive an enhanced rebate from the standard rebate for liquidity adding orders that yield fee codes B,
• Tier 1 offers an enhanced rebate of $0.0031 per share for qualifying orders (
The Exchange proposes to modify the criteria for Step-Up Tier 1 to the following:
• Proposed Tier 1 would offer an enhanced rebate of $0.0031 per share for qualifying orders (
Also pursuant to footnote 2 of the Fee Schedule, the Exchange currently offers a Non-Displayed Step-Up Tier, which provides Members an opportunity to receive an enhanced rebate from the standard rebate
• The Non-Displayed Step-Up Tier offers an enhanced rebate of $0.0025 per share for qualifying orders (
The Exchange proposes to modify the criteria of the Non-Displayed Step-Up Tier to the following:
• The Non-Displayed Step-Up Tier offers an enhanced rebate of $0.0025 per share for qualifying orders (
The Exchange notes that the Step-Up Tiers in general are designed to provide Members with additional opportunities to receive enhanced rebates by increasing their order flow to the Exchange, which further contributes to a deeper, more liquid market and provides even more execution opportunities for active market participants. The proposed modifications to the criteria of Step-Up Tier 1 and the Non-Displayed Step-Up Tier are designed to increase the Members' provision of liquidity to the Exchange, which increases execution opportunities and provides for overall enhanced price discovery and price improvement opportunities on the Exchange. Increased overall order flow benefits all Members by contributing
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Act.
As described above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The Exchange believes that its proposed modifications to Step-Up Tier 1 and the Non-Displayed Step-Up Tier reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. The Exchange believes the proposed modifications to Step-Up Tier 1 and the Non-Displayed Step-Up Tier are reasonable as they serve to incentivize Members to increase their liquidity-adding, displayed volume (Step-Up Tier 1) and liquidity-adding, non-displayed volume (Non-Displayed Step-Up Tier), which benefit all market participants by incentivizing continuous liquidity and thus, deeper, more liquid markets as well as increased execution opportunities. Particularly, the proposed incentives to provide displayed liquidity are designed to incentivize continuous displayed liquidity, which signals other market participants to take the additional execution opportunities provided by such liquidity, while the proposed incentives to provide non-displayed liquidity will further contribute to a deeper, more liquid market and provide even more execution opportunities for active market participants at improved prices. This overall increase in activity deepens the Exchange's liquidity pool, offers additional cost savings, supports the quality of price discovery, promotes market transparency, and improves market quality for all investors.
In particular, the Exchange believes the proposed modifications to Step-Up Tier 1 and the Non-Displayed Step-Up Tier represent an equitable allocation of rebates and are not unfairly discriminatory because all Members are eligible for those tiers and would have the opportunity to meet a tier's criteria and would receive the proposed rebate if such criteria is met. Further, the proposed rebates are commensurate with the proposed criteria. That is, the rebates reasonably reflect the difficulty in achieving the applicable criteria as proposed. Without having a view of activity on other markets and off-exchange venues, the Exchange has no way of knowing whether this proposed rule change would definitely result in any Members qualifying for the proposed tier. While the Exchange has no way of predicting with certainty how the proposed tiers will impact Member activity, the Exchange anticipates that at least one Member will be able to satisfy the criteria proposed under Step-Up Tier 1 and the Non-Displayed Step-Up Tier. The Exchange also notes that proposed tier/rebate will not adversely impact any Member's ability to qualify for other reduced fee or enhanced rebate tiers. Should a Member not meet the proposed criteria under the modified tier, the Member will merely not receive that corresponding enhanced rebate.
Additionally, the Exchange notes that relative volume-based incentives and discounts have been widely adopted by exchanges,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, as discussed above, the Exchange believes that the proposed changes would encourage the submission of additional order flow to a public exchange, thereby promoting market depth, execution incentives and enhanced execution opportunities, as well as price discovery and transparency for all Members. As a result, the Exchange believes that the proposed changes further the Commission's goal in adopting Regulation NMS of fostering competition among orders, which promotes “more efficient pricing of individual stocks for all types of orders, large and small.”
The Exchange believes the proposed rule changes do not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Particularly, the proposed tier changes apply to all Members equally in that all Members continue to be eligible for Step-Up Tier 1 and the Non-Displayed Step-Up Tier, have a reasonable opportunity to meet the tiers' criteria and will receive the corresponding additional rebates if such criteria are met. Additionally, the proposed tier changes are designed to attract additional order flow to the Exchange. The Exchange believes that the proposed tier criteria would incentivize market participants to direct liquidity adding displayed and non-displayed order flow to the Exchange, bringing with it additional execution opportunities for market participants and improved price transparency. Greater overall order flow, trading opportunities, and pricing transparency benefits all market participants on the Exchange by enhancing market quality and continuing to encourage Members to send orders, thereby contributing
Next, the Exchange believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including 15 other equities exchanges and off exchange venues and alternative trading systems. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single equities exchange has more than 17%
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe EDGX Exchange, Inc. (the “Exchange” or “EDGX”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (“EDGX Equities”) as follows: (1) by modifying and introducing certain Growth Tiers; (2) by modifying the criteria of Non-Displayed Step-Up Volume Tier 1; (3) by modifying and introducing certain Remove Volume Tiers; (4) by modifying the criteria of Retail Growth Tier 3; and (5) by modifying the rates associated with certain fee codes. The Exchange proposes to implement these changes effective April 3, 2023.
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Securities Exchange Act of 1934 (the “Act”), to which market participants may direct their order flow. Based on publicly available information,
Under footnote 1 of the Fee Schedule, the Exchange currently offers various Add/Remove Volume Tiers. In particular, the Exchange offers two Growth Tiers that each provide an enhanced rebate for Members' qualifying orders yielding fee codes B,
• Growth Tier 1 provides a rebate of $0.0020 per share for securities priced above $1.00 to qualifying orders (
Proposed Growth Tier 1 will provide a lower rebate than other existing Growth Tiers, but this lower rebate is commensurate with the difficulty of meeting the less stringent criteria associated with proposed Growth Tier 1.
Second, the Exchange proposes to renumber current Growth Tiers 1 and 2 and modify the criteria of proposed Growth Tier 3 (current Growth Tier 2). Currently, Growth Tier 2 (proposed Growth Tier 3) reads as follows:
• Growth Tier 2 provides a rebate of $0.0034 per share to qualifying orders (
Now, the Exchange proposes to remove the third prong of criteria. The proposed criteria for current Growth Tier 2 (proposed Growth Tier 3) is as follows:
• Proposed Growth Tier 3 provides a rebate of $0.0034 per share to qualifying orders (
The proposed modification to proposed Growth Tier 3 removes a criteria designed to encourage Members to grow their volume in retail orders on the Exchange. By removing a criteria while keeping the enhanced rebate the same, the proposed criteria slightly decreases the difficulty required for Members to meet the applicable tier threshold. By introducing proposed Growth Tier 1 and decreasing the difficulty required under proposed Growth Tier 3, Members are still incentivized to grow their volume on the Exchange, thereby contributing to a deeper and more liquid market, which benefits all market participants and provides greater execution opportunities on the Exchange.
In addition to the Growth Tiers offered under footnote 1, the Exchange also offers Non-Displayed Add Volume Tiers that each provide an enhanced rebate for Members' qualifying orders yielding fee codes DM,
• Non-Displayed Step-Up Volume Tier 1 provides a rebate of $0.0026 per share to qualifying orders (
Now, the Exchange proposes to remove the third prong of criteria. The proposed criteria for Non-Displayed Step-Up Volume Tier 1 is as follows:
• Non-Displayed Step-Up Volume Tier 1 provides a rebate of $0.0026 per share to qualifying orders (
The proposed modification to Non-Displayed Step-Up Volume Tier 1 is intended to remove criteria designed to incentivize Members to add non-displayed retail volume on the Exchange. By removing a criteria while keeping the enhanced rebate the same, the proposed criteria slightly decreases the difficulty required for Members to meet the applicable tier threshold while continuing to encourage Members to add non-displayed liquidity to the Exchange, thereby contributing to a deeper and more liquid market, which benefits all market participants and provides greater execution opportunities on the Exchange.
In addition to the Growth Tiers and Non-Displayed Add Volume Tiers offered under footnote 1, the Exchange also offers two Remove Volume Tiers that each assess a reduced fee for Members' qualifying orders yielding fee codes BB,
• Remove Volume Tier 1 provides a reduced fee of $0.00275 per share for securities priced above $1.00 or 0.28% of the total dollar value in securities priced below $1.00 to qualifying orders (
• Remove Volume Tier 2 assesses a reduced fee of $0.00275 per share for securities priced above $1.00 or 0.28% of the total dollar value in securities priced below $1.00 to qualifying orders (
Now, the Exchange proposes to replace the existing criteria with a single prong of criteria for each tier and slightly increase the reduced fee assessed by Remove Volume Tier 1. The proposed criteria is as follows:
• Remove Volume Tier 1 assesses a reduced fee of $0.00285 per share for securities priced above $1.00 or 0.28% of the total dollar value in securities priced below $1.00 to qualifying orders (
• Remove Volume Tier 2 assesses a reduced fee of $0.00275 per share for securities priced above $1.00 or 0.28% of the total dollar value in securities priced below $1.00 to qualifying orders (
The proposed change to Remove Volume Tier 1 will provide a slightly lower reduced fee in exchange for less difficult criteria that continues to encourage Members to strive to meet the criteria by removing liquidity on the Exchange. Similarly, the proposed change to Remove Volume Tier 2 will assess the current reduced fee while lessening the difficulty of meeting the criteria in Remove Volume Tier 2.
Second, the Exchange proposes to introduce Remove Volume Tier 3. The proposed criteria in proposed Remove Volume Tier 3 is as follows:
• Proposed Remove Volume Tier 3 assesses a reduced fee of $0.00275 per share in securities priced above $1.00 or 0.28% of the total dollar value in securities priced below $1.00 for qualifying orders (
The addition of proposed Remove Volume Tier 3 is designed to provide Members an alternative opportunity to earn a reduced fee where Members achieve certain add or remove volume-based criteria. The Exchange believes assessing an identical fee as Remove Volume Tier 2 albeit using slightly more difficult criteria will encourage Members to strive to meet the criteria by removing liquidity on the Exchange. The proposed changes to the Remove Volume Tiers are designed to incentivize Members to provide additional volume to the Exchange. An increase in remove liquidity on the Exchange signals an overall increase in activity from other market participants, contributes to a deeper, more liquid market, and provides additional execution opportunities for active market participants, which benefits the entire market system.
Pursuant to footnote 2 of the Fee Schedule, the Exchange offers Retail Volume Tiers which provide Retail Member Organizations (“RMOs”)
• Retail Growth Tier 3 provides a rebate of $0.0037 per share to qualifying orders (
Now, the Exchange proposes to delete the third prong of criteria. The proposed criteria for Retail Growth Tier 3 is as follows:
• Retail Growth Tier 3 provides a rebate of $0.0037 per share to qualifying orders (
The proposed modification to Retail Growth Tier 3 removes a criteria designed to encourage RMOs to grow their volume in retail orders on the Exchange. By removing a criteria while keeping the enhanced rebate the same, the proposed criteria slightly decreases the difficulty required for Members to meet the applicable tier threshold while continuing to encourage RMOs to grow their volume in retail orders.
Furthermore, the Growth Tiers, Non-Displayed Add Volume Tiers, Remove Volume Tiers, and Retail Volume Tiers are intended to provide Members an opportunity to receive an enhanced rebate or reduced fee by increasing their order flow to the Exchange, which further contributes to a deeper, more liquid market and provides even more execution opportunities for active market participants. Incentivizing an increase in liquidity adding or removing volume, through enhanced rebate or reduced fee opportunities, encourages liquidity adding Members on the Exchange to contribute to a deeper, more liquid market, and liquidity executing Members on the Exchange to increase transactions and take execution opportunities provided by such increased liquidity, together providing for overall enhanced price discovery and price improvement opportunities on the Exchange. As such, increased overall order flow benefits all Members by contributing towards a robust and well-balanced market ecosystem.
The Exchange currently offers fee code DX, which is appended to Midpoint Discretionary Orders (“MDOs”)
The Exchange also offers various fee codes for orders routed away from the Exchange. The Exchange is proposing to modify the routing fees associated with fee codes RZ,
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of
As described above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The Exchange believes that its proposal to: (1) introduce a new Growth Tier and modify current Growth Tiers 1 and 2; (2) modify Non-Displayed Step-Up Volume Tier 1; (3) introduce a new Remove Volume Tier and modify current Remove Volume Tiers 1 and 2; and (4) modify Retail Growth Tier 3 reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. Additionally, the Exchange notes that relative volume-based incentives and discounts have been widely adopted by exchanges,
In particular, the Exchange believes its proposal to: (1) introduce a new Growth Tier and modify current Growth Tiers 1 and 2; (2) modify Non-Displayed Step-Up Volume Tier 1; (3) introduce a new Remove Volume Tier and modify current Remove Volume Tiers 1 and 2; and (4) modify Retail Growth Tier 3 is reasonable because the revised tiers will be available to all Members and provide all Members with an additional opportunity to receive an enhanced rebate or a reduced fee. The Exchange further believes the proposed modifications to its Growth Tiers, Non-Displayed Step-Up Volume Tier 1, Remove Volume Tiers, and Retail Growth Tier 3 will provide a reasonable means to encourage liquidity adding displayed orders, liquidity adding non-displayed orders, and retail orders, respectively, in Members' order flow to the Exchange and to incentivize Members to continue to provide liquidity adding volume to the Exchange by offering them an additional opportunity to receive an enhanced rebate or reduced fee on qualifying orders. An overall increase in activity would deepen the Exchange's liquidity pool, offers additional cost savings, support the quality of price discovery, promote market transparency and improve market quality, for all investors.
The Exchange believes that the proposed changes to its Growth Tiers, Non-Displayed Step-Up Volume Tier 1, Remove Volume Tiers, and Retail Growth Tier 3 are reasonable as they do not represent a significant departure from the criteria currently offered in the Fee Schedule. Further, the Exchange believes its proposed changes to the routing fee codes and to fee code DX are reasonable as these changes do not represent a significant departure from the Exchange's general pricing structure. The Exchange notes that the proposed changes to fee code DX are a modest increase over existing prices and yet the proposed fee is lower than other similar fees to remove volume on the Exchange.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, as discussed above, the Exchange believes that the proposed changes would encourage the submission of additional order flow to a public exchange, thereby promoting market depth, execution incentives and enhanced execution opportunities, as well as price discovery and transparency for all Members. As a result, the Exchange believes that the proposed changes further the Commission's goal in adopting Regulation NMS of fostering competition among orders, which promotes “more efficient pricing of individual stocks for all types of orders, large and small.”
The Exchange believes the proposed rule changes do not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Particularly, the proposed changes to the Exchange's Growth Tiers, Non-Displayed Step-Up Volume Tier 1, Remove Volume Tiers, and Retail Growth Tier 3 will apply to all Members equally in that all Members are eligible for each of the Tiers, have a reasonable opportunity to meet the Tiers' criteria and will receive the enhanced rebate on their qualifying orders if such criteria is met. The Exchange does not believe the proposed changes burdens competition, but rather, enhances competition as it is intended to increase the competitiveness of EDGX by amending an existing pricing incentive and adopting pricing incentives in order to attract order flow and incentivize participants to increase their participation on the Exchange, providing for additional execution opportunities for market participants and improved price transparency. Greater overall order flow, trading opportunities, and pricing transparency benefits all market participants on the Exchange by enhancing market quality and continuing to encourage Members to send orders, thereby contributing towards a robust and well-balanced market ecosystem.
The Exchange does not believe the proposal to revise the applicable fee or rebate associated with the Exchange's routing fee codes or fee code DX does not impose a burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed fee associated with fee code DX would apply to all Members equally in that all Members would be subject to the same flat fee for the execution of an MDO with a QDP instruction that removes liquidity from the Exchange. Both MDO and the associated QDP instruction are available to all Members on an equal and non-discriminatory basis. As a result, any Member can decide to use (or not use) the QDP instruction based on the benefits provided by that instruction in potentially avoiding unfavorable executions, and the associated charge that the Exchange proposes to amend. In addition, the fees and rebates associated with routing orders away from the Exchange similarly apply to all Members on an equal and non-discriminatory basis and Members can choose to use (or not use) the Exchange's routing functionality as part of their decision to submit order flow to the Exchange.
Next, the Exchange believes the proposed rule changes does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including other equities exchanges, off-exchange venues, and alternative trading systems. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single equities exchange has more than 17% of the market share.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given of the following determinations: I hereby determine that a certain object being imported from abroad pursuant to an agreement with its foreign owner or custodian for temporary display in the exhibition “The Artist's Mother: Whistler and Philadelphia” at the Philadelphia Museum of Art, Philadelphia, Pennsylvania, and at possible additional exhibitions or venues yet to be determined, is of cultural significance, and, further, that its temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Elliot Chiu, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
BNSF Railway Company (BNSF) has filed a verified notice of exemption under 49 CFR 1180.2(d)(7), for acquisition of local and overhead trackage rights over approximately 65.7 miles of non-contiguous rail line owned by Montana Rail Link, Inc. (MRL), as follows: (1) from milepost 0.00 at Sappington, Mont., to milepost 9.84 at Harrison, Mont.; (2) from milepost 0.00 at East Helena, Mont., to milepost 4.86 at Montana City, Mont.; and (3) from milepost 0.00 at Logan, Mont., to milepost 51.00 at Spire Rock, Mont. (the Branch Lines).
BNSF and MRL have entered into a written trackage rights agreement
The transaction may be consummated on or after May 17, 2023, the effective date of the exemption.
As a condition to this exemption, any employees affected by the acquisition of the trackage rights will be protected by the conditions imposed in
If the notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than May 10, 2023 (at least seven days before the exemption becomes effective).
All pleadings, referring to Docket No. FD 36693, must be filed with the Surface Transportation Board via e-filing on the Board's website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on BNSF's representative, Peter W. Denton, Steptoe & Johnson LLP, 1330 Connecticut Ave. NW, Washington, DC 20036.
According to BNSF, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic preservation reporting requirements under 49 CFR 1105.8(b).
Board decisions and notices are available at
By the Board, Mai T. Dinh, Director, Office of Proceedings.
Federal Highway Administration (FHWA), DOT.
Notice and request for comments.
The FHWA invites public comments about our intention to request the Office of Management and Budget's (OMB) approval for a new information collection, which is summarized below under
Please submit comments by July 3, 2023.
You may submit comments identified by DOT Docket ID Number 2023-0011 by any of the following methods:
Follow the online instructions for submitting comments.
Dan Parker, Senior Program Analyst at
The FSFPP is critical to enabling State Department of Transportation (State DOT) agencies participating in the pilot added flexibility in the management and reimbursement of FHWA funded programs. The statutory requirements of the FSFPP are found under section 11107 of the BIL and codified at 23 U.S.C. 120(l). This new provision under Title 23 requires the establishment of a FSFPP not later than 180 days after the date of enactment of the BIL. Under the pilot, up to 10 State DOTs may be selected to participate. Selected State DOTs in the pilot are allowed to determine the Federal share on an individual project that is more than 0 percent and up to 100 percent as long as the average annual Federal share of all participating projects does not exceed the average of the maximum Federal share of those projects if those projects were not carried out under the pilot program.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition.
FMCSA announces its decision to exempt 11 individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to operate CMVs in interstate commerce.
The exemptions were applicable on April 26, 2023. The exemptions expire on April 26, 2025.
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room W64-224, Washington, DC 20590-0001, (202) 366-4001,
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption requests. DOT posts these comments, without edit, including any personal information the commenter provides, to
On March 22, 2023, FMCSA published a notice announcing receipt of applications from 11 individuals requesting an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) and requested comments from the public (88 FR 17287). The public comment period ended on April 21, 2023, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting exemptions to these individuals would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(8).
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received no comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes allow the Agency to renew exemptions at the end of the 5-year period. However, FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The Agency's decision regarding these exemption applications is based on the 2007 recommendations of the Agency's Medical Expert Panel. The Agency conducted an individualized assessment of each applicant's medical information, including the root cause of the respective seizure(s) and medical information about the applicant's seizure history, the length of time that has elapsed since the individual's last seizure, the stability of each individual's treatment regimen and the duration of time on or off of anti-seizure medication. In addition, the Agency reviewed the treating clinician's medical opinion related to the ability of the driver to safely operate a CMV with a history of seizure and each applicant's driving record found in the commercial driver's license Information System for commercial driver's license (CDL) holders, and interstate and intrastate inspections recorded in the Motor Carrier Management Information System. For non-CDL holders, the Agency reviewed the driving records from the State Driver's Licensing Agency. A summary of each applicant's seizure history was discussed in the March 22, 2023,
These 11 applicants have been seizure-free over a range of 31 years while taking anti-seizure medication and maintained a stable medication treatment regimen for the last 2 years. In each case, the applicant's treating physician verified his or her seizure history and supports the ability to drive commercially.
The Agency acknowledges the potential consequences of a driver experiencing a seizure while operating a CMV. However, the Agency believes the drivers granted this exemption have demonstrated that they are unlikely to have a seizure and their medical condition does not pose a risk to public safety.
Consequently, FMCSA finds further that in each case exempting these applicants from the epilepsy and seizure disorder prohibition in § 391.41(b)(8) would likely achieve a level of safety equal to that existing without the exemption, consistent with the applicable standard in 49 U.S.C. 31315(b)(1).
The terms and conditions of the exemption are provided to the applicants in the exemption document and include the following: (1) each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5T; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 11 exemption applications, FMCSA exempts the following drivers from the epilepsy and seizure disorder prohibition in § 391.41(b)(8), subject to the requirements cited above:
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) the person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136, 49 U.S.C. chapter 313, or the FMCSRs.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice; withdrawal.
On November 28, 2022, the Federal Railroad Administration (FRA) published a notice in the
As of May 3, 2023, FR Doc. 2202-25882, published on November 28, 2022, is withdrawn.
For further information, please contact Kevin MacWhorter, Attorney-Adviser, Development Law Office, at telephone: (202) 641-8727, email:
FR Doc. 2202-25882, published on November 28, 2022, (87 FR 73064), is withdrawn by this notice.
Issued in Washington, DC.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice and request for comments on a request for modification of a currently approved information collection.
The National Highway Traffic Safety Administration (NHTSA) invites public comments about our intention to request approval from the Office of Management and Budget (OMB) for a modification of a currently approved information collection. Before a Federal agency can collect certain information from the public, it must receive approval from OMB. Under procedures established by the Paperwork Reduction Act of 1995, before seeking OMB approval, Federal agencies must solicit public comment on proposed collections of information, including extensions and reinstatement of previously approved collections. This document describes a collection of information for which NHTSA intends to seek OMB approval on State Data Transfer for Vehicle Crash Information collection.
Comments must be submitted on or before July 3, 2023.
You may submit comments identified by the Docket No. NHTSA-2021-0039 through any of the following methods:
•
•
•
For additional information or access to background documents, contact Liza Lemaster-Sandbank, Office of State Data Reporting System Division, (NSA-0130), (202) 366-4257, National Highway Traffic Safety Administration, W53-306, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590.
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
1. The
2. The
On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA or the Bipartisan Infrastructure Law), Public Law 117-58. Section 24108 (d) authorizes the Secretary of Transportation to establish the State Electronic Data Collection (SEDC) program to provide grants to States to establish, upgrade, and standardize their centralized statewide crash data repositories to enable electronic data collection, intrastate data sharing, and electronic data transfer to NHTSA. The objective is to increase the accuracy, timeliness, and accessibility of the data, including data related to fatalities involving vulnerable road users. Through SEDC, NHTSA will award grants to States to modernize or establish a centralized statewide crash data repository to enable full electronic data transfer to NHTSA, increase their alignment to the Model Minimum Uniform Crash Criteria (MMUCC) Sixth Edition data, and transmit the data in a standardized format to NHTSA. This information collection request is to modify NHTSA's existing information collection for SDT to account for changes resulting from the new grant program. The new grant program will not only increase the number of States using the EDT protocol, but it will also request data standardization and increased alignment with the MMUCC. States awarded the SEDC grant will be referred to as SEDC States; States that continue to electronically transmit their crash data to NHTSA through the EDT protocol without SEDC grant funds will be referred to as non-SEDC States.
The SDT process allows States to submit all their PAR data to NHTSA. NCSA uses this data to develop a census of the participating State's crashes. The dataset helps NCSA identify existing and emerging highway safety trends and assess the effectiveness of motor vehicle safety standards and new and emerging technologies on vehicle and highway safety programs. NHTSA also uses the dataset to support NHTSA's Corporate Average Fuel Economy (CAFE) program. Specifically, NHTSA uses the data to analyze the effects vehicle mass has on fatalities in cost benefit analyses for CAFE rulemakings.
NHTSA also uses the SDT data to automatically pre-populate the motor vehicle crash data it collects for several other NHTSA data collection programs. The following are brief descriptions of these data collection programs:
• FARS (OMB Control No. 2127-0006) is a nationwide census of fatalities caused by motor vehicle traffic crashes. In addition to PAR data, FARS includes detailed information regarding the location of the crash, the vehicles, and the people involved. FARS cases can also include toxicology report data, medical records, medical examiner reports, etc.
• CRSS (OMB Control No. 2127-0714) is a nationally representative sample of police-reported crashes involving all types of motor vehicles, pedestrians, and cyclists, ranging from property-damage-only crashes to those that result in fatalities. CRSS data elements are a subset of the data elements on each State's PAR.
• Investigation-based Crash Data Studies (OMB Control Number 2127-0706) includes CISS, SCI and Special Studies. CISS is a nationally representative sample of minor, serious, and fatal crashes involving at least one passenger vehicle—cars, light trucks, sport utility vehicles, and vans—towed from the scene. CISS collects data at both the crash level through scene analysis and the vehicle level through vehicle damage assessment together with injury coding. Data collected through CISS expands upon the information that is collected in a PAR.
The SCI Program provides NHTSA with the most in-depth crash data collected by the agency. The data collected ranges from basic information contained in routine police and insurance crash reports, to comprehensive data from special reports
• The Non-Traffic Surveillance (NTS) is a data collection effort for collecting information about non-traffic crashes and non-crash incidents. The NTS data provide counts and details regarding fatalities and injuries that occur in non-traffic crashes and in non-crash incidents. The NTS non-traffic crash data are obtained through NHTSA's data collection efforts for the Crash Report Sampling System (CRSS), the Crash Investigation Sampling System (CISS), and the Fatality Analysis Reporting System (FARS). NTS also includes data outside of NHTSA's own data collections. NTS' non-crash injury data is based upon emergency department records from a special study conducted by the Consumer Product Safety Commission's National Electronic Injury Surveillance System (NEISS) All Injury Program. NTS non-crash fatality data is derived from death certificate information from the Centers for Disease Control's National Vital Statistics System.
• CIREN combines crash data collection with professional multidisciplinary analysis of medical and engineering evidence to determine injury causation in every crash investigation conducted. The mission of the CIREN is to improve the prevention, treatment, and rehabilitation of motor vehicle crash injuries to reduce deaths, disabilities, and human and economic costs.
Before EDT, the transfer of motor vehicle crash data from a State's crash data system to NHTSA's FARS, CRSS and CISS required individuals to manually enter all State vehicle crash data into each of the crash data systems operated by NHTSA. The SDT program's EDT protocol enabled NHTSA to automate the transfer of State motor vehicle crash data into NHTSA's data collection systems and automate some of the data coding processes in FARS, CRSS and CISS. Through the SEDC program, participating States will build and modernize their centralized statewide crash data repositories and increase their alignment to the MMUCC Sixth Edition; NHTSA will receive more standardized and timely data and increase the usability of the data.
NHTSA's SDT program will reduce the burden of manual data entry and result in more accurate and timely data to help save lives, prevent injuries, and reduce economic costs due to motor vehicle crashes.
In addition, the SDT data are made available to other DOT agencies, such as the Federal Highway Administration and the Federal Motor Carrier Safety Administration, to support their mission to save lives on our national roadways. The SDT data received through SEDC grant will be made available to public as required in BIL.
There are currently 39 States participating in the SDT: 31 States participating using the SDS protocol, and 20 States participating using the EDT protocol. There are 15 States providing data using both protocols.
NHTSA expects that in the next three (3) years, these thirty-nine (39) States will continue to submit their data using either SDS or EDT protocol. NHTSA also expects that, in the next three years, ten (10) out of the twenty (20) existing EDT States will apply and be awarded SEDC grants and start sending more MMUCC-aligned data to NHTSA; three (3) SDS States, that are not EDT States, will apply and be awarded SEDC grants and begin sending MMUCC-aligned data to NHTSA; and two (2) new States, neither SDS nor EDT participating States, will apply and be awarded SEDC grants and begin collecting and transmitting standardized data to NHTSA. Therefore, NHTSA estimates the total number of States participating in the SDT will increase by four (4), to a total of forty-three (43), which is the existing thirty-nine (39) SDT States plus the four (4) new SEDC States in the next three (3) years.
As mentioned above, this information collection request is being updated to incorporate the burden hour and cost estimates for the new SEDC program under the EDT protocol. Due to the different requirements for SDS States, EDT non-SEDC States and EDT SEDC States, the annual burden for these three types of data transmissions are described separately below.
SDS information is obtained annually from States and is submitted in a more traditional method via electronic media through secured mail or a Secure File Transfer Protocol (SFTP). NHTSA assumes a participating State already has a centralized statewide crash data repository. Currently, thirty-one (31) States are voluntarily submitting their annual crash database to NHTSA, with five (5) States sending electronic media and twenty-six (26) states uploading the database to an SFTP site. Since NHTSA accepts the States' centralized statewide crash data repository without changes, NHTSA estimates that it will require eight (8) hours for a State Database Administrator to save a copy of the State's annual crash database onto a SFTP site or electronic media. We estimate an additional four (4) hours will be required for an administrative assistant to package and send the electronic media to NHTSA. Therefore, the burden hours for thirty-one (31) SDS States to save a copy of the State's annual crash database onto a SFTP site or electronic media is 248 hours (8 hours × 31 States). An additional burden for the five (5) SDS States to package and send the electronic media to NHTSA is 20 hours (4 hours × 5 States).
To estimate the labor cost associated with submitting the SDS information, NHTSA looked at wage estimates for the type of personnel involved with copying, packaging and sending the data. NHTSA estimates the total labor costs associated with copying the database by looking at the average wage for Database and Network Administrators and Architects. The Bureau of Labor Statistics (BLS) estimates that the average hourly wage for Database and Network Administrators and Architects (Standard Occupational Classification #15-1240, May 2021) is $49.25
For the 5 States sending electronic media, NHTSA estimates the total labor costs for packing and sending the database by looking at the average wage for Secretaries and Administrative Assistants. The BLS estimates that the average hourly wage for Secretaries and Administrative Assistants (Standard Occupational Classification #43-6014, May 2021) is $21.76.
Combining these copying, packing, and sending burden estimates for SDS, NHTSA estimates that the total burden hours associated with this collection will be 268 (248 + 20) hours and total labor cost associated with the collection will be $19,731 ($638.48 × 31 States) for copying, and $703 ($140.60 × 5 States) for packing and sending, for a total of $20,434 ($19,731 + $703) for the SDS protocol.
Due to the different requirements including data standardization and alignment to MMUCC for SEDC and non-SEDC State, the cost estimates for these two groups under EDT protocol will be different as described below.
The non-SEDC States using the EDT protocol burden hour estimate is based on the level of effort reported by the States that have fully implemented EDT. NHTSA estimates that in the next three years, there will not be any new States joining the twenty (20) States already participating in the SDT program using the EDT protocol. Any new State will participate in EDT by applying for the SEDC grant and meeting SEDC requirements. In addition, NHTSA estimates that over the next three years, starting in year two (10) existing EDT States will begin participating in the new SEDC grant program and will start sending data aligned to MMUCC. NHTSA estimates that in year one, year two and year three, the number of non-SEDC EDT states will be 20, 15 and 10, respectively. Therefore, NHTSA estimates that there will be, on average, fifteen (15) non-SEDC EDT protocol States in each of the next three years. Since these fifteen (15) non-SEDC States are already using the EDT protocol, the cost and burden estimates for these States only account for annual maintenance effort. The estimates assume a participating State already has a centralized statewide crash data repository. The hourly burden for maintenance on States associated with non-SEDC EDT is estimated at five (5) hours per year, based upon currently participating States' experiences. This time is generally used to troubleshoot any connection issues or refine mapping protocols for any data elements that have changed.
NHTSA estimates the cost for IT personnel burden hours using the Bureau of Labor Statistics' mean wage estimate for Software and Web Developers, Programmers, and Testers (Standard Occupational Classification #15-1250, May 2021) of $54.68.
Per the loaded labor rates for State IT staff outlined above, five (5) hours of work translates to an estimated total annual maintenance burden of $441.70 ($88.34 × 5 hours) per State respondent maintaining participation in the EDT program. NHTSA estimates that there will be, on average, 15 States participating in non-SEDC EDT program in each of the next three years. The total annual responses are 5,475 (15 EDT States × 365 nightly responses). Therefore, the annual maintenance cost for the States is a total of $6,626 ($441.70 × 15 States) per year. The number of total burden hours for the 15 States is 75 hours (5 × 15 States).
NHTSA published a Request for Information (RFI)
The cost and burden estimates for the EDT protocol are divided into two efforts: a one-time implementation effort, and an annual maintenance effort. To increase their alignment with the new MMUCC, the States will need to either develop a new electronic Police Accident Report (PAR) and build a centralized statewide crash data repository if they don't already have one or update the existing PAR and centralized statewide crash data repository to increase their alignment to the new MMUCC. In addition, States will need to electronically transfer their data in a standardized format to NHTSA. NHTSA predicts the States will need to take the following specific actions:
• Manually entering PAR data if there are legacy paper PARs to be input into the new and/or updated centralized statewide crash data repository.
• Developing a new PAR to increase alignment with the updated MMUCC.
• Adopting the new State PAR by law enforcement agencies.
• Setting up information technology infrastructure for the electronic centralized statewide crash data repository.
• Identifying and implementing the system changes to align with the updated MMUCC.
• Developing a user guide, data dictionary and training materials for the new and/or updated data collection system.
• Developing and implementing database and data warehouse for the data collection.
• Developing and implementing data transfer protocols for collecting data
• Developing and implementing edit and validation rules for quality assurance for the data collection.
• Developing and implementing data transfer protocols for sharing data among States and sending data to NHTSA.
• Integrating the reporting from other vendors if some law enforcement agencies within a state use other vendor's software.
• Creating data analytics and dashboard for data monitoring and reporting.
NHTSA estimates the labor categories in the rows of table 1 are required for the implementation of tasks above. Based on the information received from the RFI, NHTSA estimates the labor hours for implementation and maintenance for each labor category as in the column “Implementation Total Hours” and “Maintenance Total Hours” in table 1. Labor category “Data Entry and Information Processing Workers” is needed when the States transition from a manual/paper system to an electronic system. Once the transition is complete, this labor category is no longer necessary and therefore is not included in the maintenance burden estimates.
NHTSA uses the Bureau of Labor Statistics' mean hourly wage estimate for each Labor Category in the column labeled “'Labor Rate w/o Fringe and Benefit”
The total cost for implementation and maintenance in table 1 are calculated as follows:
Thus, total labor cost for SEDC EDT implementation cost per State are estimated to be $3,234,789 with burden hours to be 41,024. The total annual maintenance burden cost per year per State is estimated to be $547,384 with burden hour as 6,288.
NHTSA anticipates that during the first year of the grant, States will be in the development and implementation phase, where data transmission is not expected. Beginning with year two (2), and into year three (3), it is estimated that approximately ten (10) States per year will start transmitting data to NHTSA using the EDT protocol. Therefore, the average of number of State to transmit data to NHTSA for the three (3) years is 7 ((10 + 10) ÷ 3 = 6.77, rounded to the nearest integer). In this case during year three (3), there will be ten (10) states in maintenance phase. These are the ten (10) States which start transmission data to NHTSA during year two (2). The average number of states in maintenance phase is 4 (10 ÷ 3 = 3.33, then round 3.33 up to the nearest integer which is 4).
As NHTSA estimated that there will be average 7 new SEDC EDT States each year, the total implementation cost per year will be $22,643,526 (7 × $3,234,789) with burden hours as 287,168 hours (7 × 41,024 hours); the average annual maintenance cost will be $2,189,536 (4 × $547,384) with burden hours as 25,152 hours (4 × 6,288 hours). The total SEDC EDT labor costs are $24,833,062 ($22,643,526 for implementation and $2,189,536 for annual maintenance). This estimate includes total labor costs to the State respondents, but States may choose to have contractors incur some or all of these labor cost. The total annual responses for SEDC EDT States are 4,015 (11 EDT States × 365 nightly responses).
The total estimated burden for SDT is 312,663 hours (268 hours for SDS + 15 hours for non-SEDC EDT + (287,168 hours + 25,152 hours) for SEDC EDT) and total estimated labor cost is
A summary of the burden estimates for SDT is provided in table 2.
The SEDC grant, in compliance with BIL, requires a twenty (20) percent match from participating State respondents. NHTSA estimates about half of the program cost for the SEDC grants will be labor costs. NHTSA estimates the total annual burden cost for the SEDC program (beyond the labor costs discussed in question 12) will be about $25,000,000 to respondents. Since the Grant respondents only have to provide at least 20 percent of the total cost, the respondents will have to fund about $5,000,000 annually.
NHTSA does not expect respondents to incur any additional costs for the SDS or non-SEDC States using EDT Protocol (beyond labor costs as discussed in question 12) as a result of this information collection.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Andrea Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Enforcement, Compliance & Analysis, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On April 27, 2023, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
May 4, 2023, 12:00 p.m. to 3:00 p.m., Eastern time.
This meeting will be accessible via conference call and via Zoom Meeting and Screenshare. Any interested person may call (i) 1-929-205-6099 (US Toll) or 1-669-900-6833 (US Toll), Meeting ID: 999 3560 1878, to listen and participate in this meeting. The website to participate via Zoom Meeting and Screenshare is
This meeting will be open to the public.
The Unified Carrier Registration Plan Audit Subcommittee (the “Subcommittee”) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement. The subject matter of this meeting will include:
The UCR Audit Subcommittee Chair will welcome attendees, call the meeting to order, call roll for the Audit Subcommittee, confirm whether a quorum is present, and facilitate self-introductions.
The UCR Executive Director will verify the publication of the meeting notice on the UCR website and distribution to the UCR contact list via email followed by the subsequent publication of the notice in the
The agenda will be reviewed, and the Subcommittee will consider adoption.
Subcommittee action only to be taken in designated areas on the agenda.
Draft minutes from the February 9, 2023 Subcommittee meeting via teleconference will be reviewed. The Subcommittee will consider action to approve.
The UCR Audit Subcommittee Chair, UCR Audit Subcommittee Vice-Chair, DSL Transportation Services, Inc., and Seikosoft will lead a discussion on options to replace the Retreat Audit Program currently utilized by the States with a roadside inspection data driven audit for non-IRP plated commercial motor vehicles and the motor carriers operating this type of registered equipment.
The UCR Audit Subcommittee Chair, UCR Audit Subcommittee Vice-Chair and UCR Executive Director will provide a summary of the May 3, 2023, UCR State Auditor Question and Answer session and lead a discussion of the value of the 60-minute virtual question and answer sessions.
The UCR Audit Subcommittee Chair will review audit compliance rates for the states for registration years 2022 and 2023 and related compliance percentages for FARs, retreat audits, and registration compliance percentages.
The UCR Audit Subcommittee Chair and UCR Audit Subcommittee Vice-Chair will lead discussion on auditing performance standards and direction of the program.
The UCR Audit Subcommittee Chair will call for any other items Subcommittee members would like to discuss.
The UCR Audit Subcommittee Chair will adjourn the meeting.
The agenda will be available no later than 5:00 p.m. Eastern time, April 28, 2023 at:
Elizabeth Leaman, Chair, Unified Carrier Registration Plan Board of Directors, (617) 305-3783,
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20006, (202) 266-4688 or email
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
By direction of the Secretary.
Office of Construction and Facilities Management, Department of Veterans Affairs.
Notice.
Office of Construction and Facilities Management, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before July 3, 2023.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20006, (202) 266-4688 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, CFM invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of CFM's functions, including whether the information will have practical utility; (2) the accuracy of CFM's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
Respondents include federal employees in the Department of Veteran Affairs throughout CFM, Veterans Health Administration, and National Cemetery Administration, as well as U.S. Army Corps of Engineers construction management teams. The survey also collects information from members of private contractors associated with the projects described above (
The survey uses a set of ten questions to collect the information on team performance, plus two open-ended questions that address what is going well and concerns. The survey is delivered via email with a link to an online collection instrument. Advance notice and reminder emails are used to encourage participation.
The survey is administered by a federal contracting team (Blue Water Thinking and Booz Allen Hamilton). Raw data is seen and handled only by members of this team. Summary results are provided to CFM via a dashboard designed as part of the contract to design and administer the survey.
By direction of the Secretary.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Proposed rule.
This proposed rule takes a comprehensive approach to improving access to care, quality and health outcomes, and better addressing health equity issues in the Medicaid program across fee-for-service (FFS), managed care delivery systems, and in home and community-based services (HCBS) programs. These proposed improvements seek to increase transparency and accountability, standardize data and monitoring, and create opportunities for States to promote active beneficiary engagement in their Medicaid programs, with the goal of improving access to care.
To be assured consideration, comments must be received at one of the addresses provided below, by July 3, 2023.
In commenting, please refer to file code CMS-2442-P.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
Karen LLanos, (410) 786-9071, for Medical Care Advisory Committee.
Jennifer Bowdoin, (410) 786-8551, for Home and Community-Based Services.
Jeremy Silanskis, (410) 786-1592, for Fee-for-Service Payment.
Title XIX of the Social Security Act (the Act) established the Medicaid program as a joint Federal and State program to provide medical assistance to eligible individuals, including many with low incomes. Under the Medicaid program, each State that chooses to participate in the program and receive Federal financial participation (FFP) for program expenditures, establishes eligibility standards, benefits packages, and payment rates, and undertakes program administration in accordance with Federal statutory and regulatory requirements. The provisions of each State's Medicaid program are described in the Medicaid “State plan” and, as applicable, related authorities, such as demonstration projects and waivers of State plan requirements. Among other responsibilities, CMS approves State plans, State plan amendments (SPAs), demonstration projects authorized under section 1115 of the Act, and waivers authorized under section 1915 of the Act; and reviews expenditures for compliance with Federal Medicaid law, including the requirements of section 1902(a)(30)(A) of the Act relating to efficiency, economy, quality of care, and access to ensure that all applicable Federal requirements are met.
As of December 2022, the Medicaid program provides essential health care coverage to more than 85 million
On January 28, 2021, the President signed Executive Order (E.O.) 14009,
Ensuring that beneficiaries can access covered services is necessary to the basic operation of the Medicaid program. Depending on the State and its Medicaid program structure, beneficiaries access their health care services using a variety of care delivery systems (for example, FFS, fully-capitated managed care, partially capitated managed care, etc.), including through demonstrations and waiver programs. In 2020, 70 percent of Medicaid beneficiaries were enrolled in comprehensive managed care plans;
Current access regulations are neither comprehensive nor consistent across delivery systems or coverage authority (for example, State plan and demonstration authority). For example, regulations at 42 CFR 447.203 and 447.204 relating to access to care, service payment rates, and Medicaid provider participation in rate setting apply only to Medicaid FFS delivery systems and focus on ensuring that payment rates are consistent with the statutory requirements in section 1902(a)(30)(A) of the Act. The regulations do not apply to services delivered under managed care. These regulations are also largely procedural in nature and rely heavily on States to form an analysis and reach conclusions on the sufficiency of their own payment rates.
With a program as large and complex as Medicaid, access regulations need to be multi-factorial to promote consistent access to health care for all beneficiaries across all types of care delivery systems in accordance with statutory requirements. Strategies to enhance access to health care services should reflect how people move through and interact with the health care system. We view the continuum of health care access across three dimensions of a person-centered framework: (1) enrollment in coverage; (2) maintenance of coverage; and (3) access to services and supports. Within each of these dimensions, accompanying regulatory, monitoring, and/or compliance actions may be needed to ensure access to health care is achieved and maintained.
In the spring of 2022, we released a request for information (RFI)
Some of the most common feedback we received through the RFI related to ways that we can promote health equity through cultural competency. Commenters shared the importance that cultural competency plays in how beneficiaries access health care and in the quality of health services received by beneficiaries. The RFI respondents shared examples of actions that we could take, including collecting and analyzing health outcomes data by sociodemographic categories; establishing minimum standards for how States serve communities in ways that address cultural competency and language preferences; and reducing barriers to enrollment and retention for racial and ethnic minority groups.
In addition to the topic of cultural competency, commenters also commonly shared that they viewed reimbursement rates as a key driver of provider participation in Medicaid and CHIP programs. Further, commenters noted that aligning payment approaches and setting minimum standards for payment regulations and compliance across Medicaid and CHIP delivery systems, services, and benefits could help ensure that beneficiaries' access to services is as similar as possible across beneficiary groups, delivery systems, and programs.
As mentioned previously in this proposed rule, the first dimension of access focuses on ensuring that eligible people are able to enroll in the Medicaid program. Access to Medicaid enrollment requires that a potential beneficiary know if they are or may be eligible for Medicaid, be aware of Medicaid coverage options, and be able to easily apply for and enroll in coverage. The second dimension of access in this continuum relates to maintaining coverage once the beneficiary is enrolled in the Medicaid program initially. Maintaining coverage requires that eligible beneficiaries are able to stay enrolled in the program without interruption, or that they know how to and can smoothly transition to other health coverage, such as CHIP, Exchange coverage, or Medicare, when they are no longer eligible for Medicaid coverage but have become eligible for other health coverage programs. In September 2022, we published a proposed rule,
The third dimension, which is the focus of this proposed rule, is access to services and supports. This rule is focused on addressing additional critical elements of access: (1) potential access, which refers to a beneficiary's access to providers and services, whether or not the providers or services are used; (2) beneficiary utilization, which refers to beneficiaries' actual use of the providers and services available to them; and (3) beneficiaries' perceptions and experiences with the care they did or were not able to receive. These terms and definitions build upon previous efforts to examine how best to monitor access.
We are engaging in an array of regulatory activities, including three rulemakings that are currently underway (more specifically, the Streamlining Eligibility & Enrollment proposed rule, a proposed rule, entitled
As noted earlier, we issued the Streamlining Eligibility & Enrollment proposed rule to address the first two dimensions of access to health care: (1) enrollment in coverage and (2) maintenance of coverage. Through that proposed rule, we sought to streamline Medicaid, CHIP and BHP eligibility and enrollment processes, reduce administrative burden on States and applicants/enrollees toward a more seamless eligibility and enrollment process, and increase the enrollment and retention of eligible individuals.
The managed care proposed rule seeks to improve access to care and quality outcomes for Medicaid and CHIP beneficiaries enrolled in managed care by: creating standards for timely access to care and States' monitoring and enforcement efforts; reducing burden for some State directed payments and certain quality reporting requirements; adding new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization, and specifying the scope and nature of ILOS; specifying medical loss ratio (MLR) requirements, and establishing a quality rating system for Medicaid and CHIP managed care plans.
Through the managed care proposed rule and this proposed rule (Ensuring Access to Medicaid Services), we propose additional requirements to address the third dimension of the health care access continuum: access to services. The proposed requirements outlined later in this section focus on improving access to services in Medicaid by utilizing tools such as FFS rate transparency, standardized reporting for HCBS, and improving the process for interested parties, especially Medicaid beneficiaries, to provide feedback to State Medicaid agencies and for Medicaid agencies to respond to the feedback (also known as a feedback loop).
Through a combination of these three proposed rules, we seek to address a range of access-related challenges that impact how beneficiaries are served by Medicaid across all of its delivery systems. FFP would be available for expenditures that might be necessary to implement the activities States would need to undertake to comply with the provisions of the proposed rules, if finalized.
Finally, we also believe it is important to acknowledge the role of health equity within this proposed rule. Medicaid plays a disproportionately large role in covering health care for people of color in this country.
We recognize that each State faces a unique set of challenges related to the resumption of its normal program acvitities after the end of the COVID-19 public health emergency (PHE). More specifically, the expiration of the continuous enrollment condition authorized by the Families First Coronavirus Response Act (FFCRA) presents the single largest health coverage transition event since the first open enrollment period of the Affordable Care Act. As a condition of receiving a temporary 6.2 percentage point Federal Medical Assistance Percentage (FMAP) increase under the FFCRA, States have been required to maintain enrollment of nearly all Medicaid enrollees. This continuous enrollment condition expired on March 31, 2023, and States now have 12 months to initiate and 14 months to complete renewals for all individuals enrolled in Medicaid, CHIP and the Basic Health Program. Additionally, many other temporary authorities adopted by States during the COVID-19 PHE will expire at the end of the PHE, and States will be returning to regular operations across their programs. The resumption of normal Medicaid operations is generally referred to as “unwinding” and the 12-month period for States to initiate all outstanding eligibility actions that were delayed because of the FFCRA continuous enrollment condition is called the “unwinding period.” CMS considered States' unwinding responsibilities when proposing the effective dates for the proposals in this rule, but, as noted below, we seek State feedback on whether our proposals strike the correct balance.
As we contemplate the timing of a final rule, we are considering adopting an effective date of 60 days following publication of the final rule and separate compliance dates for various provisions, which we note where relevant in our discussion of specific proposals in this proposed rule. We seek comment on whether an effective date of 60 days following publication would be appropriate when combined with later dates for compliance for some provisions. We also seek comment on the timeframe that would be most achievable and appropriate for compliance with each proposed provision and whether the compliance date should vary by provision.
We obtained feedback during various public engagement activities conducted with States and other interested parties, which supports research findings that the beneficiary perspective and lived Medicaid experience
However, effective community engagement is not as simple as planning a meeting and requesting feedback. To create opportunities that facilitate true engagement, it is important to understand and honor strengths and assets that exist within communities; recognize and solicit the inclusion of diverse voices; dedicate resources to ensuring that engagement is done in culturally meaningful ways; ensure timelines, planning processes, and resources that support equitable participation; and follow up with communities to let them know how their input was utilized. Ensuring optimal health outcomes for all beneficiaries served by a program through the design, implementation, and operationalization of policies and programs requires intentional and continuous effort to engage people who have historically been excluded from the process.
Section 1902(a)(4) of the Act is a longstanding statutory provision that, as implemented in part in regulations currently codified at 42 CFR 431.12,
The current MCAC regulations at § 431.12 require States to establish such a committee, and describe high-level requirements related to the composition of the committee, the scope of topics to be discussed, and the support the Committee can receive from the State in its administration. Due to the lack of specificity in the current regulations, these regulations have not been consistently implemented across States. For example, there is no mention of how States should approach meeting periodicity or meeting structure in ways that are conducive to including a variety of Medicaid interested parties. There is also no mention in the regulations about how States can build accountability through transparency with their interested parties by publicly sharing meeting dates, membership lists, and the outcomes of these meetings. The regulations also limit the MCAC discussions to topics about health and medical care services—which in turn limits the benefits of using the MCAC as a vehicle that can provide States with varied ideas, suggestions, and experiences on a range of issues (medical and non-medical) related to the effective administration of the Medicaid program.
As such, we have determined the requirements governing MCACs need to be more robust to ensure all States are using these committees optimally to realize a more effective and efficient Medicaid program that is informed by the experiences of beneficiaries, their caretakers, and other interested parties. The current regulations have been in place without change for over 40 years.
In 2022, we gathered feedback from various public engagement activities conducted with States, other interested parties, and directly from a subset of State Medicaid agencies that described a wide variation in how States are operating MCACs today. The feedback suggested that some MCACs operate simply to meet the broad Federal requirements. As discussed previously in this section, we have discovered that our current regulations do not further the statutory goal of meaningfully engaging Medicaid beneficiaries and other low-income people in matters related to the operation of the Medicaid program. Meaningful engagement can help develop relationships and establish trust between the communities served and the Medicaid agency to ensure States receive important information concerning how to best provide health coverage to their beneficiary populations. The current MCAC regulations establish the importance of broad feedback from interested parties, but they lack the specificity that can ensure States use MCACs in ways that facilitate that feedback.
The current regulation requires that MCACs must include Medicaid beneficiaries as committee members. However, the regulations do not mention or account for the reality that other interested parties can stifle beneficiary contribution in a group setting. For example, when there are a small number of beneficiary representatives in large committees with providers, health plans, and professional advocates, it can be uncomfortable and intimidating for beneficiaries to share their perspective and experience. Based on these reasons, several States already use beneficiary-only groups that feed into larger MCACs.
Improvements to the MCACs are critical to ensuring a robust and accurate understanding of beneficiaries' challenges to health care access. The current regulations value State Medicaid agencies having a way to get feedback from interested parties on issues related to the Medicaid program. However, the current regulations lack specificity related to how MCACs can be used to benefit the Medicaid program more expressly by more fully promoting the beneficiary voice. MCACs need to provide a forum for beneficiaries and people with lived experience with the Medicaid program to share their experiences and challenges with accessing health care, and to assist States in understanding and better addressing those challenges. These committees also represent unique opportunities for States to include representation by members that reflect the demographics of their Medicaid program to ensure that the program is best serving the needs of all beneficiaries, but not all States are utilizing that opportunity.
The proposed rule seeks to strike a balance that reflects how States currently use advisory committees (such as MCACs or standalone beneficiary groups). We know that some States approach these committees as a way to meet a Federal requirement while other States are using them in much more innovative ways. As a middle ground, the proposed rule seeks to: (1) address the gaps in the current regulations described previously in this section; and (2) establish requirements to implement
The changes we propose in this rule are rooted in best practices learned from experience and from current State examples of community engagement that support getting the type of feedback and experiences from beneficiaries, their caretakers, providers, and other interested parties that can then be used to positively impact care delivered through the Medicaid program.
Accordingly, the proposed rule includes changes that, if finalized, would support the implementation of the principles of bi-directional feedback, transparency, and accountability. We propose changes to the features of the new committee that could most effectively ensure member engagement, including the staff and logistical support that is required for beneficiaries and individuals representing beneficiaries to meaningfully participate in these committees. We also propose changes to expand the scope of topics to be addressed by the committee, address committee membership composition, prescribe the features of administration of the committee, establish requirements of an annual report, and underscore the importance of beneficiary engagement through the addition of a related beneficiary-only group.
While Medicaid programs are required to provide medically necessary nursing facility services for most eligible individuals age 21 or older, coverage for home and community-based services (HCBS) is a State option.
Furthermore, HCBS play an important role in States' efforts to achieve compliance with the Americans with Disabilities Act (ADA) of 1990, section 504 of the Rehabilitation Act of 1973 (section 504),
Medicaid coverage of HCBS varies by State and can include a combination of medical and non-medical services, such as case management, homemaker, personal care, adult day health, habilitation (both day and residential), and respite care services. HCBS programs serve a variety of targeted population groups, such as older adults, and children and adults with intellectual or developmental disabilities, physical disabilities, mental health/substance use disorders, and complex medical needs. HCBS programs provide opportunities for Medicaid beneficiaries to receive services in their own homes and communities rather than in institutions.
CMS and States have worked for decades to support the increased availability and provision of high-quality HCBS for Medicaid beneficiaries. While there are quality and reporting requirements for Medicaid HCBS, the requirements vary across authorities and are often inadequate to provide the necessary information for ensuring that HCBS are provided in a high-quality manner that best protects the health and welfare of beneficiaries. Consequently, quality measurement and reporting expectations are not consistent across and within services, but instead vary depending on the authorities under which States are delivering services. Additionally, States have flexibility to determine the quality measures they use in their HCBS programs. While we support State flexibility, a lack of
In addition, although there are differences in rates of disability among demographic groups, there are very limited data currently available to assess disparities in HCBS access, utilization, quality, and outcomes. Few States have the data infrastructure to systematically or routinely report data that could be used to assess whether disparities exist in HCBS programs. This lack of available data also prevents CMS and States from implementing interventions to make improvements in HCBS programs designed to consistently meet the needs of all beneficiaries.
Compounding these concerns have been notable and high-profile instances of abuse and neglect in recent years, which have been shown to result from poor quality care and inadequate oversight of HCBS in Medicaid. For example, a 2018 report, “Ensuring Beneficiary Health and Safety in Group Homes Through State Implementation of Comprehensive Compliance Oversight,”
Finally, through our regular interactions with State Medicaid agencies, provider groups, and beneficiary advocates, we observed that all these interested parties routinely cite a shortage of direct care workers and high rates of turnover in direct care workers among the greatest challenges in ensuring access to high-quality, cost-effective HCBS for people with disabilities and older adults. Some States have also indicated that a lack of direct care workers is preventing them from transitioning individuals from institutions to home and community-based settings. While workforce shortages have existed for years, they have been exacerbated by the COVID-19 pandemic, which has resulted in higher rates of direct care worker turnover (for instance, due to higher rates of worker-reported stress), an inability of some direct care workers to return to their positions prior to the pandemic (for instance, due to difficulty accessing child care or concerns about contracting COVID-19 for people with higher risk of severe illness), workforce shortages across the health care sector, and wage increases in types of retail and other jobs that tend to draw from the same pool of workers.
To address the list of challenges outlined in this section, we are proposing new Federal requirements in this proposed rule to improve access to care, quality of care, and health and quality of life outcomes; promote health equity for people receiving Medicaid-covered HCBS; and ensure that there are safeguards in place for beneficiaries who receive HCBS through FFS delivery systems. We seek comment on other areas for rulemaking consideration. The proposed requirements are also intended to promote public transparency related to the administration of Medicaid HCBS programs.
Section 1902(a)(30)(A) of the Act requires States to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” Regulations at § 447.203 require States to develop and submit to CMS an access monitoring review plan (AMRP) for a core set of services. Currently, the regulations rely on available State data to support a determination that the State's payment rates are sufficient to ensure access to care in Medicaid FFS that is at least as great for beneficiaries as is generally available to the general population in the geographic area, as required under section 1902(a)(30)(A) of the Act.
In the May 6, 2011,
Following enactment, numerous States have expressed concern regarding the administrative burden associated with the 2015 final rule with comment period requirements, especially those
In the July 15, 2019
States have continued to question whether the AMRP process is the most effective or accurate reflection of access to care in a State's Medicaid program, and requested we provide additional clarity on the data necessary to support compliance with section 1902(a)(30)(A) of the Act. In reviewing the information that States presented through the AMRPs, we also have questioned whether the data and analysis consistently address the primary access-related question posed by section 1902(a)(30)(A) of the Act—namely, whether rates are sufficient to ensure access to care at least as great as that enjoyed by the general population in geographic areas. The unstandardized nature of the AMRPs, which largely defer to States to determine appropriate data measures to review and monitor when documenting access to care, have made it difficult to assess whether any single State's analysis demonstrates compliance with section 1902(a)(30)(A) of the Act.
While the AMRPs were intended to be a useful guide to States in the overall process to monitor beneficiary access, they are generally limited to access in FFS delivery systems and focus on targeted payment rate changes rather than the availability of care more generally or population health outcomes (which may be indicative of the population's ability to access care). Moreover, the AMRP processes are largely procedural in nature and not targeted to specific services for which access may be of particular concern, requiring States to engage in triennial reviews of access to care for certain broad categories of Medicaid services—primary care services, physician specialist services, behavioral health services, pre and post-natal obstetric services, and home health services. Although the 2016 final rule reasonably discussed that the selected service categories intended to be indicators for available access in the overall Medicaid FFS system, the categories do not easily translate to the services authorized under section 1905(a) of the Act, granting States deference as to how broadly or narrowly to apply the AMRP analysis to services within their programs. For example, the category “primary care services” could encompass several of the Medicaid service categories described within section 1905(a) of the Act and, without clear guidance on which section 1905(a) services categories, qualified providers, or procedures we intended States to include within the AMRP analyses. States were left to make their own interpretations in analyzing access to care under the 2016 final rule.
Similarly, a number of the AMRP data elements, both required and suggested within the 2016 final rule, may be overly broad, subject to interpretation, or difficult to obtain. Specifically, under the 2016 final rule provisions, States are required to review: the extent to which beneficiary needs are fully met; the availability of care through enrolled providers to beneficiaries in each geographic area, by provider type and site of service; changes in beneficiary utilization of covered services in each geographic area; the characteristics of the beneficiary population (including considerations for care, service and payment variations for pediatric and adult populations and for individuals with disabilities); and actual or estimated levels of provider payment available from other payers, including other public and private payers, by provider type and site of service. Though service utilization and provider participation are relatively easy measures to source and track using existing Medicaid program data, an analysis of whether beneficiary needs are fully met is at least somewhat subjective and could require States to engage in a survey process to complete. Additionally, while most Medicaid services have some level of equivalent payment data that can be compared to other available public payer data, such as Medicare, private pay information may be proprietary and difficult to obtain. Therefore, many States struggled to meet the regulatory requirement comparing Medicaid program rates to private payer rates because of their inability to obtain private payer data.
Due to these issues, States produced varied AMRPs through the triennial process that were, as a whole, difficult to interpret or to use in assessing compliance with section 1902(a)(30)(A) of the Act. In isolation, a State's specific AMRP most often presented data that could be meaningful as a benchmark against changes within a State's Medicaid program, but did not present a case for Medicaid access consistent with the general population in geographic areas. Frequently, the data and information within the AMRPs were presented without a formal determination or attestation from the State that the information presented established compliance with section 1902(a)(30)(A) of the Act. Because the States' AMRPs generally varied to such a great degree, there was also little to glean in making State-to-State comparisons of performance on access measures, even for States with geographic and demographic similarities.
Based on results of the triennial AMRPs, we were uncertain of how to make use of the information presented within them other than to make them publicly available. We published the
Under this proposed rule, we are proposing to balance elimination of unnecessary Federal and State administrative burden with robust implementation of the Federal and State shared obligation to ensure that Medicaid payment rates are set at levels sufficient to ensure access to care for beneficiaries consistent with section 1902(a)(30)(A) of the Act. The provisions of this proposed rule, as discussed in more detail later, would better achieve this balance through improved transparency of Medicaid FFS payment rates, through publication of a comparative payment rate analysis to Medicare and payment rate disclosures, and through a more targeted and defined approach to evaluating data and information when States propose to reduce or restructure their Medicaid payment rates. Payment rate transparency is a critical component of assessing compliance with section 1902(a)(30)(A) of the Act. In addition, payment rate transparency helps to ensure that interested parties have basic information available to them to understand Medicaid payment levels and the associated effects of payment rates on access to care so that they may raise concerns to State Medicaid agencies via the various forms of public processes discussed within this proposed rule. Along with improved payment rate transparency and disclosures as well as comparative payment rate analyses, we are proposing a more efficient process for States to undertake when submitting rate reduction or restructuring SPAs to CMS for review. As we move toward aligning our Medicaid access to care strategy across FFS and managed care delivery systems, we will consider additional rulemaking to help ensure that Medicaid payment rate information is appropriately transparent and rates are fully consistent with broad access to care across delivery systems, so that interested parties have a more complete understanding of Medicaid payment rate levels and resulting access to care for beneficiaries.
Current § 431.12 requires States to have a MCAC to advise the State Medicaid agency about health and medical care services. The current regulations are intended to ensure that State Medicaid agencies have a way to receive feedback from interested parties on issues related to the Medicaid program. However, the current regulations lack specificity related to how these committees can be used to ensure the proper and efficient administration of the Medicaid program more expressly by more fully promoting beneficiary perspectives.
Under the authority of section 1902(a)(4) of the Act, section 1902(a)(19) of the Act, and our general rulemaking authority in section 1102 of the Act, we propose to update § 431.12 to replace the current MCAC requirements with a committee framework designed to ensure the proper and efficient administration of the Medicaid program and to better ensure that care and services under the Medicaid program will be provided in a manner consistent with the best interests of the beneficiaries. If finalized, States would be required to establish and operate the newly named Medicaid Advisory Committee (MAC) and a Beneficiary Advisory Group (BAG). The MAC and its corresponding BAG would serve as vehicles for bi-directional feedback between interested parties and the State on matters related to the effective administration of the Medicaid program. With this proposal, FFP, or Federal match, for Medicaid administrative activities would remain available to States for expenditures related to MAC and BAG activities in the same manner as the former MCAC.
We propose to amend the title and paragraph (a) of § 431.12 to update the name of the existing MCAC to the MAC, and to add the requirement for States to establish and operate a dedicated advisory group comprised of Medicaid beneficiaries, the BAG. Our goal is that the committee and its corresponding advisory group would advise the State not only on issues related to health and medical services, as the MCAC did, but also on matters related to policy development and to the effective administration of the Medicaid program consistent with the language of section1902(a)(4)(B) of the Act, which requires a State plan to meaningfully engage Medicaid beneficiaries and other low-income people in the administration of the plan. While the Medicaid program covers medical services, the program is increasingly also covering services designed to address beneficiaries' social determinants of health and their health-related social needs more generally. Therefore, having a discussion with the MAC about topics that are not directly related to covered services may be necessary to ensure that beneficiaries are able to meaningfully access these services. Expanding the scope of the current committee is necessary to align the actions of the committee with the expanding scope of the Medicaid program, consistent with section 1902(a)(4)(B) of the Act, because the MAC creates a formalized way for interested parties and beneficiary representatives to provide feedback to the State about issues related to the Medicaid program and the services it covers and to help ensure that the program operates efficiently and as it was designed to operate.
Every State will vary in the types of topics that would benefit from the interested parties' feedback, so discretion on which topics will be discussed with the MAC will be left to the State. Depending on the priorities of the State in a given year, States may find it helpful to bring to the MAC issues related to, for example, grievances, consumer experience survey ratings, design of a new program, or other like topics. Proposed mandates for these entities are described later in this section under proposed paragraph (g). We further propose conforming updates to paragraph (b) regarding the State plan requirements, to reflect the proposed MAC and BAG and the expanded mandate proposed in this proposed rule. The interested parties advisory group, proposed and described in the FFS sections of this proposed rule, to advise States on rate setting for certain HCBS
We propose to update paragraph (c) of § 431.12 regarding appointment of committee members to specify that the members of the MAC and BAG must be appointed by the agency director or higher State authority on a rotating, continuous basis. Under our proposals, committee and advisory group members would serve a specific amount of time, the length of which will be determined by each State and noted in its bylaws. After a committee or advisory group member term has been completed, the State will appoint a new member, thus ensuring that MAC and BAG memberships rotate continuously. We propose the State be required to make public its process and bylaws for recruitment and appointment of members of the MAC and BAG and post the list of both sets of members on the State's website. Under our proposal, the website page where this information is located must be easily accessible by the public. These updates align with how advisory committees similar to the MAC and BAG are run, and the changes are designed to provide additional details to support States' operation of the MAC and BAG. Further, these updates facilitate transparency, improving the current regulations, which do not mention nor promote transparency of information related the MCAC with the public. We believe that transparency of information can lead to enhanced accountability on the part of the State to making its MAC and BAG as effective as possible.
Advisory committees and groups can be most effective when they represent a wide range of perspectives and experiences. The current MAC regulations only provide high level descriptions of types of members that should be selected. Since we know that each State environment is different, in the proposed rule, we continue to provide the State with discretion on how large the MAC and BAG should be, but we outline in more detail the types of categories of members that can best reflect the needs of a Medicaid program. We believe that diversely populated MACs and BAGs can provide States with access to a broad range of perspectives, and importantly, beneficiaries' perspective, which can positively impact the administration of the Medicaid program.
We encourage States to take into consideration, as part of their member selection process, the demographics of the Medicaid population in their State. Keeping diverse representation in mind as a goal for the MAC membership can be a way for States to acknowledge that specific populations and those receiving critically important services be appropriately represented on the MAC. For example, in making the MAC appointments, the State may want to balance the representation of the MAC according to geographic areas of the State and the demographics of the Medicaid program of the State. The State may want to consider geographical diversity (for example, urban, rural, tribal) when making its membership selections. The State could also consider demographic representation of its membership by including members representing or serving Medicaid beneficiaries the following categories: (1) children's health care; (2) behavioral health services; (3) preventive care and reproductive health services; (4) health or service issues pertaining specifically to people over age 65; and (5) health or service issues pertaining specifically to people with disabilities. By offering these considerations, we seek to support States in their efforts to eliminate differences in health care access and outcomes experienced by diverse populations enrolled in Medicaid. Our aim is to support several of the priorities for operationalizing health equity across CMS programs as outlined in the CMS Framework for Health Equity (2022-2032) and the HHS Equity Action Plan which is consistent with E.O. 13985 which calls for advancing equity for underserved populations.
As we considered effective ways to better integrate the beneficiary perspective into decisions related the Medicaid program, we also recognized that a diverse and representative set of interested parties should be reflected in the composition of each State's MAC. We propose to amend paragraph (d) of § 431.12 regarding committee membership to account for both membership and composition, and to require the MAC membership include members from the BAG, described later in this section, who are currently or have been Medicaid beneficiaries, and individuals with direct experience supporting Medicaid beneficiaries (for example, family members or caregivers
Specifically, in paragraph (d)(1) of § 431.12, we propose that at least 25 percent of the MAC must be individuals with lived Medicaid beneficiary experience from the BAG. This means that the BAG would be comprised of people who: (1) are currently or have been Medicaid beneficiaries and (2) individuals with direct experience supporting Medicaid beneficiaries (family members or caregivers of those enrolled in Medicaid). We selected 25 percent as a threshold to reflect the importance of including the beneficiary perspective in the administration of the Medicaid program and to ensure that the beneficiary perspective has equitable representation in the feedback provided by the MAC. We did not select a higher percentage because we acknowledge that States will benefit from a MAC that includes representation from a diverse set of interested parties who work in areas related to Medicaid but are not beneficiaries, their family members or their caregivers. We seek comment on the 25 percent requirement.
As noted earlier, representation from the remaining committee members would be left to the States' discretion. Rather than prescribing specific percentages for each category, we only propose to require representation from each category as part of the MAC. The specific percentage of each of category (other than the BAG members) relative to the whole committee can be determined by each State. This approach would provide States with flexibility to determine how to best represent the unique landscape of each State's Medicaid program. We seek comment on what should be the minimum percentage requirement that MAC members be current/past Medicaid
States need to know how to deliver care to its beneficiaries. In addition to hearing directly from beneficiaries, the State can gain insights into how to effectively administer its program, from other groups of the Medicaid community. Categorically, we propose in paragraph (d)(2) that the rest of the MAC must include representation from each category: (1) members of State or local consumer advocacy groups or other community-based organizations that represent the interests of, or provide direct service, to Medicaid beneficiaries; (2) clinical providers or administrators who are familiar with the health and social needs of Medicaid beneficiaries and with the resources available and required for their care; (3) representatives from participating Medicaid managed care plans or the State health plan association representing such plans, as applicable; and (4) representatives from other State agencies serving Medicaid beneficiaries, as ex-officio members.
States are determining which types of providers to include under the clinical providers or administrators category, we recommend they consider a wide range of providers or administrators that are experienced with the Medicaid program including, but not limited to: (1) primary care providers (internal or family medicine physicians or nurse practitioners or physician assistants that practice primary care); (2) behavioral health providers (that is, mental health and substance use disorder providers); (3) reproductive health service providers, including maternal health providers; (4) pediatric providers; (5) dental and oral health providers; (6) community health, rural health clinic or Federally Qualified Health Center (FQHC) administrators; (7) individuals providing long-term care services and supports; and (8) direct care workers
We have also identified health plans as an important contributor to the MAC, but we acknowledge that not all States that have managed care delivery systems. We know many Medicaid health plans administer similar committees and thus allow for States to tailor health plan representation based on its managed care market. For example, States can fulfil this category with only one or with multiple plans operating in the State. In addition, we also give States the flexibility to meet the health plan representation requirements with either participating Medicaid managed care plans or the State health plan association representing such plans, as applicable.
The proposed language in paragraph (d)(2)(D) broadens the type of representatives from other State agencies that are required to be on the committee from the similar MCAC requirement. The current MCAC regulation requires membership by “the director of the public welfare department or the public health department, whichever does not head the Medicaid agency.” By expanding the definition of external agency representation to be broader than the welfare or public health department, we would give States more flexibility in representing the Medicaid program's interests based on States' unique circumstances and organizational structure. States can work with sister State agencies to determine who should participate in the MAC (for example, foster care agency, mental health agency, department of public health). We also propose that these representatives be part of the committee as ex-officio members, not as full members of the MAC. While we believe it will be essential to have these State-interested parties present for program coordination and information-sharing, we believe the formal representation of the MAC should be comprised of beneficiaries, advocates, community organizations, and providers that serve Medicaid beneficiaries.
We propose to replace paragraph (e) of § 431.12; in paragraph (e) to require that States create a BAG, a dedicated beneficiary advisory group that will meet separately from the MAC. Currently, the requirements governing MCACs require the presence of beneficiaries in committee membership but do little to ensure their contributions are considered or their voices heard. For example, current paragraph (e) describes committee participation and requires the committee “[further] the participation of beneficiary members in the agency program.” This requirement provides little guidance toward this goal and creates an environment where a beneficiary may not feel comfortable participating despite the opportunity being afforded in its technical sense. We believe adding the creation of the BAG will result in providing the State with increased access to the beneficiary perspective. This proposal directly addresses and provides the mechanism (the BAG) through which States can meet the language of section 1902(a)(4)(B) of the Act, which requires a State plan to meaningfully engage Medicaid beneficiaries and other low-income people in the administration of the plan.
As such, the creation of a separate beneficiary-only advisory group aligns with what we learned from multiple interviews with State Medicaid agencies and other Medicaid interested parties (for example, Medicaid researchers, former Medicaid officials) conducted over the course of 2022 on the effective operation of the existing MCACs. Interested parties described the importance of having a comfortable, supportive, and trusting environment that facilitates beneficiaries' ability to speak freely on matters most important to them. It is equally important that the BAG have a subset of its members that also sit on the State's MAC to ensure that the beneficiary perspective and experience are heard directly. We noted earlier that some States may already have highly effective BAG-type groups operating as part of their Medicaid program. These groups may represent specific constituencies such as children with complex medical needs or older adults or may be participants in a specific waiver. In these instances, States may utilize these groups to satisfy the proposed requirements of this rule, provided the BAG-type group membership includes the MAC members described in paragraph (d)(1). Those States must appoint members from the BAG-type group to serve on the MAC to facilitate this crossover.
Specifically, at paragraph (e)(1), we propose that the MAC members described in proposed paragraph (d)(1) must also be members of the BAG. This proposed requirement would facilitate the bi-directional communication essential to effective beneficiary
We propose at subsection (f) an administrative framework for the MAC and BAG to ensure transparency and a meaningful feedback loop to the public and among the members of the committee and group. Interested parties' feedback and recent reports
Specifically, in paragraph (f)(1), we propose to require State agencies to develop and post publicly on their website bylaws for governance of the MAC and BAG, current lists of MAC and BAG memberships, and past meeting minutes for both the committee and group. In paragraph (f)(2), we propose to require State agencies to develop and post publicly a process for MAC and BAG member recruitment and appointment, and for selection of MAC and BAG leadership. In paragraph (f)(3), we propose to require State agencies to develop, publicly post, and implement a regular meeting schedule for the MAC and BAG. The requirement specifies the MAC and BAG must each meet at least once per quarter and hold off-cycle meetings as needed. In paragraph (f)(4), we propose that, at least two MAC meetings per year must be opened to the public. For the MAC meetings that are open to the public, the meeting agenda must include a dedicated time for public comment to be heard by the MAC. Further, the State must also adequately notify the public of the date, location, and time of these type (public) of MAC meetings at least 30 calendar days in advance. None of the BAG meetings are not required to be open to the public, unless the State's BAG members decide otherwise. The same requirements would apply to States whose BAG meetings were determined, by its membership, to be open to the public. We seek comment on this approach.
In paragraph (f)(5), we propose to require that States offer in-person and virtual attendance options to maximize member participation at MAC and BAG meetings. We acknowledge that interested parties may face a range of technological and internet accessibility limitations, and that at a minimum, States will need to provide a telephone dial-in option for MAC and BAG meetings. While we understand that in-person interaction can sometimes assist in building trusted relationships, we also recognize that accommodations for members and the public to participate virtually is important, particularly since the beginning of the COVID-19 pandemic. We invite comment on ways to best strike this balance. We address technical and logistical challenges in paragraph (f)(5) and address effective communication and language access and meeting accessibility in subsequent paragraphs.
With respect to in-person meetings, we propose in paragraph (f)(6) to require that States ensure meeting times and locations for MAC and BAG meetings are selected to maximize participant attendance, which may vary by meeting. For example, States may determine, by consulting with its MAC and BAG members that holding meetings in various locations throughout the State may result in better attendance. In addition, they may ask the committee and group members about which times and weekdays may be more favorable than others and hold meetings at those times accordingly. States must also use the publicly posted meeting minutes, which lists attendance by members, as a way to gauge which meeting times and locations garner maximum participate attendance. Finally, in paragraph (f)(7), we propose to require State agencies to facilitate participation of beneficiaries by ensuring that meetings are accessible to people with disabilities, that reasonable modifications are provided when necessary to ensure access and enable meaningful participation, that communication with individuals with disabilities is as effective as with others, that reasonable steps are taken to provide meaningful access to individuals with Limited English Proficiency, and that meetings comply with the requirements at § 435.905(b) and applicable regulations implementing the ADA, section 504 of the Rehabilitation Act, and section 1557 of the Affordable Care Act at 28 CFR part 35 and 45 CFR parts 84 and 92.
We propose to revise paragraph (g) to detail an expansion of the topics on which the MAC and BAG should provide feedback to the Medicaid agency from the prior MCAC requirements. In researching other States' MACs, we know that some already use the MACs to get feedback from interested parties, including beneficiaries, on a variety of topics relating to the effective and efficient administration of the Medicaid program. The changes we propose aim to strike a balance that reflects some States' current practices without putting strict limitations on specific topics for discussion to all States. Broadening the scope of the topics that the MAC and BAG discuss will benefit the State by giving greater insight into how it is currently delivering care for its beneficiaries and thereby assist in identifying ways to improve the way the Medicaid program is administered.
The State will use this engagement with the MAC and BAG to ensure that the beneficiary and interested parties' voices are considered and to allow the opportunity to adjust course based on the feedback provided by the committee and group members. Topics of discussion are to be based on State need and determined in collaboration with the MAC to address matters related to policy development and matters related to the effective administration of the Medicaid program. These topics could include new policy or program developments; changes to services; coordination of care and quality of
We propose new paragraph (h) to expand on existing State responsibilities for managing the MAC and BAG regarding staff assistance, participation, and financial support. We understand from States and other interested parties, that many States already provide staffing and financial support to their MACs in ways that meet or going beyond what we propose through our updated requirements. We believe that expanding upon the current standards regarding State responsibility for planning and executing the functions of the MAC and BAG will ensure consistent and ongoing standards to further beneficiaries' and interested parties' engagement. For example, we know that when any kind of interested parties group meets, all members of that group need to fully understand the topics being discussed in order to meaningfully engage in that discussion. This is particularly relevant when the topics of discussion are complex or based in specific terminology as Medicaid related issues often can be.
We believe that when States provide their MACs and BAGs with additional staffing support that can explain, provide background materials, and meet with the members in preparation for the larger discussions, the members have a greater chance to provide more meaningful feedback and ensure that members are adequately prepared to engage in these discussions. The proposed changes to the requirements seek to create environments that support meaningful engagement by the members of these groups whose feedback can then be used by States to support the efficient administration of their Medicaid program. We anticipate providing additional guidance on model practices, recruitment strategies, and ways to facilitate beneficiary participation, and we invite comments on effective strategies to ensure meaningful interested parties' engagement that in turn can facilitate full beneficiary participation.
Under the current MCAC regulations in § 431.12(f), each State is required to provide the committee with staff assistance from the agency, independent technical assistance as needed to enable it to make effective recommendations, and financial arrangements, if necessary, to make possible the participation of beneficiary members. The changes we propose include adding requirements regarding recruitment, meeting scheduling, recordkeeping, and support for beneficiary members. The overlap with the current regulation would mean much of the work to implement our proposals, if finalized, would already be occurring.
The proposed requirement for beneficiary support, including financial support, is similar to current requirements, such as using dedicated staff to support beneficiary attendance at both the MAC and BAG meetings and providing financial assistance to facilitate meeting attendance by beneficiary members, as needed. Staff may support beneficiary attendance through outreach to the Medicaid beneficiary MAC and BAG members throughout the membership period to provide information and answer questions; identify barriers and supports needed to facilitate attendance at MAC and BAG meetings; and facilitate access to those supports. We are not proposing changes to existing financial support requirements. However, we are proposing an additional requirement that at least one member of the State agency's executive staff attend all MAC and BAG meetings to provide an opportunity for beneficiaries and representatives of the State's leadership to interact directly.
In the spirit of transparency and to ensure compliance with the updated regulations, we propose new paragraph (i) to require that the MAC, with support from the State and in accordance with the requirements proposed at this section, submit an annual report to the State. The BAG perspective and feedback will be embedded in the report, since the Group is represented on the MAC. The State, in turn, would be required to review the report and include responses to recommendations in the report. Prior to finalizing the report, the State must allow the MAC to perform a final review. Once the MAC completes its final review, the State must publish it by posting it on its website. The proposed requirements of this section seek to both ensure transparency while also facilitating a feedback loop and view into the impact of the committee and group's recommendations. We invite comment on additional ways to ensure that the State can create a feedback loop with the MAC and BAG.
Finally, we propose no changes to, and thus maintain, the current regulatory language on FFP from current paragraph (g) to support committee and group administration, to appear in new paragraph (j) with conforming edits for new committee and group names.
This requirement, if finalized, would be effective 60 days after the effective date of the final rule, which would provide States with 1 year to implement these requirements. We seek comment on whether 1 year is too much or not enough time for States to implement the updates in this regulation in an effective manner. We understand that States may need to modify their current MCACs to reflect the updated requirements and may also need to create the BAG and recruit members to participate, if they do not already have a similar entity already in place.
We are proposing both to amend and add new Federal HCBS requirements to improve access to care, quality of care, and beneficiary health and quality of life outcomes, while consistently meeting the needs of all beneficiaries receiving Medicaid-covered HCBS. This preamble discusses our proposed changes in the context of current law.
We have previously received questions from States with demonstration projects under section 1115 of the Act that include HCBS about the applicability of other HCBS regulatory requirements. As a result, we are identifying that, consistent with the applicability of other HCBS regulatory requirements to such demonstration projects, the proposed requirements for section 1915(c) waiver programs and section 1915(i), (j), and (k) State plan services included in this proposed rule, if finalized, would apply to such services included in approved section 1115 demonstration projects, unless we explicitly waive one or more of the requirements as part of the approval of the demonstration project. We are not proposing to apply the requirements for section 1915(c) waiver programs and section 1915(i), (j), and (k) State plan services in this proposed rule to the Program of All-Inclusive Care of the Elderly (PACE) authorized under sections 1894 and 1934 of the Act, as the existing requirements for PACE either already address or exceed the requirements outlined in this proposed rule, or are substantially different from those for section 1915(c) waiver programs and section 1915(i), (j), and (k) State plan services.
Section 1915(c)(1) of the Act requires that services provided through section 1915(c) waiver programs be provided under a written plan of care (hereinafter referred to as “person-centered service plans” or “service plans”). Existing Federal regulations at § 441.301(c) address the person-centered planning process and include a requirement at § 441.301(c)(3) that the person-centered service plan be reviewed and revised, upon reassessment of functional need, at least every 12 months, when the individual's circumstances or needs change significantly, or at the request of the individual.
In 2014, we released guidance for section 1915(c) waiver programs
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We are proposing a different approach for States to demonstrate that they meet the statutory requirements in section 1915(c) of the Act and the regulatory requirements in part 441, subpart G, including the requirements regarding assurances around service plans. The proposed approach is based on feedback CMS obtained during various public engagement activities conducted with States and other interested parties over the past several years about the reporting discussed in the 2014 guidance, as well as feedback received through the RFI
Under section 1902(a)(19) of the Act, States must provide safeguards to assure that eligibility for Medicaid-covered care and services will be determined and provided in a manner that is consistent with simplicity of administration and that is in the best interest of Medicaid beneficiaries. While the needs of some individuals who receive HCBS may be relatively stable over some time periods, individuals who receive HCBS experience changes in their functional needs and individual circumstances, such as the availability of natural supports or a desire to choose a different provider, that necessitate revisions to the person-centered service plan to remain as independent as possible or to prevent adverse outcomes. The requirements to reassess functional need and to update the person-centered service plan based on the results of the reassessment, when circumstances or needs change significantly, or at the request of the individual are important safeguards that are in the best interest of beneficiaries because they ensure that an individual's section 1915(c) waiver program services change to meet the beneficiary's needs most appropriately as those needs change. Section 2402(a) of the Affordable Care Act (Pub. L. 111-148 and Pub. L. 111-152) requires the Secretary of HHS to ensure that all States receiving Federal funds for HCBS, including Medicaid, develop HCBS systems that are responsive to the needs and choices of beneficiaries receiving HCBS, maximize independence and self-direction, provide support and coordination to facilitate the participant's full engagement in community-life, and achieve a more consistent and coordinated approach to the administration of policies and procedures across public programs providing HCBS.
Effective State implementation of the person-centered planning process is integral to ensuring compliance with section 2402 of the Affordable Care Act. This is because this process is how States identify and document the service needs and choices of people receiving HCBS, plan for delivering individualized services that promote independence and self-direction, effectively coordinate services and supports necessary for community living, and ensure that the services and supports that people receive are responsive to their changing needs and choices. Each component of the person-centered planning process, including the functional assessment, developing and implementing the person-centered service plan, and periodically reassessing and updating of the service plan, are essential to ensuring States' compliance with sections 2402(a)(1) and (2) of the Affordable Care Act.
Since the release of the 2014 guidance, we have received feedback from States, the OIG, ACL, and OCR, and other interested parties on how crucial person-centered planning is in the delivery of care and the significance of the person-centered service plan for the assurance of health and welfare for section 1915(c) waiver program participants. The importance of the person-centered planning process to the assurance of health and welfare is supported by the existing regulatory requirements for section 1915(c) waivers, which indicate, at § 441.301(c)(2)(vi), that person-centered service plans must “reflect risk factors and measures in place to minimize them, including individualized back-up plans and strategies when needed” and, at § 441.301(c)(2)(xiii)(H), that person-centered service plans must “include an assurance that interventions and supports will cause no harm to the individual.” As such, if States fail to conduct the required reassessment and updating of the person-centered service plan, they could increase the risk of harm for beneficiaries by not identifying risk factors and measures to minimize them and by not taking the steps necessary to assure that interventions and supports will not cause harm.
To ensure a more consistent application of person-centered service plan requirements across States and to protect the health and welfare of section 1915(c) waiver participants, we propose under our authority at sections 1915(c)(1) and 1902(a)(19) of the Act and section 2402(a)(1) and (2) of the Affordable Care Act, to codify a minimum performance level to demonstrate that States meet the requirements at § 441.301(c)(3). Specifically, at new § 441.301(c)(3)(ii)(A), we propose to require that States demonstrate that a reassessment of functional need was conducted at least annually for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. We also propose, at new § 441.301(c)(3)(ii)(B), to require that States demonstrate that they reviewed the person-centered service plan and revised the plan as appropriate based on the results of the required reassessment of functional need at least every 12 months for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days.
We considered whether to propose to codify the minimum 86 percent performance level that was outlined in the 2014 guidance, instead of the minimum 90 percent performance level we are now proposing. The minimum 86 percent performance level was intended to provide States with a reasonable threshold for demonstrating compliance with the requirements at § 441.301(c)(3). However, since we released the 2014 guidance, we have heard from many interested parties that a minimum 86 percent performance level may not be sufficient to demonstrate that a State is meeting these requirements. The key concern expressed is that this performance level provides States with more latitude than is necessary to account for unexpected delays in the timeframe for conducting reassessments and updating service plans, as States should assume that some delays are likely and account for them as part of their reassessment and service planning processes. Further, media and anecdotal reports indicate that re-assessment and care planning processes are often delayed without valid reasons, which suggests that beneficiaries may be at risk for preventable harm due to unnecessary delays in person-centered planning processes and that we should establish a more stringent threshold for States to demonstrate compliance with the requirements at § 441.301(c)(3). In response to the feedback we have received since 2014, we are proposing a slight increase to the minimum performance level outlined in the 2014 guidance. This proposed minimum performance level is intended to strengthen person-centered planning requirements based on feedback we have received, while also recognizing that there may be legitimate reasons why assessment and care planning processes occasionally are not completed timely in all instances.
We also considered whether to propose allowing good cause exceptions to the minimum performance level in the event of a natural disaster, public health emergency, or other event that would negatively impact a State's ability to achieve a minimum 90 percent performance level. In the end, we decided not to propose good cause exceptions because the minimum 90 percent performance level is intended to account for various scenarios that might impact a State's ability to achieve these minimum performance levels. Further, there are existing disaster authorities that States could utilize to request a waiver of these requirements in the event of a public health emergency or a disaster. We invite comment on these proposals.
At § 441.301(c)(3), we are also proposing to move the sentence beginning with “The person-centered service plan must be reviewed . . .” to a new paragraph at § 441.301(c)(3)(i) and to reposition the regulatory text under the proposed title,
Section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In the context of Medicaid coverage of HCBS, it should not matter whether the services are covered directly on an FFS basis or by a managed care entity to its enrollees. The requirement for “consistent administration” should require consistency between these two modes of service delivery. Accordingly, we are proposing to specify that a State must ensure compliance with the requirements in § 441.301(c)(3), with respect to HCBS delivered under both FFS and managed care delivery systems. To ensure consistency in person-centered service plan requirements between FFS and managed care delivery systems, we propose to add the requirements at § 441.301(c)(3) to 42 CFR 438.208(c).
We also propose updates to existing language describing the person-centered planning process specific to section 1915(c) waivers. Current language describes the role of an individual's authorized representative as if every waiver participant will require an authorized representative, which is not the case and has been a source of confusion for States and providers. We propose to remove extraneous language from the regulation text at § 441.301(c)(1) to now read: “The individual, or if applicable, the individual and the individual's authorized representative, will lead the person-centered planning process. When the term `individual' is used throughout this section, it includes the individual's authorized representative if applicable. In addition, the person-centered planning process: . . .” This proposed language brings the section 1915(c) waiver regulatory text in line with person-centered planning process language in both the section 1915(j) and (k) State plan options.
We recognize that many States may need time to implement these proposed requirements, including time to amend provider agreements or managed care contracts, make State regulatory or policy changes, implement process or procedural changes, update information systems for data collection and reporting, or conduct other activities to implement these requirements. As a result, we are proposing at § 441.301(c)(3)(iii) to make the performance levels under § 441.301(c)(3)(ii) effective 3 years after the effective date of § 441.301(c)(3) (in other words, 3 years after the effective date of the final rule) in FFS delivery systems. For States with managed care delivery systems under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act that include HCBS in the managed care organization's (MCO), prepaid inpatient health plan's (PIHP), or prepaid ambulatory health plan's (PAHP) contract, we are proposing to provide States until the first managed care plan contract rating period that begins on or after 3 years after the effective date of the final rule to implement these requirements. This time period is based on feedback from States and other interested parties that it could take 2 to 3 years to amend State regulations and work with their State legislatures, if needed, as well as to revise policies, operational processes, information systems, and contracts to support implementation of the proposals outlined in this section. We also considered this proposed timeframe based on all of the HCBS proposals outlined in this proposed rule as whole. We invite comments on whether this timeframe is sufficient, whether we should require a shorter timeframe (2 years) or longer timeframe (4 years) to implement these provisions, and if an alternate timeframe is recommended, the rationale for that alternate timeframe. As noted previously, the proposed requirements at § 441.301(c)(3), in combination with new proposed reporting requirements at § 441.311(b)(3) and other proposed requirements identified throughout this proposed rule, are intended to supersede and fully replace the reporting requirements and the required minimum 86 percent performance level for performance measures described in the 2014 guidance. We expect that States may implement some of the requirements proposed in this proposed rule in advance of the effective date. We will work with States to phase-out the requirements in the 2014 guidance as they implement the future requirements that become part of the final rule to reduce unnecessary burden and to avoid duplicative or conflicting reporting requirements.
As discussed earlier in this section of the preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In accordance with the requirement of section 2402(a)(3)(A) of the Affordable Care Act for States to achieve a more consistent administration of policies and procedures across HCBS programs and because HCBS State plan options have similar person-centered planning and service plan requirements, we are proposing to incorporate these new requirements within the applicable HCBS regulatory sections. Specifically, we propose to apply the proposed requirements at § 441.301(c)(3) to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.450(c), 441.540(c), and 441.725(c), respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements under section 1902(a)(19) of the Act, which authorizes safeguards necessary to assure that eligibility for care and services under the Medicaid program will be determined, and such care and services will be provided, in a manner consistent with the best interest of beneficiaries. We believe the same reasons for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities and are also responsive to feedback we have received from States and interested parties over the years requesting consistency of requirements across HCBS authorities. We request comment on the application of these provisions to section 1915(i), (j), and (k) authorities.
Finally, we considered whether to also apply these proposed requirements to section 1905(a) “medical assistance” State plan personal care, home health, and case management services. However, we are not proposing that these requirements apply to any section 1905(a) State plan services at this time, based on State feedback that States do not have the same data collection and reporting capabilities for these services as they do for other HCBS at section 1915(c), (i), (j), and (k), and because the person-centered planning and service plan requirements for section 1905(a) services are substantially different from those for section 1915(c), (i), (j), and (k) services. Specifically, there are requirements for a “comprehensive assessment and periodic reassessment of individual needs” and “development (and periodic revision) of a specific care plan based on the information collected through the assessment” under § 440.169(d) for the provision of case management services. There are also requirements for a “plan of treatment” (or, at the option of the State, a “service plan”) under § 440.167 for the provision of personal care services. However, §§ 440.169(d) and 440.167 do not include specific timeframes that could be used to establish minimum
As discussed earlier in section II.B.1., of this preamble, section 2402(a) of the Affordable Care Act requires the Secretary of HHS to ensure that all States receiving Federal funds for HCBS, including Medicaid HCBS, develop HCBS systems that are responsive to the needs and choices of beneficiaries receiving HCBS, maximize independence and self-direction, provide support and coordination to assist with a community-supported life, and achieve a more consistent and coordinated approach to the administration of policies and procedures across public programs providing HCBS.
Federal regulations at 42 CFR part 431, subpart E require States to provide Medicaid applicants and beneficiaries with an opportunity for a fair hearing before the State Medicaid agency in certain circumstances, including for a termination, suspension, or reduction of Medicaid eligibility, or for a termination, suspension, or reduction in benefits or services. These fair hearing rights apply to all Medicaid applicants and beneficiaries, including those receiving HCBS regardless of the delivery system. Under 42 CFR part 438, subpart F, Medicaid managed care plans must have in place: an appeal system that allows a Medicaid managed care enrollee to request an appeal, which is a review by the Medicaid managed care plan of an adverse benefit determination issued by the plan; and a grievance system, which allows a Medicaid managed care enrollee to file an expression of dissatisfaction with the plan about any matter other than an adverse benefit determination. Note that if a Medicaid managed care enrollee exhausts the Medicaid managed care plan's appeals process, the enrollee may request a fair hearing before the State Medicaid agency. Medicaid managed care enrollees cannot request a fair hearing for grievances because grievances are not generally related to the direct provision of services. Section 1902(a)(3) of the Act provides for the opportunity for a State fair hearing when a “claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness.” This structure creates a disparity for FFS HCBS beneficiaries, as it does not provide for a venue to raise concerns about issues that HCBS beneficiaries may experience which are not subject to the fair hearing process, such as the failure of a provider to comply with the HCBS settings requirements at § 441.301(c)(4) (note that these are issues for which a managed care enrollee could file a grievance with their plan).
Under our authority at section 1902(a)(19) of the Act and section 2402(a)(3)(B)(ii) of the Affordable Care Act, we propose to require at new § 441.301(c)(7) that States establish grievance procedures for Medicaid beneficiaries receiving section 1915(c) waiver program services through an FFS delivery system. Specifically, we propose at § 441.301(c)(7) that States must establish a procedure under which a beneficiary can file a grievance related to the State's or a provider's compliance with the person-centered planning and service plan requirements at §§ 441.301(c)(1) through (3) and the HCBS settings requirements at §§ 441.301(c)(4) through (6). This proposal is based on feedback obtained during various public engagement activities conducted with interested parties over the past several years about the need for beneficiary grievance processes in section 1915(c) waiver programs related to these requirements. However, to avoid duplication with the grievance requirements at part 438, subpart F, we are not proposing to apply this requirement to establish a grievance procedure to managed care delivery systems. We note, though, that the proposals in this section are similar to requirements for managed care grievance requirements found at part 438, subpart F, with any differences reflecting changes appropriate for FFS systems. The proposed requirements included at § 441.301(c)(7) in this proposed rule are focused specifically on grievance systems and do not establish new fair hearing system requirements, as appeals of adverse eligibility and/or benefit or service determinations are addressed by existing fair hearing requirements at 42 CFR part 431, subpart E. We welcome comments on any additional changes we should consider in this section.
As discussed earlier in this section of the preamble, section 2402(a)(3)(B)(ii) of the Affordable Care Act requires development and monitoring of an HCBS complaint system. In addition, section 2402(a)(3)(A) of the Affordable Care Act requires the Secretary of HHS to ensure that all States receiving Federal funds for HCBS, including Medicaid HCBS, develop HCBS systems that achieve a more consistent and coordinated approach to the administration of policies and procedures across public programs providing HCBS. As such, we believe the requirement for States to establish grievance procedures for Medicaid beneficiaries receiving section 1915(c) waiver program services through a FFS delivery system are necessary to comply with the HCBS complaint system requirements at section 2402(a)(3)(B)(ii) and to ensure consistency in the administration of HCBS between managed care and FFS delivery systems. Further, in the absence of a grievance system requirement for FFS HCBS programs, States may not have established processes and systems for people receiving section 1915(c) waiver program services through FFS delivery
We have specifically focused this requirement on States' and providers' compliance with the person-centered planning and service plan requirements at § 441.301(c)(1) through (3) and the HCBS settings requirements at § 441.301(c)(4) through (6) because of the critical role that person-centered planning and the service plan play in appropriate care delivery for people receiving HCBS. Additionally, we have focused the grievance system requirements on the HCBS settings requirements because of the importance of the HCBS settings requirements to ensuring that HCBS beneficiaries have full access to the benefits of community living and are able to receive services in the most integrated setting appropriate to their needs. Beneficiary advocates and other interested parties have also indicated to us that these are especially important areas for which to ensure that grievance processes are in place for all Medicaid beneficiaries receiving HCBS. Further, focusing the grievance systems requirements on the person-centered planning and service plan requirements at § 441.301(c)(1) through (3) and the HCBS settings requirements at § 441.301(c)(4) through (6) helps to ensure that the proposed grievance requirements do not duplicate or conflict with existing fair hearing requirements at part 431, subpart E, as HCBS settings requirements and person-centered planning requirements are outside the scope of the fair hearing requirements.
At § 441.301(c)(7)(ii)(A), we propose to define “grievance” as an expression of dissatisfaction or complaint related to the State's or a provider's compliance with the person-centered planning and service plan requirements at § 441.301(c)(1) through (3) and the HCBS settings requirements at § 441.301(c)(4) through (6), regardless of whether the beneficiary requests that remedial action be taken to address the area of dissatisfaction or complaint. At § 441.301(a)(7)(ii)(B), we also propose to define “grievance system” as the processes the State implements to handle grievances, as well as the processes to collect and track information about them. To ensure consistency in the administration of HCBS between managed care and FFS delivery systems, we based these definitions on the definitions at part 438, subpart F.
At § 441.301(c)(7)(iii)(A) through (C), we propose new general requirements for States' grievance procedures. Specifically, at § 441.301(c)(7)(iii)(A), we propose to require that a beneficiary or authorized representative be permitted to file a grievance. Under the proposal, another individual or entity may file a grievance on a beneficiary's behalf, so long as the beneficiary or authorized representative provides written consent. Our proposal would not permit a provider to file a grievance that would violate conflict of interest guidelines, which States are required to have in place under § 441.540(a)(5). At § 441.301(c)(7)(iii)(A), we also propose to specify that all references to beneficiary in the regulatory text of this section includes the beneficiary's representative, if applicable.
At § 441.301(c)(7)(iii)(B)(1) through (7), we propose to require States to:
• Have written policies and procedures for their grievance processes that at a minimum meet the requirements of this proposed section and serve as the basis for the State's grievance process;
• Provide beneficiaries with reasonable assistance in completing the forms and procedural steps related to grievances and to ensure that the grievance system is consistent with the availability and accessibility requirements at § 435.905(b);
• Ensure that punitive action is not threatened or taken against an individual filing a grievance;
• Accept grievances, requests for expedited resolution of grievances, and requests for extensions of timeframes from beneficiaries;
• Provide beneficiaries with notices and other information related to the grievance system, including information on their rights under the grievance system and on how to file grievance, and ensure that such information is accessible for individuals with disabilities and individuals who are limited English proficient in accordance with § 435.905(b);
• Review grievance resolutions with which beneficiaries are dissatisfied; and
• Provide information on the grievance system to providers and subcontractors approved to deliver services under section 1915(c) of the Act.
At § 441.301(c)(7)(iii)(C)(1) through (5), we propose to require that the processes for handling grievances must:
• Allow beneficiaries to file a grievance either orally or in writing;
• Acknowledge receipt of each grievance;
• Ensure that decisions on grievances are not made by anyone previously involved in review or decision-making related to the problem or issue for which the beneficiary has filed a grievance or a subordinate of such an individual, are made by individuals with appropriate expertise, and are made by individuals who consider all of the information submitted by the beneficiary related to the grievance;
• Provide beneficiaries with a reasonable opportunity, face-to-face (including through the use of audio or video technology) and in writing, to present evidence and testimony and make legal and factual arguments related to their grievance;
• Provide beneficiaries, free of charge and in advance of resolution timeframes, with their own case files and any new or additional evidence used or generated by the State related to the grievance; and
• Provide beneficiaries, free of charge, with language services, including written translation and interpreter services in accordance with 435.905(b), to support their participation in grievance processes and their use of the grievance system.
At § 441.301(c)(7)(iv)(A), we propose to require that the beneficiary be able to file a grievance at any time. At § 441.301(c)(7)(iv)(B), we propose to require that beneficiaries be permitted to request expedited resolution of a grievance, whenever there is a substantial risk that resolution within standard timeframes will adversely affect the beneficiary's health, safety, or welfare, such as if, for example, a beneficiary cannot access personal care services authorized in the person-centered service plan.
At § 441.301(c)(7)(v), we propose resolution and notification requirements for grievances. Specifically, at § 441.301(c)(7)(v)(A), we propose to require that States resolve and provide notice of resolution related to each grievance as quickly as the beneficiary's health, safety, and welfare requires and within State-established timeframes that do not exceed the standard and expedited timeframes proposed in § 441.301(c)(7)(v)(B). At § 441.301(c)(7)(v)(B)(1), we propose to require that standard resolution of a grievance and notice to affected parties must occur within 90 calendar days of receipt of the grievance. At
At § 441.301(c)(7)(v)(C), we propose that States be permitted to extend the timeframes for the standard resolution and expedited resolution of grievances by up to 14 calendar days if the beneficiary requests the extension, or the State documents that there is need for additional information and how the delay is in the beneficiary's interest. At § 441.301(c)(7)(v)(D), we propose to require that States make reasonable efforts to give the beneficiary prompt oral notice of the delay, give the beneficiary written notice, within 2 calendar days of determining a need for a delay but no later than the timeframes in paragraph (c)(7)(v)(B), of the reason for the decision to extend the timeframe, and resolve the grievance as expeditiously as the beneficiary's health condition requires and no later than the date the extension expires, if the State extends the timeframe for a standard resolution or an expedited resolution.
We note that the proposed requirements at § 441.301(c)(7)(iv)(B) that beneficiaries be permitted to request expedited resolution of a grievance and at § 441.301(c)(7)(v)(B)(2) related to the timeframe for expedited resolution of a grievance and notice differ from the current grievance system requirements for Medicaid managed care plans at part 438, subpart F, which do not include specific requirements for an expedited resolution of a grievance. We invite comment on whether part 438, subpart F should be amended to include the proposed requirements at § 441.301(c)(7)(iv)(B) and at § 441.301(c)(7)(v)(B)(
Proposed § 441.301(c)(7)(vi) describes proposed requirements related to the notice of resolution for beneficiaries. Specifically, at § 441.301(c)(7)(vi)(A), we propose to require that States establish a method for written notice to beneficiaries and that the method meet the availability and accessibility requirements at § 435.905(b). At § 441.301(c)(7)(vi)(B), we propose to require that States make reasonable efforts to provide oral notice of resolution for expedited resolutions.
Proposed § 441.301(c)(7)(vii) lists proposed recordkeeping requirements related to grievances. Specifically, at § 441.301(c)(7)(vii)(A), we propose to require that States maintain records of grievances and review the information as part of their ongoing monitoring procedures. At § 441.301(c)(7)(vii)(B)(
We recognize that many States may need time to implement these requirements, including to amend provider agreements, make State regulatory or policy changes, implement process or procedural changes, update information systems for data collection and reporting, or conduct other activities to implement these requirements. However, we also recognize that the absence of a grievance system in FFS HCBS systems poses a substantial risk of harm to beneficiaries. As a result, we are proposing at § 441.301(c)(7)(viii) that the requirement at § 441.301(c)(7) be effective 2 years after the effective date of the final rule. A 2-year time period after the effective date of the final rule for States to implement these requirements reflects our attempt to balance two competing challenges: (1) the fact that there is a gap in existing regulations for FFS HCBS grievance processes related to important HCBS beneficiary protection issues involving person-centered planning and HCBS settings requirements; and (2) feedback from States and other interested parties that it could take 1 to 2 years to amend State regulations and work with their State legislatures, if needed, as well as to revise policies, operational processes, information systems, and contracts to support implementation of the proposals outlined in this section. We also considered all of the HCBS proposals outlined in this proposed rule as whole. We invite comments on overall burden for States to meet the requirements of this section, whether this timeframe is sufficient, whether we should require a shorter timeframe (1 year to 18 months) or longer timeframe (3 to 4 years) to implement these provisions, and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
As discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In accordance with the requirement of section 2402(a)(3)(A) of the Affordable Care Act for States to achieve a more consistent administration of policies and procedures across HCBS programs and because HCBS State plan options also must comply with the HCBS Settings Rule and with similar person-centered planning and service plan requirements, we are proposing to incorporate these grievance requirements within the applicable regulatory sections. Specifically, we propose to apply these proposed requirements in § 441.301(c)(7) to sections 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.464(d)(2)(v), 441.555(b)(2)(iv), and 441.745(a)(1)(iii), respectively.
Consistent with our proposal for section 1915(c) waivers, we propose to apply the proposed grievance requirements in § 441.301(c)(7) to sections 1915(j), (k), and (i) State plan services based on our authority under section 1902(a)(19) of the Act to assure that there are safeguards for beneficiaries and our authority at section 2402(a)(3)(B)(ii) of the Affordable Care Act to require a complaint system for beneficiaries. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable to these other HCBS authorities. We request comment on the application of the grievance system provisions to section 1915(i), (j), and (k) authorities. We note that in the language added to § 441.464(d)(2)(v), we identify that the proposed grievance requirements apply when self-directed personal assistance services authorized under section 1915(j) include services under a section 1915(c) waiver program. As described later in this section of this proposed rule, we have not proposed to apply these requirements to section 1905(a) services; section 1905(a) personal care services are the other service authorized under section 1915(j) authorities to be self-directed.
We considered whether to also apply the proposed requirements to section 1905(a) “medical assistance” State plan personal care, home health, and case management services. However, we are not proposing that these requirements apply to any section 1905(a) State plan services because section 1905(a) services are not required to comply with HCBS settings requirements and because the person-centered planning and service plan requirements for most section 1905(a) services are substantially different from those for section 1915(c), (i), (j), and (k) services. Further, the vast majority of HCBS is delivered under section 1915(c), (i), (j), and (k) authorities, while only a small percentage of HCBS nationally is delivered under section 1905(a) State plan authorities. We request comment on whether we should establish grievance requirements for section 1905(a) State plan personal care, home health, and case management services.
Section 1902(a)(19) of the Act requires States to provide safeguards as may be necessary to assure that eligibility for care and services will be determined, and that “such care and services will be provided,” in a manner consistent with simplicity of administration and “the best interests of the recipients.” Section 1915(c)(2)(A) of the Act and current Federal regulations at § 441.302(a) require that States have in place necessary safeguards to protect the health and welfare of individuals receiving section 1915(c) waiver program services. Further, as discussed previously in section II.B.1. of this preamble, section 2402(a) of the Affordable Care Act requires the Secretary of HHS to ensure that all States receiving Federal funds for HCBS, including Medicaid, develop HCBS systems that are responsive to the needs and choices of beneficiaries receiving HCBS, maximize independence and self-direction, provide support and coordination to assist with a community-supported life, and achieve a more consistent and coordinated approach to the administration of policies and procedures across public programs providing HCBS.
As noted earlier in section II.B.1. of this preamble we released guidance for section 1915(c) waiver programs in 2014 which noted that States should report on State-developed performance measures to demonstrate that they meet six assurances, including a Health and Welfare assurance for States to demonstrate that they have designed and implemented an effective system for assuring waiver participant health and welfare. Specifically, the 2014 guidance highlighted, related to the Health and Welfare assurance, the following:
• The State demonstrates on an ongoing basis that it identifies, addresses, and seeks to prevent instances of abuse, neglect, exploitation, and unexplained death;
• The State demonstrates that an incident management system is in place that effectively resolves incidents and prevents further similar incidents to the extent possible;
• The State policies and procedures for the use or prohibition of restrictive interventions (including restraints and seclusion) are followed;
• The State establishes overall health care standards and monitors those standards based on the responsibility of the service provider as stated in the approved waiver.
Consistent with the expectations for other performance measures, the 2014 guidance noted that States should conduct systemic remediation and implement a Quality Improvement Project when they score below 86 percent on any of their Health and Welfare performance measures.
Despite States implementing these statutory and regulatory requirements to protect the health and welfare of individuals receiving section 1915(c) waiver program services, and States' adherence to related subregulatory guidance, there have been notable and high-profile instances of abuse and neglect in recent years that highlight the risks associated with poor quality care and with inadequate oversight of HCBS in Medicaid. For example, a 2018 report, “Ensuring Beneficiary Health and Safety in Group Homes Through State Implementation of Comprehensive Compliance Oversight,”
In addition, in 2016 and 2017, OIG released several reports on their review of States' compliance with Federal and State requirements regarding critical incident reporting and monitoring.
• Critical incidents were not reported correctly;
• Adequate training to identify appropriate action steps for reported critical incidents or reports of abuse or neglect was not provided to State staff;
• Appropriate data sets to trend and track critical incidents were not accessible to State staff; and
• Critical incidents were not clearly defined, making it difficult to identify potential abuse or neglect.
In 2016, we conducted three State audits based at least in part on concerns regarding health and welfare and media coverage on abuse, neglect, or exploitation issues.
In January 2018, the United States Government Accountability Office (GAO) released a report on a study of 48 States that covered assisted living services.
In July 2019, we issued a survey to States that operate section 1915(c) waivers, requesting information on their approach to administering incident management systems. The goal of the survey was to obtain a comprehensive understanding of how States organize their incident management system to best respond to, resolve, monitor, and prevent critical incidents in their waiver programs. The survey found that:
• Definitions of critical incidents vary across States and, in some cases, within States for different HCBS programs or populations;
• Some States do not use standardized forms for reporting incidents, thereby impeding the consistent collection of information on critical incidents;
• Some States do not have electronic incident management systems, and, among those that do, many use systems with outdated electronic platforms that are not linked with other State systems, leading to the systems operating in silos and the need to consolidate information across disparate systems; and
• Many States cited the lack of communication within and across State agencies, including with investigative agencies, as a barrier to incident resolution.
Additionally, during various public engagement activities conducted with interested parties over the past several years, we have heard that ensuring access to HCBS requires that we must first ensure health and safety systems are in place across all States, a theme underscored by the Joint Report.
Based on these findings and reports, under the authorities at sections 1902(a)(19) and 1915(c)(2)(A) of the Act and section 2402(a)(3)(B)(ii) of the Affordable Care Act, we propose a new requirement at § 441.302(a)(6) to require that States provide an assurance that they operate and maintain an incident management system that identifies, reports, triages, investigates, resolves, tracks, and trends critical incidents. This proposal is intended to ensure standardized requirements for States regarding incidents that harm or place a beneficiary at risk of harm and is based on our experience working with States as part of the section 1915(c) waiver program and informed by the incident management survey described previously in this section of the proposed rule. In the absence of an incident management system, people receiving section 1915(c) waiver program services are at risk of preventable or intentional harm. As such, we believe that such a system to identify and address incidents of abuse, neglect, exploitation, or other harm during the course of service delivery is in the best interest of and necessary for protecting the health and welfare of individuals receiving section 1915(c) waiver program services.
At § 441.302(a)(6)(i)(A) through (G), we propose new requirements for States' incident management systems. Specifically, at § 441.302(a)(6)(i)(A), we propose to establish a minimum standard definition of a critical incident to include, at a minimum, verbal, physical, sexual, psychological, or emotional abuse; neglect; exploitation including financial exploitation; misuse or unauthorized use of restrictive interventions or seclusion; a medication error resulting in a telephone call to or a consultation with a poison control center, an emergency department visit, an urgent care visit, a hospitalization, or death; or an unexplained or unanticipated death, including but not limited to a death caused by abuse or neglect. Currently, there is no standardized Federal definition for the type of events or instances that States should consider a critical incident that must be reported by a provider to the State and considered for an investigation by the State to assess whether the incident was the result of abuse, neglect, or exploitation, and whether it could have been prevented. The proposed definition at § 441.302(a)(6)(i)(A) is based on internal analyses of data and information obtained through a CMS survey of States' incident management systems, commonalities across definitions, and common gaps in States' definitions of critical incidents (for instance, that many States do not consider sexual assault to be a critical incident). We request comment on whether there are specific types of events or instances of serious harm to section 1915(c) waiver participants, such as identity theft or fraud, that would not be captured by the proposed definition and that should be included, and whether the inclusion of any specific types of events or instances of harm in the proposed definition would lead to the overidentification of critical incidents.
At § 441.302(a)(6)(i)(B), we propose to require that States have electronic critical incident systems that, at a minimum, enable electronic collection, tracking (including of the status and resolution of investigations), and trending of data on critical incidents. We request comment on the burden associated with requiring States to have electronic critical incident systems and whether there is specific functionality, such as unique identifiers, that should be required or encouraged for such systems. Although we are not proposing to require States to do so, States are also encouraged to advance the interoperable exchange of HCBS data and support quality improvement activities by adopting standards in 45 CFR, part 170 and other relevant standards identified in the Interoperability Standards Advisory (ISA).
At § 441.302(a)(6)(i)(C), we propose to require States to require providers to report to States any critical incidents that occur during the delivery of section 1915(c) waiver program services as specified in a waiver participant's person-centered service plan, or any critical incidents that are a result of the
At § 441.302(a)(6)(i)(D), we propose to require that States use claims data, Medicaid Fraud Control Unit data, and data from other State agencies such as Adult Protective Services or Child Protective Services to the extent permissible under applicable State law to identify critical incidents that are unreported by providers and occur during the delivery of section 1915(c) waiver program services, or as a result of the failure to deliver authorized services. We believe that such data can play an important role in identifying serious instances of harm to waiver program participants, which may be unreported by a provider, such as a death that occurs as a result of choking of an individual with a developmental disability residing in a group home, or a burn that occurs because a provider failed to appropriately supervise someone with dementia and that results in an emergency department visit. We request comment on whether States should be required to use these data sources to identify unreported critical instances, and whether there are other specific data sources that States should be required to use to identify unreported critical incidents.
At § 441.302(a)(6)(i)(E), we propose to require that States share information, consistent with the regulations in 42 CFR part 431, subpart F, on the status and resolution of investigations. We expect this data sharing could be accomplished through the use of information sharing agreements, with other entities in the State responsible for investigating critical incidents, if the State refers critical incidents to other entities for investigation. We also propose, at § 441.302(a)(6)(i)(F), to require States to separately investigate critical incidents if the investigative agency fails to report the resolution of an investigation within State-specified timeframes. These proposed requirements are intended to ensure that the failure to effectively share information between State agencies or other entities in the State responsible for investigating incidents does not impede a State's ability to effectively identify, report, triage, investigate, resolve, track, and trend critical incidents, particularly where there could be evidence of serious harm or a pattern of harm to a section 1915(c) waiver program participant for which a provider is responsible.
As noted in section II.B.1. of this proposed rule, in 2014, we released guidance for section 1915(c) waiver programs in which we indicated that States should report on State-developed performance measures across several domains, including to demonstrate that the State designed and implemented an effective system for assuring waiver participant health and welfare. Specifically, the 2014 guidance noted that States should demonstrate: on an ongoing basis that they identify, address, and seek to prevent instances of abuse, neglect, exploitation, and unexplained death; that an incident management system is in place that effectively resolves those incidents and prevents further similar incidents to the extent possible; State policies and procedures for the use or prohibition of restrictive interventions (including restraints and seclusion) are followed; and overall health care standards are established and monitored. The 2014 guidance also indicated that States should conduct systemic remediation and implement a Quality Improvement Project when they score below 86 percent on any of their performance measures.
Section 1902(a)(6) of the Act requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. Under our authority at section 1902(a)(6) of the Act, we propose to modernize the health and welfare reporting by requiring all States to report on the same Federally prescribed quality measures as opposed to the State-developed measures, which naturally vary State by State. Specifically, at new § 441.302(a)(6)(i)(G), we propose to require that States meet the reporting requirements at § 441.311(b)(1) related to the performance of their incident management systems. We discuss these reporting requirements in our discussion of proposed § 441.311(b)(1). Further, under our authority at sections 1915(c)(2)(A) and 1902(a)(19) of the Act, we propose to codify a minimum performance level to demonstrate that States meet the requirements at § 441.302(a)(6). Specifically, at new § 441.302(a)(6)(ii)(A) through (C), we propose to require that States demonstrate that an investigation was initiated, within State-specified timeframes, for no less than 90 percent of critical incidents; an investigation was completed and the resolution of the investigation was determined, within State-specified timeframes, for no less than 90 percent of critical incidents; and corrective action was completed, within State-specified timeframes, for no less than 90 percent of critical incidents that require corrective action.
While we expect States to meet State-specified timeframes for initiating investigations, completing investigations and determining resolution, and completing corrective action plans for all critical incidents, we are proposing to establish a minimum 90 percent performance level in each of these areas in recognition of the various scenarios that may impact a State's ability to meet these timeframes for each critical incident (for example, some critical incidents may require more complex investigations than others, an illness may delay the interview of an important witness to the incident).
We considered whether to codify the minimum 86 percent performance level that was established in the 2014 guidance, instead of the minimum 90 percent performance level we have proposed. The minimum 86 percent performance level was intended to provide States with a reasonable threshold for demonstrating compliance with the requirements at § 441.302(a)(6). However, we have conducted extensive oversight and received significant feedback from external parties since we released the 2014 guidance. Our findings from the oversight and feedback have led us to conclude that the minimum 86 percent performance level may not be sufficient to demonstrate a State is meeting these requirements because it provides States with more latitude than is necessary to account for unexpected delays in the timeframes for investigating and addressing critical incidents. Further, findings from our 2016 audits and 2019 survey, feedback from States, OIG, ACL, OCR, and other interested parties, and media and anecdotal reports document the harm that beneficiaries can experience when States fail to investigate and address critical incidents and indicate that we should establish a more stringent threshold for States to demonstrate compliance with the requirements at § 441.302(a)(6). As a result, we are proposing an increase to the minimum performance level in the 2014 guidance. This proposed minimum performance level is intended to
We also considered whether to propose allowing good cause exceptions to the minimum performance level in the event of a natural disaster, public health emergency, or other event that would negatively impact a State's ability to achieve a minimum 90 percent performance level. In the end, we are not proposing good cause exceptions because the minimum 90 percent performance level is intended to account for various scenarios that might impact a State's ability to achieve these performance levels. Further, as noted earlier with the person-centered service plan requirements in section II.B.1. of this preamble, there are existing disaster authorities that States could utilize to request a waiver of these requirements in the event of a public health emergency or a disaster.
At § 441.302(a)(6)(iii), we propose to apply these requirements to services delivered under FFS or managed care delivery systems. As discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In the context of Medicaid coverage of HCBS, it should not matter whether the services are covered directly on a FFS basis or by a managed care entity to its enrollees. The requirement for “consistent administration” should require consistency between these two modes of service delivery. We accordingly are proposing to identify that a State must ensure compliance with the requirements in § 441.302(a)(6) with respect to HCBS delivered both under FFS and managed care delivery systems.
As noted throughout the HCBS proposals in this rule, we recognize that many States may need time to implement these requirements, including to amend provider agreements or managed care contracts, make State regulatory or policy changes, implement process or procedural changes, update information systems for data collection and reporting, or conduct other activities to implement these requirements. As a result, we are proposing at § 441.302(a)(6)(iii) to provide States with 3 years to implement these requirements in FFS delivery systems following effective date of the final rule. For States with managed care delivery systems under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or PAHP's contract, we are proposing to provide States until the first managed care plan contract rating period that begins on or after 3 years after the effective date of the final rule to implement these requirements. This time period is based on feedback from States and other interested parties that it could take 2 to 3 years to amend State regulations and work with their State legislatures, if needed, as well as to revise policies, operational processes, information systems, and contracts to support implementation of the proposals outlined in this section. We also considered all of the HCBS proposals outlined in proposed rule as whole. We invite comments on whether this timeframe is sufficient, whether we should require a shorter timeframe (2 years) or longer timeframe (4 years) to implement these provisions, and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
Again, the proposed requirements at §§ 441.302(a)(6)(iii) and 441.311(b)(1), in combination with other proposed requirements identified throughout this proposed rule, are intended to supersede and fully replace the reporting expectations and the minimum 86 percent performance level for State's performance measures described in the 2014 guidance. We expect that States may implement some of the requirements proposed in this proposed rule in advance of the effective date. To reduce unnecessary burden and to avoid duplicative or conflicting reporting requirements, we will work with States to phase-out the 2014 guidance as they implement these proposed requirements should a final rule be adopted.
Additionally, as discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In accordance with the requirement of section 2402(a)(3)(A) of the Affordable Care Act for States to achieve a more consistent administration of policies and procedures across HCBS programs and because of the importance of assuring health and welfare for other HCBS State plan options, we are proposing to incorporate these incident management requirements within the applicable regulatory sections. Specifically, we propose to apply the proposed requirements § 441.302(a)(6) to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.570(e), 441.464(e), and 441.745(a)(1)(v), respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements based on our authority under section 1902(a)(19) of the Act to assure that there are safeguards for beneficiaries. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities. We request comment on the application of these provisions across section 1915(i), (j), and (k) authorities. To accommodate the addition of new language at § 441.464(e) and (f) (discussed later in section II.B.5. of this proposed rule), we are proposing to renumber existing § 441.464(e) as § 441.464(g) and existing § 441.464(f) as § 441.464(h).
Finally, we considered whether to also apply the proposed incident management system and critical incident reporting and performance threshold requirements to section 1905(a) “medical assistance” State plan personal care, home health, and case management services. However, we are not proposing that these requirements apply to any section 1905(a) State plan services based on State feedback that they do not have the same data collection and reporting capabilities in place for section 1905(a) services as they do for section 1915(c), (i), (j), and (k) services. Further, the vast majority of HCBS is delivered under section 1915(c), (i), (j), and (k) authorities, while only a small percentage of HCBS nationally is delivered under section 1905(a) State plan authorities. We request comment on whether we should establish similar health and welfare requirements for section 1905(a) State plan personal care, home health, and case management services.
Proposed § 441.311, described in section II.B.7. of this proposed rule, establishes a new
To avoid duplicative or conflicting reporting requirements at § 441.302(h), we propose to amend § 441.302(h) by removing the following language: “annually”; “The information must be consistent with a data collection plan designed by CMS and must address the waiver's impact on -”; and by removing paragraphs (1) and (2) under § 441.302(h). Further, we propose to add “, including the data and information as required in § 441.311” at the end of the new amended text, “Assurance that the agency will provide CMS with information on the waiver's impact.” By making these changes, we are consolidating reporting expectations in one new section at proposed § 441.311, described in section II.B.7. of this proposed rule, under our authority at section 1902(a)(6) of the Act and section 2402(a)(3)(A) of the Affordable Care Act. As noted earlier in section II.B.1. of this proposed rule, this reporting will supersede existing reporting for section 1915(c) waivers and standardize reporting across section 1915 HCBS authorities.
Section 1902(a)(30)(A) of the Act requires State Medicaid programs to ensure that payments to providers are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available to beneficiaries at least to the extent as to the general population in the same geographic area. Access to most HCBS generally requires hands-on and in-person services to be delivered by direct care workers. Direct care workers are referred to by various names, such as direct support professionals, personal care attendants, and home health aides, within and across States. They perform a variety of roles, including nursing services, assistance with activities of daily living (such as mobility, personal hygiene, eating) and instrumental activities of daily living (such as cooking, grocery shopping, managing finances), behavioral supports, employment supports, and other services to promote community integration for older adults and people with disabilities. We discuss the definition of direct care workers in more detail below in the context of our proposed definition of direct care workers.
Direct care workers typically earn low wages and receive limited benefits,
Shortages of direct care workers and high rates of turnover also reduce the quality of HCBS. For instance, workforce shortages can prevent individuals from receiving needed services and, in turn, lead to poorer outcomes for people who need HCBS. Insufficient staffing can also make it difficult for providers to achieve quality standards.
While workforce shortages have existed for years, the COVID-19 pandemic has exacerbated the problem, leading to higher rates of direct care worker turnover (for instance, due to higher rates of worker-reported stress), an inability of some direct care workers to return to their positions prior to the pandemic (for instance, due to difficulty accessing child care or concerns about contracting COVID-19 for people with higher risk of severe illness), workforce shortages across the health care sector, and wage increases in retail and other jobs that tend to draw from the same pool of workers as some
Consistent with section 1902(a)(30)(A) of the Act and sections 2402(a)(1) and 2402(a)(3)(B)(iii) of the Affordable Care Act, we propose to require that State Medicaid agencies demonstrate that payment rates for certain HCBS authorized under section 1915(c) of the Act are sufficient to ensure a sufficient direct care workforce (defined and explained later in this section of the proposed rule) to meet the needs of beneficiaries and provide access to services in accordance with the amount, duration, and scope specified in the person-centered service plan, as required under § 441.301(c)(2). We believe that this proposal supports the economy, efficiency, and quality of HCBS authorized under section 1915(c) of the Act, by ensuring that a sufficient portion of State FFS and managed care payments for HCBS go directly to compensation of the direct care workforce. While many States have already voluntarily established such minimums for payments authorized under section 1915(c) of the Act,
This proposal is designed to affect the inextricable link between sufficient payments being received by the direct care workforce and access to and, ultimately, the quality of HCBS received by Medicaid beneficiaries. We believe that this proposal would not only benefit direct care workers but also individuals receiving Medicaid HCBS because supporting and stabilizing the direct care workforce will result in better qualified employees, lower turnover, and a higher quality of care. The direct care workforce must be able to attract and retain qualified workers in order for beneficiaries to access providers of the services they have been assessed to need and for the direct care workforce to be comprised of workers with the training, expertise, and experience to meet the diverse and often complex HCBS needs of individuals with disabilities and older adults. Without access to a sufficient pool of direct care providers, individuals are forced to forgo having their needs met or addressed by workers without sufficient training, expertise, or experience to meet their unique needs, both of which could lead to worsening health and quality of life outcomes, loss of independence, and institutionalization.
This proposal is based on feedback from States that have implemented similar requirements for payments for certain HCBS under section 9817 of the ARP
We considered whether the proposed requirements at § 441.302(k)(3)(i) related to the percent of payments going to the direct care workforce should apply to other services, such as adult day health, habilitation, day treatment or other partial hospitalization services, psychosocial rehabilitation services, and clinic services for individuals with chronic mental illness. However, these services may have facility or other indirect costs for which we do not have adequate information to determine a minimum percent of the payment that should be spent on compensation for the direct care workforce. We request comment on whether the proposed requirements at § 441.302(k)(3)(i) related to the percent of payments going to the direct care workforce should apply to other services listed at § 440.180(b). In particular, in recognition of the importance of services provided to individuals with intellectual or developmental disabilities, we request comment on whether the proposed requirements at § 441.302(k)(3)(i) related to the percent of payments going to the direct care workforce should apply to residential habilitation services, day habilitation services, and home-based habilitation services.
We also request comment on the following options for the minimum percentage of payments that must be spent on compensation to direct care workers for each specific service that this provision should apply if this provision should apply to other services at § 440.180(b): (1) 65 percent; (2) 70 percent; (3) 75 percent; and (4) 80 percent. Specifically, we request that commenters respond separately on the minimum percentage of payments for services delivered in a non-residential community-based facility, day center, senior center, or other dedicated physical space, which would be expected to have higher other indirect costs and facility costs built into the Medicaid payment rate than other HCBS. If an alternate minimum percentage is recommended, we request that commenters provide the rationale for that minimum percentage.
We further clarify that we are requesting comment on a different range of options for the other services at § 440.180(b) than for the services at § 440.180(b)(2) through (4) because we expect that some of the other services at § 440.180(b), such as adult day health and day habilitation services, may have higher other indirect costs and facility costs than the services at § 440.180(b)(2) through (4). We also request that commenters respond separately on the minimum percentage of payments for facility-based residential services and other facility-based round-the-clock services that have other indirect costs and facility costs that would be paid for at least in part by room and board payments that Medicaid does not cover. If a minimum percentage is recommended for any services, we request that commenters provide the rationale for that minimum percentage.
At § 441.302(k)(1)(i), we propose to define compensation to include salary, wages, and other remuneration as defined by the Fair Labor Standards Act and implementing regulations (29 U.S.C. 201
At § 441.302(k)(1)(ii), we propose to define direct care workers to include workers who provide nursing services, assist with activities of daily living (such as mobility, personal hygiene, eating) or instrumental activities of daily living (such as cooking, grocery shopping, managing finances), and provide behavioral supports, employment supports, or other services to promote community integration. Specifically, we propose to define direct care workers to include nurses (registered nurses, licensed practical nurses, nurse practitioners, or clinical nurse specialists) who provide nursing services to Medicaid-eligible individuals receiving HCBS, licensed or certified nursing assistants, direct support professionals, personal care attendants, home health aides, and other individuals who are paid to directly provide services to Medicaid beneficiaries receiving HCBS to address activities of daily living or instrumental activities of daily living, behavioral supports, employment supports, or other services to promote community integration. We further identify that our definition of direct care worker is intended to exclude nurses in supervisory or administrative roles who are not directly providing nursing services to people receiving HCBS.
Our definition of direct care worker is intended to broadly define such workers to ensure that the definition appropriately captures the diversity of roles and titles that direct care workers may have. We included workers with professional degrees, such as nurses, in our proposed definition because of the
Section 1902(a)(6) of the Act requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. At § 441.302(k)(2), under our authority at section 1902(a)(6) of the Act, we propose to require that States demonstrate that they meet the minimum performance level at § 441.302(k)(3)(i) through new Federal reporting requirements at § 441.311(e). We discuss these reporting requirements in our discussion of proposed § 441.311(e).
At § 441.302(k)(4), we propose to apply these requirements to services delivered under FFS or managed care delivery systems. As discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In the context of Medicaid coverage of HCBS, it should not matter whether the services are covered directly on a FFS basis or by a managed care entity to its enrollees. The requirement for “consistent administration” should require consistency between these two modes of service delivery. We accordingly are proposing to specify that a State must ensure compliance with the requirements in § 441.302(k) with respect to HCBS delivered both under FFS and managed care delivery systems.
Similarly, because workforce shortages exist under other HCBS authorities, which include many of the same types of services to address activities of daily living or instrumental activities of daily living as under section 1915(c) waiver authority, we are proposing to incorporate these requirements within the applicable regulatory sections. Specifically, we propose to apply the proposed requirements at § 441.302(k) to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.464(f), 441.570(f), and 441.745(a)(1)(vi), respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements based on our authority under section 1902(a)(30)(A) of the Act to ensure payments to HCBS providers are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available to beneficiaries at least to the extent as to the general population in the same geographic area. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities. We request comment on the application of payment adequacy provisions across section 1915(i), (j), and (k) authorities. As noted earlier in section II.B.4. of this proposed rule, to accommodate the addition of new language at §§ 441.464(e) and 441.464(f), we are proposing to renumber existing § 441.464(e) as § 441.464(g) and existing § 441.464(f) as § 441.464(h). We request comment on whether we should exempt, from these requirements, services delivered using any self-directed service delivery model under any Medicaid authority.
We considered whether to also apply these proposed payment adequacy requirements to section 1905(a) “medical assistance” State plan personal care and home health services. However, we are not proposing that these requirements apply to any 1905(a) State plan services based on State feedback that they do not have the same data collection and reporting capabilities in place for section 1905(a) services as they do for section 1915(c), (i), (j), waiver programs and section 1915(i), (j), and (k) services. Further, the vast majority of HCBS is delivered under section 1915(c), (i), (j), and (k) authorities, while only a small percentage of HCBS nationally is delivered under section 1905(a) State plan authorities. We request comment on whether we should apply these requirements to section 1905(a) State plan personal care and home health services.
As noted throughout the HCBS provisions in this preamble, we recognize that many States may need time to implement these requirements, including to amend provider agreements or managed care contracts, make State regulatory or policy changes, implement process or procedural changes, update information systems for data collection and reporting, or conduct other activities to implement these proposed payment adequacy requirements. We expect that these activities will take longer than similar activities for other HCBS provisions in this proposed rule. Further, we expect that it will take a substantial amount of time for managed care plans and providers to establish the necessary systems, data collection tools, and processes necessary to collect the required information to report to States. As a result, we are proposing at § 441.302(k)(4), to provide States with 4 years to implement these requirements in FFS delivery systems following effective date of the final rule. For States with managed care delivery systems under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or PAHP's contract, we are proposing to provide States until the first managed care plan contract rating period that begins on or after 4 years after the effective date of the final rule to implement these requirements. Similar to our rationale in other sections, this proposed timeline reflects feedback from States and other interested parties that it could take 3 to 4 years for States to complete any necessary work to amend State regulations and work with their State legislatures, if needed, as well as to revise policies, operational processes, information systems, and contracts to support implementation of the proposals outlined in this section. We also considered the overall burden of the proposed rule as whole in proposing the effective date for the payment adequacy provision. We invite comments on the overall burden associated with implementing this section, whether this timeframe is sufficient, whether we should require a shorter timeframe (such as 3 years) or longer timeframe (such as 5 years) to implement the payment adequacy provisions and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
As described in section II.B.7 of this proposed rule, discussing newly proposed reporting requirements, States vary in whether they maintain waiting lists for section 1915(c) waivers, and if a waiting list is maintained, how individuals may join the waiting list. Section 1915(c) of the Act authorizes States to set enrollment limits or caps on the number of individuals served in a waiver, and many States maintain waiting lists of individuals interested in receiving waiver services once a spot becomes available. While some States require individuals to first be determined eligible for waiver services to join the waiting list, other States permit individuals to join a waiting list after an expression of interest in receiving waiver services. This can overestimate the number of people who need Medicaid-covered HCBS because the waiting lists may include individuals who are not eligible for services. According to the Kaiser Family Foundation, over half of people on HCBS waiting lists live in States that do not screen people on waiting lists for eligibility.
We have not previously required States to submit any information on the existence or composition of waiting lists, which has led to gaps in information on the accessibility of HCBS within and across States. Further, feedback obtained during various public engagement activities conducted with States and other interested parties over the past several years about reporting requirements for HCBS, as well as feedback received through the RFI
Section 1902(a)(6) of the Act requires State Medicaid agencies to make such reports, in such form and containing such information as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. Based on the authority found at section 1902(a)(6) of the Act, we now propose to require information from States on waiting lists to improve public transparency and processes related to States' HCBS waiting lists and ensure that we are able to adequately oversee and monitor States' use of waiting lists in their section 1915(c) waiver programs. To address new proposed requirements at § 441.311(d)(1), described in the next section of the preamble, on State reporting on waiting lists, we propose to amend § 441.303(f)(6) by adding the following sentence to the end of the existing regulatory text: If the State has a limit on the size of the waiver program and maintains a list of individuals who are waiting to enroll in the waiver program, the State must meet the reporting requirements at § 441.311(d)(1).”
Section 1902(a)(6) of the Act requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. As discussed in section II.B.1. of this proposed rule, in 2014, we released guidance for section 1915(c) waiver programs in which we requested States to report on State-developed performance measures across several domains, as part of an overarching HCBS waiver quality strategy. The 2014 guidance established an expectation that States conduct systemic remediation and implement a Quality Improvement Project when they score below 86 percent on any of their performance measures. Under our authority at section 1902(a)(6) of the Act, we are proposing requirements at § 441.311, in combination with other proposed requirements identified throughout this proposed rule, to supersede and fully replace the reporting metrics and the minimum 86 percent performance level expectations for States' performance measures described in the 2014 guidance. We describe the basis and scope of this section in paragraph (a).
The reporting requirements proposed in this proposed rule represent consolidated feedback from States, consumer advocates, managed care plans, providers, and other HCBS interested parties on improving and enhancing section 1915(c) waiver performance to integrate nationally standardized quality measures into the reporting requirements, address gaps in existing reporting requirements related to access and the direct service workforce, strengthen health and welfare and person-centered planning reporting requirements, and eliminate annual performance measure reporting requirements that provide limited useful data for assessing State compliance with statutory and regulatory requirements. We believe that the proposed reporting requirements will allow us to better assess State compliance with the statutory and regulatory requirements for section 1915(c) waiver programs. As indicated at the end of this preamble section, we propose that the following reporting requirements also apply to State plan options authorized under section 1915(i), (j) and (k) of the Act, as well as to both FFS and managed care delivery systems.
As noted earlier in section II.B.3. of this preamble, there have been notable and high-profile instances of abuse and neglect in recent years that highlight the risks associated with poor quality care and with inadequate oversight of HCBS in Medicaid, despite State efforts to implement statutory and regulatory requirements to protect the health and welfare of individuals receiving section 1915(c) waiver program services, and State adoption of related subregulatory guidance, requirements, and adopting subregulatory guidance. In addition, a July 2019 survey of States that operate section 1915(c) waivers found that:
• Definitions of critical incidents vary across States and, in some cases, within States for different HCBS programs or populations;
• Some States do not use standardized forms for reporting incidents, thereby impeding the consistent collection of information on critical incidents;
• Some States do not have electronic incident management systems, and, among those that do, many use systems
• Many States cited the lack of communication within and across State agencies, including with investigative agencies, as a barrier to incident resolution.
Based on these findings and reports, as well as feedback obtained during various public engagement activities conducted with interested parties over the past several years to standardize and strengthen health and welfare reporting requirements, we are proposing new requirements for States' incident management systems at § 441.302(a)(6), as discussed in section II.B.3. of this preamble. We believe that these proposed reporting requirements will allow us to better assess State compliance with the requirements at § 441.302(a)(6).
Relying on our authority at section 1902(a)(6) of the Act, at § 441.311(b), we propose to establish new compliance reporting requirements. Specifically, at § 441.311(b)(1)(i), we propose to require that States report every 24 months on the results of an incident management system assessment to demonstrate that they meet the requirements at § 441.302(a)(6) that the State operate and maintain an incident management system that identifies, reports, triages, investigates, resolves, tracks, and trends critical incidents, including that:
• The State define critical incidents to meet the proposed minimum standard definition at § 441.302(a)(6)(i)(A);
• The State have an electronic critical incident system that, at a minimum, enables electronic collection, tracking (including of the status and resolution of investigations), and trending of data on critical incidents as proposed at § 441.302(a)(6)(i)(B);
• The State require that providers report any critical incidents that occur during the delivery of section 1915(c) waiver program services as specified in a waiver participant's person-centered service plan, or are a result of the failure to deliver authorized services, as proposed at § 441.302(a)(6)(i)(C);
• The State use claims data, Medicaid Fraud Control Unit data, and data from other State agencies such as Adult Protective Services or Child Protective Services to the extent permissible under applicable State law to identify critical incidents that are unreported by providers and occur during the delivery of section 1915(c) waiver program services, or as a result of the failure to deliver authorized services, as proposed at § 441.302(a)(6)(i)(D);
• The State share information on reported incidents, the status and resolution of investigations, such as through the use of information sharing agreements, with other entities in the State responsible for investigating critical incidents, if the State refers critical incidents to other entities for investigation, as proposed at § 441.302(a)(6)(i)(E); and
• The State separately investigate critical incidents if the investigative agency fails to report the resolution of an investigation within State-specified timeframes as proposed at § 441.302(a)(6)(i)(F).
Given the risk of preventable and intentional harm to beneficiaries when effective incident management systems are not in place, documented instances of abuse and neglect among people receiving HCBS, and identified shortcomings and weaknesses of States' incident management systems discussed earlier, we believe the requirement for States to report every other year on the results of an incident management system assessment is in the best interest of and necessary for protecting the health and welfare of individuals receiving section 1915(c) waiver program services. In the absence of such a reporting requirement, we are unable to determine whether States have effective systems in place to identify and address incidents of abuse, neglect, exploitation, or other harm during the course of service delivery; ensure that States are protecting the health and welfare of individuals receiving section 1915(c) waiver program services; and safeguard people receiving section 1915(c) waiver program services from preventable or intentional harm.
In proposing an every other year timeframe for reporting, we were attempting to take into account the likely frequency of State changes to policies, procedures, and information systems, while also balancing State reporting burden and the potential risk to beneficiaries if States have incident management systems that are not compliant with the proposed requirements at § 441.302(a)(6). We believe every other year timeframe for reporting is sufficient to detect substantial changes to policies, procedures, and information systems and ensure that we have accurate information on States' incident management systems. We also propose, at § 441.311(b)(1)(ii), to allow States to reduce the frequency of reporting to up to once every 60 months for States with incident management systems that are determined to meet the requirements at proposed § 441.302(a)(6). We expect to provide States with technical assistance on how to meet the requirements at proposed § 441.302(a)(6). We invite comments on whether the timeframe for States to report on the results of the incident management system assessment is sufficient or if we should require reporting more frequently (every year) or less frequently (every 3 years). We also invite comment on whether we should require reporting more frequently (every 3 years or every 4 years) for States that are determined to have an incident management system that meets the requirements at § 441.302(a)(6). If an alternate timeframe is recommended, we request that commenters provide the rationale for that alternate timeframe.
As discussed earlier in section II.B.4. of this proposed rule, at § 441.302(a)(6)(i)(A), we propose to require States to define critical incidents at a minimum as verbal, physical, sexual, psychological, or emotional abuse; neglect; exploitation including financial exploitation; misuse or unauthorized use of restrictive interventions or seclusion; a medication error resulting in a telephone call to or a consultation with a poison control center, an emergency department visit, an urgent care visit, a hospitalization, or death; or an unexplained or unanticipated death, including but not limited to a death caused by abuse or neglect.
Based on the same rationale as discussed previously in section II.B.7.a.(1) of this preamble related to the proposed incident management system assessment proposed reporting requirement, at § 441.311(b)(2), relying on our authority under section 1902(a)(6) of the Act, we propose to require that States report annually on the number and percent of critical incidents for which an investigation was initiated within State-specified timeframes; number and percent of critical incidents that are investigated and for which the State determines the resolution within State-specified timeframes; and number and percent of critical incidents requiring corrective action, as determined by the State, for which the required corrective action has been completed within State-specified timeframes. We intend to use the information generated from the proposed reporting requirements at § 441.311(b)(2)(ii) through (iv) to determine if States meet the requirements at § 441.302(a)(6)(ii). Given the risk of harm to beneficiaries when effective incident management
Under the authority of section 1902(a)(6) of the Act, we propose at § 441.311(b)(3) to require that States report annually to demonstrate that they meet the requirements at § 441.301(c)(3)(ii). Specifically, at § 441.311(b)(3)(i), we propose to require that States report on the percent of beneficiaries continuously enrolled for at least 365 days for whom a reassessment of functional need was completed within the past 12 months. At § 441.311(b)(3)(ii), we propose to require that States report on the percent of beneficiaries continuously enrolled for at least 365 days who had a service plan updated as a result of a re-assessment of functional need within the past 12 months. These proposed requirements are based on feedback obtained during various interested parties' engagement activities conducted with States and other interested parties over the past several years about the reporting discussed in the 2014 guidance. As discussed in section II.B.7. of this preamble, this feedback has indicated that we should strengthen person-centered planning reporting requirements, and eliminate annual performance measure reporting requirements that provide limited useful data for assessing State compliance with statutory and regulatory requirements. These proposed requirements are also based on feedback received through the RFI
As discussed in section II.B.1. of this preamble, we are proposing a revision to the regulatory text so that it is clear that changes to the person-centered service plan are not required if the re-assessment does not indicate a need for changes. As such, for the purpose of the reporting requirement at § 441.311(b)(3)(ii), beneficiaries will be considered to have had a service plan updated as a result of the re-assessment if it is documented that the required re-assessment did not indicate a need for changes.
For both of the metrics at § 441.301(c)(3), we propose to allow States to report on a statistically valid random sample of beneficiaries, rather than for all individuals continuously enrolled in the waiver program for at least 365 days. We invite comments on whether there are other specific compliance metrics related to person-centered planning that we should require States to report, either in place of or in addition to the metrics we proposed. We also invite comments on the timeframe for States to report on the person-centered planning, whether we should require reporting less frequently (every 2 years), and if an alternate timeframe is recommended, the rationale for the alternate timeframe.
As discussed previously in section II.B.4. of this preamble, we propose to amend § 441.302(h) to avoid duplicative or conflicting reporting requirements with the new
At § 441.311(c), relying on our authority under section 1902(a)(6) of the Act, we propose to require that States report every other year on the HCBS Quality Measure Set, which is described later in section II.B.8. of the preamble. Specifically, we propose, at § 441.311(c)(1)(i), to require that States report every other year, according to the format and schedule prescribed by the Secretary through the process for developing and updating the HCBS Quality Measure Set described later in section II.B.8. of the preamble, on measures identified in the HCBS Quality Measure Set as mandatory measures for States to report or are identified as measures for which the Secretary will report on behalf of States, and, at § 441.311(c)(1)(ii), to allow States to report on measures in the HCBS Quality Measure Set that are not identified as mandatory, as described later in this section of this proposed rule. We are proposing every other year for State reporting in recognition of the fact that the current, voluntary HCBS Quality Measure Set is heavily comprised of survey-based measures, which are more burdensome, including for beneficiaries who would be the respondents for the surveys, and costlier to implement than other types of quality measures. Further, we believe that requiring reporting every other year, rather than annually, would better allow States to use the data that they report for quality improvement purposes, as it would provide States with sufficient time to implement interventions that would result in meaningful improvement in performance scores from one reporting period to another. We are also proposing this frequency in recognition of the overall burden of the proposed requirements.
As discussed earlier in section II.B.1. of this preamble, section 1902(a)(19) of the Act requires States to provide safeguards to assure that eligibility for Medicaid-covered care and services will be determined and provided in a manner that is consistent with simplification, simplicity of administration, and in the best interest of Medicaid beneficiaries. Because the delivery of high quality services is in the best interest of Medicaid beneficiaries, we propose at § 441.311(c)(1)(iii), under our authority at section 1902(a)(19) of the Act, to require States to establish performance targets, subject to our review and approval, for each of the measures in the HCBS Quality Measure Set that are identified as mandatory for States to report or are identified as measures for which we will report on behalf of States, as well as to describe the quality improvement strategies that they will pursue to achieve the performance targets for those measures.
At § 441.311(c)(1)(iv), we propose to allow States to establish State performance targets for other measures in the HCBS Quality Measure Set that are not identified as mandatory for States to report or as measures for which
At § 441.311(c)(2), we propose to report, on behalf of the States, on a subset of measures in the HCBS Quality Measure Set that are identified as measures for which we will report on behalf of States. Further, at § 441.311(c)(3), we propose to allow, but not require, States to report on measures that are not yet required but will be, and on populations for whom reporting is not yet required but will be phased-in in the future.
We invite comments on whether the timeframe for States to report on the measures in HCBS Quality Measure Set is sufficient, whether we should require reporting more frequently (every year) or less frequently (every 3 years), and if an alternate timeframe is recommended, the rationale for that alternate timeframe. We welcome comments on any additional changes we should consider in this section.
As noted earlier in section II.B.6. of this preamble, feedback obtained during various public engagement activities conducted with States and other interested parties over the past several years about reporting requirements for HCBS, as well as feedback received through the RFI
At § 441.311(d)(1)(i), relying on our authority under section 1902(a)(6) of the Act, we propose to require that States provide a description annually on how they maintain the list of individuals who are waiting to enroll in a section 1915(c) waiver program, if they have a limit on the size of the waiver program and maintain a list of individuals who are waiting to enroll in the waiver program, as described in § 441.303(f)(6). We further propose to require that this description must include, but be not limited to, information on whether the State screens individuals on the waiting list for eligibility for the waiver program, whether the State periodically re-screens individuals on the waiver list for eligibility, and the frequency of re-screening if applicable. We also propose to require States to report, at § 441.311(d)(1)(ii), the number of people on the waiting list, if applicable, and, at § 441.311(d)(1)(iii), the average amount of time that individuals newly enrolled in the waiver program in the past 12 months were on the waiting list, if applicable. We invite comments on whether there are other specific metrics or reporting requirements related to waiting lists that we should require States to report, either in place of or in addition to the requirements we proposed. We also invite comments on the timeframe for States to report on their waiting lists, whether we should require reporting less frequently (every 2 or 3 years), and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
At § 441.311(d)(2)(i), based on our authority under section 1902(a)(6) of the Act, we propose to require States report annually on the average amount of time from when homemaker services, home health aide services, or personal care services, as listed in § 440.180(b)(2) through (4), are initially approved to when services began, for individuals newly approved to begin receiving services within the past 12 months. We propose to focus on these specific services for this reporting requirement because of feedback from States, consumer advocates, managed care plans, providers, and other HCBS interested parties that timely access to these services is especially challenging and because the failure of States to ensure timely access to these services poses substantial risk to the health, safety, and quality of care of individuals residing independently and in other community-based residences. Having States report this information will assist us in our oversight of State HCBS programs by helping us target our technical assistance and monitoring efforts. We request comment on whether this requirement should apply to additional services authorized under section 1915(c) of the Act.
For this metric, we propose to allow States to report on a statistically valid random sample of individuals newly approved to begin receiving these services within the past 12 months, rather than for all individuals newly approved to begin receiving these services within the past 12 months. We invite comments on the timeframe for States to report on this metric, whether we should require reporting less frequently (every 2 or 3 years), and if an alternate timeframe is recommended, the rationale for that alternate timeframe. We also invite comments on whether there are other specific metrics related to the amount of time that it takes for eligible individuals to begin receiving homemaker services, home health aide services, or personal care services that we should require States to report, either in place of or in addition to the metric we proposed.
At § 441.311(d)(2)(ii), also based on our authority under section 1902(a)(6) of the Act, we propose to require States to report annually on the percent of authorized hours for homemaker services, home health aide services, or personal care services, as listed in § 440.180(b)(2) through (4), that are provided within the past 12 months. For this metric, we further propose to allow States to report on a statistically valid random sample of individuals authorized to receive these services within the past 12 months, rather than all individuals authorized to receive these services within the past 12 months. We invite comments on the timeframe for States to report on this metric, whether we should require reporting less frequently (every 2 or 3 years), and if an alternate timeframe is recommended, the rationale for that alternate timeframe. We also invite comments on whether there are other specific metrics related to individuals' use of authorized homemaker services, home health aide services, or personal care services that we should require States to report, either in place of or in addition to the metric we proposed. We further request comment on whether this requirement should apply to additional services authorized under section 1915(c) of the Act.
At § 441.311(e), we propose new reporting requirements for section 1915(c) waivers, under our authority at section 1902(a)(6) of the Act, for States to demonstrate that they meet the proposed
We considered whether the proposed reporting requirements at § 441.311(e) related to the percent of payments going to the direct care workforce should apply to other services, such as adult day health, habilitation, day treatment or other partial hospitalization services, psychosocial rehabilitation services and clinic services for individuals with chronic mental illness. As discussed in section II.B.5. of this preamble, these services may have facility or other indirect costs for which we do not have adequate information to determine a minimum percent of the payment that should be spent on compensation for the direct care workforce and, as a result, we are not proposing to apply
We further propose that States separately report for each service subject to the reporting requirement and, within each service, separately report on payments for services that are self-directed. We considered whether other reporting requirements such as a State assurance or attestation or an alternative frequency of reporting could be used to determine State compliance with the requirement at § 441.302(k) and decided that the proposed requirement would be most effective to demonstrate State compliance. We request comment on whether we should allow States to provide an assurance or attestation, subject to audit, that they meet the requirement in place of reporting on the percent of payments, and whether we should reduce the frequency of reporting to every other year.
The intent of this proposed requirement is for States to report in the aggregate for each service across all of their services across all programs as opposed to separately report for each waiver or HCBS program. As an alternative, we considered whether to require reporting at the delivery system, HCBS waiver program, or population level. However, we are not proposing to require additional levels of reporting because we expect that it would increase reporting burden for States without providing us with additional information necessary for determining whether States meet the requirements at § 441.302(k). We request comment on whether we should require States to report on the percent of payments for certain HCBS that are spent on compensation for direct care workers at the delivery system, HCBS waiver program, or population level. In addition, we considered whether to require States to report on median hourly wage and on compensation by category, including salary, wages, and other remuneration; benefits; and payroll taxes. We believe that such information would be valuable for better monitoring workforce compensation and its impact on workforce shortages and turnover and access to services for Medicaid beneficiaries. While such information should be readily accessible for providers, we have not proposed requiring these types of reporting, as collecting and aggregating such information would increase State burden. We request comment on whether we should require States to report on median hourly wage and on compensation by category. We considered whether to allow States, at their option, to exclude, from their reporting to CMS but not from the proposed requirement at § 441.302(k) related to the percent of payments that are spent on compensation for direct care workers, payments to providers of agency-directed services that have low Medicaid revenues or serve a small number of Medicaid beneficiaries, based on Medicaid revenues for the service, number of direct care workers serving Medicaid beneficiaries, or the number of Medicaid beneficiaries receiving the service. We considered this option as a way to reduce State, managed care plan, and provider data collection and reporting burden based on the experience of States that have implemented similar reporting requirements. However, we are concerned that such an option could discourage providers from serving Medicaid beneficiaries or increasing the number of Medicaid beneficiaries or amount of Medicaid revenues. We request comment on whether we should allow States the option to exclude, from their reporting to CMS, payments to providers of agency directed services that have low Medicaid revenues or serve a small number of Medicaid beneficiaries, based on Medicaid revenues for the service, number of direct care workers serving Medicaid beneficiaries, or the number of Medicaid beneficiaries receiving the service.
We also request comment on whether we should establish a specific limit on this exclusion and, if so, the specific limit we should establish, such as to limit the exclusion to providers in the lowest 5th, 10th, 15th, or 20th percentile of providers in terms Medicaid revenues for the service, number of Medicaid beneficiaries served, or number of direct care workers serving Medicaid beneficiaries.
We also considered whether to allow States to exclude payments for self-directed services from this reporting requirement, based on feedback obtained during various interested parties' engagement activities conducted with States and other interested parties over the past several years related to HCBS workforce shortages that indicate that compensation for direct care workers in self-directed models tends to be higher and may comprise a higher percentage of the payments for services than other HCBS, and that administrative costs account for a small percentage of the cost of self-directed services. However, we have decided that payments for self-directed services by States should be included in these reporting requirements. This decision not to exclude them was based on the importance of ensuring a sufficient direct care workforce for self-directed services, the experience of States that have applied similar requirements to report on the percent of payments for to self-directed services that are spent on compensation for direct care workers, and the lack of conclusive data indicating that compensation for direct care workers meets or exceeds the proposed 80 percent threshold. We request comment on whether we should allow States to exclude payments for self-directed services from these reporting requirements.
We recognize that many States may need time to implement these reporting requirements, including to amend provider agreements or managed care contracts, make State regulatory or
In addition, we are proposing at § 441.311(f)(2) to provide States with 4 years to implement the payment adequacy reporting requirements at § 441.311(e) in FFS delivery systems following the effective date of the final rule. For States with managed care delivery systems under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or PAHP's contract, we are proposing to provide States until the first managed care plan contract rating period that begins on or after 4 years after the effective date of the final rule to implement these requirements. This time period is intended to align with the effective date for the HCBS payment adequacy requirements at § 441.302(k), which are discussed in section II.B.5. of this preamble. It is also based on feedback from States and other interested parties that it could take 3 to 4 years to amend State regulations and work with their State legislatures, if needed, as well as to revise policies, operational processes, information systems, and contracts to support implementation of these reporting requirements. We also have considered all of the HCBS proposals outlined in this proposed rule as whole. We invite comments on whether this timeframe is sufficient, whether we should require a shorter timeframe (3 years) or longer timeframe (5 years) to implement these provisions, and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
At § 441.311(f), we propose to apply all of the reporting requirements described in § 441.311 to services delivered under FFS and managed care delivery systems. As discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs, and as noted in the Medicaid context this would include consistent administration between FFS and managed care programs. We accordingly are proposing to specify that a State must ensure compliance with the requirements in § 441.302(a)(6) with respect to HCBS delivered both under FFS and managed care delivery systems.
As discussed earlier in section II.B.1. of this preamble, the proposed requirements at § 441.311, in combination with other proposed requirements identified throughout this proposed rule, are intended to supersede and fully replace the reporting expectations and the minimum 86 percent performance level for State's performance measures described in the 2014 guidance, also discussed earlier in section II.B.1. of this preamble. We expect that States may implement some of the requirements proposed in this proposed rule in advance of any effective date. If the rule is finalized, we will work with States to phase out the 2014 guidance as they implement the requirements in the future final rule to reduce unnecessary burden and to avoid duplicative or conflicting reporting requirements.
In accordance with the requirement of section 2402(a)(3)(A) of the Affordable Care Act for States to achieve a more consistent administration of policies and procedures across HCBS programs, and because these reporting requirements are relevant to other HCBS authorities, we are proposing to incorporate these requirements within the applicable regulatory sections for other HCBS authorities. Specifically, we propose to apply the requirements at § 441.311 to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.474(c), 441.580(i), and 441.745(a)(1)(vii), respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements based on our authority under section 1902(a)(6) of the Act, which requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities. We request comment on the application of these provisions across section 1915(i), (j), and (k) authorities. To accommodate the addition of new language at § 441.580(i), we are proposing to renumber existing § 441.580(i) as § 441.580(j).
We considered whether to also apply these reporting requirements to section 1905(a) “medical assistance” State plan personal care, home health, and case management services. However, we are not proposing that these requirements apply to any section 1905(a) State plan services based on State feedback that they do not have the same data collection and reporting capabilities in place for section 1905(a) services as they do for sections 1915(c), (i), (j), and (k) services and because the person-centered planning, service plan, and waiting list requirements that comprise a significant portion of these reporting requirements have little to no relevance for section 1905(a) services, in comparison to section 1915(c), (i), (j), and (k) services. Further, the vast majority of HCBS is delivered under section 1915(c), (i), (j), and (k) authorities, while only a small percentage of HCBS nationally is delivered under section 1905(a) State plan authority. We request comment on whether we should establish similar reporting requirements for section 1905(a) “medical assistance” State plan personal care, home health, and case management services.
We expect that, should we finalize these reporting requirements, we will establish new processes and forms for States to meet the reporting requirements, provide additional technical information on how States can meet the reporting requirements including related to sampling requirements (where States are
On July 21, 2022, we issued State Medicaid Director Letter # 22-003
Section 1102(a) of the Act provides the Secretary of HHS with authority to make and publish rules and regulations that are necessary for the efficient administration of the Medicaid program. Section 1902(a)(6) of the Act requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. Under our authority at sections 1102(a) and 1902(a)(6) of the Act, we are proposing to add a new section, at § 441.312,
We believe that quality is a critical component of efficiency, and as such, having a standardized set of measures that is used to assess the quality of Medicaid HCBS programs supports the efficient operation of the Medicaid program. Further, we believe that this proposal is necessary for the efficient administration of Medicaid-covered HCBS authorized under section 1915(c) of the Act, consistent with section 1902(a)(4) of the Act, as it would establish a process through which we would regularly update and maintain the required set of measures at § 441.311(c) in consultation with States and other interested parties (as described later in this section of the preamble). This process would ensure that the priorities of interested parties are reflected in the selection of the measures included in the HCBS Quality Measure Set. This process would also ensure that the required set of HCBS quality measures is updated to address gaps in the HCBS Quality Measure Set as new measures are developed and to remove measures that are less relevant or add less value than other available measures, and that it meets scientific and other standards for quality measures. Due to the constantly evolving field of HCBS quality measurement, we believe that the failure to establish such a process would result in ongoing reporting by States of measures that do not reflect the priorities of interested parties, measures that offer limited value compared to other measures, and measures that do not meet strong scientific and other standards. It would also result in a lack of reporting on key measurement priority areas, which could be addressed by updating the HCBS Quality Measure Set as new measures are developed. The failure to establish such a process would lead to inefficiency in States' HCBS quality measurement activities through the continued reporting on an outdated set of measures. In other words, we believe that such a process is necessary for the efficient administration of Medicaid-covered HCBS by ensuring that quality measure reporting requirements are focused on the most valuable, useful, and scientifically supported areas of quality measurement, and that quality measures with limited value are removed timely from quality measure reporting requirements.
We propose a definition at § 441.312(b)(1) for “Attribution rules,” to mean the process States use to assign beneficiaries to a specific health care program or delivery system for the purpose of calculating the measures on the “HCBS Quality Measure Set” as described in proposed § 441.312(d)(6), and at § 441.312(b)(2) for “Home and Community-Based Services Quality Measure Set” to mean the Home and Community-Based Measures for Medicaid established and updated at least every other year by the Secretary through a process that allows for public input and comments, including through the
At § 441.312(c), we describe the general process that the Secretary will follow to update and maintain the HCBS Quality Measure Set. Specifically, at § 441.312(c)(1), we propose that the Secretary will identify and update at least every other year, through a process that allows for public input and comment, the quality measures to be included in the HCBS Quality Measure Set. At § 441.312(c)(2), we propose that the Secretary will solicit comment at least every other year with States and other interested parties, which are identified later in this section of the preamble, to:
• Establish priorities for the development and advancement of the HCBS Quality Measure Set.
• Identify newly developed or other measures which should be added including to address gaps in the measures included in the HCBS Quality Measure Set.
• Identify measures which should be removed as they no longer strengthen the HCBS Quality Measure Set.
• Ensure that all measures included in the HCBS Quality Measure Set are evidence-based, are meaningful for States, and are feasible for State-level and program-level reporting as appropriate.
The proposed frequency for updating the quality measures included in the HCBS Quality Measure Set is aligned with the proposed frequency at § 441.311(c)(1)(i) for States' reporting of the measures in the HCBS Quality Measure Set. We have based other aspects of the process that the Secretary will follow to update and maintain the HCBS Quality Measure Set in part on the proposed processes for the Secretary to update and maintain the Child, Adult, and Health Home Core Sets as described in the Medicaid Program and CHIP; Mandatory Medicaid and
At § 441.312(c)(3), we propose that the Secretary will, in consultation with States and other interested parties (as described later in this section of preamble), develop and update the measures in the HCBS Quality Measure Set, at least every other year, through a process that allows for public input and comment. We invite comments on whether the timeframes for updating the measures in the HCBS Quality Measure Set and conducting the process for developing and updating the HCBS Quality Measure Set is sufficient, whether we should conduct these activities more frequently (every year) or less frequently (every 3 years), and if an alternate timeframe is recommended, the rationale for that alternate timeframe.
At § 441.312(d), we describe the proposed process for developing and updating the HCBS Quality Measure Set. Specifically, we propose that the Secretary will address the following through the proposed process:
• Identify all measures in the HCBS Quality Measure Set, including newly added measures, measures that have been removed, mandatory measures, measures that the Secretary will report on States' behalf, measures that States can elect to have the Secretary report on their behalf, as well as the measures that the Secretary will provide States with additional time to report and the amount of additional time.
• Inform States how to collect and calculate data on the measures.
• Provide a standardized format and reporting schedule for reporting the measures.
• Provide procedures that States must follow in reporting the measure data.
• Identify specific populations for which States must report the measures, including people enrolled in a specific delivery system type, people who are dually eligible for Medicare and Medicaid, older adults, people with physical disabilities, people with intellectual or developmental disabilities, people who have serious mental illness, and people who have other health conditions; and provide attribution rules for determining how States must report on measures for beneficiaries who are included in more than one population.
• Identify the subset of measures that must be stratified by race, ethnicity, Tribal status, sex, age, rural/urban status, disability, language, or such other factors as may be specified by the Secretary.
• Describe how to establish State performance targets for each of the measures.
We anticipate that, for State reporting on the measures in the HCBS Quality Measure Set, as outlined in § 441.311, the technical information on attribution rules described at proposed § 441.312(d)(6), would call for inclusion in quality reporting based on a beneficiary's continuous enrollment in the Medicaid waiver. This would ensure the State has enough time to furnish services during the measurement period. In the technical information, we anticipate we would set attribution rules to address transitions in Medicaid eligibility, enrollment in Medicare, or transitions between different delivery systems or managed care plans, within a reporting year, for example, based on the length of time beneficiaries was enrolled in each. We invite comment on other considerations we should address in the attribution rules or other topics we should address in the technical information.
At § 441.312(e), we propose, in the process for developing and updating the Home and Community-Based Services Quality Measure Set described at proposed § 441.312(d), that the Secretary consider the complexity of State reporting and allow for the phase-in over a specified period of time of mandatory State reporting for some measures and of reporting for certain populations, such as older adults or people with intellectual and disabilities. At § 441.312(f), we propose that, in specifying the measures and the factors by which States must report stratified measures, the Secretary will consider whether such stratified sampling can be accomplished based on valid statistical methods, without risking a violation of beneficiary privacy, and, for measures obtained from surveys, whether the original survey instrument collects the variables or factors necessary to stratify the measures. This proposed stratification of data for the measures contained in the HCBS Quality Measure Set is consistent with our statutory authority under section 1902(a)(6) of the Act, which requires States to report information “in such form and containing such information” as the Secretary requires.
Stratified sampling is a method of sampling from a population, in which the sampling can be partitioned into sub-populations, such as by race, ethnicity, sex, age, rural/urban status, disability, language, or such other factors. Stratified data would enable us and States to identify the health and quality of life outcomes of underserved populations and potential differences in outcomes based on race, ethnicity, sex, age, rural/urban status, disability, language, or such factors on measures contained in the HCBS Quality Measure Set. Measuring health disparities, reporting these results, and driving improvements in quality are cornerstones of the CMS approach to advancing health equity. Advancing equity for underserved populations through data reporting and stratification aligns with E.O. 13985.
We considered giving States the flexibility to choose which measures they would stratify and by what factors. However, as discussed in the Mandatory Medicaid and CHIP Core Set Reporting rule (87 FR 51313), consistent measurement of differences in health and quality of life outcomes between different groups of beneficiaries is essential to identifying areas for intervention and evaluation of those interventions.
We recognize that States may be constrained in their ability to stratify measures in the HCBS Quality Measure Set and that data stratification would require additional State resources. There are several challenges to stratification of measure reporting. First, the validity of stratification is threatened when the demographic data are incomplete. Complete demographic information is often unavailable to us and to States due to several factors, including the fact that Medicaid applicants and beneficiaries are not required to provide race and ethnicity data. Second, when States with smaller populations and less diversity stratify data, it may be possible to identify individual data, raising privacy concerns. Therefore, if the sample sizes are too small, the data would be suppressed, in accordance with the CMS Cell Size Suppression Policy and the data suppression policies for associated measure stewards and therefore not publicly reported to avoid a potential violation of privacy.
We also may face constraints in stratifying measures for which we are able to report on behalf of States, as our ability to stratify will be dependent on whether the original dataset or survey instrument: (1) collects the demographic information or other variables needed and (2) has a large enough sample size. The Transformed Medicaid Statistical Information System (T-MSIS), for example, currently has the capability to stratify some HCBS Quality Measure Set measures by sex and urban/rural status, but not by race, ethnicity, or disability status. This is because applicants provide information on sex and urban/rural address, which is reported to T-MSIS by States, whereas applicants are not required to provide information on their race and ethnicity or disability status, and often do not do so. However, we have developed the capacity to impute race and ethnicity using a version of the Bayesian Improved Surname Geocoding (BISG) method
The method proposed for this project utilizes State-submitted race/ethnicity data when it is complete and accurate as based on the Medicaid DQ Atlas assessment for a given year.
With these challenges in mind, we propose that stratification by States in reporting of HCBS Quality Measure Set data would be implemented through a phased-in approach in which the Secretary would specify which measures and by which factors States must stratify reported measures. In proposed § 441.312(f), States would be required to provide stratified data for 25 percent of the measures in the HCBS Quality Measure Set for which the Secretary has specified that reporting should be stratified by 3 years after the effective date of these regulations, 50 percent of such measures by 5 years after the effective date of these regulations, and 100 percent of measures by 7 years after the effective date of these regulations. We note that the percentages listed here align with the proposed phase-in of equity reporting in the Mandatory Medicaid and CHIP Core Set Reporting proposed rule, although the proposed deadlines for each compliance level would be longer here (87 FR 51314). However, the timeframe associated with each percentage is different from what was proposed in that rule. Specifically, that proposed rule would require States to provide stratified data for 25 percent of measures within 2 years after the effective date of the final rule, 50 percent of measures within 3 years after the effective date of the final rule, and 100 percent of measures within 5 years after the effective date of the final rule.
We propose a slower phase-in for stratification for the measures in the HCBS Quality Measure Set because the HCBS Quality Measure Set was only first released for voluntary use by States in July 2022, while Child, Adult, and Health Home Core Sets voluntary reporting has been in place for a number of years. Further, a substantial portion of the measures included in the HCBS Quality Measure Set, particularly compared to the Child, Adult, and Health Home Core Sets, are derived from beneficiary experience of care surveys, which are costlier to implement than other types of measures. In addition, the slower phase-in is also intended to take into consideration the overall burden of the reporting requirements in this proposed rule.
We have determined that this proposed phased-in approach to data stratification would be reasonable and minimally burdensome, and thus consistent with E.O. 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (January 20, 2021),
We recognize that States may need to make enhancements to their data and information systems or incur other costs in implementing the HCBS Quality Measure Set. We remind States that enhanced FFP is available at a 90 percent match rate for the design, development, or installation of improvements of mechanized claims
We solicit comments on the proposed schedule for phasing in reporting of HCBS Quality Measure Set data. We also seek comment on whether we should phase-in reporting on all of the measures in the HCBS Quality Measure Set.
At § 441.312(g), we propose the list of interested parties with whom the Secretary must consult to specify and update the quality measures established in the HCBS Quality Measure Set. The proposed list of interested parties includes: State Medicaid Agencies and agencies that administer Medicaid-covered HCBS; health care and HCBS professionals who specialize in the care and treatment of older adults, children and adults with disabilities, and individuals with complex medical needs; health care and HCBS professionals, providers, and direct care workers who provide services to older adults, children and adults with disabilities and complex medical and behavioral health care needs who live in urban and rural areas or who are members of groups at increased risk for poor outcomes; HCBS providers; direct care workers and organizations representing direct care workers; consumers and national organizations representing consumers; organizations and individuals with expertise in HCBS quality measurement; voluntary consensus standards setting organizations and other organizations involved in the advancement of evidence-based measures of health care; measure development experts; and other interested parties the Secretary may determine appropriate.
Because these quality measurement requirements are relevant to other HCBS authorities, we are proposing to incorporate these requirements within the applicable regulatory sections for other HCBS authorities. Specifically, we propose to apply the proposed requirements at § 441.312 to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.474(c), 441.585(d), and 441.745(b)(1)(v), respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements based on our authority under section 1902(a)(6) of the Act, which requires State Medicaid agencies to make such reports, in such form and containing such information, as the Secretary may from time to time require, and to comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities. We request comment on the application of these provisions across sections 1915(i), (j), and (k) authorities.
Section 1102(a) of the Act provides the Secretary of HHS with authority to make and publish rules and regulations that are necessary for the efficient administration of the Medicaid program. Under our authority at section 1102(a) of the Act, we are proposing to add a new section, at § 441.313, titled
Specifically, at § 441.313(a), we propose to require States to operate a website that meets the availability and accessibility requirements at § 435.905(b) of this chapter and that provides the results of the reporting requirements under newly proposed § 441.311 (specifically, incident management, critical incident, person centered planning, and service provision compliance data; data on the HCBS Quality Measure Set; access data; and payment adequacy data). We request comment on whether the requirements at § 435.905(b) are sufficient to ensure the availability and the accessibility of the information for people receiving HCBS and other HCBS interested parties and for specific requirements to ensure the availability and accessibility of the information.
At § 441.313(a)(1), we propose to require that the data and information that States are required to report under § 441.311 be provided on one web page, either directly or by linking to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that is authorized to provide services. We request comment on whether States should be permitted to link to web pages of these managed care entities and whether we should limit the number of separate web pages that a State could link to, in place of directly reporting the information on its own web page.
At § 441.313(a)(2), we propose to require that the web page include clear and easy to understand labels on documents and links. We request comment on whether these requirements are sufficient to ensure the accessibility of the information for people receiving HCBS and other HCBS interested parties and for specific requirements to ensure the accessibility of the information.
At § 441.313(a)(3), we propose to require that States verify the accurate function of the website and the timeliness of the information and links
At § 441.313(a)(4), we propose to require that States include prominent language on the website explaining that assistance in accessing the required information on the website is available at no cost and include information on the availability of oral interpretation in all languages and written translation available in each non-English language, how to request auxiliary aids and services, and a toll-free and TTY/TDY telephone number.
We are also proposing at § 441.313(b) that CMS must report on its CMS website the information reported by States to us under § 441.311. For example, we envision that we will update CMS's website to provide HCBS comparative information reported by States that can be compared to HCBS information shared by other States. We also envision using data from State reporting in future iterations of the CMS Medicaid and CHIP Scorecard.
We are proposing at § 441.313(c), to provide States with 3 years to implement these requirements in FFS delivery systems following effective date of the final rule. For States with managed care delivery systems under the authority of sections 1915(a), 1915(b), 1932(a), or section 1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or PAHP's contract, we are proposing to provide States until the first managed care plan contract rating period that begins on or after 3 years after the effective date of the final rule to implement these requirements. This time period is based primarily on the effective date for State reporting at § 441.311. We also have considered all of the HCBS proposals outlined in the proposed rule as whole. We invite comments on whether this timeframe is sufficient, whether we should require a longer timeframe (4 years) to implement these provisions, and if a longer timeframe is recommended, the rationale for that longer timeframe.
As discussed earlier in section II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care Act requires States to improve coordination among, and the regulation of, all providers of Federally and State-funded HCBS programs to achieve a more consistent administration of policies and procedures across HCBS programs. In the context of Medicaid coverage of HCBS, it should not matter whether the services are covered directly on a FFS basis or by a managed care entity to its enrollees. The requirement for “consistent administration” should require consistency between these two modes of service delivery. We accordingly are proposing to specify that a State must ensure compliance with the requirements in § 441.313, with respect to HCBS delivered both under FFS and managed care delivery systems.
Similarly, because we are proposing to apply the reporting requirements at § 441.311 to other HCBS State plan options, we are proposing to incorporate these website transparency requirements within the applicable regulatory sections. Specifically, we propose to apply the proposed requirements of § 441.313 to section 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.486, 441.595, and 441.750, respectively. Consistent with our proposal for section 1915(c) waivers, we propose these requirements based on our authority under section 1102(a) of the Act to make and publish rules and regulations that are necessary for the efficient administration of the Medicaid program. We believe the same arguments for proposing these requirements for section 1915(c) waivers are equally applicable for these other HCBS authorities. We request comment on the application of these provisions across section 1915(i), (j), and (k) authorities.
As discussed earlier in sections II.B.1., II.B.4., II.B.5., II.B.7., and II.J. of this rule, we are proposing to apply the requirements at §§ 441.301(c)(3), 441.302(a)(6), 441.302(k), 441.311, and 441.313 to both FFS and managed care delivery systems. Although the proposed provisions at §§ 441.301(c)(3), 441.302(a)(6) and (k), 441.311, and 441.313 would apply to LTSS programs that use a managed care delivery system to deliver services authorized under section 1915(c) waivers and section 1915(i), (j), and (k) State plan authorities, we believe incorporating a reference in 42 CFR part 438 would be helpful to States and managed care plans. Therefore, we propose to add a cross reference to the requirements in proposed § 438.72 to be explicit that States that include HCBS in their MCO, PIHP, or PAHP contracts would have to comply with the requirements at §§ 441.301(c)(1) through (3), 441.302(a)(6) and (k), 441.311, and 441.313. We believe this would make the obligations of States that implement LTSS programs through a managed care delivery system clear, consistent, and easy to locate. While we believe the list proposed in § 438.72 would help States easily identify the provisions related to LTSS, we identify that a provision specified in any other section of 42 CFR part 438 or any other Federal regulation but omitted from § 438.72, is still in full force and effect. We also note that § 438.208(c)(3)(ii) currently includes a cross-reference to § 441.301(c)(1) and (2). We are not proposing any changes to the regulatory language at § 441.301(c)(1) or (2) or to § 438.208(c)(3)(ii) through this rule. We have included § 441.301(c)(1) and (2) in the proposed regulatory language at § 438.72 so that it is clear that the requirements at § 441.301(c)(1) and (2) continue to apply when States include HCBS in their MCO, PIHP, or PAHP contracts.
Section 1902(a)(30)(A) of the Act requires that State plans “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” Through the proposed provisions in § 447.203, we seek to establish an updated process through which States would be required to document, and we would ensure, compliance with the requirements of section 1902(a)(30)(A) of the Act.
In the 2015 final rule with comment period, we codified a process that requires States to complete and make public AMRPs that analyze and inform determinations of the sufficiency of access to care (which may vary by geographic location in the State) and are used to inform State policies affecting access to Medicaid services, including provider payment rates. The AMRP must specify data elements that support the State's analysis of whether beneficiaries have sufficient access to care, based on data, trends, and factors that measure beneficiary needs, availability of care through enrolled providers, and utilization of services. States are required to update their AMRPs at regular intervals and whenever the State proposes to reduce FFS provider payment rates or restructure them in circumstances when the changes could result in diminished access. Specifically, the current AMRP process at § 447.203 requires States to consider the extent to which beneficiary needs are fully met; the availability of
Through AMRPs, we aimed to create a transparent and data-driven process through which to ensure State compliance with section 1902(a)(30)(A) of the Act. Following publication of the 2011 proposed rule and as discussed in both the 2015 final rule with comment period and the 2016 final rule, as we worked with States to implement the AMRP requirements, many States expressed numerous concerns about the rule.
Separately, the Supreme Court, in
In consideration of State agencies' and other interested parties' feedback on the AMRP process, as well as CMS' obligation to ensure continued compliance with section 1902(a)(30)(A) of the Act, we propose to update the requirements in § 447.203. We propose to rescind and replace the AMRP requirements currently in § 447.203(b)(1) through (8) with a streamlined and standardized process, described in proposed § 447.203(b) and (c). This proposed change is informed by a center-wide review of our policy and processes regarding access to care for all facets of the Medicaid program. The 2015 final rule with comment period acknowledged our need to better understand FFS rate actions and their potential impact on State programs, and the requirements we finalized require a considerable amount of data from States. To ensure States were meeting the statutory requirement under section 1902(a)(30)(A) of the Act, the AMRP process was originally intended to establish a transparent data-driven process for States to measure the current status of access to services within the State and utilize this process for monitoring access when proposing rate reductions and restructurings.
We are seeking comment on whether additional access standards for States with a fully FFS delivery system may be appropriate. Because the timeliness standards of the proposed Medicaid and Children's Health Insurance Program Managed Care Access, Finance, and Quality proposed rule (Managed Care proposed rule) at § 438.68 would not apply to any care delivery in such States, we are considering whether a narrow application of timeliness standards to fully FFS States that closely mirrors the proposed appointment wait time standards, secret shopper survey requirements, and publication requirements (as applied to outpatient mental health and substance use disorder, adult and pediatric; primary care, adult and pediatric; obstetrics and gynecology; and an additional type of service determined by the State) in that rule might be appropriate. Given that timeliness standards would apply directly to States, we also seek comment on a potentially appropriate method for CMS to collect data demonstrating that States meet the established standards at least 90 percent of the time.
We propose to rescind § 447.203(b) in its entirety and replace it with new requirements to ensure FFS Medicaid payment rate adequacy, including a new process to promote payment rate transparency. This new proposed process would require States to publish their FFS Medicaid payment rates in a clearly accessible, public location on the State's website, as described later in this section. Then, for certain services, States would be required to conduct a comparative payment rate analysis between the States' Medicaid payment rates and Medicare rates, or provide a payment rate disclosure for certain HCBS that would permit CMS to develop and publish HCBS payment benchmark data.
In paragraph (b)(1), we propose to require the State agency to publish all Medicaid FFS payment rates on a website developed and maintained by the single State agency that is accessible to the general public. We propose that published Medicaid FFS payment rates would include fee schedule payment rates made to providers delivering Medicaid services to Medicaid beneficiaries through a FFS delivery system. We also propose to require that the website be easily reached from a hyperlink easily reached from a hyperlink on the State Medicaid agency's website.
Within this payment rate publication, we propose that FFS Medicaid payment rates must be organized in such a way that a member of the public can readily determine the amount that Medicaid would pay for the service and, in the case of a bundled or similar payment methodology, identify each constituent service included within the rate and how much of the bundled payment is allocated to each constituent service under the State's methodology. We also propose that, if the rates vary, the State must separately identify the Medicaid FFS payment rates by population (pediatric and adult), provider type, and geographical location, as applicable.
Longstanding legal requirements to provide effective communication with individuals with disabilities and the obligation to take reasonable steps to provide meaningful access to individuals with limited English proficiency also apply to the State's website containing Medicaid FFS payment rate information. Under Title II of the Americans with Disabilities Act of 1990, section 504 of the Rehabilitation Act, section 1557 of the Affordable Care Act, and implementing regulations, qualified individuals with disabilities may not be excluded from participation in, or denied the benefits of any programs or activities of the covered entity, or otherwise be subjected to discrimination by any covered entity, on the basis of disability, and programs must be accessible to people with disabilities.
We propose that for States that pay varying Medicaid FFS payment rates by population (pediatric and adult), provider type, and geographical location, as applicable, those States would need to separately identify their Medicaid FFS payment rates in the payment rate transparency publication by each grouping or multiple groupings, when applicable to a State's program. In the event rates vary according to these factors, as later discussed in this proposed rule, our intent is that a member of the public be readily able to determine the payment amount that would be made, accounting for all relevant circumstances. For example, a State that varies their Medicaid FFS payment rates by population may pay for a service identified by code 99202 when provided to a child at a rate of $110.00 and when provided to an adult at a rate of $80.00. Because the Medicaid FFS payment rates vary based on population, both of these Medicaid FFS payment rates would need to be included separately as Medicaid FFS payment rates for 99202 in the State's payment rate transparency publication. As another example, a State that varies their Medicaid FFS payment rates by provider type may pay for 99202 when delivered by a physician at a rate of $50.00, and when delivered by a nurse practitioner or physician assistant at a rate of $45.00.
We are aware that some State plans include language that non-physician practitioners (NPPs), such as a nurse practitioner or physician assistant, are paid a percentage of the State's fee schedule rate. Because the Medicaid FFS payment rates vary by provider type, both of the Medicaid FFS payment rates in both situations (fee schedule rates of $50.00 and $45.00) would need to be separately identified as Medicaid FFS payment rates for 99202 in the State's payment rate transparency publication, regardless of whether the State has individually specified each amount certain in its approved payment schedule or has State plan language specifying the nurse practitioner or physician assistant rate as a percentage of the physician rate. Additionally, for
For a State that varies its Medicaid FFS payment rates by any combination of these groupings, then the payment rate transparency publication would be required to reflect these multiple groupings. For example, the State would be required to separately identify the rate for a physician billing 99202 provided to a child in a rural area, the rate for a nurse practitioner billing 99202 provided to a child in a rural area, the rate for a physician billing 99202 provided to an adult in a rural area, the rate for a nurse practitioner billing 99202 provided to an adult in a rural area, the rate for a physician billing 99202 provided to a child in an urban area, the rate for a nurse practitioner billing 99202 provided to a child in an urban area, and so on. This information would be required to be presented clearly so that a member of the public can readily determine the payment rate for a service that would be paid for each grouping or combination of groupings (population (pediatric and adult), provider type, and geographical location), as applicable. We acknowledge that States may also pay a single Statewide rate regardless of population (pediatric and adult), provider type, and geographical location, and as such would only need to list the single Statewide rate in their payment rate transparency publication.
We acknowledge that there may be additional burden associated with our proposal that the payment rate transparency publication include a payment rate breakdown by population (pediatric and adult), provider type, and geographical location, as applicable, when States' Medicaid FFS payment rates vary based on these groupings. Despite the additional burden, we believe that the additional level of granularity in the payment rate transparency publication is important for ensuring compliance with section 1902(a)(30)(A) of the Act, given State Medicaid programs rely on multiple provider types to deliver similar services to Medicaid beneficiaries of all ages, across multiple Medicaid benefit categories, throughout each area of each State.
We further propose that Medicaid FFS payment rates published under the proposed payment rate transparency requirement would only include fee schedule payment rates made to providers delivering Medicaid services to Medicaid beneficiaries through a FFS delivery system. To ensure maximum transparency in the case of a bundled fee schedule payment rate or rate determined by a similar payment methodology where a single payment rate is used to pay for multiple services, we propose that the State must identify each constituent service included in the bundled fee schedule payment rate or rate determined by a similar payment methodology. We also propose that the State must identify how much of the bundled fee schedule payment rate or rate determined by a similar payment methodology is allocated to each constituent service under the State's payment methodology. For example, if a State's fee schedule lists a bundled fee schedule rate that pays for day treatment under the rehabilitation benefit and the following services are included in the day treatment bundle: community based psychiatric rehabilitation and support services, individual therapy, and group therapy, then the State would need to identify services community based psychiatric rehabilitation and support services, individual therapy, and group therapy separately and each portion of the bundled fee schedule payment rate for day treatment that is allocated to community based psychiatric rehabilitation and support services, individual therapy, and group therapy. Proposing to require States identify the portion of the bundled fee is allocable to each constituent service included in the bundled fee schedule payment rate would add an additional level of granularity to the payment rate transparency publication that continues to enable a member of the public to readily be able to determine the payment amount that would be made for a service, accounting for all relevant circumstances, including the payment rates for each constituent service within a bundle and as a standalone service. We also propose to require that the website be easily reached from a hyperlink to ensure transparency of payment rate information is available to beneficiaries, providers, CMS, and other interested parties.
We propose the initial publication of Medicaid FFS payment rates would occur no later than January 1, 2026, and include approved Medicaid FFS payment rates in effect as of that date, January 1, 2026. We propose this timeframe to provide States with at least 2 years from the possible effective date of the final rule, if this proposal is finalized, to comply with the payment rate transparency requirement. The proposed timeframe would initially set a consistent baseline for all States to first publish their payment rate transparency information and then set a clear schedule for States to update their payment rates based on the cadence of the individual States' payment rate changes.
The same initial publication due date for all States to publish their payment rates as of January 1, 2026, would promote comparability between States' payment rate transparency publications. Once States would begin making updates to their payment rate transparency publication, there would be a clear distinction between State payment rates that have recently updated their payment rates and State payment rates that have long maintained the same payment rates. For example, two States initially publish their payment rates for 99202 at $50; however, one State annually increases their payment rate by 5 percent over the next 2 years and would update their payment rate transparency publication in 2027 with a payment rate of $52.50, then in 2028 with a payment rate of $55.13, while the other States' payment rate for the same service remains at $50 in 2027 and 2028. The transparency of a State's recent payment rates including the date the payment rates were last updated on the State Medicaid agency's website, as discussed later, as well as the ability to compare payment rates between States on accessible and easily reachable State-maintained websites, highlights how the proposed payment rate transparency would help to ensure that Medicaid payment rate information is available to beneficiaries, providers, CMS, and other interested parties for the purposes of assessing access to care issues to better ensure compliance with section 1902(a)(30)(A) of the Act.
We also propose that the initial publication include approved Medicaid FFS payment rates in effect as of January 1, 2026. We propose this language to narrow the scope of the publication to CMS-approved payment rates and methodologies, thereby excluding any rate changes for which a SPA or similar amendment request is
As discussed later in this proposed rule regarding paragraph (b)(2) and(b)(3), States are encouraged to use the proposed payment rate transparency publication as a source of Medicaid payment rate data for compliance with the paragraph (b)(3)(i)(B) proposed comparative payment rate analysis and paragraph (b)(3)(ii)(B) proposed payment rate disclosure requirements. However, we note that the comparative payment rate analysis and payment rate disclosure requirements impose a one-year lag on the date when rates are effective. We include a more in-depth discussion of the timeframes for publication of the comparative payment rate analysis and payment rate disclosure in paragraph (b)(4) later in this proposed rule, where we note that the 1-year shift in timeframe is necessitated by the timing of when Medicare publishes their payment rates in November and the rates taking effect on January 1, leaving insufficient time for CMS to publish the code list for States to use for the comparative payment rate analysis and for States develop and publish their comparative payment rate analysis and payment rate disclosure by January 1. We note that the ongoing payment transparency publication requirements will allow the public to view readily available, current Medicaid payment rates at all times, even if slightly older Medicaid payment rate information must be used for comparative payment rate analyses due to the cadence of Medicare payment rate changes as well as the payment rate disclosure. We are cognizant that the payment rate disclosure does not depend on the availability of Medicare payment rates, however, we are proposing to provide States with the same amount of time to comply with both of the proposed comparative payment rate analysis and payment rate disclosure requirements.
If this proposal is finalized at a time that does not allow for States to have a period of at least 2 years between the effective date of the final rule and the proposed January 1, 2026, due date for the initial publication of Medicaid FFS payment rates, then we would propose an alternative date of July 1, 2026, for the initial publication of Medicaid FFS payment rates and for the initial publication to include approved Medicaid FFS payment rates as of that date, July 1, 2026. This shift would allow more time for States to comply with the payment rate transparency requirements. We acknowledge that the date of the initial payment rate transparency publication is subject to change based on the final rule publication schedule and effective date, if this rule is finalized. If further adjustment is necessary beyond the July 1, 2026, timeframe to allow adequate time for States to comply with the payment rate transparency requirements, then we would adjust date of the initial payment rate transparency publication in 6-month intervals, as appropriate, to allow for approximately 2 years between the effective date of the final rule and the initial required payment rate transparency publication.
We propose to require the that the single State agency include the date the payment rates were last updated on the State Medicaid agency's website. We also propose to require that the single State agency ensure that Medicaid FFS payment rates are kept current where any necessary updates to the State fee schedules made no later than 1 month following the date of CMS approval of the SPA, section 1915(c) HCBS waiver, or similar amendment revising the provider payment rate or methodology. Finally, in paragraph (b)(1), we propose that, in the event of a payment rate change that occurs in accordance with a previously approved rate methodology, the State would be required to update its payment rate transparency publication no later than 1 month after the effective date of the most recent update to the payment rate. This provision is intended to capture Medicaid FFS payment rate changes that occur because of previously approved SPAs containing payment rate methodologies. For example, if a State sets their Medicaid payment rates for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) at a percentage of the most recent Medicare fee schedule rate, then the State's payment rate would change when Medicare adopts a new fee schedule rate through the quarterly publications of the Medicare DMEPOS fee schedule, unless otherwise specified in the approved State plan methodology that the State implements a specific quarterly publication, for example, the most recent April Medicare DMEPOS fee schedule. Therefore, the State's Medicaid FFS payment rate automatically updates when Medicare publishes a new fee schedule, without the submission of a SPA because the State's methodology pays a percentage of the most recent State plan specified Medicare fee schedule rate. In this example, the State would need to update its Medicaid FFS payment rates in the payment rate transparency publication no later than 1 month after the effective date of the most recent update to the Medicare fee schedule payment rate made applicable under the approved State plan payment methodology.
While there is no current Federal requirement for States to consistently publish their rates in a publicly accessible manner, we are aware that most States already publish at least some of their payments through FFS rate schedules on State agency websites. Currently, rate information may not be easily obtained from each State's website in its current publication form, making it difficult to understand the amounts that States pay providers for items and services furnished to Medicaid beneficiaries and to compare Medicaid payment rates to other health care payer rates or across States. However, through this proposal we seek to ensure all States do so in a format that is publicly accessible and where all Medicaid FFS payment rates can be easily located and understood. The new transparency requirements under this proposed rule would help to ensure that interested parties have access to updated payment rate schedules and could conduct analyses that would provide insights into how State Medicaid payment rates compare to, for example, Medicare payment rates and other State Medicaid payment rates. The proposal intends to help ensure that payments are transparent and clearly understandable to beneficiaries, providers, CMS, and other interested parties. We are seeking public comment on the proposed requirement for States to publish their Medicaid FFS payment rates for all services, the proposed structure for Medicaid FFS payment rate transparency publication on the State's website, and the timing of the publication of and updates to the State's Medicaid FFS payment rates for the
In paragraph (b)(2), we propose to require States to develop and publish a comparative payment rate analysis of Medicaid payment rates for certain specified services, and a payment rate disclosure for certain HCBS. In paragraph (b)(2) we specify the categories of services that States would be required to include in a comparative payment rate analysis and payment rate disclosure of Medicaid payment rates. Specifically, we are proposing that for each of the categories of services in paragraphs (b)(2)(i) through (iii), each State agency would be required to develop and publish a comparative payment rate analysis of Medicaid payment rates as specified in proposed § 447.203(b)(3). We also propose that for each of the categories of services in paragraph (b)(2)(iv), each State agency would be required to develop and publish a payment rate disclosure of Medicaid payment rates as specified in proposed § 447.203(b)(3). We propose for both the comparative payment rate analysis and payment rate disclosure that, if the rates vary, the State must separately identify the payment rates by population (pediatric and adult), provider type, and geographical location, as applicable. The categories of services listed in paragraph (b)(2) include: primary care services; obstetrical and gynecological services; outpatient behavioral health services; and personal care, home health aide, and homemaker services, as specified in § 440.180(b)(2) through (4), provided by individual providers and providers employed by an agency.
In paragraph (b)(2), we propose to require States separately identify the payment rates in the comparative payment rate analysis and payment rate disclosure, if the rates vary, by population (pediatric and adult), provider type, and geographical location, as applicable. These proposed breakdowns of the Medicaid payment rates, similar to how we propose payment rates would be broken down in the payment rate transparency disclosures under proposed § 447.203(b)(1), would apply to all proposed categories of services listed in paragraph (b)(2): primary care services, obstetrical and gynecological services, outpatient behavioral health services, and personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency.
We acknowledge that not all States pay varied payment rates by population (pediatric and adult), provider type, and geographical location, which is why we have included language “if the rates vary” and “as applicable” in the proposed regulatory text. This language is included in the proposed regulatory text to ensure the comparative payment rate analysis and payment rate disclosure captures all Medicaid payment rates, including when States pay varied payment rates by population (pediatric and adult), provider type, and geographical location. We also included proposed regulatory text for the payment rate disclosure that ensures the average hourly payment rates for personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency are separately identified for payments made to individual providers and to providers employed by an agency, if the rates vary, as later discussed in connection with proposed § 447.203(b)(3)(ii). For States that do not pay varied payment rates by population (pediatric and adult), provider type, and geographical location and pay a single Statewide payment rate for a single service, then the comparative payment rate analysis and payment rate disclosure would only need to include the State's single Statewide payment rate.
We propose to include a breakdown of Medicaid payment rates by population (pediatric and adult), provider type, and geographical location, as applicable, on the Medicaid side of the comparative payment rate analysis in paragraph (b)(2) to align with the proposed payment rate transparency provision, to account for State Medicaid programs that pay variable Medicaid payment rates by population (pediatric and adult), provider type, and geographical location, and to help ensure the State's comparative payment rate analyses accurately align with Medicare. Following the initial year that the provisions proposed in this rule would be in effect, these proposed provisions would align with and build on the payment rate transparency requirements described in § 447.203(b)(1), because States could source the codes and their corresponding Medicaid payment rates that the State already would publish to meet the payment rate transparency requirements.
These proposed provisions are also intended to help ensure that the State's comparative payment rate analysis contains the highest level of granularity in each proposed aspect by considering and accounting for any variation in Medicaid payment rates by population (pediatric and adult), provider type, and geographical location, as currently required in the AMRP process under current § 447.203(b)(1)(iv) and (v), and (b)(3). Additionally, Medicare varies payment rates for certain NPPs (nurse practitioners, physician assistants, and clinical nurse specialists) by paying them 85 percent of the full Medicare physician fee schedule amount and varies their payment rates by geographical location through calculated adjustments to the pricing amounts to reflect the variation in practice costs from one geographical location to another; therefore, the comparative payment rate analysis accounting for these payment rate variations is crucial to ensuring the Medicaid FFS payment rates accurately align with FFS Medicare Physician Fee Schedule (PFS) rates.
Similar to the payment rate transparency publication, we acknowledge that there may be additional burden associated with our proposal that the payment rate transparency publication and the comparative payment rate analysis include a payment rate breakdown by population (pediatric and adult), provider type, and geographical location, as applicable, when States' payment rates vary based on these groupings. However, we believe that any approach to requiring a comparative payment rate analysis would involve some level of burden that is greater for States that choose to employ these payment rate differentials, since any comparison methodology would need to take account—through a separate comparison, weighted average, or other mathematically reasonable approach—of all rates paid under the Medicaid program for a given service. In all
We identified payment rate variation by population (pediatric and adult), provider type, and geographical location as the most commonly applied adjustments to payment rates that overlap between FFS Medicaid and Medicare and could be readily broken down into separately identified payment rates for comparison in the comparative payment rate analysis. For transparency purposes and to help to ensure the comparative payment rate analysis is conducted at a granular level of analysis, we believe it is important for the State to separately identify their rates, if the rates vary, by population (pediatric and adult), provider type, and geographical location, as applicable. We are seeking public comments on the proposal to require the comparative payment rate analysis includes, if the rates vary, separate identification of payment rates by population (pediatric and adult), provider type, and geographical location, as applicable, in the comparative payment rate analysis in proposed § 447.203(b)(2).
We acknowledge that States may apply additional payment adjustments or factors, for example, the Consumer Price Index, Medicare Economic Index, or State-determined inflationary factors or budget neutrality factors, to their Medicaid payment rates other than population (pediatric and adult), provider type, and geographical location identified in this proposed rule. We would expect any other additional payment adjustments and factors to already be included in the State's published Medicaid fee schedule rate or calculable from the State plan because § 430.10 requires the State plan to be a “comprehensive written statement . . . contain[ing] all information necessary for CMS to determine whether the plan can be approved to serve as a basis for . . . FFP . . .” Therefore, for States paying for services with a fee schedule payment rate, the Medicaid fee schedule is the sole source of information for providers to locate their final payment rate for Medicaid services provide to Medicaid beneficiaries under a FFS delivery system. For States with a rate-setting methodology where the approved State plan describes how rates are set based upon a fee schedule (for example, payment for NPPs are set a percentage of a certain published Medicaid fee schedule), the Medicaid fee schedule would again be the source of information for providers to identify the relevant starting payment rate and apply the rate-setting methodology described in the State plan to ascertain their Medicaid payment.
In paragraphs (b)(2)(i) through (iv), we propose that primary care services, obstetrical and gynecological services, and outpatient behavioral health services would be subject to a comparative payment rate analysis of Medicaid payment rates and personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency would be subject to a payment rate disclosure of Medicaid payment rates. We begin with a discussion about the importance of primary care services, obstetrical and gynecological services, and outpatient behavioral health services as proposed in § 447.203(b)(2)(i) through (iii), and the reason for their inclusion in this proposed requirement. Then, we will discuss the importance and justification for including personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency as proposed in § 447.203(b)(2)(iv).
In § 447.203(b)(2)(i) through (iii), we propose to require primary care services, obstetrical and gynecological services, and outpatient behavioral health services be included in the comparative payment rate analysis, because we believe that these categories of services are critical preventive, routine, and acute medical services in and of themselves, and that they often serve as gateways to access to other needed medical services, including specialist services, laboratory and x-ray services, prescription drugs, and other mandatory and optional Medicaid benefits that States cover. Including these categories of services in the comparative payment rate analysis would require States to closely examine their Medicaid FFS payment rates to comply with section 1902(a)(30)(A) of the Act. As described in the recent key findings from public comments on the February 2022 RFI that we published, payment rates are a key driver of provider participation in the Medicaid program.
As discussed later in this section, we believe that Medicare payment rates for these services are likely to serve as a reliable benchmark for a level of payment sufficient to enlist providers to furnish the relevant services to a beneficiary because Medicare delivers services through a FFS delivery system across all geographical regions of the US and historically, the vast majority of physicians accept new Medicare patients, with extremely low rates of physicians opting out of the Medicare program, suggesting that Medicare's payment rates are generally consistent with a high level of physician willingness to accept new Medicare patients.
We propose to focus on these particular services because they are critical medical services and of great importance to overall beneficiary health. Beginning with primary care, these services provide access to preventative services and facilitate the development of crucial doctor-patient relationships. Primary care providers often deliver preventative health care services, including immunizations, screenings for common chronic and infectious diseases and cancers, clinical and behavioral interventions to manage chronic disease and reduce associated risks, and counseling to support healthy living and self-management of chronic diseases; Medicaid coverage of preventative health care services promotes disease prevention which is critical to helping people live longer, healthier lives.
Similar to primary care services, both obstetrical and gynecological services and outpatient behavioral health services provide access to preventative and screening services unique to each respective field. A well-woman visit to an obstetrician-gynecologist often provides access to screenings for cervical and breast cancer; screenings for Rh(D) incompatibility, syphilis infection, and hepatitis B virus infection in pregnant persons; monitoring for healthy weight and weight gain in pregnancy; immunization against the human papillomavirus infection; and perinatal depression screenings among other recommended preventive services.
The U.S. is simultaneously experiencing a maternal health crisis and mental health crisis, putting providers of obstetrical and gynecological and outpatient behavioral health services, respectively, at the forefront.
Improving access to behavioral health services is a critical, national issue facing all payors, particularly for Medicaid which plays a crucial role in mental health care access as the single largest payer of services and has a growing role in payment for substance use disorder services, in part due to Medicaid expansion and various efforts by Congress to improve access to mental health and substance use disorder services.
Some of the barriers to accessing behavioral health treatment in Medicaid reflect larger system-wide access problems: overall shortage of behavioral health providers in the United States and relatively small number of psychiatrists who accept any form of insurance or participate in health coverage programs.
In § 447.203(b)(2)(iv), we propose to require personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency in the payment rate disclosure requirements proposed in § 447.203(b)(3)(ii). We are cognizant that many HCBS providers nationwide are facing workforce shortages and high staff turnover that have been exacerbated by the COVID-19 pandemic, and these issues and related difficulty accessing HCBS can lead to higher rates of costly, institutional stays for beneficiaries.
The proposed payment rate disclosure would require States to publish the average hourly payment rates made to individual providers and to providers employed by an agency, separately, if the rates vary, for each category of services specified in paragraph (b)(2)(iv) of this section. No comparison to Medicare payment rates would be required in recognition that Medicare generally does not cover and pay for these services, and when these services are covered and paid for by Medicare, the services are very limited and provided on a short-term basis, rather than long-term basis as with Medicaid HCBS. While Medicare covers part-time or intermittent home health aide services (only if a Medicare beneficiary is also getting other skilled services like nursing and/or therapy at the same time) under Medicare Part A (Hospital Insurance) or Medicare Part B (Medical Insurance), Medicare does not cover personal care or homemaker services.
We propose to require these services be subject to a payment rate disclosure because this proposed rule aims to standardize data and monitoring across service delivery systems with the goal of improving access to care. To remain consistent with the proposed HCBS provisions at § 441.311(d)(2) and (e), where we propose to require annual State reporting on access and payment adequacy metrics for homemaker, home health aide, and personal care services, we are proposing to include these services, provided by individual providers and providers employed by an agency in the FFS payment rate disclosure proposed in § 447.203(b)(2). As described earlier in the HCBS provisions of this rule, these specific services were chosen because we expect them to be most commonly conducted in individuals' homes and general community settings and, therefore, constitute the vast majority of FFS payments for direct care workers delivering services under FFS. We acknowledge that the proposed analyses required of States in the HCBS provisions at § 441.311(d)(2) and (e) and in the FFS provisions at § 447.203(b)(2) are different, although, unique to assessing access in each program and delivery system. We are proposing to include personal care, home health aide, and homemaker services for consistency with HCBS access and payment adequacy provisions in this proposed rule, and also to include these services in the proposed provisions of § 447.203(b)(2) to require States to conduct and publish a payment rate disclosure. We believe the latter proposal is important because the payment rate disclosure of personal care, home health aide, and homemaker services would provide CMS with sufficient information, including average hourly payment rates, claims volume, and number of Medicaid enrolled beneficiaries who received a service as specified in proposed § 447.203(b)(3)(ii), from States for ensuring compliance with section 1902(a)(30)(A) of the Act, which requires that payments be consistent with efficiency, economy, and quality of care and sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area. Additionally, this proposal to include personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency is supported by the statutory mandate at section 2402(a) of the Affordable Care Act. Among other things, section 2402(a) of the Affordable Care Act directs the Secretary to promulgate regulations ensuring that all States develop service systems that ensure that there is an adequate number of qualified direct care workers to provide self-directed services. We are seeking public comment on personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency as the proposed categories of services subject to the payment rate disclosure requirements in proposed § 447.203(b)(2)(iv).
After discussing our proposed categories of services for the comparative payment rate analysis and payment rate disclosure requirements, we discuss the similarities and differences between the proposed rule and services currently included in the existing AMRP requirements. While this proposed rule would eliminate the triennial AMRP process, there are some similarities between the service categories for which we are proposing to require a comparative payment rate analysis or payment rate disclosure in § 447.203(b)(2) and those subject to the current AMRP requirements under § 447.203(b)(5)(ii). Specifically, § 447.203(b)(5)(ii)(A) currently requires the State agency to use data collected through the AMRP to provide a separate analysis for each provider type and site of service for primary care services (including those provided by a physician, FQHC, clinic, or dental care). We are proposing the comparative payment rate analysis include primary care services, without any parenthetical description. We believe this is appropriate because the proposed rule includes a comparative payment rate analysis that is at the Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) code level, as applicable, the specifics for which are discussed later in this section. This approach requires States to perform less sub-categorization of the data analysis, and as discussed later the analysis, would exclude FQHCs and clinics.
The current AMRP process also includes in § 447.203(b)(5)(ii)(C) behavioral health services (including mental health and substance use disorder); however, this proposed rule specifies that the comparative payment rate analysis only would include outpatient behavioral health services to narrow the scope of the analysis by excluding inpatient behavioral health services (including inpatient behavioral health services furnished in psychiatric residential treatment facilities, institutions for mental diseases, and psychiatric hospitals). While we acknowledge that behavioral health services encompass a broad range of services provided in a wide variety of settings, from outpatient screenings in a physician's office to inpatient hospital treatment, we are proposing to narrow the scope of behavioral health services to just outpatient services to focus the comparative payment rate analysis on ambulatory care provided by practitioners in an office-based setting without duplicating existing
The proposed categories of services in this rule are delivered as ambulatory care where the patient does not need to be hospitalized to receive the service being delivered. Particularly for behavioral health services, we propose to narrow the scope to outpatient behavioral health services to maintain consistency within the categories of service included in the proposed comparative payment rate analysis and payment rate disclosure all being classified as ambulatory care. Additionally, as discussed further in this section of the proposed rule, we proposed that the comparative payment rate analysis would be conducted on a CPT/HCPCS code level, focusing on E/M codes. By narrowing the comparative payment rate analysis to E/M CPT/HCPCS codes, we are proposing States' analyses includes a broad range of core services which would cover a variety of commonly provided services that fall into the categories of service proposed in paragraphs (b)(2)(i) through (iii). To balance State administrative burden with our oversight of State compliance with the access requirement in section 1902(a)(30)(A) of the Act, we are also proposing to limit the services to those delivered primarily by physicians and NPPs in an office-based setting for primary care, obstetrical and gynecological, and outpatient behavioral health services. By excluding facility-based services, particularly inpatient behavioral health services, we intend to ensure the same E/M CPT/HCPCS code-level methodology could be used for all categories of services included in the proposed comparative payment rate analysis, including the use of E/M CPT/HCPCS codes used for outpatient behavioral health services. Rather than fee schedule rates, States often pay for inpatient behavioral health services using prospective payment rate methodologies, such as Diagnosis Related Groups (DRGs), or interim payment methodologies that are reconciled to actual cost.
While we considered including inpatient behavioral health services as one of the proposed categories of services in the comparative payment rate analysis, we ultimately did not because we already collect and review Medicaid and Medicare payment rate data for inpatient behavioral health services through annual upper payment limits demonstrations (UPL) and supplemental payment reporting requirements under section 1903(bb) of the Act. SMDL 13-003 discusses the annual submission of State UPL demonstrations for inpatient hospital services, among other services, including a complete data set of payments to Medicaid providers and a reasonable estimate of what Medicare would have paid for the same services.
Additionally, section 1903(bb) of the Act requires us to establish a Medicaid supplemental payment reporting system that collects detailed information on State Medicaid supplemental payments, including total quarterly supplemental payment expenditures per provider; information on base payments made to providers that have received a supplemental payment; and narrative information describing the methodology used to calculate a provider's payment, criteria used to determine which providers qualifies to receive a payment, and explanation describing how the supplemental payments comply with section 1902(a)(30)(A) of the Act. Section 1903(bb)(1)(C) of the Act requires us to make State-reported supplemental payment information publicly available. For States making or wishing to make supplemental payments, including for inpatient behavioral health services, States must report supplemental payment information to us and we must make that information public and, therefore, transparent. Though this proposed rule seeks to increase transparency, with the
The AMRP process also currently includes in § 447.203(b)(5)(ii)(D) pre- and post-natal obstetric services including labor and delivery; we are proposing to include these services in the comparative payment rate analysis requirements under proposed § 447.203(b)(2)(ii), but intend to broaden the scope of this category of services to include both obstetrical and gynecological services. This expanded proposed provision would capture a wider array of services, both obstetrical and gynecological services, for States and CMS to assess and ensure access to care in Medicaid FFS is at least as great for beneficiaries as is generally available to the general population in the geographic area, as required by with section 1902(a)(30)(A) of the Act. Lastly, similar to current § 447.203(b)(5)(ii)(E), which specifies that Home health services are included in the AMRP process, we are proposing to include personal care, home health aide, and homemaker services, provided by individual providers and providers employed by an agency. This refined proposed provision would help ensure a more standardized effort to monitor access across Medicaid delivery systems, including for Medicaid-covered LTSS. We believe this proposal also addresses public comments received in response to the February 2022 RFI.
In public comments that we received during the public comment period for the 2015 final rule with comment period, many commenters requested that we require States to publish access to care analyses for pediatric services, including pediatric primary care, behavioral health, and dental care. At the time, we responded that pediatric services did not need to be specified in the required service categories because States were already required through § 447.203(b)(1)(iv) to consider the characteristics of the beneficiary population, “including . . . payment variations for pediatric and adult populations,” within the AMRPs.
We are proposing to eliminate the following from the current AMRP process without replacement in the proposed comparative payment rate analysis requirement, § 447.203(b)(5)(ii)(F): Any additional types of services for which a review is required under current § 447.203(b)(6); § 447.203(b)(5)(ii)(G): Additional types of services for which the State or CMS has received a significantly higher than usual volume of beneficiary, provider or other interested party access complaints for a geographic area, including complaints received through the mechanisms for beneficiary input consistent with current § 447.203(b)(7); and § 447.203(b)(5)(ii)(H): Additional types of services selected by the State.
We propose to eliminate § 447.203(b)(5)(ii)(F) and (G) without a direct replacement because the proposed State Analysis Procedures for Rate Reduction or Restructuring described in § 447.203(c) are inclusive of and more refined than the current AMRP requirements for additional types of services for which a review is required under current § 447.203(b)(6). Specifically, as discussed later in this section, we are proposing in § 447.203(c)(1) that States seeking to reduce provider payment rates or restructure provider payments would be required to provide written assurance and relevant supporting documentation that three conditions are met to qualify for a streamlined SPA review process, including that required public processes yielded no significant access to care concerns for beneficiaries, providers, or other interested parties, or if such processes did yield concerns, that the State can reasonably respond to or mitigate them, as appropriate. If the State is unable to meet all three of the proposed conditions for streamlined SPA review, including the absence of or ability to appropriately address any access concern raised through public processes, then the State would be required to submit additional information to support that its SPA is consistent with the access requirement in section 1902(a)(30)(A) of the Act, as proposed in § 447.203(c)(2). We are proposing to modify this aspect of the current AMRP process, because our implementation experience since the 2017 SMDL has shown that States typically have been able to work directly with the public (including beneficiaries and beneficiary advocacy groups, and providers) to resolve access concerns, which emphasizes that public feedback continues to be a valuable source of knowledge regarding access in Medicaid. We believe this experience demonstrates that public processes that occur before the submission of a payment SPA to CMS often resolve initial access concerns, and where concerns persist, they will be addressed through the SPA submission and our review process, as provided in proposed § 447.203(c). Rather than services affected by proposed provider rate reductions or restructurings (current § 447.203(b)(5)(ii)(F)) and services for which the State or CMS received significantly higher than usual volume of complaints (current § 447.203(b)(5)(ii)(G)) being addressed through an AMRP, these services subject to rate reductions or restructurings and services where a high volume of complaints have been expressed would now be addressed by the State analysis procedures in proposed § 447.203(c). We believe this approach would ensure public feedback is fully considered in the context of a payment SPA, without the need to specifically require a
Lastly, we propose to eliminate current § 447.203(b)(5)(ii)(H), requiring the AMRP include analysis regarding “Additional types of services selected by the State,” without a direct replacement because our implementation experience has shown that the majority of States did not select additional types of service to include in their AMRPs beyond the required services § 447.203(b)(5)(ii)(A) through (G). When assessing which services to include in this proposed rule, we determined that the absence of an open-ended type of service option, similar to § 447.203(b)(5)(ii)(H) is unlikely to affect the quality of the analysis proposed in this rule and therefore, we are not including it in the proposed set of services required for the comparative payment rate analysis. These shifts in policy were informed by our implementation experience and our consideration of State concerns about the burden and value of the AMRP process.
In paragraph (b)(3), we propose that the State agency would be required to develop and publish, consistent with the publication requirements described in paragraph (b)(1) of this section for payment rate transparency data, a comparative payment rate analysis and payment rate disclosure. This comparative payment rate analysis is divided into two sections based on the categories of services and the organization of each analysis or disclosure. Paragraph (b)(3)(i) describes the comparative payment rate analysis for the categories of service described in paragraphs (b)(2)(i) through (iii): primary care services, obstetrical and gynecological services, and outpatient behavioral health services. Paragraph (b)(3)(ii) describes the payment rate disclosure for the categories of service described in paragraphs (b)(2)(iv): personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency.
Specifically, in paragraph (b)(3)(i), we propose that for the categories of service described in paragraphs (b)(2)(i) through (iii), the State's analysis would compare the State's Medicaid FFS payment rates to the most recently published Medicare payment rates effective for the same time period for the E/M CPT/HCPCS codes applicable to the category of service. The proposed comparative payment rate analysis of FFS Medicaid payment rates to FFS Medicare payment rates would be conducted on a code-by-code basis at the CPT/HCPCS code level using the most current set of codes published by us. It is intended to provide an understanding of how Medicaid payment rates compare to the payment rates established and updated under the FFS Medicare program.
We would expect to publish the E/M CPT/HCPCS codes to be used for the comparative payment rate analysis in subregulatory guidance along with the final rule, if this proposal is finalized. We propose that we would identify E/M CPT/HCPCS codes to be included in the comparative payment rate analysis based on the following criteria: the code is effective for the same time period of the comparative payment rate analysis; the code is classified as an E/M CPT/HCPCS code by the American Medical Association (AMA) CPT Editorial Panel; the code is included on the Berenson-Eggers Type of Service (BETOS) code list effective for the same time period as the comparative payment rate analysis and falls into the E/M family grouping and families and subfamilies for primary care services, obstetrics and gynecological services, and outpatient behavioral services; and the code has an A (Active), N (Non-Covered), R (Restricted), or T (Injections) code status on the Medicare PFS with a Medicare established relative value unit (RVU) and payment amount for the same time period of the comparative payment rate analysis.
The CMS published list of E/M CPT/HCPCS codes subject to the comparative payment rate analysis would classify each E/M CPT/HCPCS code into a corresponding category of service as described in proposed § 447.203(b)(2)(i) through (iii). As previously discussed, by narrowing the comparative payment rate analysis to CMS-specified E/M CPT/HCPCS codes, we are proposing States' analyses include a broad range of core services which would cover a variety of commonly provided services that fall into the categories of service proposed in paragraphs (b)(2)(i) through (iii), while also limiting the services to those delivered primarily by physicians and NPPs in an office-based setting. Based on the categories of services specified in proposed § 447.203(b)(2)(i) through (iii), we expect the selected E/M CPT/HCPCS codes to fall under mandatory Medicaid benefit categories, and therefore, we expect that all States would cover and pay for the selected E/M CPT/HCPCS codes. To clarify, we did not narrow the list of E/M CPT/HCPCS codes to those with an A (Active), N (Non-Covered), R (Restricted), or T code status on the Medicare PFS with a Medicare established relative value unit (RVU) and payment amount on the basis of Medicare coverage of a particular code. We are cognizant that codes with N (Non-Covered), R (Restricted), or T code statuses have limited or no Medicare coverage, however, Medicare may establish RVUs and payment amounts for these codes. Therefore, when Medicare does establish RVUs and payment amounts for codes with N (Non-Covered), R (Restricted), or T (Injections) code statuses on the Medicare PFS, we are proposing to include these codes in the comparative payment rate analysis in order to ensure the analysis includes a comprehensive set of codes, for example pediatric services, including well child visits (for example, 99381 through 99384), that are commonly provided services that fall into the categories of service proposed in paragraphs (b)(2)(i) through (iii) and delivered primarily by physicians and NPPs in an office-based setting, as previously described.
As discussed later in this rule, we propose that the comparative payment rate analysis would be updated no less than every 2 years. Therefore, prior to the start of the calendar year in which States would be required to update their comparative payment rate analysis, we would intend to publish an updated list of E/M CPT/HCPCS codes for States to use for their comparative payment rate analysis updates through subregulatory guidance. The updated list of E/M CPT/HCPCS codes would incorporate changes made by to the AMA CPT Editorial Panel (such as additions, removals, or amendments to a code definition where there is a change in the set of codes classified as an E/M CPT/HCPCS code billable for primary care services, obstetrics and gynecological services, or outpatient behavioral services) and changes to the Medicare PFS based on the most recent Medicare PFS final rule (such as changes in code status or creation of Medicare-specific codes).
We intend to publish the initial and subsequent updates of the list of E/M CPT/HCPCS codes subject to the comparative payment rate analysis in a timely manner that allows States approximately one full calendar year between the publication of the CMS-
We acknowledge that there are limitations to relying on E/M CPT/HCPCS codes to select payment rates for comparative payment rate analysis to aid States, CMS, and other interested parties in assessing if payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area. Providers across the country and within each State deliver a variety of services to patients, including individuals with public and private sources of coverage, and then bill them under a narrow subset of CPT/HCPCS codes that fit into the E/M classification as determined by the AMA CPT Editorial Panel. The actual services delivered can require a wide array of time, skills, and experience of the provider which must be represented by a single five digit code for billing to receive payment for the services delivered. While there are general principles that guide providers in billing the most representative E/M CPT/HCPCS code for the service they delivered, two providers might perform substantially similar activities when delivering services and yet bill different E/M CPT/HCPCS codes for those activities, or bill the same E/M CPT/HCPCS code for furnishing two very different services. The E/M CPT/HCPCS code itself is not a tool for capturing the exact service that was delivered, but medical documentation helps support the billing of a particular E/M CPT/HCPCS code.
Although they do not encompass all Medicaid services covered and paid for in the Medicaid program which are subject to the requirements in section 1902(a)(30)(A) of the Act, E/M CPT/HCPCS codes are some of the most commonly billed codes and including them in the comparative payment rate analysis would allow us to uniformly compare Medicaid payment rates for these codes to Medicare PFS rates. As such, to balance administrative burden on States and our enforcement responsibilities, we are proposing to use E/M CPT/HCPCS codes in the comparative payment rate analysis to define the parameters of our analysis to how much Medicaid and the FFS Medicare program would pay for services that can be classified into a particular E/M CPT/HCPCS code. We are seeking public comment on the proposed comparative payment rate analysis requirement in § 447.203(b)(3)(i), including the proposed requirement to conduct the analysis at the CPT/HCPCS code level, the proposed criteria that we would apply in selecting E/M CPT/HCPCS codes for inclusion in the required analysis, and the proposed requirement for States to compare Medicaid payment rates for the selected E/M CPT/HCPCS codes to the most recently published Medicare non-facility payment rate as listed on the Medicare PFS effective for the same time period which is discussed in more detail later in this rule when describing the proposed provisions of § 447.203(b)(3)(i)(C).
In paragraph (b)(3)(i), we further propose that the State's comparative payment rate analysis would be required to meet the following requirements: (A) the analysis must be organized by category of service as described in § 447.203(b)(2)(i) through (iii); (B) the analysis must clearly identify the Medicaid base payment rates for each E/M CPT/HCPCS code identified by us under the applicable category of service, including, if the rates vary, separate identification of the payment rates by population (pediatric and adult), provider type, and geographical location, as applicable; (C) the analysis must clearly identify the Medicare PFS non-facility payment rates effective for the same time period for the same set of E/M CPT/HCPCS codes, and for the same geographical location as the Medicaid base payment rates, that correspond to the Medicaid payment rates identified under paragraph (b)(3)(i)(B); (D) the analysis must specify the Medicaid payment rate identified under paragraph (b)(3)(i)(B) as a percentage of the Medicare payment rate identified under paragraph (b)(3)(i)(C) for each of the services for which the Medicaid payment rate is published under paragraph (b)(3)(i)(B); and (E) the analysis must specify the number of Medicaid-paid claims within a calendar year for each of the services for which the Medicaid payment rate is published under paragraph (b)(3)(i)(B). We are seeking public comment on the proposed requirements and content of the items in proposed § 447.203(b)(3)(i)(A) through (E).
In paragraph (b)(3)(i)(A), we propose to require States to organize their comparative payment rate analysis by the service categories described in paragraphs (b)(2)(i) through (iii) of this section. This proposed requirement is included to ensure the analysis breaks out the payment rates for primary care services, obstetrical and gynecological services, and outpatient behavioral health services separately for individual analyses of the payment rates for each CMS-selected E/M CPT/HCPCS code, grouped by category of service. We are seeking public comment on the proposed requirement for States to break out their payment rates at the CPT/HCPCS code level for primary care services, obstetrical and gynecological services, and outpatient behavioral health services, separately, in the comparative payment rate analysis as specified in proposed § 447.203(b)(3)(i)(A).
In paragraph (b)(3)(i)(B), after organizing the analysis by § 447.203(b)(2)(i) through (iii) categories of service and CMS-specified E/M CPT/HCPCS code, we propose to require States to clearly identify the Medicaid base payment rate for each code, including, if the rates vary, separate identification of the payment rates by population (pediatric and adult), provider type, and geographical location, as applicable. We propose that the Medicaid base payment rate in the comparative payment rate analysis would only include the State's Medicaid fee schedule rate, that is, the State's Medicaid base rate for each E/M CPT/HCPCS code. By specifying the services included in the comparative payment rate analysis by E/M CPT/HCPCS code, we expect the Medicaid base payment rate in the comparative payment rate analysis would only include the State's Medicaid fee schedule rate for that particular E/M CPT/HCPCS code as published on the State's Medicaid fee schedule effective for the same time period covered by the comparative payment rate analysis. As an example,
Medicaid base payment rates are typically determined through one of three methods: the resource-based relative value scale (RBRVS), a percentage of Medicare's fee, or a State-developed fee schedule using local factors.
We acknowledge that only including Medicaid base payments in the analysis does not necessarily represent all of a provider's revenues that may be related to furnishing services to Medicaid beneficiaries, and that other revenues not included in the proposed comparative analysis may be relevant to a provider's willingness to participate in Medicaid (such as beneficiary cost sharing payments, disproportionate share hospital payments for qualifying hospitals, supplemental payments, etc.). Public comments we received on the 2011 proposed rule and responded to in the 2015 final rule with comment period regarding the AMRPs expressed differing views regarding which provider “revenues” should be included within comparisons of Medicaid to Medicare payment rates. One commenter “noted that the preamble of the 2011 proposed rule refers to `payments' and `rates' interchangeably but that courts have defined payments to include all Medicaid provider revenues rather than only Medicaid FFS rates.” The commenter stated that if the final rule consider[ed] all Medicaid revenues received by providers, States may be challenged to make any change to the Medicaid program that might reduce provider revenues.”
We believe this proposal represents the best way to create a consistent metric across States against which to evaluate access. To be specific, we are not proposing to include supplemental payments in the comparative payment rate analysis. Requiring supplemental payment data be collected and included under this rule would be duplicative of existing requirements. State supplemental payment and DSH payment data are already subject to our review in various forms, such as through DSH audits for DSH payments, and through annual upper payment limits demonstrations, and through supplemental payment reporting under section 1903(bb) of the Act.
Additionally, in paragraph (b)(3)(i)(B), we propose that, if the States' payment rates vary, the Medicaid base payment rates must include a breakdown by payment rates paid to providers delivering services to pediatric and adult populations, by provider type, and geographical location, as applicable, to capture this potential variation in the State's payment rates. This proposed provision to breakdown the Medicaid payment rate is first stated in proposed paragraph (b)(2) and carried through in proposed paragraph (b)(3)(i)(B) to provide clarity to States about how the Medicaid payment rate should be reported in the comparative payment rate analysis.
In paragraph (b)(3)(i)(C), we propose to require States' comparative payment rate analysis clearly identify the Medicare non-facility payment rates effective for the same time period for the same set of E/M CPT/HCPCS codes, and for the same geographical location, that correspond to the Medicaid payment rates identified under paragraph (b)(3)(i)(B), including, separate identification of the payment rates by provider type. We are not proposing to establish a threshold percentage of Medicare non-facility payment rates that States would be required to meet when setting their Medicaid payment rates. Rather, we are proposing to use Medicare non-facility payment rates as listed on the Medicare PFS as a benchmark to which States would compare their Medicaid payment rates to inform their and our assessment of whether the State's payment rates are compliant with section 1902(a)(30)(A) of the Act. Benchmarking against FFS Medicare, another of the nation's large public health coverage programs, serves as an important data point in determining whether payment rates are likely to be sufficient to ensure access for Medicaid beneficiaries at least as great as for the general population in the geographic area, and whether any identified access concerns may be related to payment sufficiency. Similar to Medicaid, Medicare provides health coverage for a significant number of
Additionally, Medicare is widely accepted nationwide according to recent findings from the National Electronic Health Records Survey. In 2019, 95 percent of physicians accepting new patients overall, and 89 percent of office-based physicians, were accepting new Medicare patients, and the percentage of office-based physicians accepting new Medicare patients has remained stable since 2011 when the value was 88 percent, with modest fluctuations in the years in between.
Historically, Medicare has low rates of physicians formally opting out of the Medicare program with 1 percent of physicians consistently opting out between 2013 and 2019 and of that 1 percent of physicians opting out of Medicare, 42 percent were psychiatrists.
Specifically, in paragraph (b)(3)(i)(C), we propose to require States to compare their Medicaid payment rates to the Medicare non-facility payment rates effective for the same time period as the same set of E/M CPT/HCPCS codes paid under Medicaid as specified under paragraph (b)(3)(i)(B) of this section, including, separate identification of the payment rates by provider type. We propose to require States to compare their payment rates to the corresponding Medicare PFS non-facility rates because we are seeking a payment analysis that compares Medicaid payment rates to Medicare payment rates at comparable location of service delivery (that is, in a non-clinic, non-hospital, ambulatory setting such as a physician's office). States often pay physicians operating in an office based on their Medicaid fee schedule whereas they may pay physicians operating in hospitals or clinics using an encounter rate. The Medicaid fee schedule rate typically reflects payment for an individual service that was rendered, for example, an office visit that is billed as a single CPT/HCPCS code. An encounter rate often reflects reimbursement for total facility specific costs divided by the number of encounters to calculate a per visit or per encounter rate that is paid to the facility for all services received during an encounter, regardless of which specific services are provided during a particular encounter. For example, the same encounter rate may be paid for a beneficiary who has an office visit with a physician, a dental examination and cleaning from a dentist, and laboratory tests and for a beneficiary who receives an office visit with a physician and x-rays. Encounter rates are typically paid to facilities, such as hospitals, FQHCs, RHCs, or clinics, many of which function as safety net providers that offer a wide variety of medical services. Within the Medicaid program, encounter rates can vary
From that logic, we likewise determined that the Medicare non-facility payment rates as listed on the Medicare PFS rate afforded the best point of comparison because it is the most accurate and most analogous comparison of a service-based access analysis using Medicare non-facility payment rates as listed on the Medicare PFS as a benchmark to compare Medicaid fee schedule rates on a CPT/HCPCS code level basis, as opposed to an encounter rate which could include any number of services or specialties. The Medicare non-facility payment rate as listed on the Medicare PFS is described as “. . . the fee schedule amount when a physician performs a procedure in a non-facility setting such as the office” and “[g]enerally, Medicare gives higher payments to physicians and other health care professionals for procedures performed in their offices [compared to those performed elsewhere] because they must supply clinical staff, supplies, and equipment.”
For the purposes of the comparative payment rate analysis, we would expect States to source the Medicare non-facility payment rate from the published Medicare fee schedule amounts on the Medicare PFS through one or both of the following sources: the Physician Fee Schedule Look-Up Tool
As described in the Medicare Claims Processing Manual, most physician services are paid according to the Medicare PFS and the fee schedule amounts for a particular procedure code (including HCPCS, CPT, and CDT) are computed using a resource-based formula made up of three components of a procedure's RVU: physician work, practice expense, and malpractice as well as geographical differences in each locality area of the country.
Medicare also includes adjustments to the fee schedule amounts, for example, based on site of service (non-facility versus facility setting), where the rate, facility or non-facility, that a physician service is paid under the PFS is determined by the place of service (POS) code that is used to identify the setting where the beneficiary received the face-to-face encounter with the billing practitioner. We are proposing States use the Medicare non-facility payment rate as listed on the Medicare PFS in the comparative payment rate analysis. For codes that are not available in the Look-Up Tool, we would direct States to the Excel file downloads of the Medicare PFS Relative Value Files which include the RVUs, GPCI, and the “National Physician Fee Schedule Relative Value File Calendar Year 2023” file which contains the associated relative value units (RVUs), a fee schedule status indicator, and various payment policy indicators needed for payment adjustment (
Medicaid fee-schedule rates should be representative of the total computable payment amount a provider would expect to receive as payment-in-full for the provision of Medicaid services to individual beneficiaries. 42 CFR 447.15 defines payment-in-full as “the amounts paid by the agency plus any deductible, coinsurance or copayment required by the plan to be paid by the individual.” Therefore, the State's Medicaid base payment rate used for comparison should be inclusive of total base payment from the Medicaid agency plus any applicable coinsurance and deductibles to the extent that a beneficiary is expected to be liable for those payments. If a State Medicaid fee schedule does not include these additional beneficiary cost-sharing payment amounts, then the Medicaid fee schedule amounts would need to be modified to align with the inclusion of expected beneficiary cost sharing in Medicare's non-facility payment rates as listed on the Medicare PFS.
In paragraph (b)(3)(i)(C), we propose that the Medicare non-facility payment rates must be effective for the same time period for the same set of E/M CPT/HCPCS codes that correspond to the Medicaid base payment rates identified under paragraph (b)(3)(i)(B) of this section. We included this language to ensure the comparative payment rate analysis is as accurate and analogous as possible by proposing that the Medicaid and Medicare payment rates that are effective during the same time period for the same set of E/M CPT/HCPCS codes. As later described in this rule, in paragraph (b)(4), we propose the initial comparative payment rate analysis and payment rate disclosure of its Medicaid payment rates would be a retroactive analysis of payment rates that are in effect as of January 1, 2025, with the analysis and disclosure published no later than January 1, 2026. For example, the first comparative payment rate analysis a State develops and publishes would compare Medicaid base payment rates in effect as of January 1, 2025, to the Medicare non-facility payment rates effective January 1, 2025, to ensure the Medicare non-facility payment rates are effective for the same time period for the same set of E/M CPT/HCPCS codes that correspond to the Medicaid base payment rates identified under paragraph (b)(3)(i)(B) of this section.
Additionally, in paragraph (b)(3)(i)(C), we propose that the Medicare non-facility payment rates as listed on the Medicare PFS used for the comparison must be for the same geographical location as the Medicaid base payment rates. For States that pay Medicaid payment rates based on geographical location (for example, payment rates that vary by rural or non-rural location, by zip code, or by metropolitan statistical area), we propose that States comparative payment rate analysis would need to utilize the Medicare non-facility payment rates as listed on the Medicare PFS for the same geographical location as the Medicaid base payment rates to achieve an equivalent comparison. We would expect States to review Medicare's published listing of the current PFS locality structure organized by State, locality area, and when applicable, counties assigned to each locality area and identify the comparable Medicare locality area for the same geographical area as the Medicaid base payment rates.
We recognize that States that make Medicaid payment based on geographical location may not use the same locality areas as Medicare. For example, a State may use its own State-determined geographical designations, resulting in 5 geographical areas in the State for purposes of Medicaid payment while Medicare recognizes 3 locality areas for the State based on Metropolitan Statistical Area (MSA) delineations determined by the US Office of Management and Budget (OMB) and are the result of the application of published standards to Census Bureau data.
We are aware that States may not determine their payment rates by geographical location. For States that do not pay Medicaid payment rates based on geographical location, we propose that States compare their Medicaid payment rates (separately identified by population, pediatric and adult, and provider type, as applicable) to the Statewide average of Medicare non-facility payment rates as listed on the Medicare PFS for a particular CPT/HCPCS code. The Statewide average of the Medicare non-facility payment rates as listed on the Medicare PFS for a particular CPT/HCPCS code would be calculated as a simple average or arithmetic mean where all Medicare non-facility payment rates as listed on the Medicare PFS for a particular CPT/HCPCS code for a particular State would be summed and divided by the number of all Medicare non-facility payment rates as listed on the Medicare PFS for a particular CPT/HCPCS code for a particular State. This calculated Statewide average of the Medicare non-facility payment rates as listed on the Medicare PFS would be calculated for each CPT/HCPCS code subject to the comparative payment rate analysis using the Non-Facility Price for each locality in the State rates as listed on the Medicare PFS. As previously mentioned, Medicare has published a listing of the current PFS locality structure organized by State, locality area, and when applicable, counties assigned to each locality area and we would expect States to utilize this listing to identify the Medicare locality areas in their State. For example, the Specific Medicare Administrative Contractor (MAC) for Maryland is 12302 and there are two Specific Locality codes, 1230201 for BALTIMORE/SURR. CNTYS and 1230299 for REST OF STATE. When using the Medicare Physician Fee Schedule Look Up Tool to identify the Medicare Non-Facility Price(s) for CY 2023 for 99202 in the Specific MAC locality code for Maryland (12302 MARYLAND), the following search results are populated: Medicare Non-Facility Price of $77.82 for BALTIMORE/SURR. CNTYS and $74.31 for REST OF STATE.
For States that do not determine their payment rates by geographical location, we propose that States would use the Statewide average of the Medicare Non-Facility Price(s) as listed on the PFS, as previously described, because it ensures consistency across all States' comparative payment rate analysis,
Additionally, we propose that States that do not determine their payment rates by geographical location should use the Statewide average of the Medicare non-facility payment rates as listed on the Medicare PFS to align the implementing regulatory text with the statute's geographic area requirement in section 1902(a)(30)(A) of the Act. Section 1902(a)(30)(A) of the Act requires that Medicaid payments are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area. Therefore, the proposed provisions of this rule, which are implementing section 1902(a)(30)(A) of the Act, must include a method of ensuring we have sufficient information for determining sufficiency of access to care as compared to the general population in the geographic area. As we have proposed to use Medicare non-facility payment rates as a benchmark for comparing Medicaid base payment rates, we believe that utilizing a Statewide average of Medicare non-facility payment rates as listed on the Medicare PFS for States that do not pay varying rates by geographical location would align the geographic area requirement of section 1902(a)(30)(A) of the Act, treating the entire State (throughout which the Medicaid base payment rate applies uniformly) as the relevant geographic area.
We considered requiring States weight the Statewide average of the Medicare non-facility payment rates by the proportion of the Medicare beneficiary population covered by each rate, but we did not propose this due to the additional administrative burden this would create for States complying with the proposed comparative payment rate analysis as well as limited availability of Medicare beneficiary and claims data necessary to weight the Statewide average of the Medicare non-facility payment rates as described above. As proposed, States that do not determine their payment rates by geographical location would be required to consider Medicare's geographically determined payment rates by Statewide average of the Medicare non-facility payment rates. We believe that proposing an additional step to weight the Statewide average by the proportion of the Medicare beneficiary population covered by each rate would create would not result in a practical version of the Medicare non-facility payment rate for purposes of the comparative payment rate analysis. Additionally, proposing only States that do not determine their payment rates by geographical location would result in additional administrative burden that is not imposed on States who do determine their payment rates by geographical location. Additionally, in order to accurately weight the Statewide average of the Medicare non-facility payment rates by the proportion of the Medicare beneficiary population covered by each rate, States would likely require Medicare-paid claims data for each code subject to the comparative payment rate analysis, broken down by each of the comparable Medicare locality areas for the same geographical area as the Medicaid base payment rates that are included in the Statewide average of Medicare non-facility payment rates. While total Medicare beneficiary enrollment data broke down by State and county level is publicly available on
Furthermore, in paragraph (b)(3)(i)(C), we propose that the Medicare non-facility payment rate must separately identify the payment rates by provider type. We previously discussed that some States and Medicare pay a percentage less than 100 percent of their fee schedule payment rates to NPPs, including, for example, nurse practitioners, physician assistants, and clinical nurse specialists. To ensure a State's comparative payment rate analysis is as accurate as possible when comparing their Medicaid payment rates to Medicare, we are proposing that States include a breakdown of Medicare's non-facility payment rates by provider type. The proposed breakdown of Medicare's payment rates by provider type would be required for all States, regardless of whether or how the State's Medicaid payment rates vary by provider type, because it ensures the comparative payment rate analysis accurately reflects this existing Medicare payment policy on the Medicare side of the analysis. Therefore, every comparative payment rate analysis would include the following Medicare non-facility payment rates for the same set of E/M CPT/HCPCS codes paid under Medicaid as described in § 447.203(b)(3)(i)(B): the non-facility payment rate as listed on Medicare PFS rate as the Medicare payment rate for physicians and the non-facility payment rate as listed on Medicare PFS rate multiplied by 0.85 as the Medicare payment rate for NPPs.
As previously mentioned in this proposed rule, Medicare pays nurse practitioners, physician assistants, and clinical nurse specialists at 85 percent of the Medicare PFS rate. Medicare
This granular level of comparison provides States with the opportunity to benchmark their Medicaid payment rates against Medicare as part of the State's and our process for ensuring compliance with section 1902(a)(30)(A) of the Act. For example, a State's comparative payment rate analysis may show that the State's Medicaid base payment rate for physicians is 80 percent of the Medicare non-facility payment rate and their Medicaid base payment rate for nurse practitioners is 71 percent of the Medicare non-facility payment rate for NPPs, because the State pays a reduced rate to nurse practitioners. Although Medicare also pays a reduced rate to nurse practitioners, the reduced rate the State pays to nurse practitioners compared to Medicare's reduced rate is still a lower percentage than the physician rate. However, another State's comparative payment rate analysis may show that the State's Medicaid base payment rate for physicians is 95 percent of the Medicare non-facility payment rate and their Medicaid base payment rate for nurse practitioners is 110 percent of the Medicare non-facility payment rate because the State pays all providers the same Medicaid base payment rate while Medicare pays a reduced rate of 85 percent of the Medicare non-facility payment rate as listed on the Medicare PFS when the service is furnished by an NPP. By conducting this level of analysis through the comparative payment rate analysis, States would be able to pinpoint where there may be existing or potential future access to care concerns rooted in payment rates. We are seeking public comment on the proposed requirement for States to compare their Medicaid payment rates to the Medicare non-facility payment rate as listed on the Medicare PFS, effective for the same time period for the same set of E/M CPT/HCPCS codes, and for the same geographical location as the Medicaid base payment rates, that correspond to the Medicaid base payment rates identified under paragraph (b)(3)(i)(B) of this section, including, separate identification of the payment rates by provider type, as proposed in § 447.203(b)(3)(i)(C).
In paragraph (b)(3)(i)(D), we propose to require States specify the Medicaid base payment rate identified under proposed § 447.203(b)(3)(i)(B) as a percentage of the Medicare non-facility payment rate identified under proposed § 447.203(b)(3)(i)(C) for each of the services for which the Medicaid base payment rate is published under proposed § 447.203(b)(3)(i)(B). For each E/M CPT/HCPCS code that we select, we propose that States would calculate each Medicaid base payment rate as specified in paragraph (b)(3)(i)(B) as a percentage of the corresponding Medicare non-facility payment rate specified in paragraph (b)(3)(i)(C). Both rates would be required to be effective for the same time period of the comparative payment rate analysis. As previous components of the proposed comparative payment rate analysis have considered variance in payment rates based on population the service is delivered to (adult or pediatric), provider type, and geographical location to extract the most granular and accurate Medicaid and Medicare payment rate data, we propose that States would calculate the Medicaid base payment rate as a percentage of the Medicare non-facility payment rate in the comparative payment rate analysis to obtain an informative metric that can be used in the State's and our assessment of whether the State's payment rates are compliant with section 1902(a)(30)(A) of the Act. As previously discussed, benchmarking against Medicare serves as an important data point in determining whether payment rates are likely to be sufficient to ensure access for Medicaid beneficiaries at least as great as for the general population in the geographic area, and whether any identified access concerns may be related to payment sufficiency. We propose that States would calculate their Medicaid payment rates as a percentage of the Medicare non-facility payment rate because it is a common, simple, and informative statistic that can provide us with a gauge of how Medicaid payment rates compare to Medicare non-facility payment rates in the same geographic area. Initially and over time, States, CMS, and other interested parties would be able to compare the State's Medicaid payment rates as a percentage of Medicare's non-facility payment rates to identify how the percentage changes over time, in view of changes that may take place to the Medicaid and/or the Medicare payment rate. Being able to track and analyze the change in percentage over time would help States and CMS identify possible access concerns that may be related to payment insufficiency.
The organization and content of the comparative payment rate analysis, including the expression of the Medicaid base payment rate as a percentage of the Medicare payment rate, can provide us with a great deal of information about access in the State. For example, we would be able to identify when and how the Medicaid base payment rate as a percentage of the Medicare non-facility payment rate for E/M CPT/HCPCS codes for primary care
We are aware that provider payment rates are an important factor influencing beneficiary access; as expressly indicated in section 1902(a)(30)(A) of the Act, insufficient provider payment rates are not likely to enlist enough providers willing to serve Medicaid beneficiaries to ensure broad access to care; however, there may be situations where access issues are principally due to other causes. For example, even if Medicaid payment rates are generally consistent with amounts paid by Medicare (and those amounts have been sufficient to ensure broad access to services for Medicare beneficiaries), Medicaid beneficiaries may have difficulty scheduling behavioral health care appointments because the overall number of behavioral health providers within a State is not sufficient to meet the demands of the general population. Therefore, a State's rates may be consistent with the requirements of section 1902(a)(30)(A) of the Act even when access concerns exist, and States and CMS may need to examine other strategies to improve access to care beyond payment rate increases. By contrast, comparing a State's Medicaid behavioral health payment rates to Medicare may demonstrate that the State's rates fall far below Medicare non-facility payment rates, which would likely impede beneficiaries from accessing needed care when the demand already exceeds the supply of providers within a State. In that case, States may need to evaluate budget priorities and take steps to ensure behavioral health rates are consistent with section 1902(a)(30)(A) of the Act.
Lastly, in paragraph (b)(3)(i)(E), we propose to require States to specify in their comparative payment rate analyses the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid base payment rate is published under paragraph (b)(3)(i)(B). The previous components of the comparative payment rate analysis focus on the State's payment rate for the E/M CPT/HCPCS code and comparing the Medicaid base payment rate to the Medicare non-facility payment rate for the same code (separately, for each Medicaid base payment rate by population (adult or pediatric), provider type, and geographic area, as applicable). This component examines the Medicaid-paid claims volume of each E/M CPT/HCPCS code included in the comparative payment rate analysis relative to the number of Medicaid enrolled beneficiaries receiving each service within a calendar year. We propose to limit the claims volume data to Medicaid-paid claims, and the number of beneficiaries would be limited to Medicaid-enrolled beneficiaries who received a service in the calendar year of the comparative payment rate analysis, where the service would fall into the list of CMS-identified E/M CPT/HCPCS code(s). In other words, a beneficiary would be counted in the comparative payment rate analysis for a particular calendar year when the beneficiary received a service that is included in one of the categories of services described in paragraphs (b)(2)(i) through (iii) for which the State has a Medicaid-based payment rate (the number of Medicaid-enrolled beneficiaries who received a service). A claim would be counted in the comparative payment rate analysis for a particular calendar year when that beneficiary had a claim submitted on their behalf by a provider who billed one of the codes from the list of CMS-identified E/M CPT/HCPCS code(s) to the State and the State paid the claim (number of Medicaid-paid claims). With this proposal, we are seeking to ensure the comparative payment rate analysis reflects actual services received by beneficiaries and paid for by the State, or realized access.
We considered but did not propose States identify the number of unique Medicaid-paid claims and the number of unique Medicaid-enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid base payment rate is published pursuant to paragraph (b)(3)(i)(B). We considered this detail in order to identify the unique, or deduplicated, number of beneficiaries who received a service that falls into one of the categories of services described in in paragraph (b)(2)(i) through (iii) in a calendar year. For example, if a beneficiary has 6 visits to their primary care provider in a calendar year and the provider bills 6 claims with 99202 for the same beneficiary, then the beneficiary and claims for 99202 would only be counted as one claim and one beneficiary. Therefore, we chose not to propose this aspect because we intend for the comparative payment rate analysis to capture the total amount of actual services received by beneficiaries and paid for by the State. We are seeking public comment regarding our decision not to propose States identify the number of unique Medicaid-paid claims and the number of unique Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid base payment rate is published pursuant to paragraph (b)(3)(i)(B) in comparative payment rate analysis as proposed § 447.203(b)(3)(i)(E).
We also considered but did not propose States identify the total Medicaid-enrolled population who could potentially receive a service within a calendar year for each of the services for which the Medicaid base
We propose to include beneficiary and claims information in the comparative payment rate analysis to contextualize the payment rates in the analysis, and to be able to identify longitudinal changes in Medicaid service volume in the context of the Medicaid beneficiary population receiving services, since utilization changes could be an indication of an access to care issue. For example, a decrease in the number of Medicaid-paid claims for primary care services furnished to Medicaid beneficiaries in an area (when the number of Medicaid-enrolled beneficiaries who received primary care services in the area is constant or increasing) could be an indication of an access to care issue. Without additional context provided by the number of Medicaid enrolled beneficiaries who received a service, changes in claims volume could be attributed to a variety of changes in the beneficiary population, such as a temporary loss of coverage when enrollees disenroll and then re-enroll within a short period of time.
Further, if the Medicaid base payment rate for the services with decreasing Medicaid service volume has failed to keep pace with the corresponding Medicare non-facility payment rate over the period of decrease in utilization (as reflected in changes in the Medicaid base payment rate expressed as a percentage of the Medicare non-facility payment rate as required under proposed § 447.203(b)(3)(i)(D)), then we would be concerned and would further scrutinize whether any access to care issue might be caused by insufficient Medicaid payment rates for the relevant services. With each biennial publication of the State's comparative payment rate analysis, as proposed in § 447.203(b)(4), discussed later in this section, States and CMS would be able to compare the number of paid claims in the context of the number of Medicaid enrolled beneficiaries receiving services within a calendar year for the services subject to the comparative payment rate analysis with previous years' comparative payment rate analyses. Collecting and comparing the number of paid claims data in the context of the number of Medicaid enrolled beneficiaries receiving services alongside Medicaid base payment rate data may reveal trends where an increase in the Medicaid base payment rate is correlated with an increase in service volume and utilization, or vice versa with a decrease in the Medicaid base payment rate is correlated with a decrease in service volume and utilization. As claims utilization and number of Medicaid enrolled beneficiaries receiving services are only correlating trends, we acknowledge that there may be other contextualizing factors outside of the comparative payment rate analysis that affect changes in service volume and utilization and we would (and would expect States and other interested parties to) take such additional factors into account in analyzing and ascribing significance to changes in service volume and utilization. We are seeking public comment on the proposed requirement for States to include the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for which the Medicaid base payment rate is published under proposed paragraph (b)(3)(i)(B), as specified in proposed § 447.203(b)(3)(i)(E).
We believe the comparative payment rate analysis proposed in paragraph (b)(3) is needed to best enable us to ensure State compliance with the requirement in section 1902(a)(30)(A) of the Act that payments are sufficient to enlist enough providers so that care and services are available to Medicaid beneficiaries at least to the extent they are available to the general population in the geographic area. As demonstrated by the findings of Sloan, et al.,
The AMRP requirements currently address this standard under section 1902(a)(30)(A) of the Act by requiring States to compare Medicaid payment rates to the payment rates of other
By comparing FFS Medicaid payment rates to corresponding FFS Medicare non-facility payment rates, where Medicare is a public payer with large populations of beneficiaries and participating providers whose payment rates are readily available, we aim to establish a uniform benchmarking approach that allows for more meaningful oversight and transparency and reduces the burden on States and CMS relative to the current AMRP requirements that do not impose specific methodological standards for comparing payment rates and that contemplate the availability of private payer rate information that has proven difficult for States to obtain due to its often proprietary nature. This aspect of the proposal specifically responds to States' expressed concerns that the AMRP requirement to include “actual or estimated levels of provider payment available from other payers, including other public and private payers” was challenging to accomplish based on the general unavailability of this information, as discussed elsewhere in this proposed rule.
Following the 2011 proposed rule, and as addressed by us through public comment response in the 2015 final rule with comment period, States expressed concerns that private payer payment rates were proprietary information and not available to them and that large private plans did not exist within some States so there were no private payer rates to compare to, therefore, the State would need to rely on State employee health plans or non-profit insurer rates.
Next, in paragraph (b)(3)(ii), we propose that for each category of services described in proposed paragraph (b)(2)(iv), the State agency would be required to publish a payment rate disclosure that expresses the State's payment rates as the average hourly payment rates, separately identified for payments made to individual providers and to providers employed by an agency, if the rates differ. The payment rate disclosure would be required to meet specified requirements. The reason for including this proposal builds on our justification for including personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency in this proposed rule, which is to remain consistent with the proposed HCBS provisions at § 441.311(d)(2) and (e) and take specific action regarding direct care workers per Section 2402(a) of the Affordable Care Act. HCBS and direct care workers that deliver these services are unique to Medicaid and often not covered by other payers, which is why we are proposing a different analysis of payment rates for providers of these services that does not involve a comparison to Medicare. As previously stated, Medicare covers part-time or intermittent home health aide services (only if a Medicare beneficiary is also getting other skilled services like nursing and/or therapy at the same time) under Medicare Part A (Hospital Insurance) or Medicare Part B (Medical Insurance); however, Medicare does not cover personal care or homemaker services. Therefore, comparing personal care and homemaker services to Medicare, as we proposed in paragraph (b)(3)(i) for other specified categories of services, would not be feasible for States, and a comparison of Medicaid home health aide average hourly payment rates to analogous rates for Medicare would be of limited utility given the differences in circumstances when Medicaid and Medicare may pay for such services.
As previously discussed, private payer data are often considered proprietary and not available to States, thereby eliminating private payers as feasible point of comparison. Even if private payer payment rate data were more readily available, like Medicare, many private payers do not cover HCBS as HCBS is unique to the Medicaid program, leaving Medicaid as the largest or the only payer for personal care, home health aide, and homemaker services. Given Medicaid's status as the most important payer for HCBS, we believe that scrutiny of Medicaid HCBS payment rates themselves, rather than a comparison to other payer rates that frequently do not exist, is most important in ascertaining whether such Medicaid payment rates are sufficient to enlist adequate providers so that the specified services are available to Medicaid beneficiaries at least to the same extent as to the general population in the geographic area. We acknowledge that individuals without insurance may self-pay for medical services provided in their home or community; however, similar to private payer data, self-pay data is unlikely to be available to States. Because HCBS coverage is unique to Medicaid, Medicaid beneficiaries are generally the only individuals in a given geographic area with access to HCBS. Through the proposed payment rate disclosure, Medicaid payments rates
As noted previously in this section, we propose to require States to express their rates separately as the average hourly payments made to individual providers and providers employed by an agency, if the rates differ, as applicable for each category of service specified in proposed § 447.203(b)(2)(iv). We believe expressing the data in this manner would best account for variations in types and levels of payment that may occur in different settings and employment arrangements. Individual providers are often self-employed or contract directly with the State to deliver services as a Medicaid provider while providers employed by an agency are employed by the agency which works directly with the Medicaid agency to provide Medicaid services. These differences in employment arrangements often include differences in the hourly rate a provider would receive for services delivered, for example, providers employed by an agency typically receive benefits, such as health insurance, and the cost of those benefits are factored into the hourly rate that the State pays for the services delivered by providers employed by an agency (even though the employed provider does not retain the entire amount as direct monetary compensation). However, these benefits are not always available for individual providers who may need to separately purchase a marketplace health plan or be able to opt into the State-employee health plan, for example. Therefore, the provider employed by an agency potentially could receive a higher hourly rate because benefits are factored into the hourly rate they receive for delivering services, whereas the individual provider might be paid a rate that does not reflect employment benefits.
With States expressing their payment rates separately as the average hourly payment rate made to individual and agency employed providers for personal care, home health aide, and homemaker services, States, CMS, and other interested parties would be able to compare payment rates among State Medicaid programs. Such comparisons may be particularly relevant for States in close geographical proximity to each other or that otherwise may compete to attract providers of the services specified in proposed paragraph (b)(2)(iv) or where such providers may experience similar costs or other incentives to provide such services. For example, from reviewing all States' payment rate analyses for personal care, home health aide, and homemaker services, we would be able to learn that two neighboring States have similar hourly rates for providers of these services, but a third neighboring State has much lower hourly rates than both of its neighbors. This information could highlight a potential access issue, since providers in the third State might have an economic incentive to move to one of the two neighboring States where they could receive higher payments for furnishing the same services. Such movement could result in beneficiaries in the third State having difficulty accessing covered services, compared to the general population in the tri-State geographic area.
Additionally in paragraph (b)(3)(ii), we propose that the State's payment rate disclosure must meet the following requirements: (A) the State must organize the payment rate disclosure by category of service as specified in proposed paragraph (b)(2)(iv); (B) the disclosure must identify the average hourly payment rates, including, if the rates vary, separate identification of the average hourly payment rates for payments made to individual providers and to providers employed by an agency by population (pediatric and adult), provider type, and geographical location, as applicable; and (C) the disclosure must identify the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid base payment rate is published under proposed paragraph (b)(3)(ii)(B). We are seeking public comment on the proposed requirements and content of the items in proposed § 447.203(b)(3)(ii)(A) through (C).
In paragraph (b)(3)(ii)(A), we propose to require States to organize their payment rate disclosures by each of the categories of services specified in proposed paragraph (b)(2)(iv), that is, to break out the payment rates for personal care, home health aide, and homemaker services provided by individual providers and providers employed by an agency, separately for individual analyses of the payment rates for each category of service and type of employment structure. We are seeking public comment on the proposed requirement for States to break out their payment rates for personal care, home health aide, and homemaker services separately for individual analyses of the payment rates for each category of service in the comparative payment rate analysis, as described in proposed § 447.203(b)(3)(ii)(A).
In paragraph (b)(3)(ii)(B), we propose to require States identify in their disclosure the Medicaid average hourly payment rates by applicable category of service, including, if the rates vary, separate identification of the average hourly payment rates for payments made to individual providers and to providers employed by an agency, as well as by population (pediatric and adult), provider type, and geographical location, as applicable. Given that direct care workers deliver unique services in Medicaid that are often not covered by other payers, we are proposing to require a payment rate disclosure, instead of comparative payment rate analysis. To be clear, we are not proposing to require a State's payment rate disclosure for personal care, home health aide, and homemaker services be broken down and organized by E/M CPT/HCPCS codes, nor are we proposing States compare their Medicaid payment rates to Medicare for these services.
We propose to require States calculate their Medicaid average hourly payment rates made to providers of personal care, home health aide, and homemaker services, separately, for each of these categories of services, by provider employment structures (individual providers and agency employed providers). For each of the categories of services in paragraph (b)(3)(ii)(A), one Medicaid average hourly payment rate would be calculated as a simple average or arithmetic mean where all payment rates would be adjusted to an hourly figure, summed, then divided by the number of all hourly payment rates. As an example, the State's Medicaid average hourly payment rate for personal care providers may be $10.50 while the average hourly payment rate for a home health aide is $15.00. A more granular analysis may show that within personal care providers receiving a payment rate of $10.50, an individual personal care provider is paid an average hourly payment rate of $9.00, while a personal care provider employed by an agency is paid an average hourly payment rate of $12.00 for the same type of service. Similarly for home health aides, a more granular analysis may show that within home health aides receiving a payment rate of $15.00, an individual home health aide is paid an average hourly payment rate of $13.00, while a home health aide employed by an agency is paid an average hourly payment rate of $17.00.
We understand that States may set payment rates for personal care, home health aide, and homemaker services based on a particular unit of time for delivering the service, and that time
Additionally, and similar to proposed paragraph (b)(3)(i)(E), we propose in paragraph (b)(3)(ii)(B), that, if the States' Medicaid average hourly payment rates vary, the rates must separately identify the average hourly payment rates for payments made to individual providers and to providers employed by an agency, by population (pediatric and adult), provider type, and geographical location, as applicable. We include this proposed provision with the intent of ensuring the payment rate disclosure contains the highest level of granularity in each element. As previously discussed, States may pay providers different payment rates for billing the same service based on the population being served, provider type, and geographical location of where the service is delivered. We are seeking public comments on the proposed requirement for States to calculate the Medicaid average hourly payment rate made separately to individual providers and to agency employed providers, which accounts for variation in payment rates by population (pediatric and adult), provider type, and geographical location, as applicable, in the payment rate disclosure as discussed in this section about proposed § 447.203(b)(3)(ii)(B).
In paragraph (b)(3)(ii)(C), we propose to require that the State disclosure must identify the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid payment rate is published under proposed paragraph (b)(3)(ii)(B), so that States, CMS, and other interested parties would be able to contextualize the previously described payment rate information with information about the volume of paid claims and number of beneficiaries receiving personal care, home health aide, and homemaker services.
We propose that the number of Medicaid-paid claims and number of Medicaid enrolled beneficiaries who received a service be reported under the same breakdown as paragraph (b)(3)(ii), where the State provides the number of paid claims and number of beneficiaries receiving services from individual providers versus agency-employed providers of personal care, home health aide services, and homemaker services. As with the comparative payment rate analysis, we are proposing the claims volume data would be limited to Medicaid-paid claims and the number of beneficiaries would be limited to Medicaid enrolled beneficiaries who received a service in the calendar year of the payment rate disclosure, where the services would fall into the categories of service for which the average hourly payment rates are published pursuant to paragraph (b)(3)(ii)(B). In other words, beneficiary would be counted in the payment rate disclosure for a particular calendar year when the beneficiary received a service that is included in one of the categories of services described in paragraph (b)(2)(iv) that the State has calculated average hourly payment rates for (the number of Medicaid enrolled beneficiaries who received a service). A claim would be counted when that beneficiary had a claim submitted on their behalf by a provider who billed for one of the categories of services described in paragraph (b)(2)(iv) and the State paid the claim (number of Medicaid-paid claims). We are seeking to ensure the payment rate disclosure reflects actual services received by beneficiaries and paid for by the State, or realized access.
Similar to the comparative payment rate analysis, we considered but did not propose States identify the number of unique Medicaid-paid claims and the number of unique Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the average hourly payment rates are published pursuant to paragraph (b)(3)(ii)(B). We also considered but did not propose States identify the total Medicaid enrolled population who could receive a service within a calendar year for each of the services for which the average hourly payment rates are published pursuant to paragraph (b)(3)(ii)(B) in addition to the proposing States identify the number of Medicaid enrolled beneficiaries who received a service. As discussed in the comparative payment rate discussion, we are requesting public comment on our decision not to require these levels of detail for the payment rate disclosure. Also similar to the comparative payment rate analysis requirement under proposed paragraph (b)(3)(i)(E), this disclosure element would help States, CMS, and other interested parties identify longitudinal changes in Medicaid service volume and beneficiary utilization changes that may be an indication of an access to care issue. Again, with each biennial publication of the State's comparative payment rate analysis and payment rate disclosure, States and CMS would be able to compare the number of Medicaid-paid claims and number of Medicaid enrolled beneficiaries who received a service within a calendar year for services subject to the payment rate disclosure with previous years' disclosures. Collecting and comparing data on the number of paid claims and number of Medicaid enrolled beneficiaries alongside Medicaid average hourly payment rate data may reveal trends, such as where a provider type that previously delivered a low volume of services to beneficiaries has increased their volume of services delivered after receiving an increase in their payment rate.
We acknowledge that one limitation of using the average hourly payment rate is that the statistic is sensitive to highs and lows so one provider receiving an increase in their average hourly payment rate would bring up the average overall while other providers may not see an improvement. As these are only correlating trends, we also acknowledge that there may be other contextualizing factors outside of the payment rate disclosure that may affect changes in service volume and utilization. We are seeking public comments on the proposed requirement for States to include the number of Medicaid-paid claims and number of Medicaid enrolled beneficiaries who received a service within a calendar year for which the Medicaid payment rate is published under paragraph (b)(3)(ii)(B), as specified in proposed § 447.203(b)(3)(ii)(C).
Additionally, in recognition of the importance of services provided to individuals with intellectual or developmental disabilities and in an effort to remain consistent with the proposed HCBS provisions at
In paragraph (b)(4), we propose to require the State agency to publish the initial comparative payment rate analysis and payment rate disclosure of its Medicaid payments in effect as of January 1, 2025, as required under § 447.203(b)(2) and (b)(3), by no later than January 1, 2026. Thereafter, the State agency would be required to update the comparative payment rate analysis and payment rate disclosure no less than every 2 years, by no later than January 1 of the second year following the most recent update. The comparative payment rate analysis and payment rate disclosure would be required to be published consistent with the publication requirements described in proposed § 447.203(b)(1) for payment rate transparency data.
As previously discussed in this proposed rule, we propose that the Medicaid payment rates included in the initial comparative payment rate analysis and payment rate disclosure would be those in effect as of January 1, 2025. Specifically, for the comparative payment rate analysis, we propose States would conduct a retrospective analysis to ensure CMS can publish the list of E/M CPT/HCPCS codes for the comparative payment rate analysis and States have timely access to all information required to complete comparative payment rate analysis. As described in paragraph (b)(3)(i)(C), we propose States would compare their Medicaid payment rates to the Medicare non-facility payment rates effective for the same time period for the same set of E/M CPT/HCPCS codes, therefore, the Medicare non-facility payment rates as published on the Medicare PFS for the same time period as the State's Medicaid payment rates would need to be available to States in a timely manner for their analysis and disclosure to be conducted and published as described in paragraph (b)(4). Medicare publishes its annual PFS final rule in November of each year and the Medicare non-facility payment rates as listed on the Medicare PFS are effective the following January 1. For example, the 2025 Medicare PFS final rule would be published in November 2024 and the Medicare non-facility payment rates as listed on the Medicare PFS would be effective January 1, 2025, so States would compare their Medicaid payment rates effective as of January 1, 2025, to the Medicare PFS payment rates effective January 1, 2025 when submitting the initial comparative payment rate analysis that is due on January 1, 2026.
Also previously discussed in this proposed rule, we intend to publish the initial and subsequent updates to the list of E/M CPT/HCPCS codes subject to the comparative payment rate analysis in a timely manner that allows States approximately one full calendar year between the publication of the CMS-published list of E/M CPT/HCPCS codes and the due date of the comparative payment rate analysis. Because the list of E/M CPT/HCPCS codes is derived from the relevant calendar year's Medicare PFS, the Medicare non-facility payment rates the State would need to include in their comparative payment rate analysis would also be available to States. We expect approximately one full calendar year of the CMS-published list of E/M CPT/HCPCS codes and Medicare non-facility payment rates as listed on the Medicare PFS being available to States would provide the States with sufficient time to develop and publish their comparative payment rate analyses as described in paragraph (b)(4). We considered proposing the same due date and effective time period for Medicaid and Medicare payment rates where the initial publication of the comparative payment rate analysis would be due January 1, 2026, and would contain payment rates effective January 1, 2026; however, we believe a two month time period between Medicare publishing its PFS payment rates in November and the PFS payment rates taking effect on January 1 would be an insufficient amount of time for CMS to publish the list of E/M CPT/HCPCS codes subject to the comparative payment rate analysis and for States to develop and publish their comparative payment rate analyses by January 1. While the proposed payment rate disclosure would not require a comparison to Medicare, we are proposing to use the same due date and effective period of Medicaid payment rates for both the proposed comparative payment rate analysis and payment rate disclosure to maintain consistency.
We expect the proposed initial publication timeframe to provide sufficient time for States to gather necessary data, perform, and publish the first required comparative payment rate analysis and payment rate disclosure. We determined this timeframe was sufficient based on implementation experience from the AMRP process, where we initially proposed a 6-month timeframe between the January 4, 2016 effective date of the 2015 final rule with comment period in the
Also, in § 447.203(b)(4), we propose to require the State agency to update the comparative payment rate analysis and payment rate disclosure no less than every 2 years, by no later than January 1 of the second year following the most recent update. We propose that the comparative payment rate analysis and payment rate disclosure would be required to be published consistent with the publication requirements described in proposed paragraph (b)(1) for payment rate transparency data. After publication of the 2011 proposed rule, and as we worked with States to implement the current AMRP requirements after publication of the 2015 final rule with comment period, many States expressed concerns that the current requirements of § 447.203, specifically those in current § 447.203(b)(6) that impose additional analysis and monitoring requirements in the case of provider rate reductions or restructurings that could result in diminished access, are overly burdensome. As described in the 2018 and 2019 proposed rules, “a number of States expressed concern regarding the administrative burden associated with the requirements of § 447.203, particularly those States with a very high beneficiary enrollment in comprehensive, risk-based managed care and a limited number of beneficiaries receiving care through a FFS delivery system.”
Additionally, from our implementation experience, we learned that the triennial due date for updated AMRPs required by current § 447.203(b)(5)(ii) was too infrequent for States or CMS to identify and act on access concerns identified by the AMRPs. For example, one State timely submitted its initial ongoing AMRP on October 1, 2016, consistent with the requirements in § 447.203(b)(1) through (5), and timely submitted its first AMRP update (the next ongoing AMRP) 3 years later, on October 1, 2019. The 2016 AMRP included data about beneficiary utilization and Medicaid-participating providers accepting new Medicaid patients from 2014 to 2015 (the most recent data available at the time the State was developing the AMRP), while the 2019 AMRP update included similar data for 2016 to 2017 (the most recent data then available). The 2019 AMRP showed that the number of Medicaid-participating providers accepting new Medicaid patients significantly dropped in 2016, and the State received a considerable number of public comments during the 30-day public comment period for the 2019 AMRP update prior to submission to us per the requirements in § 447.203(b) and (b)(2). This data lag between a drop in Medicaid-participating providers accepting new Medicaid patients in 2016 and CMS receiving the next AMRP update with information about related concerns in 2019 illustrates how the infrequency of the triennial due date for the AMRP updates could allow a potential access concern to develop without notice by the State or CMS in between the due dates of the ongoing AMRP updates. Although § 447.203(b)(7) currently requires States to have ongoing mechanisms for beneficiary and provider input on access to care, and States are expected to promptly respond to concerns expressed through these mechanisms that cite specific access problems, beneficiaries and providers themselves may not be aware of even widespread access issues if such issues are not noticed before published data reveal them.
We also learned from our AMRP implementation experience that the timing of the ongoing AMRP submissions required by current § 447.203(b)(5)(ii) and access reviews associated with rate reduction or restructuring SPA submissions required by § 447.203(b)(6) have led to confusion about the due date and scope of routine, ongoing AMRP updates and SPA-connected access review submissions, particularly when States were required to submit access reviews within the 3-year period between AMRP updates when proposing a rate reduction or restructuring SPA, per the requirements in current § 447.203(b)(6). For example, one State timely submitted its initial ongoing AMRP on October 1, 2016, consistent with the requirements in § 447.203(b)(1) through (5), then the State submitted a SPA that proposed to reduce provider payment rates for physical therapy services with an effective date of July 1, 2018, along with an access review for the affected service completed within the prior 12 months, consistent with the requirements in § 447.203(b)(6). The State's access review submission consisted of its 2016 AMRP submission, updated with data from the 12 months prior to this SPA submission, with the addition of physical therapy services for which the SPA proposed to reduce rates. Because the State submitted an updated version of its 2016 AMRP in 2018 in support of the SPA submission, the State was confused whether its next AMRP update submission was due in 2019 (3 years from 2016), or in 2021 (3 years from 2018). Based on the infrequency of a triennial due date for AMRP updates and the numerous instances of similar State confusion during the implementation process for the AMRPs, we identified that the triennial timeframe was insufficient for the proposed comparative payment rate analysis and payment rate disclosure. As we considered a new timeframe for updates to the comparative payment rate analysis and payment rate disclosure to propose in this rulemaking, we initially considered proposing to require annual updates. However, we believe annual updates would add unnecessary administrative burden as annual updates would be too frequent because many States do not update their Medicaid fee schedule rates for the codes subject to the comparative payment rate analysis and payment rate disclosure on an annual basis.
As proposed, the payment rates for the categories of services subject to the proposed comparative payment rate analysis and payment rate disclosure are for office-based visits and, in our experience, the Medicaid payment rates generally do not change much over time due to the nature of an office visit.
As this proposed rule strives to reduce the amount of administrative burden from AMRPs on States while also fulfilling our oversight responsibilities, we believe updating the comparative payment rate analysis and
With careful consideration, we believe that our proposal to require updates to the comparative payment rate analysis and payment rate disclosure to occur no less than every 2 years is reasonable. We expect the proposed biennial publication requirement for the comparative payment rate analysis and payment rate disclosure after the initial publication date would be feasible for State agencies, provide a straightforward timeline for updates, limit unnecessary State burden, help ensure public payment rate transparency, and enable us to conduct required oversight. We are seeking public comment on the proposed timeframe for the initial publication and biennial update requirements for the comparative payment rate analysis and payment rate disclosure as proposed in § 447.203(b)(4).
Lastly, we also propose in paragraph (b)(4) to require States to publish the comparative payment rate analysis and payment rate disclosure consistent with the publication requirements described in proposed paragraph (b)(1) for payment rate transparency data. Paragraph (b)(1) would require the website developed and maintained by the single State Agency to be accessible to the general public. We are proposing States utilize the same website developed and maintained by the single State Agency to publish their Medicaid FFS payment rates and their comparative payment rate analysis and payment rate disclosure. We are seeking public comment on the proposed required location for States to publish their comparative payment rate analysis and payment rate disclosure proposed in § 447.203(b)(4).
In § 447.203(b)(5), we propose a mechanism to ensure compliance with paragraphs (b)(1) through (b)(4). Specifically, we propose that, if a State fails to comply with the payment rate transparency and comparative payment rate analysis and payment rate disclosure requirements in paragraphs (b)(1) through (b)(4) of proposed § 447.203, including requirements for the time and manner of publication, that, under section 1904 of the Act and procedures set forth in regulations at 42 CFR part 430 subparts C and D, future grant awards may be reduced by the amount of FFP we estimate is attributable to the State's administrative expenditures relative to the total expenditures for the categories of services specified in paragraph (b)(2) of proposed § 447.203 for which the State has failed to comply with applicable requirements, until such time as the State complies with the requirements. We also propose that unless otherwise prohibited by law, FFP for deferred expenditures would be released after the State has fully complied with all applicable requirements. This proposed enforcement mechanism is similar in structure to the mechanism that applies with respect to the Medicaid Disproportionate Share Hospital (DSH) reporting requirements in § 447.299(e), which specifies that State failure to comply with reporting requirements will lead to future grant award reductions in the amount of FFP CMS estimates is attributable to expenditures made for payments to the DSH hospitals as to which the State has not reported properly. We are proposing this long-standing and effective enforcement mechanism in this proposed rule because we believe it is proportionate and clear, and to remain consistent with other compliance actions we take for State non-compliance with statutory and regulatory requirements. We are seeking public comment on the proposed method for ensuring compliance with the payment rate transparency and comparative payment rate analysis and payment rate disclosure requirements, as specified in proposed § 447.203(b)(5).
A fundamental element of ensuring access to covered services is the sufficiency of a provider network. As discussed elsewhere in this rule, the HCBS direct care workforce is currently experiencing notable worker shortages.
Understanding how Medicaid payment rates compare in different geographic areas of a State and across State programs is also an important access to care data point for covered benefits where Medicaid is a predominant payer of services, as in the case of HCBS. In the absence of HCBS coverage and a lack of available payment rate and claims utilization data from other health payers, such as Medicare or private insurers, and with the significant burden and potential infeasibility associated with gathering payment data for individuals who pay out of pocket (that is, self-pay), we believe it would be a reasonable standard for States to compare their rates to geographically similar State Medicaid program payment rates as a basis for understanding compliance with section 1902(a)(30)(A) of the Act for those services. In addition, even for services where other payers establish
Section 2402(a) of the Affordable Care Act directs the Secretary to promulgate regulations ensuring that all States develop service systems that, among other things, improve coordination and regulation of providers of HCBS to oversee and monitor functions, including a complaint system, and ensure that there are an adequate number of qualified direct care workers to provide self-directed services. This statutory mandate, coupled with the workforce shortages exacerbated by the COVID-19 pandemic, necessitates action specific to direct care workers. As such, we are proposing to require States to establish an interested parties' advisory group to advise and consult on FFS rates paid to direct care workers providing self-directed and agency-directed HCBS, at a minimum for personal care, home health aide, and homemaker services as described in § 440.180(b)(2) through (4), and States may choose to include other HCBS. The definition of direct care workers is proposed elsewhere in this rule under § 441.302(k)(1)(ii). We propose to utilize that definition, to consider a direct care worker a registered nurse, licensed practical nurse, nurse practitioner, or clinical nurse specialist who provides nursing services to Medicaid-eligible individuals receiving HCBS; a licensed nursing assistant who provides such services under the supervision of a registered nurse, licensed practical nurse, nurse practitioner, or clinical nurse specialist; a direct support professional; a personal care attendant; a home health aide; or other individuals who are paid to provide services to address activities of daily living or instrumental activities of daily living directly to Medicaid-eligible individuals receiving HCBS available under part 441, subpart G. A direct care worker may be employed by a Medicaid provider, State agency, or third party; contracted with a Medicaid provider, State agency, or third party; or delivering services under a self-directed service model.
We propose that the group would consult on rates for service categories under the Medicaid State plan, section 1915(c) waiver and demonstration programs, as applicable, where payments are made to individual providers or providers employed by an agency for, at a minimum, the previously described types of services, including for personal care, home health aide, and homemaker services provided under sections 1905(a), 1915(i), 1915(j), and 1915(k) State plan authorities, and section 1915(c) waivers. These proposed requirements also would extend to rates for HCBS provided under section 1115 demonstrations, as is typical for rules pertaining to HCBS authorized using demonstration authority. The interested parties advisory group may consult on other HCBS, at the State's discretion.
Specifically, in § 447.203(b)(6), we propose that the State agency would be required to establish an advisory group for interested parties to advise and consult on provider rates with respect to service categories under the Medicaid State plan, section 1915(c) waiver and demonstration programs, as applicable, where payments are made to the direct care workers specified in § 441.302(k)(1)(ii) for the self-directed or agency-directed services found at § 440.180(b)(2) through (4). The interested parties' advisory group would be required to include, at a minimum, direct care workers, beneficiaries and their authorized representatives, and other interested parties. “Authorized representatives” refers to individuals authorized to act on the behalf of the beneficiary, and other interested parties may include beneficiary family members and advocacy organizations. To the extent a State's MAC established under proposed § 431.12, if finalized, meets the requirements of this regulation, the State could utilize that committee for this purpose. However, we note the roles of the MAC under proposed § 431.12 and the interested party advisory group under proposed § 447.203(b)(6) would be distinct, and the existence or absence of one committee or group (for example, if one of these proposals is not finalized) would not affect the requirements with respect to the other as established in a final rule.
We further propose in § 447.203(b)(6)(iii) that the interested parties' advisory group would advise and consult with the Medicaid agency on current and proposed payment rates, HCBS payment adequacy data as required at § 441.311(e), and access to care metrics described in § 441.311(d)(2), associated with services found at § 440.180(b)(2) through (4), to ensure the relevant Medicaid payment rates are sufficient to ensure access to homemaker services, home health aide services, and personal care services for Medicaid beneficiaries at least as great as available to the general population in the geographic area and to ensure an adequate number of qualified direct care workers to provide self-directed personal assistance services.
In proposed § 447.203(b)(6)(iv), we propose that the interested parties advisory group would meet at least every 2 years and make recommendations to the Medicaid agency on the sufficiency of State plan, 1915(c) waiver, and demonstration direct care worker payment rates, as applicable. The State agency would be required to ensure the group has access to current and proposed payment rates, HCBS provider payment adequacy minimum performance and reporting standards as described in § 441.311(e), and applicable access to care metrics for HCBS as described in § 441.311(d)(2) to produce these recommendations. These materials would be required to be made be available with sufficient time for the advisory group to consider them, formulate recommendations, and transmit those recommendations to the State. If the State has asked the group to consider a proposed rate change, they would need to provide the group with sufficient time to review and produce a recommendation within the State's intended rate adjustment schedule. This would be necessary because the group's recommendation would be considered part of the interested parties input described in proposed §§ 447.203(c)(4) and 447.204(b)(3), which States would be required to consider and analyze. The interested parties' advisory group would make recommendations to the Medicaid agency on the sufficiency of the established and proposed State plan, section 1915(c) waiver and demonstration payment rates, as applicable. In other words, the group would provide information to the State regarding whether, based on the group's knowledge and experience, current payment rates are sufficient to enlist a sufficiently large work force to ensure beneficiary access to services, and whether a proposed rate change would be consistent with a sufficiently large work force or would disincentivize participation in the work force in a manner that might compromise beneficiary access.
We propose to require States to convene this interested parties' advisory group every 2 years, at a minimum, to advise and consult on current and suggested payment rates and the sufficiency of these rates to ensure access to HCBS for beneficiaries consistent with section 1902(a)(30)(A) of the Act. This timing aligns with the comparative payment rate analysis and payment rate disclosure publication requirements proposed in § 447.203(b)(4), although we note that
Finally, in § 447.203(b)(6)(v), we propose that the Medicaid agency would be required to publish the recommendations of the interested parties' advisory group consistent with the publication requirements described in paragraph (b)(1) of this section for payment rate transparency data, within 1 month of when the group provides the recommendation to the agency. We intend that States would consider, but not be required to adopt, the recommendations of the advisory group. Under this proposal, the work of the advisory group would be regarded as an element of the State's overall rate-setting process. Additionally, the feedback of this advisory group would not be required for rate changes. That is to say, should a State need or want to adjust rates and it is not feasible to obtain a recommendation from the advisory group in a particular instance, the State would still be permitted to submit its rate change SPA to CMS. However, to the extent the group comments on proposed rate changes, its feedback would be considered part of the interested parties input described in proposed §§ 447.203(c)(4) and 447.204(b)(3), which States would be required to consider and analyze, and submit such analysis to us, in connection with any SPA submission that proposes to reduce or restructure Medicaid service payment rates. In addition, by way of clarification, we intend that the advisory group would be permitted to suggest alternate rates besides those proposed by the State for consideration.
We are seeking public comment on the proposed interested parties advisory group and about whether other categories of services should be included in the requirement for States to consult with the interested parties advisory group.
As stated previously, the Supreme Court's Armstrong decision underscored the importance of CMS' administrative review of Medicaid payment rates to ensure compliance with section 1902(a)(30)(A) of the Act. CMS' oversight role is particularly important when States propose to reduce provider payment rates or restructure provider payments, since provider payment rates can affect provider participation in Medicaid, and therefore, beneficiary access to care. In § 447.203(c), we propose a process for State access analyses that would be required whenever a State submits a SPA proposing to reduce provider payment rates or restructure provider payments.
As noted previously, the 2015 final rule with comment period required that, for any SPA proposing to reduce provider payment rates or restructure provider payments in circumstances when the changes could result in diminished access, States must submit a detailed analysis of access to care under §§ 447.203(b)(1) and (b)(6) and 447.204(b)(1). This analysis includes, under current § 447.203(b)(1), the extent to which beneficiary needs are fully met; the availability of care through enrolled providers to beneficiaries in each geographic area, by provider type and site of service; changes in beneficiary utilization of covered services in each geographic area; the characteristics of the beneficiary population (including considerations for care, service and payment variations for pediatric and adult populations and for individuals with disabilities); and actual or estimated levels of provider payment available from other payers, including other public and private payers, by provider type and site of service. Currently, this information is required for any SPA that proposes to reduce provider payment rates or restructure provider payments in circumstances when the changes could result in diminished access, regardless of the provider payment rates or levels of access to care before the proposed reduction or restructuring.
Following the implementation of the 2015 final rule with comment period, as we worked with States to implement the AMRP requirements, many States expressed concerns that the requirements that accompany proposed rate reductions or restructurings are overly burdensome. Specifically, States pointed to instances where proposed reductions or restructurings are nominal, or where rate changes are made via the application of a previously approved rate methodology, such as when the State's approved rate methodology ties Medicaid payment rates to a Medicare fee schedule and the Medicare payment rate is reduced. We acknowledged these concerns through previous proposed rulemaking. In the 2018 proposed rule, we agreed that our experience implementing the AMRP process from the 2015 final rule with comment period raised questions about the benefit of the access analysis when proposed rate changes include nominal rate reductions or restructurings that are unlikely to result in diminished access to care.
We did not finalize the 2018 proposed rule; instead, in response to feedback, we proposed a rescission of the AMRP process in the 2019 proposed rule.
To improve the efficiency of our administrative procedures and better inform our SPA approval decisions, this proposed rule would establish standard information that States would be required to submit with any proposed rate reductions or proposed payment restructurings in circumstances when the changes could result in diminished access, including a streamlined set of data when the reductions or restructurings are nominal, the State rates are above a certain percentage of Medicare payment rates, and there are no evident access concerns raised through public processes; and an additional set of data elements that would be required when States propose FFS provider payment rate reductions or restructurings in circumstances when the changes could result in diminished access and these criteria are not met. For both sets of required or potentially required elements, we are proposing to standardize the data and information States would be required to submit with rate reduction or restructuring SPAs. Although the AMRP processes have helped to improve our administrative
This proposed rule seeks to achieve a more appropriate balance between reducing unnecessary burden for States and CMS, and ensuring that we have the information necessary to make appropriate determinations for whether a rate reduction or restructuring SPA might result in beneficiary access to covered services failing to meet the standard in section 1902(a)(30)(A) of the Act. In § 447.203(c), we propose to establish analyses that States would be required to perform, document, and submit concurrently with the submission of rate reduction and rate restructuring SPAs, with additional analyses required in certain circumstances due to potentially increased access to care concerns.
We are proposing a two-tiered approach for determining the level of access analysis States would be required to conduct when proposing provider payment rate reductions or payment restructurings. The first tier of this approach, proposed at § 447.203(c)(1), sets out three criteria for States to meet when proposing payment rate reductions or payment restructurings in circumstances when the changes could result in diminished access that, if met, would not require a more detailed analysis to establish that the proposal meets the access requirement in section 1902(a)(30)(A) of the Act. The State agency would be required to provide written assurance and relevant supporting documentation that the three criteria specified in those paragraphs are met, as well as a description of the State's procedures for monitoring continued compliance with section 1902(a)(30)(A) of the Act. As explained in more detail later in this section, these criteria proposed in § 447.203(c)(1) represent thresholds we believe would likely assure that Medicaid payment rates would continue to be sufficient following the change to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.
We note that, in the course of our review of a payment SPA that meets these criteria, as with any SPA review, we may need to request additional information to ensure that all Federal SPA requirements are met. We also note that meeting the three criteria described in proposed § 447.203(c)(1) does not guarantee that the SPA would be approved, if other applicable Federal requirements are not met. Furthermore, if any criterion in the first tier is not met, we propose a second tier in § 447.203(c)(2), which would require the State to conduct a more extensive access analysis in addition to providing the results of the analysis in the first tier. A detailed discussion of the second tier follows the details of the first tier in this section.
Under proposed § 447.203(c)(1)(i), the State would be required to provide a supported assurance that Medicaid payment rates in the aggregate (including base and supplemental payments) following the proposed reduction or restructuring for each benefit category affected by the proposed reduction or restructuring would be at or above 80 percent of the most recently published Medicare payment rates for the same or a comparable set of Medicare-covered services.
In proposed § 447.203(c)(1)(i), we mean for “benefit category” to refer to all individual services under a category of services described in section 1905(a) of the Act for which the State is proposing a payment rate reduction or restructuring. Comparing the payment rates in the aggregate would involve first performing a comparison of the Medicaid to the Medicare payment rate on a code-by-code basis, meaning CPT, CDT, or HCPCS as applicable, to derive a ratio for individual constituent services, and then the ratios for all codes within the benefit category would be averaged by summing the individual ratios then dividing the sum by the number of ratios. For example, if the State is seeking to reduce payment rates for a subset of physician services, the State would review all current payment rates for all physician services and determine if the proposed reduction to the relevant subset of codes would result in an average Medicaid payment rate for all physician services that is at or above 80 percent of the average corresponding Medicare payment rates. For supplemental payments, we are relying upon the definition of supplemental payments in section 1903(bb)(2) of the Act, which defines supplemental payments as “a payment to a provider that is in addition to any base payment made to the provider under the State plan under this title or under demonstration authority . . . [b]ut such term does not include a disproportionate share hospital payment made under section 1923 [of the Act].” With the inclusion of supplemental payments, States would need to aggregate the supplemental payments paid to qualifying providers during the State fiscal year and divide by all providers' total service volume (including service volume of providers that do not qualify for the supplemental payment) to establish an aggregate, per-service supplemental payment amount, then add that amount to the State's fee schedule rate to compare the aggregate Medicaid payment rate to the corresponding Medicare payment rate. As this supportive assurance in proposed § 447.203(c)(1)(i) is expected to be provided with an accompanying SPA, CMS may ask the State to explain how the analysis was conducted if additional information is needed as part of the analysis of the SPA. We are requesting comment on the proposed § 447.203(c)(1)(i) supported assurance that Medicaid payment rates in the aggregate (including base and supplemental payments) following the proposed reduction or restructuring for each benefit category affected by the proposed reduction or restructuring would be at or above 80 percent of the most recently published Medicare payment rates for the same or a comparable set of Medicare-covered services should include a weighted average of the payment rate analysis by service volume, number of beneficiaries receiving the service, and total amount paid by Medicaid for the code in a year using State's Medicaid utilization data from the MMIS claims system rather than using a straight code-by-code analysis.
We understand that this approach may have a smoothing effect on the demonstrated overall levels of Medicaid payment within a benefit category under the State plan. In many circumstances, only a subset of providers are recipients of Medicaid supplemental payments with the rest of the providers within the benefit category simply receiving the State plan fee schedule amount. This could result in a demonstration showing the Medicaid payments being high relative to Medicare, but the actual payments to a large portion of the providers would be less than the overall demonstration would suggest. As an alternative, we considered whether to adopt separate comparisons for
We selected FFS Medicare, as opposed to Medicare Advantage, as the proposed payer for comparison for a number of reasons. A threshold issue is payment rate data availability: private payer data may be proprietary or otherwise limited in its availability for use by States. In addition, Medicare sets its prices rather than negotiating them through contracts with providers, and is held to many similar statutory standards as Medicaid with respect to those prices, such as efficiency, access, and quality.
In addition, Medicare fee schedule rates are stratified by geographic areas within the States, which we seek to consider, as well to ensure that payment rates are consistent with section 1902(a)(30)(A) of the Act. The Medicare PFS pricing amounts are adjusted to reflect the variation in practice costs from area to area. Medicare established GPCI for every Medicare payment locality for each of the three components of a procedure's relative value unit (that is, the RVUs for work, practice expense, and malpractice). The current Medicare PFS locality structure was implemented in 2017 in accordance with the Protecting Access to Medicare Act of 2014 (PAMA 2014). Under the current locality structure, there are 112 total PFS localities.
When considering geography in their rate analyses, CMS expects States to conduct a code-by-code analysis of the ratios of Medicaid-to-Medicare provider payment rates for all applicable codes within the benefit category, either for each of the GPCIs within the State, or by calculating an average Medicare rate across the GPCIs within the State (such as in cases where a State does not vary its rates by region). In cases where a State does vary its Medicaid rates based on geography, but that variation does not align with the Medicare GPCI, the State should utilize the Medicare payment rates as published by Medicare for the same geographical location as the Medicaid base payment rates to achieve an equivalent comparison and align the Medicare GPCI to the locality of the Medicaid payment rates, using the county and locality information provided by Medicare for the GPCIs, for purposes of creating a reasonable comparison of the payment rates.
Once we decided to propose using Medicare payment rates as a point of comparison, we needed to decide what threshold ratio of proposed Medicaid to Medicare payment rates should trigger additional consideration and review for potential access issues. First, we considered how current levels of Medicaid payment compares to the Medicare payment for the same services. In a 2021
Next, considering that Medicaid rates are generally lower than Medicare, we wanted to examine the relationship between these rates and a beneficiary's ability to access covered services. This led us to first look into a comparison of physician new patient acceptance rates based on a prospective new patient's payer. In a June 2021 fact sheet, the Medicaid and CHIP Payment and Access Commission (MACPAC) found “in 2017 (the most recent year available), physicians were significantly less likely to accept new patients insured by Medicaid (74.3 percent) than those with Medicare (87.8 percent) or
We then wanted to confirm whether this was related to the rates themselves. In a 2019
Similarly, in a 2020 study published by the
The Kaiser Family Foundation found that 23 States have Medicaid-to-Medicare fee ratios of at least 80 percent for all services, 17 States have fee ratios of 80 percent for primary care services, 32 States have fee ratios of 80 percent for obstetric care, and 27 States have fee ratios of 80 percent for other services.
In general, we are concerned that higher rates of acceptance by some providers of new patients with payers other than Medicaid (specifically, Medicare and private coverage), and indications by some providers that low Medicaid payments are a primary reason for not accepting new Medicaid patients, may suggest that some beneficiaries could have a more difficult time accessing covered services than other individuals in the same geographic area. We are encouraged by findings that suggest that some increases in Medicaid payment rates may drive increases in provider acceptance of new Medicaid patients, with one study finding that new Medicaid patient acceptance rates increased by 0.78 percent for every percentage point increase in the Medicaid-to-Medicare fee ratio, for certain providers for certain States above the median Medicaid-to-Medicare fee ratio.
Given the results of this literature review, and by proposing this provision as only one part of a three-part assessment of the likely effect of a proposed payment rate reduction or payment restructuring on access to care, as further discussed in this section, we propose 80 percent of the most recently published Medicare payment rates, as identified on the applicable Medicare fee schedule for the same or a comparable set of Medicare-covered services, as a benchmark for the level of Medicaid payment for benefit categories that are subject to proposed provider payment reductions or restructurings that is likely to enlist enough providers so that care and services are available to Medicaid beneficiaries at least to the extent as to the general population in the geographic area, where the additional tests in proposed § 447.203(c)(1) also are met. The published Medicare payment rates means the amount per applicable procedure code identified on the Medicare fee schedule. The established Medicare fee schedule rate includes the amount that Medicare pays for the claim and any applicable co-insurance and deductible amounts owed by the patient. Medicaid fee-schedule rates should be representative of the total computable payment amount a provider would expect to receive as payment-in-full for the provision of Medicaid services to individual beneficiaries. Section 447.15 defines payment-in-full as “the amounts paid by the agency plus any deductible, coinsurance or copayment required by the plan to be paid by the individual.” Therefore, State fee schedule should be inclusive of total base payment from the Medicaid agency plus any applicable coinsurance and deductibles to the extent that a beneficiary is expected to be liable for those payments. If a State Medicaid fee schedule does not include these additional beneficiary cost-sharing payment amounts, then the Medicaid fee schedule amounts would need to be modified to include expected beneficiary cost sharing to align with Medicare's fee schedule.
We note that Medicaid benefits that do not have a reasonably comparable Medicare-covered analogue, and for which a State proposes a payment rate reduction or payment restructuring in circumstances when the changes could result in diminished access, would be subject to the expanded review criteria proposed in § 447.203(c)(2), because the State would be unable to demonstrate its Medicaid payment rates are at or above 80 percent of Medicare payment rates for the same or a comparable set of Medicare-covered services after the payment rate reduction or payment restructuring in circumstances when the changes could result in diminished access. For identifying a comparable set of Medicare-covered services, we would expect to see services that bear a reasonable relationship to each other. For example, the clinic benefit in Medicaid does not have a directly analogous clinic benefit in Medicare. In Medicaid, clinic services generally are defined in § 440.90, as “preventive, diagnostic, therapeutic, rehabilitative, or palliative services that are furnished by a facility that is not part of a hospital but is organized and operated to provide medical care to outpatients.” This can include a number of primary care services otherwise available through physician practices and other primary care providers, such as nurse practitioners. Therefore, in seeking to construct a comparable set of Medicare-covered services to which the State could compare its proposed Medicaid payment rates, the State reasonably could include Medicare payment rates for practitioner services, such as physician and nurse practitioner services, or payments for facility-based services that bear a reasonable similarity to clinic services, potentially including those provided in Ambulatory Surgical Centers. We would expect the State to develop a reasonably comparable set of Medicare-covered services to which its proposed Medicaid payment rates could be compared and to include with its submission an explanation of its reasoning and methodology for constructing the Medicare rate to compare Medicaid payment rates to.
In § 447.203(c)(1)(ii), we propose that the State would be required to provide a supported assurance that the proposed reduction or restructuring, including the cumulative effect of all reductions or restructurings taken throughout the State fiscal year, would result in no more than a 4 percent reduction in aggregate FFS Medicaid expenditures for each benefit category affected by proposed reduction or restructuring within a single State fiscal year. The documentation would need to show the change stated as a percentage reduction in aggregate FFS Medicaid expenditures for each affected benefit category. We recognize that the effects of payment rate reductions and payment restructurings on beneficiary access generally cannot be determined through any single measure, and applying a 4 percent threshold without sufficient additional safeguards would not be prudent. Therefore, we are proposing to limit the 4 percent threshold as the cumulative percentage of rate reductions or restructurings applied to the overall FFS Medicaid expenditures for a particular benefit category affected by the proposed reduction(s) or restructuring(s) within each State fiscal year. We are proposing the cumulative application of the threshold to State plan actions taken within a State fiscal year as opposed to a SPA-specific application to avoid circumstances where a State may propose rate reductions or restructurings that cumulatively exceed the 4 percent threshold across multiple SPAs without providing additional analysis.
For example, if a State proposed to reduce payment rates for a broad set of obstetric services by 3 percent in State fiscal year 2023 and had not proposed any other payment changes affecting the benefit category of obstetric care during the same State fiscal year, that payment change would meet the criterion proposed in § 447.203(c)(1)(ii) because it would be expected to result in no more than a 3 percent reduction in aggregate Medicaid expenditures for obstetric care within a State fiscal year. However, if the State had received approval earlier in the State fiscal year to revise its obstetric care payment methodology to include value-based arrangements expected to reduce overall Medicaid expenditures for obstetric care by 2 percent per State fiscal year, then it is likely that the cumulative effect of the proposal to reduce payment rates for a broad set of obstetric services by 3 percent and the Medicaid obstetric care
We propose to codify a 4 percent reduction threshold for aggregate FFS Medicaid expenditures in each benefit category affected by a proposed payment rate reduction or payment restructuring within a State fiscal year. This threshold is consistent with one we proposed in the 2018 proposed rule, which proposed to require the States to submit an AMRP with any SPA that proposed to reduce provider payments by greater than 4 percent in overall service category spending in a State fiscal year or greater than 6 percent across 2 consecutive State fiscal years, or restructure provider payments in circumstances when the changes could result in diminished access.
We are proposing a 4 percent threshold on cumulative provider payment rate reductions throughout a single State fiscal year as one of the criteria of the streamlined process in proposed paragraph (c)(1), and therefore, emphasizing that while we believe this payment threshold to be nominal and unlikely to diminish access to care, we propose to include paragraph (c)(1)(i) to require States to review current levels of provider payment in relation to Medicare and propose to include paragraph (c)(1)(iii) to require that States rely on the public process to inform the determination on the sufficiency of the proposed payment rates after reduction or restructuring, with consideration for providers and practice types that may be disproportionately impacted by the State's proposed rate reductions or restructurings.
As previously noted, we would not consider any payment rate reduction or payment rate restructuring proposal to qualify for the streamlined analysis process in the proposed paragraph (c)(1) unless all three of the proposed paragraph (c)(1) criteria are met. Using information from the Kaiser Family Foundation's Medicaid-to-Medicare fee index
We issued SMDL #17-004 to provide States with guidance on complying with regulatory requirements to help States avoid unnecessary burden when seeking approval of and implementing payment changes, because States often seek to make payment rate and/or payment structure changes for a variety of programmatic and budgetary reasons with limited or potentially no effect on beneficiary access to care, and we recognized that State legislatures needed some flexibility to manage State budgets accordingly. We discussed a 4 percent spending reduction threshold with respect to a particular service category in SMDL #17-004 as an example of a targeted reduction where the overall change in net payments within the service category would be nominal and any effect on access difficult to determine (although we reminded States that they should document that the State followed the public process under § 447.204, which could identify access concerns even with a seemingly nominal payment rate reduction). To our knowledge, since the release of SMDL #17-004, the 4 percent threshold for regarding a payment rate reduction as nominal has not resulted in access to care concerns in State Medicaid programs, and it received significant State support for this reason in comments submitted in response to the 2018 proposed rule.
In instances where States submitted payment rate reduction SPAs after the publication of SMDL #17-004, we routinely have asked the State for an explanation of the purpose of the proposed change, whether the FFS Medicaid expenditure impact for the
Accordingly, we propose that, where a State has provided the information required under proposed paragraphs (c)(1)(i) through (iii), we would consider that the proposed reduction would result in a nominal payment adjustment unlikely to diminish access below the level consistent with section 1902(a)(30)(A) of the Act and would approve the SPA, provided all other criteria for approval also are met, without requiring the additional analysis that otherwise would be required under proposed § 447.203(c)(2).
Finally, in § 447.203(c)(1)(iii), we propose that the State would be required to provide a supported assurance that the public processes described in § 447.203(c)(4) yielded no significant access to care concerns or yielded concerns that the State can reasonably respond to or mitigate, as appropriate, as documented in the analysis provided by the State under § 447.204(b)(3). The State's response to any access concern identified through the public processes, and any mitigation approach, as appropriate, would be expected to be fully described in the State's submission to us.
We note that the proposed requirement in § 447.203(c)(4) would not duplicate the requirements in current § 447.204(a)(2), as the current § 447.204(a)(2) requires States to consider provider and beneficiary input as part of the information that States are required to consider prior to the submission of any SPA that proposes to reduce or restructure Medicaid service payment rates. The proposed § 447.203(c)(4) describes material that States would be required to include with any SPA submission that proposes to reduce or restructure provider payment rates. As discussed in the CMCS informational bulletin dated June 24, 2016,
In addition, States are required use the applicable public process required under section 1902(a)(13) of the Act, as applicable, and follow the public notice requirement in § 447.205, as well as any other public processes required by State law (for example, State-specified budgetary process requirements), in setting payment rates and methodologies in view of potential access to care concerns. States have an important role in identifying access to care concerns, including through ongoing and collaborative efforts with beneficiaries, providers, and other interested parties. We understand that not every concern would be easily resolvable, but we anticipate that States would be meaningfully engaged with their beneficiary, provider, and other interested party communities to identify and mitigate issues as they arise. As discussed herein, we would consider information about access concerns raised by beneficiaries, providers, and other interested parties when States propose SPAs to reduce Medicaid payment rates or restructure Medicaid payments and would not approve proposals that do not comport with all applicable requirements, including the access standard in section 1902(a)(30)(A) of the Act.
In feedback received regarding implementation of the AMRP
Together, we believe the proposed criteria of § 447.203(c)(1)(i) through (iii), where all are met, would establish that a State's proposed Medicaid payment rates and/or payment structure are consistent with the access requirement in section 1902(a)(30)(A) of the Act at the time the State proposes a payment rate reduction or payment restructuring in circumstances when the changes could result in diminished access. Importantly, as noted above, proposed § 447.203(c)(4) (proposed to be relocated from current § 447.203(b)(7)) would ensure that States have ongoing procedures for compliance monitoring independent of any approved Medicaid payment changes.
We previously outlined in SMDL #17-004 several circumstances where Medicaid payment rate reductions generally would not be expected to diminish access: reductions necessary to implement CMS Federal Medicaid payment requirements; reductions that will be implemented as a decrease to all codes within a service category or targeted to certain codes, but for services where the payment rates continue to be at or above Medicare and/or average commercial rates; and reductions that result from changes implemented through the Medicare program, where a State's service payment methodology adheres to the Medicare methodology. This proposed rule would not codify this list of policies that may produce payment rate reductions unlikely to diminish access to Medicaid-covered services. However, as a possible addition to the proposed streamlined access analysis criteria in proposed § 447.203(c)(1), we are requesting comment on whether this list of circumstances discussed in SMDL #17-004 should be included in a new paragraph under proposed § 447.203(c)(1) and, if one or more of these circumstances were applicable, the State's proposal would be considered to qualify for the streamlined analysis process under proposed § 447.203(c)(1) notwithstanding the other proposed criteria in proposed paragraph(c)(1).
Proposed paragraph (c)(1) discusses the full set of written assurances and relevant supporting documentation that States would be required to submit with a proposed payment rate reduction or payment restructuring SPA in circumstances when the changes could result in diminished access, where the requirements in proposed paragraphs (c)(1)(i) through (c)(1)(iii) are met. The inclusion of documentation that confirms all criteria proposed in paragraph (c)(1) are met would exempt the State from the requirements in proposed § 447.203(c)(2), discussed later in this section; however, it would not guarantee SPA approval. Proposed payment rate reduction SPAs and payment rate restructuring SPAs meeting the requirements in proposed § 447.203(c)(1) would still be subject to CMS' standard review requirements for all proposed SPAs to ensure compliance with section 1902(a) of the Act, including implementing regulations in part 430. Specifically, and without limitation, this includes compliance with sections 1902(a)(2) of the Act, requiring financial participation by the State in payments authorized under section 1903 of the Act. CMS reviews SPAs involving payments to ensure that the State has identified an adequate source of non-Federal share financing for payments under the SPA so that section 1902(a)(2) of the Act is satisfied; in particular, section 1903(w) of the Act and its implementing regulations establish requirements for certain non-Federal share financing sources that CMS must ensure are met. We further note that a proposed SPA's failure to meet the criteria in proposed paragraph (c)(1) would not result in automatic SPA disapproval; rather, such proposals would be subject to additional documentation and review requirements, as described in proposed § 447.203(c)(2).
In paragraph (c)(2), we propose the additional, more rigorous State access analysis that States would be required to submit where the State proposes to reduce provider payment rates or restructure provider payments in circumstances when the changes could result in diminished access where the requirements in paragraphs (c)(1)(i) through (iii) are not met. We believe this more rigorous access analysis should be required because we believe that, where the State is unable to demonstrate that the proposed paragraph (c)(1) criteria are met, more scrutiny is needed to ensure that the proposed payment rates and structure would be sufficient to enlist enough providers so that covered services would be available to beneficiaries at least to the same extent as to the general population in the geographic area. Accordingly, we are proposing in § 447.203(c)(2) to have States document current and recent historical levels of access to care, including a demonstration of counts and trends of actively participating providers, counts and trends of FFS Medicaid beneficiaries who receive the services subject to the proposed payment rate reduction or payment restructuring; and service utilization trends, all for the 3-year period immediately preceding the submission date of the proposed rate reduction or payment restructuring SPA, as a condition for approval. As with the current AMRP process, the information provided by the State would serve as a baseline of understanding current access to care within the State's program, from which the State's payment rate reduction or payment restructuring proposal would be scrutinized.
The 2015 final rule with comment period included requirements that the AMRP process include data on the following topics, in current § 447.203(b)(1)(i) through (v): the extent to which beneficiary needs are fully met; the availability of care through enrolled providers to beneficiaries in each geographic area, by provider type and site of service; changes in beneficiary utilization of covered services in each geographic area; the characteristics of the beneficiary population (including considerations for care, service and payment variations for pediatric and adult populations and for
In § 447.203(c)(2), we propose that, for any SPA that proposes to reduce provider payment rates or restructure provider payments in circumstances when the changes could result in diminished access, where the requirements in paragraphs (c)(1)(i) through (iii) are not met, the State would be required to also provide specified information to us as part of the SPA submission as a condition of approval, in addition to the information required under paragraph (c)(1), in a format prescribed by us. Specifically, in § 447.203(c)(2)(i), we propose to require States to provide a summary of the proposed payment change, including the State's reason for the proposal and a description of any policy purpose for the proposed change, including the cumulative effect of all reductions or restructurings taken throughout the current State fiscal year in aggregate FFS Medicaid expenditures for each benefit category affected by proposed reduction or restructuring within a State fiscal year. We are proposing to collect this information for SPAs that require a § 447.203(c)(2) analysis, but for those that meet the criteria proposed under § 447.203(c)(1), we are not proposing to require a summary of the proposed payment change, including the State's reason for the proposal and a description of any policy purpose for the proposed change beyond that which is already provided as part of a normal State plan submission or as may be requested by CMS through the normal State plan review process; we are requesting comment whether these elements should apply to both proposed § 447.203(c)(1) and (c)(2) equally.
In § 447.203(c)(2)(ii), we propose to require the State to provide Medicaid payment rates in the aggregate (including base and supplemental payments) before and after the proposed reduction or restructuring for each benefit category affected by proposed reduction or restructuring, and a comparison of each (aggregate Medicaid payment before and after the reduction or restructuring) to the most recently published Medicare payment rates for the same or a comparable set of Medicare-covered services and, as reasonably feasible, to the most recently available payment rates of other health care payers in the State or the geographic area for the same or a comparable set of covered services. This proposed element is similar to the current § 447.203(b)(1)(v) rate comparison requirement, which requires the AMRP to include “[a]ctual or estimated levels of provider payment available from other payers, including other public and private payers, by provider type and site of service.” However, the proposed analysis specifically would require an aggregate comparison including Medicaid base and supplemental payments, as applicable, before and after the proposed reduction or restructuring are implemented, compared to the most recently published Medicare payment rates for the same or comparable set of Medicare-covered services and, as reasonably feasible, to the most recently available payment rates of other health care payers in the State or the geographic area for the same or a comparable set of covered services. We found that, first, States struggled with obtaining and providing private payer data as contemplated by the 2015 final rule with comment period, and, second, States were confused about how to compare Medicaid rates to Medicare rates where there were no comparable services between Medicare and Medicaid. We wanted to acknowledge the feedback we received from States during the AMRP process and modify the requirements in the proposed rule by focusing on the more readily available Medicare payment data as the most relevant payment comparison for Medicaid in this proposed rule, as discussed in detail above. We believe that the E/M CPT/HCPCS code comparison methodology included in the proposed § 447.203(b)(3)(i) and the payment rate disclosure in proposed § 447.203(b)(3)(ii) can serve, at a minimum, as frameworks for States that struggled to compare Medicaid rates to Medicare where there may be no other comparable services between the two programs. Otherwise where comparable services exist, States would be required to compare all applicable Medicaid payment rates within the benefit category to the Medicare rates for the same or comparable services under proposed § 447.203(c)(2)(ii). For reasons mentioned previously in this section, Medicare through MEDPAC engages in substantial analysis of access to care as it reviews payment rates for services, so we believe this is a sufficient benchmark for the Medicaid payment rate analysis.
In § 447.203(c)(2)(iii), we are proposing to require States to provide information about the number of actively participating providers of services in each benefit category affected by the proposed reduction or restructuring. For this purpose, an actively participating provider is a provider that is participating in the Medicaid program and actively seeing and providing services to Medicaid beneficiaries or accepting Medicaid beneficiaries as new patients. The State would be required to provide the number of actively participating providers of services in each affected benefit category for each of the 3 years immediately preceding the SPA submission date, by State-specified geographic area (for example, by county or parish), provider type, and site of service. The State would be required to document observed trends in the number of actively participating providers in each geographic area over this period. The State could provide estimates of the anticipated effect on the number of actively participating providers of services in each benefit category affected by the proposed
In § 447.203(c)(2)(iv), we are proposing to require States to provide information about the number of Medicaid beneficiaries receiving services through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring. The State would be required to provide the number of beneficiaries receiving services in each affected benefit category for each of the 3 years immediately preceding the SPA submission date, by State-specified geographic area (for example, by county or parish). The State would be required to document observed trends in the number of Medicaid beneficiaries receiving services in each affected benefit category in each geographic area over this period. The State would be required to provide quantitative and qualitative information about the beneficiary populations receiving services in the affected benefit categories over this period, including the number and proportion of beneficiaries who are adults and children and who are living with disabilities, and a description of the State's consideration of the how the proposed payment changes may affect access to care and service delivery for beneficiaries in various populations. The State would be required to provide estimates of the anticipated effect on the number of Medicaid beneficiaries receiving services through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring, by geographic area. This proposed provision is a combination of current § 447.203(b)(1)(i) and (iv), which require States to provide an analysis of the extent to which beneficiary needs are met, and the characteristics of the beneficiary population (including considerations for care, service and payment variations for pediatric and adult populations and for individuals with disabilities). Even though we are not proposing to require this analysis to be updated broadly with respect to many benefit categories on an ongoing basis, we would require current information on the number of beneficiaries currently receiving services through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring to inform our SPA review process to ensure that the statutory access standard is met. The inclusion of this beneficiary data is relevant because it provides information about the recipients of Medicaid services and where, geographically, these populations reside to ensure that the statutory access standard is met.
In § 447.203(c)(2)(v), we are proposing to require information about the number of Medicaid services furnished through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring. The State would be required to provide the number of Medicaid services furnished in each affected benefit category for each of the 3 years immediately preceding the SPA submission date, by State-specified geographic area (for example, by county or parish), provider type, and site of service. The State would be required to document observed trends in the number of Medicaid services furnished in each affected benefit category in each geographic area over this period. The State would be required to provide quantitative and qualitative information about the Medicaid services furnished in the affected benefit categories over this period, including the number and proportion of Medicaid services furnished to adults and children and who are living with disabilities, and a description of the State's consideration of the how the proposed payment changes may affect access to care and service delivery. The State would be required to provide estimates of the anticipated effect on the number of Medicaid services furnished through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring, by geographic area. This proposed data element is similar to that currently required in § 447.203(b)(1)(iii), which requires an analysis of changes in beneficiary utilization of covered services in each geographic area. However, as stated earlier, the difference here is that this proposed analysis would be limited to the beneficiary populations impacted by the rate reduction or restructuring, for a more narrow set of data points, rather than requiring the State to conduct a full review of the Medicaid beneficiary population every 3 years on an ongoing basis. Even though we are not proposing to require this analysis to be updated broadly with respect to many benefit categories on an ongoing basis, we would require current information on the number and types of Medicaid services being delivered to Medicaid beneficiaries through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring to inform our SPA review process to ensure that the statutory access standard is met. The inclusion of this data is relevant because it provides information about the actual distribution of care received by Medicaid beneficiaries and where, geographically, these services are provided to ensure that the statutory access standard is met.
Finally, in § 447.203(c)(2)(vi), we are proposing to require a summary of, and the State's response to, any access to care concerns or complaints received from beneficiaries, providers, and other interested parties regarding the service(s) for which the payment rate reduction or restructuring is proposed as required under § 447.204(a)(2). This proposed requirement mirrors the requirement in § 447.204(b)(3), which requires that for any SPA submission that proposes to reduce or restructure Medicaid service payment rates, a specific analysis of the information and concerns expressed in input from affected interested parties must be provided at the time of the SPA submission. The new proposed § 447.203(c)(2)(vi) requires the same analysis while providing more detail as to what we expect the State to provide. Specifically, proposed § 447.203(c)(2)(vi) would require information about concerns and complaints from beneficiaries and providers specifically, as well as from other interested parties, and would underscore that the required analysis would be required to include the State's responses.
Where any of the previously discussed proposed data elements requires an analysis of data over a 3-year period, we are proposing this time span to smooth statistical anomalies, and so that data variations can be understood. For example, any 3-year period look-back that includes portions of time
Proposed paragraph (c)(2) would require that States conduct and provide to us a rigorous analysis of a proposed payment rate reduction's or payment restructuring's potential to affect beneficiary access to care. However, by limiting these analyses to only those proposed payment rate reductions and payment restructurings in circumstances when the changes could result in diminished access that do not meet the criteria in proposed paragraph (c)(1), we believe that the requirements proposed in paragraph (c)(2) would help to enable us to determine whether the proposed State Medicaid payment rates and payment methodologies are consistent with section 1902(a)(30)(A) of the Act while minimizing State and Federal administrative burden, to the extent possible. We would use this State-provided information and analysis to help us understand the current levels of access to care in the State's program, and determine, considering the provider, beneficiary, and other interested party input collected through proposed § 447.203(c)(4), whether the proposed payment rate reduction or payment restructuring likely would reduce access to care for the particular service(s) consistent with the statutory standard in section 1902(a)(30)(A) of the Act. If we approve the State's proposal, the data provided would serve as a baseline for prospective monitoring of access to care within the State.
The proposed analysis and documentation requirements in paragraph (c)(2) draw, in part, from the current requirements of the AMRP process in the current § 447.203(b)(1), and reflect the diverse methods and measures that are and can be used to monitor access to care. We also drew on some of the comments received on the 2011 proposed rule, as discussed in the 2015 final rule with comment period, where several commenters recommended that CMS consider identifying a set of uniform measures that States must collect data on or that CMS weighs more heavily in its analysis.
The proposed analyses in paragraph (c)(2) would enable us to focus our review of Medicaid access to care on proposals that may result in diminished access to care, enabling us to more substantively review a proposed rate reduction's or restructuring's potential impact on access (for example, counts of participating providers), realized access (for example, service utilization trends), and the beneficiary experience of care (for example, characteristics of the beneficiary population, beneficiary utilization data, and information related to feedback from beneficiaries and other interested parties collected during the public process and through ongoing beneficiary feedback mechanisms, along with the State's responses to that feedback), while also being able to more quickly work through a review of nominal rate reduction SPAs for which States have demonstrated certain levels of payment and for which the public process did not generate access to care concerns. By including information on provider type and site of service, we believe States would be able to demonstrate access to the services provided under a specific benefit category within a number different settings across the Medicaid program, such as the availability of physicians services delivered in a physician practice, clinic setting, FQHC or RHC, or even in a hospital-based office setting. We believe that by defining specific data elements which must be provided to support a payment rate reduction SPA would create a more predictable process for States and for CMS in conducting the SPA review than under the current AMRP process in § 447.203(b)(6).
Furthermore, data elements proposed to be required under proposed § 447.203(c)(2) would be based on State-specified geographic stratifications, to help ensure we can perform access
If finalized, we anticipate releasing subregulatory guidance, including a template to support completion of the analysis that would be required under paragraph (c)(2), prior to the beginning date of the
In § 447.203(c)(3), we propose mechanisms for ensuring compliance with requirements for State analysis for rate reduction or restructuring, as specified in proposed paragraphs (c)(1) and (c)(2), as applicable. We propose that a State that submits a SPA that proposes to reduce provider payments or restructure provider payments that fails to provide the required information and analysis to support approval as specified in proposed paragraphs (c)(1) and (2), as applicable, may be subject to SPA disapproval under § 430.15(c). Additionally, States that submit relevant information, but where there are unresolved access to care concerns related to the proposed SPA, including any raised by CMS in our review of the proposal and any raised through the public process as specified in proposed paragraph (c)(4) of this section, or under § 447.204(a)(2), may be subject to SPA disapproval under § 430.15(c). Disapproving a SPA means that the State would not have authority to implement the proposed rate reduction or restructuring and would be required to continue to pay providers according to the rate methodology described in the approved State plan. Proposed paragraph (c)(3) would further provide that if, after approval of a proposed rate reduction or restructuring, State monitoring of beneficiary access shows a decrease in Medicaid access to care, such as a decrease in the provider-to-beneficiary ratio for any affected service, or the State or CMS experiences an increase in the number of beneficiary or provider complaints or concerns about access to care that suggests possible noncompliance with the access requirements in section 1902(a)(30)(A) of the Act, we may take a compliance action. As described in § 447.204(d), compliance actions would be carried out using the procedures described in § 430.35.
As discussed in the prior section, we are proposing to move current § 447.203(b)(7) to proposed § 447.203(c)(4). We are not proposing any changes to the public process described in current paragraph (b)(7). If the other provisions of this proposed rule are finalized, we would redesignate paragraph (b)(7) as paragraph (c)(4). The ability for providers and beneficiaries to provide ongoing feedback to the State regarding access to care and a beneficiary's ability to access Medicaid services is essential to the Medicaid program in that it provides the primary interested parties the opportunity to communicate with the State and for the State to track and take account of those interactions in a meaningful way. The ongoing mechanisms for provider and beneficiary feedback must be retained in this proposed rule as this process serves an important role in determining whether or not the public has raised concerns regarding access to Medicaid-covered services, which would inform the State's approach to ongoing Medicaid provider payment rates and methodologies, and whether related proposals would be approvable.
We are proposing to move current § 447.203(b)(8) to proposed § 447.203(c)(5) to better organize § 447.203 to reflect the policies in this proposed rule. We are not proposing any changes to the methods for addressing access questions and remediation of inadequate access to care, as described in current paragraph (b)(8). If the other provisions of this proposed rule are finalized, we would redesignate paragraph (b)(8) as paragraph (c)(5). It is important to retain this provision because we acknowledge that there may be access issues that come about apart from a specific State payment rate action, and there must be mechanisms through which those issues can be identified and corrective action taken.
Finally, we are proposing to move current § 447.204(d) to proposed § 447.203(c)(6). We believe the subject matter, of compliance actions for an access deficiency, is better aligned to the proposed changes in § 447.203. We are not proposing any changes to defining the remedy for the identification of an unresolved access deficiency, as described in current § 447.204(d). If the other provisions of this proposed rule are finalized, we would redesignate § 447.204(d) as paragraph (c)(6).
We are seeking public comment on our proposed procedures and requirements for State analysis for payment rate reduction or payment restructuring SPAs, including the qualification criteria for streamlined analysis proposed in § 447.203(c)(1), the proposed additional analysis elements in § 447.203(c)(2) for those proposed payment rate reductions or payment restructurings that do not meet the criteria in paragraph (c)(1), the proposed methods for ensuring compliance in § 447.203(c)(3), the proposed mechanisms for ongoing beneficiary and provider input in § 447.203(c)(4), the proposed methods to address access questions and remediation of inadequate access to care in § 447.203(c)(5), and the proposed compliance actions for access deficiencies in § 447.203(c)(6).
In § 447.204, we propose conforming changes to reflect proposed changes in § 447.203, if finalized. These conforming edits are limited to § 447.204(a)(1) and (b) and are necessary
Specifically, we propose to update the language of § 447.204(a)(1), which currently references § 447.203, to reference § 447.203(c). Because we are proposing wholesale revisions to § 447.203(b) and the addition of § 447.203(c), the proposed data and analysis referenced in the current citation to § 447.203 would be located more precisely in § 447.203(c). Current § 447.204(b)(1) refers to the State's most recent AMRP performed under current § 447.203(b)(6) for the services at issue in the State's payment rate reduction or payment restricting SPA; we propose to remove this requirement to align with our proposal to rescind the AMRP requirements in current § 447.203(b). Current § 447.204(b)(2) and (3) require the State to submit with such a payment SPA an analysis of the effect of the change in the payment rates on access and a specific analysis of the information and concerns expressed in input from affected interested parties; we believe these current requirements are addressed in proposed § 447.203(c)(1) and (2), as applicable. We believe that the continued inclusion of these paragraphs (b)(2) and (3) would be unnecessary or redundant in light of the proposals in § 447.203(c)(1) and (2), if finalized. The objective processes proposed under § 447.203(c)(1) and (2), which would require States to submit quantitative and qualitative information with a proposed payment rate reduction or payment restructuring SPA, would be sufficient for us to obtain the information necessary to assess the State's proposal with the same or similar information as currently is required under § 447.204(b)(2) and (3).
With the removal of § 447.204(b)(1) through (b)(3), we propose to revise § 447.204(b) to read, “[t]he State must submit to us with any such proposed State plan amendment affecting payment rates documentation of the information and analysis required under § 447.203(c) of this chapter.”
Finally, as noted in the previous section, we propose to remove and relocate § 447.204(d), as we felt the nature of that provision is better suited to codification in § 447.203(c)(6).
We are seeking public comment on the proposed amendments to § 447.204.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
• The need for the information collection and its usefulness in carrying out the proper functions of our Agency.
• The accuracy of our estimate of the information collection Burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements (see section III.E. of this preamble for further information). Comments, if received, will be responded to within the subsequent final rule.
To derive average costs, we used data from the U.S. Bureau of Labor Statistics' (BLS's) May 2021 National Occupational Employment and Wage Estimates for all salary estimates (
For States and the private sector the employee hourly wage estimates have been adjusted by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and other indirect costs vary significantly across employers, and because methods of estimating these costs vary widely across studies. Nonetheless, we believe
We believe that the costs for beneficiaries undertaking administrative and other tasks on their own time is a post-tax hourly wage rate of $20.71/hr.
We adopt an hourly value of time based on after-tax wages to quantify the opportunity cost of changes in time use for unpaid activities. This approach matches the default assumptions for valuing changes in time use for individuals undertaking administrative and other tasks on their own time, which are outlined in an ASPE report on “Valuing Time in U.S. Department of Health and Human Services Regulatory Impact Analyses: Conceptual Framework and Best Practices.” [*] We start with a measurement of the usual weekly earnings of wage and salary workers of $998. [**] We divide this weekly rate by 40 hours to calculate an hourly pre-tax wage rate of $24.95. We adjust this hourly rate downwards by an estimate of the effective tax rate for median income households of about 17 percent, resulting in a post-tax hourly wage rate of $20.71. We adopt this as our estimate of the hourly value of time for changes in time use for unpaid activities.
To estimate the financial burden on States, it was important to consider the Federal government's contribution to the cost of administering the Medicaid program. The Federal government provides funding based on an FMAP that is established for each State, based on the per capita income in the State as compared to the national average. FMAPs range from a minimum of 50 percent in States with higher per capita incomes to a maximum of 83 percent in States with lower per capital incomes. For Medicaid, all States receive a 50 percent FMAP for administration. States also receive higher Federal matching rates for certain systems improvements, redesign, or operations. As such, and taking into account the Federal contribution to the costs of administering the Medicaid programs for purposes of estimate State burden with respect to collection of information, we elected to use the higher end estimate that the States would contribute 50 percent of the costs, even though the burden would likely be much smaller.
The following proposed changes will be submitted to OMB for review under control number 0938-TBD (CMS-10845). At this time, the control number is to be determined (TBD). OMB will assign the control number upon their clearance of this new collection of information request. The control number will be set out in the subsequent final rule (CMS-2442-F).
Currently, most States have an established Medicaid Advisory Committee (MAC, previously known as a Medical Care Advisory Committee, or MCAC) whereby each State has the discretion on how to operate its MAC. A small number of States also use consumer advisory subcommittees as part of their MACs, similar to the Beneficiary Advisory Groups (BAGs) in proposed § 431.12. We reviewed data from 10 States to determine the current status of MACs and to determine the burden needed to comply with the proposed § 431.12 requirements across 50 States and the District of Columbia.
Under the proposed provision, States would be required to:
• Appoint members to the MAC and BAG on a rotating and continuous basis.
• Develop and publish a process for MAC and BAG member recruitment and appointment and selection of MAC and BAG leadership.
• Develop and publish:
++ Bylaws for governance of the MAC.
++ A current list of MAC and BAG membership.
++ Past meeting minutes, including a summary from the most recent BAG Meeting.
• Develop, publish, and implement a regular meeting schedule for the MAC and BAG.
Additionally, the State must provide and post to its website an annual report written by the MAC to the State describing its activities, topics discussed, recommendations. The report must also include actions taken by the State based on the MAC recommendations.
The proposed requirements would require varying levels of effort by States. For example, a handful of States already have a BAG. However, we believe that most States will be required to create new structures and processes. The majority of States reviewed are already meeting some of the new proposed requirements for MACs, such as publication of meeting schedules, publication of membership lists, and publication of bylaws. However, all MAC bylaws would need to be updated to meet the new proposed requirements. Our review showed that most States are not currently publishing their recruitment and appointment processes for MAC members, and those that did would need to update these processes to meet the new proposed requirements. About half of the States reviewed published meeting minutes with responses and State actions, as required under the new proposed requirements. But only one State reviewed published an annual report, so this will likely be a new requirement for almost all State MACs. States will not need to modify or build a reporting systems to create and post these annual reports. Due to the wide range in the use and maturity of current MCACs across the States, we are providing a range of estimates to address these variations. We recognize that some States, which do not currently operate a MCAC, will have a higher burden to implement the requirements of § 431.12 to shift to the MAC and BAG structure. However, our research showed that the majority of States do have processes and procedures for their current MCACs, which will require updating, but at a much lower burden. Therefore, we believe it is appropriate to offer average low and high burden estimates.
For a low estimate, we estimate it would take a team of business operations specialists 120 hours at $76.20/hr to develop and publish the processes and report. In aggregate, we estimate an annual burden of 6,120 hours (120 hr/response × 51 responses) at a cost of $466,344 (6,120 hr × $76.20/hr). We also estimate that it would take 40 hours at $131.34/hr for a human resources manager to review and approve bylaws and help with recruitment and appointment and selection of MAC and BAG leadership which would occur every 2 years. In aggregate, we estimate a biennial burden of 2,040 hours (40 hr/response × 51
We derived the high estimate by doubling the hours from the low estimate. We used this approach because all States already have a MCAC requirement which means the type of work being discussed is already underway in most States and that there is reference point for the type of work described. For example, we estimate it would take a team of business operations specialists 240 hours at $76.20/hr to develop and publish the processes and annual report. In aggregate, we estimate an annual burden of 12,240 hours (240 hr/response × 51 responses) at a cost of $932,688 (12,240 hr × $76.20/hr). We also estimate that it would take 80 hours at $131.34/hr for a human resources manager to review and approve bylaws and help with recruitment and appointment and selection of MAC and BAG leadership which would occur every 2 years. In aggregate, we estimate a biennial burden of 4,080 hours (80 hr/response × 51 responses) at a cost of $535,867 (4,080 hr × $131.34). Additionally, we estimate it would take 20 hours at $110.82/hr for an operations manager to review the updates and prepare the required annual report for publication. In aggregate, we estimate an annual burden of 1,020 hours (20 hr/response × 51 responses) at a cost of $113,036 (1,020 hr × $110.82/hr).
We have summarized the total burden in Table 2. To be conservative and not underestimate our burden analysis, we are using the high end of our estimates to score the PRA-related impact of the proposed requirements.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
Section 1915(c)(1) of the Act requires that services provided through section 1915(c) waiver programs be provided under a written plan of care (hereinafter referred to as “person-centered service plans” or “service plans”). Existing Federal regulations at § 441.301(c) address the person-centered planning process and include a requirement at § 441.301(c)(3) that the person-centered service plan be reviewed and revised upon reassessment of functional need, at least every 12 months, when the individual's circumstances or needs change significantly or at the request of the individual.
In 2014, we released guidance for section 1915(c) waiver programs
Within this rule we propose to replace expectations for State reporting of State-developed performance measures and the 86 percent performance threshold included in the 2014 guidance and codify requirements for reporting on standardized measures and a minimum performance level for States to demonstrate that they meet the existing person-centered service plan requirements at § 441.301(c)(3). Specifically, at new § 441.301(c)(3)(ii)(A), we propose to require that States demonstrate that a reassessment of functional need was conducted at least annually for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. We also propose, at new § 441.301(c)(3)(ii)(B), to require that States demonstrate that they reviewed the person-centered service plan and revised the plan as appropriate based on the results of the required reassessment of functional need at least every 12 months for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. At
As discussed above, at new § 441.301(c)(3)(ii)(A), we propose to require that States demonstrate that a reassessment of functional need was conducted at least annually for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. We also propose, at new § 441.301(c)(3)(ii)(B), to require that States demonstrate that they reviewed the person-centered service plan and revised the plan as appropriate based on the results of the required reassessment of functional need at least every 12 months for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. The burden associated with the person-centered service plan reporting requirements proposed at § 441.301(c)(3)(ii)(A) and (B) will affect the 48 States (including the District of Columbia) that deliver HCBS under sections 1915(c), (i), (j), or (k) authorities.
However, because we are codifying a minimum performance level associated with existing regulations but not otherwise changing the regulatory requirements under § 441.301(c)(3)(ii)(A) and (B), we do not estimate any additional burden related to those requirements. We also hold that there is no additional burden associated with repositioning, specifying, and removing extraneous language from the regulatory text at § 441.301(c)(1). In this regard we are only estimating burden for updating State policy and oversight and monitoring processes related to the codification of the new 90 percent minimum performance level associated with requirements.
We estimate it would take 8 hours at $108.68/hr for an administrative services manager to update State policy and oversight and monitoring processes, 2 hours at $110.82/hr for a general and operations manager to review and approve the updates to State policy and oversight and monitoring processes, and 1 hour at $204.82/hr for a chief executive to review and approve the updates to State policy and oversight and monitoring processes. In aggregate, we estimate a one-time burden of 528 hours (48 States × [8 hr + 2 hr + 1 hr]) at a cost of $62,203 (48 States × [(8 hr × $108.68/hr) + (2 hr × $110.82/hr) + (1 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $31,102 ($62,203 × 0.50).
As discussed earlier in sections II.B.1 of this preamble, we are proposing to also apply, to managed care delivery systems, the requirements at § 441.301(c)(3) to demonstrate that a reassessment of functional need was conducted at least annually for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days and to demonstrate that they reviewed the person centered service plan and revised the plan as appropriate based on the results of the required reassessment of functional need at least every 12 months for at least 90 percent of individuals continuously enrolled in the waiver for at least 365 days. As with the burden estimate for States, we do not estimate an ongoing burden related to the codification of a minimum performance level associated with the requirements at § 441.301(c)(3).
For managed care entities we estimate it would take 5 hours at $108.68/hr for an administrative services manager to update organizational policy and oversight and monitoring processes related to the codification of a new minimum performance level and 1 hour at $204.82/hr for a chief executive to review and approve the updates to organizational policy and oversight and monitoring processes. In aggregate, we estimate a one-time burden of 966 hours (161 managed care entities × [5 hr + 1 hr]) at a cost of $120,463 (161 managed care entities × [(5 hr × $108.68/hr) + (1 hr × $204.82/hr)]).
At § 441.301(c)(7), we propose to require that States establish grievance procedures for Medicaid beneficiaries receiving section 1915(c) waiver program services through a FFS delivery system to file a complaint or expression or dissatisfaction related to the State's or a provider's compliance with the person-centered planning and service plan requirements at § 441.301(c)(1) through (3) and the HCBS settings requirements at § 441.301(c)(4) through (6).
Proposed § 441.301(c)(7)(vii) lists proposed recordkeeping requirements related to grievances. Specifically, at § 441.301(c)(7)(vii)(A), we propose to require that States maintain records of grievances and review the information as part of their ongoing monitoring procedures. At § 441.301(c)(7)(vii)(B)(
We also propose to apply these proposed requirements in § 441.301(c)(7) to sections 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.464(d)(2)(v), 441.555(b)(2)(iv), and 441.745(a)(1)(iii), respectively. However, to avoid duplication with the grievance requirements at part 438, subpart F, we do not propose to apply these requirements to managed care delivery systems.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our reporting tools and survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The burden associated with the grievance system requirements proposed at § 441.301(c)(7) will affect the 48 States (including the District of Columbia) that deliver at least some HCBS under sections 1915(c), (i), (j), or (k) authorities through FFS delivery systems.
With regard to the one-time requirements, we estimate it would take: 240 hours at $108.68/hr for an administrative services manager to draft policy and procedure content, prepare notices and informational materials, draft rules for publication, and conduct public hearings; 100 hours at $92.92/hr for a computer programmer to build, design, and operationalize internal systems for data collection and tracking; 120 hours at $65.02/hr for a training and development specialist to develop and conduct training for staff; 40 hours at $110.82/hr for a general and operations manager to review and approve policies, procedures, rules for publication, notices, and training materials; and 20
With regard to the on-going requirements, we estimate that approximately 2 percent of 1,460,363 Medicaid beneficiaries who receive HCBS under section 1915(c), (i), (j), or (k) authorities through FFS delivery systems annually
At § 441.302(a)(6), we propose to require that States provide an assurance that they operate and maintain an incident management system that identifies, reports, triages, investigates, resolves, tracks, and trends critical incidents. At § 441.302(a)(6)(i)(A), we propose to establish a minimum standard definition of a critical incident. At § 441.302(a)(6)(i)(B), we propose to require that States have electronic incident management systems that, at a minimum, enable electronic collection, tracking (including of the status and
At § 441.302(a)(6)(iii), we propose to apply these requirements to services delivered under FFS or managed care delivery systems. We also propose to apply the proposed requirements § 441.302(a)(6) to sections 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.570(e), 441.464(e), and 441.745(a)(1)(v), respectively.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The burden associated with the incident management system requirements proposed at § 441.302(a)(6) will affect the 48 States (including Washington, DC) that deliver HCBS under section 1915(c), (i), (j), or (k) authorities.
All of the States impacted by § 441.302(a)(6)(i)(B), requiring that States use an information system, as defined in 45 CFR 164.304 and compliant with 45 CFR part 164, have existing incident management systems in place. However, we assume that all States will need to make at least some changes to their existing systems to fully comply with the proposed requirements. Specifically, States will have to update State policies and procedures; implement new or update existing electronic incident management systems; publish revised provider requirements through State notice and publication processes; update provider manuals and other policy guidance; amend managed care contracts; collect required information from providers; use other required data sources to identify unreported incidents; and share information with other entities in the State responsible for investigating critical incidents.
With regard to the one-time requirements related to proposed § 441.302(a)(6), we estimate it would take: 120 hours at $108.68/hr for an administrative services manager to draft policy content, prepare notices and draft rules for publication, conduct public hearings, and draft contract modifications for managed care plans; 20 hours at $96.66/hr for a management analyst to update provider manuals; 80 hours at $65.02/hr for a training and development specialist to develop and conduct training for providers; 80 hours at $76.20/hr for a business operations specialist to establish processes for information sharing with other entities; 80 hours at $100.80/hr for a computer and information analyst to build, design, and implement reports for using claims and other data to identify unreported incidents; 24 hours at $110.82/hr for a general and operations manager to review and approve managed care contract modifications, policy and rules for publication, and training materials; and 10 hours at $204.82/hr for a chief executive to review and approve all operations associated with this requirement.
In aggregate, we estimate a one-time burden of 19,872 hours (414 hr × 48 States) at a cost of $1,874,125 (48 States × [(120 hr × $108.68/hr) + (20 hr × $96.66/hr) + (80 hr × $65.02/hr) + (80 hr × $76.20/hr) + (80 hr × $100.80/hr) + (24 hr × $110.82/hr) + (10 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $937,063 ($1,874,125 × 0.50).
In addition, we estimate that States, based on the results of the incident management system assessment discussed earlier in section II.B.3. of this preamble, that 82 percent of States, or 39 States (48 States × 0.82), would need to update existing electronic incident management systems, while the remaining 9 States would need to implement new electronic incident management systems, to meet the proposed requirement at § 441.302(a)(6)(i)(B). We estimate based on information reported by some States in spending plans for section 9817 of the American Rescue Plan Act of 2021 that the cost per State to update existing electronic systems is $2 million while the cost per State to implement new electronic systems is $5 million.
With regard to the ongoing requirements § 441.302(a)(6), we estimate that there are 0.5 critical incidents annually
In total, for § 441.302(a)(6), we estimate an ongoing burden each year of 12,297 hours (3,576 hours + 8,721 hours) at a cost of $424,985 ($123,587 + $301,398) to record the information on all critical incidents for individuals enrolled in FFS and managed care delivery systems across all States. We further estimate it would take 12 hours at $76.20/hr for a business operations specialist to maintain processes for information sharing with other entities; 20 hours at $100.80/hr for a computer and information analyst to update and maintain reports for using claims and other data to identify unreported incidents; 24 hours at $110.82/hr for a general and operations manager to monitor the operations associated with this requirement; and 4 hours at $204.82/hr for a chief executive to review and approve all operations associated with this collection of information requirement in each State. In aggregate, we estimate an ongoing burden of 15,177 hours ([60 hr × 48 States] + 12,297 hr) at a cost of $732,617 ($424,985 + [48 States × ((12 hr × $76.20/hr) + (20 hr × $100.80/hr) + (24 hr × $110.82/hr) + 4 hr × $204.82/hr)]). In addition, we estimate an on-going annual technology-related cost of $500,000 per State for States to maintain their electronic incident management systems. In aggregate, we estimate an ongoing burden of $24,000,000 ($500,000 × 48 States) for States to maintain their electronic incident management systems. In total, we estimate an ongoing annual burden of 15,177 hours at a cost $24,732,617 ($732, 617 + $24,000,000). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $12,366,309 ($24,732,617 × 0.50). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $12,366,309 ($24,732,617 × 0.50).
The burden associated with this proposed rule would affect service providers that provide HCBS under sections 1915(c), (i), (j), and (k) authorities, as well as managed care entities that contract with the States to provide managed long-term services and supports.
The following discussion estimates an ongoing burden for service providers to implement these requirements and both a one-time and ongoing burden for managed care contractors.
To estimate the number of service providers that would be impacted by this proposed rule, we used unpublished data from the Provider Relief Fund to estimate that there are 19,677 providers nationally across all payers delivering the types of HCBS that are delivered under sections 1915(c), (i), (j), and (k) authorities. We then prorate the number to estimate the number of providers in the 48 States that are subject to this requirement (19,677 providers nationally × 48 States subject to the proposed requirement/51 States = 18,520 providers). We used data from the Centers for Disease Control and Prevention
As discussed earlier, we estimate that providers will report 10 percent, or 28,345, of the more critical incidents (283,446 more critical incidents × 0.10) identified annually as a result of these requirements. Based on these figures, we estimate that, on average, each provider will report 1.8 (28,345 incidents/15,742 providers) more critical incidents annually. We further estimate that, on average, it would take a provider 1 hour at $110.82/hr for a general and operations manager to collect the required information and report the information to the State or to the managed care entity as appropriate for each incident.
As required under proposed § 441.302(a)(6), while States can establish different processes for the reporting of critical incidents for individuals enrolled in managed care, we assume for the purpose of this analysis that the States would delegate provider reporting of critical incidents and identification of critical incidents through claims and other data sources to managed care entities and that the managed care entities would be responsible for reporting the identified critical incidents to the State.
We estimated that there are 161 managed long-term services and supports plans providing services across 25 States.
The on-going burden to managed care entities consists of the collection and maintenance of information on critical incidents. As noted earlier, we estimate that these requirements will result in the identification of 283,446 more critical incidents annually than are currently identified by States. We further estimate that 24 percent, or 68,027 (283,446 × 0.24), will be reported for individuals enrolled in managed care delivery systems
This proposed rule would update § 441.302, by adding new paragraph (k)(2), which would require that at least 80 percent of Medicaid payments for the following services be spent on compensation, as defined at § 441.302(k)(1)(i), to direct care workers for the following services: homemaker services, home health aide services, and personal care services.
Proposed § 441.302(k)(1)(i) defines compensation to include salary, wages, and other remuneration as defined by the Fair Labor Standards Act and implementing regulations (29 U.S.C. 201
To demonstrate compliance with the requirements proposed at § 441.302(k), new reporting requirements are proposed at § 441.311(e). Specifically, States would be required to report separately on the percent of payments that are spent on the direct care workforce for HCBS services. The services are found at § 440.180(b)(2) through (4), and include: homemaker services, home health aide services, and personal care services. Separate reporting would be required on payment for services that are self-directed.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The burden associated with the proposed requirements would affect the 48 States (including Washington, DC) that deliver HCBS under sections 1915(c), (i), (j), or (k) authorities.
With regard to the one-time requirements, we estimate it would take: 80 hours at $108.68/hr for an administrative services manager to: draft policy content, prepare notices and draft rules for publication, conduct public hearings, and draft contract modifications for managed care plans; 30 hours at $96.66/hr for a management analyst to update provider manuals for each of the affected services, and draft provider agreement amendments; 25 hours at $92.92/hr for a computer programmer to build, design, and operationalize internal systems for collection, aggregation, stratification by service, reporting, and creating remittance advice; 60 hours at $65.02/hr for a training and development specialist to develop and conduct training for providers; 6 hours at $110.82/hr for a general and operations manager to: review, approve managed care contract modifications, policy and rules for publication, and training materials; and 3 hours at $204.82/hr for a chief executive to review and approve all operations associated with this requirement. In aggregate, we estimate a one-time burden of 9,792 hours (204 hr × 48 States) at a cost of $916,693 (48 States × [(80 hr × $108.68/hr) + (30 hr × $96.66/hr) + (25 hr × $92.92/hr) + (60 hr × $65.02/hr) + (6 hr × $110.82/hr) + (3 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $458,347 ($916,693 × 0.50).
With regard to the on-going requirements, we estimate it would take 6 hours at $92.92/hr for a computer programmer to: (1) collect the information from all providers for each service required; (2) aggregate and stratify by each service as well as self-directed services; (3) derive an overall percentage for each service including self-directed services; and (4) develop report to CMS on an annual basis. We also estimate it would take 2 hours at $110.82/hr by a general and operations manager to review, verify, and approve reporting to CMS and 1 hour at $204.82/hr for a chief executive to review and approve all operations associated with this requirement. In aggregate, we estimate an ongoing burden of 432 hours (9 hr × 48 States) at a cost of $47,231 (48 States × [(6 hr × $92.92/hr) + (2 hr × $110.82/hr) + (1 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $23,616 ($47,231 × 0.50) per year.
The burden associated with this proposed rule will affect both service providers that provide the services listed at § 440.180(b)(2) through (4) across HCBS programs as well as managed care entities that contract with the States to provide managed long-term services and supports. We estimate both a one-time and ongoing burden to implement the reporting requirements § 441.311(e) for both service providers and managed care contractors.
To estimate the number of service providers that will be impacted by this proposed rule, we used unpublished data from the Provider Relief Fund to estimate that there are 14,444 providers nationally across all payers delivering homemaker, home health aide, and/or personal care services. We then prorate the number to estimate the number of providers in the 48 States that are subject to this requirement (14,444 providers nationally × 48 States subject to the proposed requirement/51 States = 13,594 providers). We used data from the Centers for Disease Control and Prevention
With regard to the one-time requirements, we estimate it would take: 35 hours at $70.98/hr for a compensation, benefits and job analysis specialist to calculate compensation, as defined by § 441.302(k)(1)(i) for each direct care worker defined at § 441.302(k)(1)(ii); 40 hours at $92.92/hr for a computer programmer to build, design and operationalize an internal system to calculate each direct care worker's compensation as a percentage of total revenues received, aggregate the sum of direct care worker compensation as an overall percentage, and separate self-directed services to report to the State; and 8 hours at $110.82/hr for a general and operations manager to review and approve reporting to the State. In aggregate, we estimate a one-time burden of 959,065 hours (11,555 providers × 83 hr) at a cost of $81,897,911 (11,555 providers × [(35 hr × $70.98/hr) + (40 hr × $92.92/hr) + (8 hr × $110.82/hr)]).
With regard to the on-going requirements, we estimate it would take 8 hours at $70.98/hr for a compensation, benefits, and job analysis specialist to account for new hires and/or contracted employees; 8 hours at $92.92/hr for a computer programmer to calculate compensation, aggregate data, and report to the State as required; and 5 hours at $110.82/hr for a general and operations manager to review and approve reporting to the State. In aggregate, we estimate an on-going burden of 242,655 hours (11,555 providers × 21 hr) at a cost of $21,553,542 (11,555 providers × [(8 hr × $70.98/hr) + (8 hr × $92.92/hr) + (5 hr × $110.82/hr)]).
As noted earlier, the burden associated with this proposed rule will affect managed care entities (see section d, below) that contract with the States to provide managed long-term services and supports. We estimate that there are 161 managed long-term services and supports plans providing services across 25 States.
With regard to the one-time requirements, we estimate it would take 40 hours at $108.68/hr for an administrative services manager to draft policy for contracted providers; 25 hours at $92.92/hr for a computer programmer to build, design, and operationalize internal systems for data collection, aggregation, stratification by service, and reporting; 30 hours at $65.02/hr for a training and development specialist to develop and conduct training for providers; and 3 hours at $204.82/hr for a chief executive to review and approve reporting to the State. In aggregate, we estimate a one-time burden of 15,778 hours (161 MCEs × 98 hr) at a cost of $1,486,877 (161 MCEs × [(40 hr × $108.68/hr) + (25 hr × $92.92/hr) + (30 hr × $65.02/hr) + (3 hr × $204.82/hr)]).
With regard to the ongoing requirements, we estimate it would take: 6 hours at $92.92/hr for a computer programmer to: (1) collect the information from all providers for each service required, (2) aggregate and stratify data as required, and (3) develop report to the State on an annual basis; and 2 hours at $204.82/hr for a chief executive to review and approve the reporting to the State. In aggregate, we estimate an ongoing burden of 1,288 hours (161 MCEs × 8 hr) at a cost of $155,713 (161 MCEs × [(6 hr × $92.92/hr) + (2 hr × $204.82/hr)]).
Section 1915(c) of the Act authorizes States to set enrollment limits or caps on the number of individuals served in a waiver, and many States maintain waiting lists of individuals interested in receiving waiver services once a spot becomes available. States vary in the way they maintain waiting lists for section 1915(c) waivers, and if a waiting list is maintained, how individuals may join the waiting list. Some States permit individuals to join a waiting list as an expression of interest in receiving waiver services, while other States require individuals to first be determined eligible for waiver services to join the waiting list. States have not been required to submit any information on the existence or composition of waiting lists, which has led to gaps in information on the accessibility of HCBS within and across States. Further, feedback obtained during various interested parties' engagement activities conducted with States and other interested parties over the past several years about reporting requirements for HCBS, as well as feedback received through the RFI
We propose to amend § 441.303(f)(6) by adding language to the end of the regulatory text: “If the State has a limit on the size of the waiver program and maintains a list of individuals who are waiting to enroll in the waiver program, the State must meet the reporting requirements at § 441.311(d)(1).”
For States that limit or cap enrollment in a section 1915(c) waiver and maintain a waiting list, States would be required to provide a description annually on how they maintain the list of individuals who are waiting to enroll in a section 1915(c) waiver program. The description must include, but not be limited to, information on whether the State screens individuals on the waiting list for eligibility for the waiver program, whether the State periodically re-screen individuals on the waiver list for eligibility, and the frequency of re-screening, if applicable. In addition, States would be required to report of the number of people on the waiting list if applicable, as well as the average amount of time that individuals newly enrolled in the waiver program in the past 12 months were on the waiting list, if applicable.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The one-time State burden associated with the waiting list reporting requirements proposed in § 441.311(d)(1) will affect the 39 State Medicaid programs with waiting lists for section 1915(c) waivers.
With regard to the one-time requirements, we estimate it would take: 16 hours at $108.68/hr for an administrative services manager to write or update State policy, direct information collection, compile information, and produce a report; 20 hours at $92.92/hr for a computer programmer or contractor to query internal systems for reporting requirements; 3 hours at $110.82/hr for a general and operations manager to review and approve report; and 2 hours at $204.82/hr for a chief executive to review and approve all reports associated with this requirement. In aggregate, we estimate a burden of 1,599 hours (39 States × 41 hr) at a cost of $169,236 (39 States × [(16 hr × $108.68/hr) + (20 hr × $92.92/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $84,618 ($169,236 × 0.50).
Assuming no changes to the State waiting list policies, each year States would only need to update the report to reflect the number of people on the list of individuals who are waiting to enroll in the waiver program and average amount of time that individuals newly enrolled in the waiver program in the past 12 months were on the list.
With regard to the on-going burden for the section 1915(c) waiver waiting list reporting requirements at § 441.311(d)(1), we estimate it would take: 4 hours at $108.68/hr for an administrative services managers across relevant operating agencies to direct information collection, compile information, and produce a report; 6 hours at $92.92/hr for a computer programmer or contractor to query internal systems for reporting requirements; 3 hours at $110.82/hr for a general and operations manager to review and approve report; and 2 hours at $204.82/hr for a chief executive to review and approve all reports associated with this requirement. In aggregate, we estimate a burden of 585 hours (39 States × 15 hr) at a cost of $67,639 (39 States × [(4 hr × $108.68/hr) + (6 hr × $92.92/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]. Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $33,820 ($67,639 × 0.50) per year.
Additional HCBS access reporting is proposed at § 441.311(d)(2)(i). States would be required to report annually on the average amount of time from when homemaker services, home health aide services, or personal care services, listed in § 440.180(b)(2) through (4), are initially approved to when services began for individuals newly approved to begin receiving services within the past 12 months. For this specific metric, States will be allowed to report on a statistically valid random sample of individuals newly approved to begin receiving these services within the past 12 months.
Proposed § 441.311(d)(2)(ii) would require States to report annually on the percent of authorized hours for homemaker services, home health aide services, or personal care, as listed in § 440.180(b)(2) through (4), that are provided within the past 12 months. States will have the option to report on a statistically valid random sample of individuals authorized to receive these services within the past 12 months, rather than all individuals authorized to receive these services within the past 12 months.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The burden associated with the proposed additional HCBS access reporting requirements at § 441.311(d)(2) would affect the 48 States (including Washington DC) that deliver HCBS under sections 1915(c), (i), (j), or (k) authorities.
We estimate one-time and ongoing burden to implement the requirements at § 441.311(d)(2) at the State level.
With regard to the one-time burden related to the HCBS access reporting requirements, we estimate it would take: 20 hours at $108.68/hr for an administrative services manager across relevant operating agencies to direct information collection, compile information, and produce a report; 60 hours at $92.92/hr for a computer programmer or contractor to analyze service authorization and claims data; 40 hours at $95.62/hr for a statistician to conduct data sampling; 3 hours at $110.82/hr for a general and operations manager to review and approve report; and 2 hours at $204.82/hr for a chief executive to review and approve all reports associated with this requirement. In aggregate, we estimate a one-time burden of 6,000 hours (48 States × 125 hr) at a cost of $591,154 (48 States × [(20 hr × $108.68/hr) + (60 hr × $92.92/hr) + (40 hr × $95.62/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $295,577 ($591,154 × 0.50) per year.
With regard to the on-going burden related to the HCBS access reporting requirements for States, we estimate it would take: 10 hours at $108.68/hr for an administrative services manager to direct information collection, compile information, and produce a report; 20 hours at $92.92/hr for a computer programmer or contractor to analyze service authorization and claims data; 10 hours at $95.62/hr for a statistician to conduct data sampling; 3 hours at $110.82/hr for a general and operations manager to review and approve report; and 2 hours at $204.82/hr for a chief executive to review and approve all reports associated with this requirement. In aggregate, we estimate a burden of 2,160 hours (48 States × 45 hr) at a cost of $222,888 (48 States × [(10 hr × $108.68/hr) + (20 hr × $92.92/hr) + (10 hr × $95.62/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $111,444 ($222,888 × 0.50) per year.
With regard to the one-time proposed HCBS access reporting requirements at § 441.311(d)(2) for managed care entities, we estimate it would take: 10 hours at $108.68/hr for an administrative services manager to direct information collection, compile information, and produce a report to the State; 35 hours at $92.92/hr for a computer programmer to analyze service authorization and claims data; 10 hours at $95.62/hr for a statistician to conduct data sampling; and 2 hours at $204.82/hr for a chief executive review and approval. In aggregate, we estimate a one-time burden of 9,177 hours (161 MCEs × 57 hr) at a cost of $918,479 (161 MCEs × [(10 hr × $108.68/hr) + (35 hr × $92.92/hr) + (10 hr × $95.62/hr) + (2 hr × $204.82/hr)]).
With regard to the ongoing requirements associated with the annual collection, aggregation, and reporting the HCBS access measures at § 441.311(d)(2), we estimate it would require: 4 hours at $108.68/hr for an administrative services manager to direct information collection, compile information, and produce a report to the State; 20 hours at $92.92/hr for a computer programmer to analyze service authorization and claims data; 8 hours at $95.62/hr for a statistician to conduct data sampling; and 2 hours at $204.82/hr for a chief executive to review and approve. In aggregate, we estimate a burden of 5,474 hours (161 MCEs × 34 hr) at a cost of $558,303 (161 MCEs × [(4 hr × $108.68/hr) + (20 hr × $92.92/hr) + (8 hr × $95.62/hr) + (2 hr × $204.82/hr)]).
Through proposed updates to § 441.311(b)(1), as described in proposed § 441.302(a)(6), this proposed rulemaking aims to standardize CMS expectations and State reporting requirements to ensure that States operate and maintain an incident management system that identifies, reports, triages, investigates, resolves, tracks, and trends critical incidents. The proposed updates were informed by the responses to the HCBS Incident Management Survey (CMS-10692; OMB 0938-1362) recently released to States.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
This proposed rulemaking codifies existing compliance reporting requirements on Critical Incidents, Person-Centered Planning, and Type, Amount, and Cost of Services. This includes codifying minimum performance standards at § 441.311(b)(2) and (3) and making updates to critical incident and person-centered planning requirements previously described in 2014 guidance,
This proposed rule would remove our currently approved burden and replace it with the burden associated with the proposed amendments to § 441.311(b)(2) through (4). In aggregate, the change would remove 11,132 hours (253 waivers × 44 hr) and $860,281 (11,132 hr × $77.28/hr for a business operations specialist). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost reduction would be minus $430,140 (−$860,281 × 0.50).
We expect to revise the Form CMS-372(S) and the form's instructions based on the proposed reporting requirements. The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The net change resulting from reporting requirements on critical incidents, person-centered service planning, and type, amount, and cost of services, proposed by § 441.311(b)(2) through (4) is a burden decrease of 8,492 hours and $319,594 (State share).
At § 441.311(c), we propose to require that States report every other year on the HCBS Quality Measure Set, which is described in section II.B.8. of the preamble. The proposed reporting requirement would affect the 48 States (including Washington, DC) that deliver HCBS under section 1915(c), 1915(i), 1915(j), and 1915(k) authorities. We estimate both a one-time and ongoing burden to implement these requirements at the State level.
As proposed at § 441.311(c), the data collection would include reporting every other year on all measures in the HCBS Quality Measure Set that are identified by the Secretary.
Under proposed § 441.312(c)(1)(iii), States would also be required to establish performance targets, subject to our review and approval, for each of the measures in the HCBS Quality Measure Set that are identified as mandatory for States to report or are identified as measures for which we will report on behalf of States, as well as to describe the quality improvement strategies that they will pursue to achieve the performance targets for those measures.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
This one-time burden analysis assumes that States must newly adopt one of the “experience of care” surveys cited in the HCBS Quality Measure Set: The Consumer Assessment of Healthcare Providers and Systems Home and Community-Based (HCBS CAHPS®) Survey, National Core Indicators®-Intellectual and Developmental Disabilities (NCI®-IDD), National Core Indicators-Aging and Disability (NCI-AD)
The estimate of one-time burden related to the effort associated with the proposed requirements is for the first year of reporting. It assumes that the Secretary will initially require 25 of the 97 measures currently included in the HCBS Quality Measure Set. The estimate disregards costs associated with the voluntary reporting of measures in the HCBS Quality Measure Set that are not yet mandatory, and voluntary stratification of measures ahead of the phase-in schedule, discussed later in this section.
Additionally, the Secretary will require stratification by demographic characteristics of 25 percent of the measures in the HCBS Quality Measure Set for which the Secretary has specified that reporting should be stratified 3 years after the effective date of these regulations, 50 percent of such measures by 5 years after the effective date of these regulations, and 100 percent of measures by 7 years after the effective date of these regulations. The burden associated with stratifying data is considered in the ongoing cost estimate only. We anticipate that certain costs will decline after the first year of reporting, but that some of the reduction will be supplanted with costs associated with stratifying data.
With regard to the one-time requirements at § 441.311(c) for reporting on the initial mandatory elements of the HCBS Quality Measure Set, we estimate that would take: 540 hours at $108.68/hr for administrative services managers to conduct project planning, administer and oversee survey administration, compile measures, establish and describe performance targets, describe quality improvement strategies, and produce a report; 40 hours at $95.62/hr for a statistician to determine survey sampling methodology; 500 hours at $62.20/hr for survey researcher(s) to be trained in survey administration and to administer an in-person survey; 200 hours at $34.56/hr for a data entry worker to input the data; 60 hours at $92.92/hr for a computer programmer to synthesize the data; and 5 hours at $204.82/hr for a chief executive to verify, certify, and approve the report. In aggregate, we estimate a one-time burden of 64,560 hours (48 States × 1,345 hr) at a cost of $5,141,918 (48 States × [(540 hr × $108.68/hr) + (40 hr × $95.62/hr) + (500 hr × $62.20/hr) + (200 hr × $34.56/hr) + (60 hr × $92.92/hr) + (5 hr × $204.82/
With regard to the ongoing burden of fulfilling proposed requirements at § 441.311(c), every other year, for reporting on mandatory elements of the HCBS Quality Measure Set, including data stratification by demographic characteristics, we estimate it would take: 520 hours at $108.68/hr for administrative services managers to conduct project planning, administer and oversee survey administration, compile measures, update performance targets and quality improvement strategy description, and produce a report; 80 hours at $95.62/hr for a statistician to determine survey sampling methodology; 1,250 hours at $62.20/hr for survey researcher(s) to be trained in survey administration and to administer an in-person survey; 500 hours at $34.56/hr for a data entry worker to input the data; 100 hours at $92.92/hr for a computer programmer to synthesize the data; and 5 hours at $204.82/hr for a chief executive to verify, certify, and approve a State data submission to us. In aggregate, we estimate an ongoing burden of 117,840 hours (48 States × 2,455 hr) at a cost of $8,136,446 (48 States × [(520 hr × $108.68/hr) + (80 hr × $95.62/hr) + (1,250 hr × $62.20/hr) + (500 hr × $34.56/hr) + (100 hr × $92.92/hr) + (5 hr × $204.82/hr)]). Given that reporting is every other year, the annual burden would be 58,920 hours (117,840 hr/2 years) and $4,068,223 ($8,136,446/2 years). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $2,034,112 ($4,068,223 × 0.50).
State adoption of existing beneficiary experience surveys, contained in the HCBS Quality Measure Set, to fulfill the proposed mandatory reporting requirements would include a burden on beneficiaries. As proposed in the previous section, a State must newly adopt one of the “experience of care” surveys cited in the HCBS Quality Measure Set: The Consumer Assessment of Healthcare Providers and Systems Home and Community Based (HCBS CAHPS®) Survey, National Core Indicators® Intellectual and Developmental Disabilities (NCI® IDD), National Core Indicators Aging and Disability (NCI AD)
With regard to beneficiary burden, we estimate it would take 45 minutes (0.75 hr) at $20.71/hr for a Medicaid beneficiary to complete a survey every other year that will be used to derive one or more of the measures in the
The proposed rule adds a new section, at § 441.313, titled, “website Transparency, to promote public transparency related to the administration of Medicaid-covered HCBS under section 1915(c) of the Act.” Specifically, at § 441.313(a), we propose to require States to operate a website that meets the availability and accessibility requirements at § 435.905(b) and that provides the data and information that States are required to report under the newly proposed reporting section at § 441.311. At § 441.313(a)(1), we propose to require that the data and information that States are required to report under § 441.311 be provided on one website, either directly or by linking to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that is authorized to provide services. At § 441.313(a)(2), we propose to require that the web page include clear and easy to understand labels on documents and links.
At § 441.313(a)(3), we propose to require that States verify the accurate function of the website and the timeliness of the information and links at least quarterly. At § 441.313(c), we propose to apply these requirements to services delivered under FFS or managed care delivery systems. At § 441.313(a)(4), we propose to require that States explain that assistance in accessing the required information on the website is available at no cost and include information on the availability of oral interpretation in all languages and written translation available in each prevalent non-English language, how to request auxiliary aids and services, and a toll-free and TTY/TDY telephone number. Further, we propose to apply the proposed requirements at § 441.313 to sections 1915(j), (k), and (i) State plan services by cross-referencing at §§ 441.486, 441.595, and 441.750, respectively.
The following proposed changes will be submitted to OMB for their approval after this proposed rule is finalized and our survey instrument has been developed. The survey instrument and burden will be made available to the public for their review under the standard non-rule PRA process which includes the publication of 60- and 30-day
The burden associated with the website transparency requirements proposed at § 441.313 will affect the 48 States (including Washington, DC) that deliver HCBS under sections 1915(c), (i), (j), or (k) authorities. We are requiring at § 441.313(c) to apply the website transparency requirements to services delivered under FFS or managed care delivery systems, and we propose to provide States with the option to meet the requirements at § 441.313 by linking to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that are authorized to provide services. However, we are not requiring managed care entities to report the data and information required under § 441.311 on their website. As such, we estimate that there is no additional burden for managed care entities associated with the requirements to link to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that are authorized to provide services for § 441.313. Further, the burden associated with the requirements for managed care entities to report the data and information required under § 441.311 is estimated in the ICRs Regarding Compliance Reporting (§ 441.311(b)).
If a State opts to comply with the requirements at § 441.313 by linking to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that are authorized to provide services, the State would incur a burden. However, such burden would be less than the burden associated with posting the information required under § 441.311 on their own website. We are unable to estimate the number of States that may opt to comply with the requirements at § 441.313 by linking to the web pages of the managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, or primary care case management entity that are authorized to provide services. As a result, we do not take into account the option in our burden estimate and conservatively assume that all States subject to the requirements at § 441.313 by posting the information required under § 441.311 on their own website.
We estimate both a one-time and ongoing burden to implement these requirements at the State level.
The burden associated with the website transparency requirements proposed at § 441.313 will affect the 48 States (including Washington, DC) that deliver HCBS under sections 1915(c), (i), (j), or (k) authorities. We estimate
With regard to the one-time burden, based on the website transparency requirements, we estimate it would take: 24 hours at $108.68/hr for an administrative services manager to determine the content of the website; 80 hours at $92.92/hr for a computer programmer or contractor to develop the website; 3 hours at $110.82/hr for a general and operations manager to review and approve the website; and 2 hours at $204.82/hr for a chief executive to review and approve the website. In aggregate, we estimate a one-time burden of 5,232 hours (48 States × 109 hr) at a cost of $517,633 (48 States × [(24 hr × $108.68/hr) + (80 hr × $92.92/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $258,817 ($517,633 × 0.50) per year.
With regard to the State on-going burden related to the website transparency requirement, per quarter we estimate it would take: 8 hours at $108.68/hr for an administrative services manager to provide updated data and information for posting and to verify the accuracy of the website; 20 hours at $92.92/hr for a computer programmer or contractor to update the website; 3 hours at $110.82/hr for a general and operations manager to review and approve the website; and 2 hours at $204.82/hr for a chief executive to review and approve the website. In aggregate, we estimate an ongoing annual burden of 6,336 hours (33 hr × 48 States × 4 quarters) at a cost of $666,228 (48 States × 4 quarters × [(8 hr × $108.68/hr) + (20 hr × $92.92/hr) + (3 hr × $110.82/hr) + (2 hr × $204.82/hr)]). Taking into account the Federal contribution to Medicaid administration, the estimated State share of this cost would be $333,114 ($666,228 × 0.50) per year.
The following proposed changes will be submitted to OMB for review under control number 0938-1134 (CMS-10391).
This proposed rule would update documentation requirements in § 447.203. To develop the burden estimates associated with these changes, we account for the removal of existing information collection requirements in current § 447.203(b), and the introduction of new requirements at proposed 447.203(b) and (c). As described later in this section, we estimate the impact of the proposed revisions to § 447.203 would result in a net burden reduction. We do not anticipate any additional information collection burden from the conforming edits proposed in § 447.204, as the conforming edits merely alter the items submitted as part of an existing submission requirement, and the burden of producing those items is reflected in the estimates related to § 447.203, including instances where we propose to move language from § 447.204 to § 447.203.
The burden reduction associated with the removal of § 447.203(b)(1) through (8) consists of the removal of time and effort necessary to develop and publish AMRPs, perform ongoing monitoring, and corrective action plans.
Current § 447.203(b)(1) and (2) describes the minimum factors that States must consider when developing an AMRP. Specifically, the AMRP must include: input from both Medicaid beneficiaries and Medicaid providers, an analysis of Medicaid payment data,
Section 447.203(b)(6)(ii) requires that States have procedures within the AMRP to monitor continued access after implementation of a SPA that reduces or restructures payment rates. The monitoring procedures must be in place for a period of at least 3 years following the effective date of the SPA. However, States were already required to submit information on compliance with section 1902(a)(30)(A) of the Act prior to the 2015 final rule with comment period. Therefore, removal of § 447.203(b)(6)(ii) will result in a burden reduction.
Finally, we note that this section references the proposed rescission of the current AMRP process contained in § 447.203(b)(1) to § 447.203(b)(8). However, the requirements of paragraph (b)(7) are reflected in proposed paragraph (b)(4), and the requirements of paragraph (b)(8) are reflected in proposed paragraph (c)(5). As such, there is not a change in impact related to the rescission of these specific aspects of the AMRP process, should our proposals be finalized, and are not reflected in this section.
In our currently approved information collection request, we estimated that the requirements to develop and make the AMRPs publicly available for the specific categories of Medicaid services will affect each of the 50 State Medicaid programs and the District of Columbia (51 total respondents). We will use that estimate here as well, although we note that the figure does not represent solely those States, but may include territories not exempt under waivers, and exclude States not subject due to reliance entirely on managed care (with no beneficiaries receiving any benefits through FFS delivery), and these figures fluctuate. As such, for consistency, we will maintain the estimate of 51 respondents subject to this proposed rule. We further note that the one-time cost estimates have already been met for AMRPs, and the ongoing monitoring requirements are every 3 years. As such, the estimates in this section for burden reduction are for 17 respondents, one-third of the 51 affected respondents, to provide an annual estimate of the reduced burden.
We estimated that every 3 years, it would take: 80 hours at $54.26/hr for a research analyst to gather data, 80 hours at $100.80/hr for an information analyst to analyze the data, 100 hours at $96.66/hr for a management analyst to develop the content of the AMRP, 40 hours at $77.28/hr for a business operations specialist to publish the AMRP, and 10 hours at $110.82/hr for managerial staff to review and approve the AMRP. In aggregate, and as shown in Table 35, we estimate the reduced annual burden of the rescission of the ongoing AMRP requirements would be minus 5,270 hours (17 States × 310 hr) and minus $446,593 (17 States × [(80 hr × $54.26/hr) + (80 hr × $100.80/hr) + (100 hr × $96.66/hr) + (40 hr × $77.28/hr) + (10 hr × $110.82/hr)]). Taking into account the 50 percent Federal contribution for administrative expenditures, the rescission represents a saving to States of minus $223,297 ($446,593 × 0.50).
The currently approved ongoing burden associated with the requirements under § 447.203(b)(6)(ii) is the time and effort it takes each of the State Medicaid programs to monitor continued access following the implementation of a SPA that reduces or restructures payment rates. In our currently approved information collection request, we estimate that in each SPA submission cycle, 22 States would submit SPAs to implement rate changes or restructure provider payments based on the number of submissions received in FY 2010. Using our currently approved burden estimates we estimate a reduction of: 40 hours at $96.66/hr for a management analyst to develop the monitoring procedures, 24 hours at $96.66/hr for a management analyst to periodically review the monitoring results, and 3 hours at $110.82/hr for a general and operations manager to review and approve the monitoring procedures. In aggregate, we estimate burden reduction of minus 1,474 hours (22 Respondents × 67 hr) and minus $143,411 (22 States × [(40 hr × $96.66/hr) + (24 hr × $96.66/hr) + (3 hr × $110.82/hr)]). Accounting for the 50 percent Federal administrative match, the total State cost reduction is adjusted to $71,706 ($143,411 × 0.50).
We are proposing to replace the AMRP requirements with a new payment rate transparency requirement at § 447.203(b)(1) through (5). The burden associated with the proposed payment rate transparency requirement consists of the time and effort to develop and publish a Medicaid FFS provider payment rate information and analysis.
Proposed § 447.203(b)(1) specifies that all FFS Medicaid payments must be published on a publicly accessible website that is maintained by the State. Proposed § 447.203(b)(2) specifies the service types that are subject to the proposed payment analysis, which include: primary care services; obstetrical and gynecological services; outpatient behavioral health services; and certain HCBS. Proposed § 447.203(b)(3) describes the required components of the payment analysis to include, for services in proposed § 447.203(b)(2)(i) through (iii), a percentage comparison of Medicaid payment rates to the most recently published Medicare payment rates effective for the time period for each of the service categories specified in paragraph (b)(2). We also specify that the payment analysis must include percentage comparisons made on the basis of Medicaid base payments. For HCBS described in proposed § 447.203(b)(2)(iv), we propose to require a State-based comparison of average hourly payment rates. Proposed § 447.203(b)(4) details the payment analysis timeframe, with the first payment analysis required to be published by the State agency by January 1, 2026, and updated every 2 years by January 1. Proposed § 447.203(b)(5) describes our mechanism for ensuring compliance and that we may take compliance action against a State that fails to meet the requirements of the payment rate transparency, comparative payment rate analysis, and payment rate disclosure provisions in preceding proposed paragraphs in § 447.203(b) including a deferral or disallowance of certain of the State's administrative expenditures following the procedures described at part 430, subpart C.
We estimate that the proposed requirements to complete and make publicly available all FFS Medicaid payments and the comparative payment rate analysis and payment rate disclosures under § 447.203(b)(1) through (5) for the specific categories of Medicaid services would affect 51 total respondents, based on the estimate in the prior section regarding the variation in States and territories subject to these requirements. We propose to require applicable States and territories to publish all FFS Medicaid payments initially by January 1, 2026, while future updates to the payment rate transparency information would depend on when a State submits a SPA updating provider payments and we have approved that SPA. As such, we assume 51 one-time respondents for the initial rates publication. Because the comparative payment rate analysis and payment rate disclosure requirement is biennial, we assume 26 annual respondents in any given year, and we will assume this figure would account for the updates made following a rate reduction SPA or rate restructuring SPA approval. The proposed comparative payment rate analysis would be similar to the current requirement at § 447.203(b)(3) that requires AMRPs to include a comparative payment rate analysis against public or private payers. The inclusion of levels of provider payment available from other payers is also one of five required components of the AMRP as specified by current § 447.203(b)(1). To estimate the burden associated with our proposed comparative payment rate analysis and payment rate disclosure provisions, we assume this work would require approximately 25 percent of the ongoing labor hour burden that we previously estimated to be required by the entire AMRP, to account for the service categories subject to the comparative payment rate analysis and payment rate disclosure in proposed § 447.203(b)(2) as decreased from the full body of AMRP service requirements. We invite comment on these estimated proportions.
With regard to the developing and publishing the payment rate transparency data at proposed § 447.203(b)(1), we estimate a low one-time and ongoing burden due to the data being available, and the main work required to meet the proposed requirement would be formatting and web publication. As such, we estimate it would initially take: 5 hours at $54.26/hr for a research assistant to gather the data, 5 hours at $77.28/hr for a business operations specialist to publish, and 1 hour at $110.82/hr for a general and operations manager to review and approve the rate transparency data. In aggregate, we estimate a one-time burden of 561 hours (51 Respondents × 11 hr) at a cost of $39,195 (51 Respondents × [(5 hr × $54.26/hr) + (5 hr × $77.28/hr) + (1 hr × $110.82/hr)]). Taking into account the Federal administrative match of 50 percent, the requirement will cost States $19,597 ($39,195 × 0.50).
For the ongoing cost to update assumed to take place every 2 years (although we are proposing that updates would only be required as necessary to keep the data current, with any update made no later than 1 month following the date of CMS approval of the SPA or similar amendment providing for the change), we estimate an annualized impact on 26 respondents (51 respondents every 2 years) of: 2 hours at $54.26/hr for a research assistant to update the data, 1 hour at $77.28/hr for a business operations specialist to publish the updates, and 1 hour at $110.82/hr for a general and operations manager to review and approve the rate transparency update. In aggregate, we estimate an annualized burden of 104 hours (26 Respondents × 4 hr) at a cost of $7,712 (26 Respondents × [(2 hr × $54.26/hr) + (1 hr × $77.28/hr) + (1 hr × $110.82/hr)]). Taking into account the Federal administrative match of 50 percent, the requirement will cost States $3,856 ($7,712 × 0.50).
With regard to developing and publishing the comparative payment rate analysis and payment rate disclosure at proposed § 447.203(b)(2), we estimate it would take: 20 hours at $54.26/hr for a research assistant to gather the data, 20 hours at $100.80/hr for an information analyst to analyze the data, 25 hours at $96.66/hr for a management analyst to design the comparative payment rate analysis, 11 hours at $77.28/hr for a business operations specialist to publish the comparative payment rate analysis and payment rate disclosure, and 3 hours at $110.82/hr for a general and operations manager to review and approve the comparative payment rate analysis and payment rate disclosure. In aggregate, we estimate an annualized burden, based on 51 respondents every 2 years, of 2,054 (26 Respondents × 79 hr) at a cost of $174,206 (26 States × [(20 hr × $54.26/hr) + (20 hr × $100.80/hr) + (25 hr × $96.66/hr) + (11 hr × $77.28/hr) + (3 hr × $110.82/hr)]). We then adjust the total cost to $87,103 ($174,206 × 0.50) to account for the 50 percent Federal administrative match. We have summarized the total burdens in Table 33.
The burden associated with the recordkeeping requirements proposed § 447.203(b)(6), specifically the online publication associated with the reporting and recommendations of the interested parties advisory group, would consist of the time and effort for all 50 States and the District of Columbia to:
• Appoint members to the interested parties' advisory group.
• Provide the group members with materials necessary to:
++ Review current and proposed rates.
++ Hold meetings.
++ Provide a written recommendation to the State.
• Publish the group's recommendations to a website maintained by the single State agency.
The proposed requirements would require varying levels of efforts for States depending on the existence of groups that may fulfil the requirements of this group. However, because it is unknown how many States would be able to leverage existing practices, and to what extent, this estimate does not account for those differences.
We estimate that it would take 40 hours at $131.34/hr for a human resources manager to recruit interested parties and provide the necessary materials for the group to meet. In aggregate, we estimate a one-time burden of 2,040 hours (51 Respondents × 40 hr) at a cost of $267,934 (2,040 hr × $131.34/hr). Taking into account the 50 percent administrative match, the total one-time State cost is estimated to be $133,967 ($267,934 × 0.50).
We believe the ongoing work to maintain the needs of this group would take a human resources manager 5 hours at $131.34/hr annually. Additionally, we estimate it would take 4 hours for the biennial requirement, or 2 hours annually at $110.82/hr for an operations manager to review and prepare the recommendation for publication. In aggregate, we estimate an ongoing annualized burden of 182 hours (26 Respondents × 7 hr) at a cost of $22,837 (26 Respondents × [(5 hr × $131.34/hr) + (2 hr × $110.82/hr)]). Accounting for the 50 percent Federal administrative match, the total State cost is adjusted to $11,418 ($22,837 × 0.50). We have summarized the total burdens in Table 34.
The proposed State analysis procedures for payment rate reductions and payment restructurings at § 447.203(c)(1) through (3) within this proposed rule effectively would replace payment rate reduction or payment restructuring procedures in current § 447.203(b)(6). As noted, the burden reduction associated with the removal of § 447.203(b)(6)(i) has already been accounted for in the recurring burden reduction estimate shown in Table 36 for the removal of the AMRP requirements, and the burden reduction associated with the removal of monitoring requirements at current § 447.203(b)(6)(ii) has been accounted for in Table 37. Our proposed replacement procedures at § 447.203(c)(1) through (3) would introduce new requirements as follows.
Proposed § 447.203(c)(1) would require that for States proposing to reduce or restructure provider payment rates, the State must document that their program and proposal meet all of the following requirements: (i) Medicaid rates in the aggregate for the service category following the proposed reduction(s) or restructurings are at or above 80 percent of most recent Medicare prices or rates for the same or a comparable set of services; (ii) Proposed reductions or restructurings result in no more than a 4 percent reduction of overall spending for each service category affected by a proposed reduction or restructuring in a single State fiscal year; and (iii) Public process yields no significant access concerns or the State can reasonably respond to concerns.
Proposed § 447.203(c)(1) would apply to all States that submit a SPA that proposes to reduce or restructure provider payment rates. We limited our estimates for new information collection burden to the requirements at § 447.203(c)(1)(i) through (ii). Our estimates assume States will build off the comparative analysis required by proposed § 447.203(b)(2) through (4) to complete the requirements proposed by § 447.203(c)(1)(i), which will limit the additional information collection burden. We also assume no additional
The requirements of proposed § 447.203(c) apply to all 50 States and the District of Columbia, as well as US territories. We will again use the estimate of 50 utilized in preceding sections, which we note may include territories not exempt under waivers, and exclude States not subject due to reliance entirely on managed care (with no beneficiaries receiving any benefits through FFS delivery), and these figures fluctuate. As such, for consistency, we will maintain the estimate of 51 respondents subject to this proposed rule. While we cannot predict how many States will submit a rate reduction SPA or rate restructuring SPA in a given year, the figures from 2019 provide the best recent estimate, as the years during the COVID pandemic do not reflect typical behavior. In 2019, we approved rate reduction and rate restructuring SPAs from 17 unique State respondents. Therefore, to estimate the annualized number of respondents subject to this information collection burden, we will utilize a count of 17 respondents.
With regard to the burden associated with completing the required State analysis for proposed rate reductions or restructurings at § 447.203(c)(1), we estimate that it would take: 20 hours at $96.66/hr for a management analyst to structure the rate reduction or restructuring analysis, 25 hours at $100.80/hr for an information analyst to complete the rate reduction or restructuring analysis, and 3 hours at $110.82/hr for a general and operations manager to review and approve the rate reduction or restructuring analysis. In aggregate, we estimate a burden of 816 hours (17 States × 48 hr) at a cost of $81,356 (17 States × [(20 hr × $96.66/hr) + (25 hr × $100.80/hr) + (3 hr × $110.82/hr)]). Accounting for the 50 percent Federal administrative reimbursement, this adjusts to a total State cost of $40,678 ($81,356 × 0.50). We are soliciting public comment on these estimates as well as relevant State data to further refine the burden and time estimates.
Proposed § 447.203(c)(2) describes requirements for payment proposals that do not meet the requirements in paragraph (c)(1), requiring the State to provide the nature of the change and policy purpose, the rates compared to Medicare and/or other payers pre- and post-reduction or restructuring, counts/trends of actively participating providers by geographic areas, counts of FFS Medicaid beneficiaries residing in geographic areas/characteristics of the beneficiary population, service utilization trends, access to care complaints from beneficiaries, providers, and other interested parties, and the State's response to access to care complaints.
The information collection requirements proposed at § 447.203(c)(2) applies to those States that submit rate reduction or restructuring SPAs that do not meet one or more of the criteria proposed by § 447.203(c)(1). Using 2019 rate reduction and restructuring SPA figures, we estimate that 17 States will submit rate reduction or restructuring SPAs per year. Then, a 2019 Urban Institute analysis
The required components of the review and analysis in proposed § 447.203(c)(2) are similar to the AMRP requirements found at current § 447.203(b)(1). However, due to the anticipated development and release of a template for States to facilitate completion of the required analysis, as well as the lack of a requirement to publish the analysis, we anticipate a moderately reduced burden associated with proposed § 447.203(c)(2) when compared to the burden estimated for the AMRPs.
With regard to our proposed requirements, we estimate that it would take: 64 hours at $54.26/hr for a social science research assistant to gather data, 64 hours at $100.80/hr for a computer and information analyst to analyze data, 80 hours at $96.66/hr for a management analyst to structure the analyses and organize output, and 8 hours at $110.82/hr for a general and operations manager to review and approve the rate reduction or restructuring analysis. In aggregate, we estimate a burden of 2,160 hours (10 States × 216 hr) at a cost of $185,432 (10 States × [(64 hr × $54.26/hr) + (64 hr × $100.80/hr) + (80 hr × $96.66/hr) + (8 hr × $110.82/hr)]). The total cost is adjusted down to $92,716 ($185,432 × 0.50) for States after accounting for the 50 percent Federal administrative match. We are soliciting public comment on these estimates as well as relevant State data to further refine the burden and time estimates.
We do not assume any additional information collection imposed by the
Table 41 shows our estimated combined annualized burden for § 447.203(c), which includes 17 States for § 447.203(c)(1) and 10 States for § 447.203(c)(2). In total, we estimate an annualized burden of 4,992 (1,104 hours + 2,160 hours) hours at a cost of $443,848 ($110,070 + $74,172). This cost to States is then adjusted to $221,924 after the 50 percent Federal administrative reimbursement is applied.
We have submitted a copy of this proposed rule to OMB for its review of the rule's information collection requirements. The requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms for the proposed collections discussed above, please visit the CMS website at
We invite public comments on these potential information collection requirements. If you wish to comment, please submit your comments electronically as specified in the
Because of the large number of public comments we normally receive on
The changes to § 431.12 are intended to provide beneficiaries a greater voice in State Medicaid programs. In making policy and program decisions, it is vital for States to incorporate the perspective and experience of those served by the Medicaid program. States are currently required to operate a MCAC, made up of health professionals, consumers, and State representatives to “advise the Medicaid agency about health and medical care services.” This rule establishes new requirements for a MAC in place of the MCAC, with additional membership requirements to include a broader group of interested parties, to advise the State Medicaid agency on matters related to the effective administration of the Medicaid program. We seek to expand the viewpoints represented on the MAC, to provider States with richer feedback on Medicaid program and policy issues. States are already required to set up and use MCACs. The proposed changes will result in the State also setting up a smaller group, the BAG which will likely have a cost implication. The additional cost will depend on whether or not States already have a beneficiary committee—we know that many States already do. This smaller group which feeds into the larger MCAC will benefit the Medicaid program by creating a forum for beneficiaries to weigh in on key topics and share their unique views as Medicaid program participants. The new provisions of § 431.12 also enhance transparency and accountability through public reporting requirements related to the operation and activities of the MAC and BAG, and guidelines for operation of both bodies.
The proposed changes at part 441, subpart G, seek to amend and add new Federal requirements, which are intended to improve access to care, quality of care, and health outcomes, and strengthen necessary safeguards that are in place to ensure health and welfare, and promote health equity for people receiving Medicaid-covered HCBS. The provisions in this proposed rule are intended to achieve a more consistent and coordinated approach to the administration of policies and procedures across Medicaid HCBS programs in accordance with section 2402(a) of the Affordable Care Act, and is made applicable to part 441, subparts J, K, and M, as well as part 438 to achieve these goals.
Specifically, the proposed rule seeks to: strengthen person-centered services planning and incident management systems in HCBS; require minimum percentages of Medicaid payments for certain HCBS to be spent on compensation for the direct care workforce; require States to establish grievance systems in FFS HCBS programs; report on waiver waiting lists in section 1915(c) waiver programs, service delivery timeframes for certain HCBS, and a standardized set of HCBS quality measures; and promote public transparency related to the administration of Medicaid-covered HCBS through public reporting on measures related to incident management systems, critical incidents, person-centered planning, quality, access, and payment adequacy.
In 2014, we released guidance
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Despite these assurances, there is evidence that State HCBS systems still need to be strengthened and that there are gaps in existing reporting requirements. We believe that this proposed rule is necessary to address these concerns and strengthen HCBS systems. The requirements in this proposed rule are intended to supersede and fully replace the reporting and performance expectations described in the 2014 guidance for section 1915(c) waiver programs. They are also intended to promote consistency and alignment across HCBS programs, as well as delivery systems, by applying the requirements (where applicable) to sections 1915(i), (j), and (k) authorities State plan benefits and to both FFS and managed care delivery systems.
Provisions under § 447.203 from this proposed rule would impact States' required documentation of compliance with section 1902(a)(30)(A) of the Act to “assure that payments are . . . sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” We have received comments from State agencies that the existing AMRP requirement first established by the 2015 final rule with comment period imposes excessive administrative burden for its corresponding value in demonstrating compliance with section 1902(a)(30)(A) of the Act.
This proposed rule would replace the existing AMRP requirement with a more limited payment rate transparency requirement under proposed § 447.203(b), while requiring a more detailed access impact analysis (as described at proposed § 447.203(c)(2)) when a State proposes provider rate reductions or restructurings that exceed certain thresholds for a streamlined analysis process under proposed § 447.203(c)(1). By limiting the data collection and publication requirements imposed on all States, while targeting certain provider rate reductions or restructuring proposals for a more detailed analysis, this proposed rule would provide administrative burden relief to States while maintaining a transparent and data-driven process to assure State compliance with section 1902(a)(30)(A) of the Act.
We have examined the impacts of this rule as required by E.O. 12866 on Regulatory Planning and Review (September 30, 1993), E.O. 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), E.O. 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2))
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 as amended by Executive Order 14094 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) having an annual effect on the economy of $200 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities; (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules. Accordingly, this proposed rule is not a “significant” rule under section 3(f)(1) of the Executive Order, as the aggregate amount of benefits and costs will not meet the $200 million threshold in any 1 year.
Based on our estimates using a “no action” baseline in accordance with OMB Circular A-4, (available at
As mentioned in the prior section, and in accordance with OMB Circular A-4, the following estimates were determined using a “no action” baseline. That is, our analytical baseline for impact is a direct comparison between the proposed provisions and not proposing them at all.
We believe the changes to § 431.12 would benefit State Medicaid programs and those they serve by ensuring that beneficiaries have a significant role in advising States on the experience of receiving health care and services through Medicaid. These benefits cannot be quantified. However, the BAG and a more diverse and transparent MAC will provide opportunities for richer interested parties feedback and expertise to positively impact State decision making on Medicaid program and policy chances. For example, beneficiary feedback on accessing health care services and the quality of those services can inform decisions on provider networks and networks adequacy requirements. Issues that States need to address, like cultural competency of providers, language accessibility, health equity, and disparities and biases in the Medicaid program, can be revealed through beneficiary experiences. The MAC falls into the Public Administration 921 Executive, Legislative, and Other General Government Support.
The proposed changes benefit Medicaid beneficiaries and States by requiring States to demonstrate through reporting requirements that they provide safeguards to assure eligibility for Medicaid-covered care and services is determined and provided in a manner that is in the Medicaid beneficiaries' best interest, although these potential benefits cannot be monetarily quantified at this time. The proposed changes would provide further safeguards that ensure health and welfare by strengthening the person-centered service plan requirements, establishing grievance systems, amending requirements for incident management systems, and establishing new reporting requirements for States, and contracted managed care entities identified by the North American Industry Classification System (NAICS) industry code (Direct Health and Medical Insurance Carriers (524114).
These changes would benefit individuals on HCBS waiver wait lists, and individuals who receive homemaker, home health aide, and personal care services, under the amended and proposed regulations found at §§ 441.301(c), 441.302(a)(6), 441.302(h), 441.303(f), 441.311, and cross-referenced in §§ 441.464, 441.555(b)(2)(iv), 441.570, and 441.745(a)(1)(iii). These potential benefits cannot be monetarily quantified at this time.
The proposed rule adds new requirements at §§ 441.302(k) and 441.311 (cross-referenced at §§ 441.464(f) and 441.745(a)(1)(vi)) that require States to demonstrate through reporting that payments to providers are sufficient to provide access to care that is at least comparable to that of the general population in the same geographic location, in accordance with section 1902(a)(30(A) of the Act. This proposed rule seeks to address access to care that is being affected by direct care workforce shortages.
Through this proposed rule, which establishes certain minimum thresholds for compensation for direct care workers, we can better ensure payment adequacy to a provider population experiencing worker shortages that impact beneficiary access. States will be required to report annually to us on the percent of payments for certain HCBS that are spent on compensation for direct care workers and will be required to separately report on payments for services that are self-directed. States may benefit from reporting in the aggregate for each service subject to the requirement across HCBS programs and delivery systems, which minimizes administrative burden while providing us better oversight of compensation of the direct care workforce, although these potential benefits cannot be monetarily quantified at this time due to the variety of State data collection approaches.
As described in section II.B.8. of this proposed rule, on July 21, 2022, we issued State Medicaid Director Letter (SMDL) # 22-003
The proposed changes to § 447.203 would update requirements placed on States to document access to care and service payment rates. The proposed updates create a systematic framework through which we can ensure compliance with section 1902(a)(30)(A) of the Act, while reducing existing burden on States and maximizing the value of their efforts, as described in section III.C.11.a of this rule.
The proposed payment rate transparency provisions at § 447.203(b) create a process that would facilitate transparent oversight by us and other interested parties. By requiring States to calculate Medicaid payment rates as a percent of corresponding Medicare payment rates, this provision offers a uniform benchmark through which us and interested parties can assess payment rate sufficiency. When compared to the existing AMRP requirement, the rate analysis proposed by § 447.203(b) should improve the utility of the reporting, while reducing the associated administrative burden, as reflected in the Burden Estimate Summary Table 37. Proposed updates at § 447.203(c) specify required documentation and analysis when States propose to reduce or restructure provider payment rates. By establishing thresholds at § 447.203(c)(1), this proposed rule would generally limit the more extensive access review prescribed by § 447.203(c)(2) to those SPAs that we believe more likely to cause access concerns. In doing so, these proposed updates reduce the State administrative burden imposed by existing documentation requirements for proposed rate reductions or restructurings, without impeding our ability to ensure proposed rate reduction and restructuring SPAs comply with section 1902(a)(30)(A) of the Act. These burden reductions are reflected in the Collection of Information section of this rule.
When considering the benefits of these regulatory updates, we considered the possibility that the improved transparency required by § 447.203(b) could create upward pressure on provider payment rates, and that the tiered nature of documentation requirements set by § 447.203(c) could create an incentive for States to moderate proposed payment reductions or restructurings that were near the proposed thresholds that would trigger additional analysis and documentation requirements. If either of these rate impacts were to occur, existing literature implies there could be follow-on benefits to Medicaid beneficiaries, including but not limited to increased physician acceptance rates,
States will incur additional costs (estimated below) in appointing and recruiting members to the MAC and BAG and also developing and publishing bylaws, membership lists, and meeting minutes for the MAC and BAG. All of these costs can be categorized under the NAICS Code 921 (Executive, Legislative, and Other General Government Support) since States are the only entity accounted for in the MAC and BAG. How often these costs occur will vary in how often the State chooses to make changes such as add or replace members of the MAC and BAC or change its bylaws. Additionally, there will be new costs, estimated below, for States related to meeting logistics and administration for the BAG. All of these new costs can also be categorized under the NAICS Code 921 (Executive, Legislative, and Other General Government Support). Since most States are already holding MAC meetings under current regulatory requirements, any new costs related to MAC requirements would likely be minimal. In terms of the BAG meeting costs, we estimate a total annual cost of $532,627 for States. We estimate it will take a business operations specialist 10 hours to plan and execute each BAG meeting, at a total cost of $155,448 ($76.20/hour × 10 hours × 4 meetings/year) × 51 States and the District of Columbia). To satisfy the requirements of § 431.12(i)(4)(i), a public relations specialist will spend an estimated 80 hours/year supporting Medicaid beneficiary MAC and BAG members at a total cost of $287,395 ($70.44/hour × 80 hours) × 51 States and the District of Columbia). A chief executive in State government, as required by § 431.12(i)(4)(iii), will spend a total of 8 hours a year attending BAG meetings, which we estimate will be 2 hours in duration, 4 times a year at a total cost of $48,984 ($120.06/hour × 2 hours/meeting × 4 meetings) × 51 States and the District of Columbia). Each meeting of the BAG will cost States an estimated $200 in meeting costs and telecommunication, at an annual total cost of $40,800 ($200 × 4 meetings) × 51 States and the District of Columbia).
There will also be a per meeting cost to States for financial support for beneficiary members participating in MAC and BAG meetings, as described in § 431.12(i)(4)(ii). We estimate a cost of $75/beneficiary/meeting in the form of transportation vouchers, childcare reimbursement, meals, and/or other financial compensation. Assuming 4 meetings per year (with BAG and MAC meetings co-located and occurring on the same day) and an average of 8 beneficiary members on the BAG and MAC, the cost of financial support for beneficiary members across States is estimated to cost approximately $122,400 annually (($75/beneficiary × 8 beneficiaries × 4 meetings/year) × 51 States and the District of Columbia). This cost will vary depending on the decisions States make around financial support, the number of beneficiary members of the BAG and MAC, and the number of meetings per year. We seek comment on the costs associated with planning, execution, and participation in the MAC and BAG meetings.
Costs displayed in Table 38 are inclusive of both one-time and ongoing costs. One-time costs are split evenly over the years leading up to the proposed effective date. For example, if a proposed provision takes effect 3 years after the final rule's publication, the one-time costs would be split evenly across each of the years leading to that effective date. Because costs are projected over 5 years, the total estimated costs exceed the amounts shown in the COI section. The estimates below do not account for higher costs associated with medical care, as the costs are related exclusively to reporting costs. Costs to States, the Federal government, and managed care entities do not account for enrollment fluctuations, as they assume a stable number of States operating HCBS programs and managed care entities delivering services through these programs. Similarly, costs to providers and beneficiaries do not account for enrollment fluctuations. In the COI section, costs are based on a projected range of HCBS providers and beneficiaries. Given this uncertainty, here, we based cost estimates on the mid-point of the respective ranges and kept those assumptions consistent over the course of the 5-year projection. Per OMB guidelines, the projected estimates for future years do not consider ordinary inflation.
Table 39 summarizes the estimated ongoing costs for States, managed care entities (Direct Health and Medical Insurance Carriers (NAICS 524114)), and providers (Services for the Elderly and Persons with Disabilities (NAICS 624120) and Home Health Care Services (NAICS 621610)) from the COI section of the HCBS provisions of the proposed rule projected over 5 years. This comprises the entirety of anticipated quantifiable costs associated with proposed changes to part 441, subpart G. It is also possible that increasing the threshold from 86 percent to 90 percent for compliance reporting at § 441.311(b)(2) through (3) may lead to additional costs to remediate issues pertaining to critical incidents or person-centered planning. However, the various avenues through which States could address these concerns creates substantial uncertainty as to what those costs may be. While we acknowledge the potential for increased costs in a limited number of States that may fall within the gap between the existing and
The costs displayed in Table 40 are inclusive of costs anticipated to be incurred by State Medicaid agencies, the Federal government, providers, managed care entities, and beneficiaries. Table 40 distributes those costs across these respective entities.
The costs associated with the payment rate transparency proposals are wholly associated with information collection requirements, and as such those impacts are reflected in the COI section of this rule. For ease of reference, and for projection purposes, we are including those costs here in Table 41.
Transfers are payments between persons or groups that do not affect the total resources available to society. They are a benefit to recipients and a cost to payers, with zero net effects. Because this rule proposes changes to requirements to State agencies without changes to payments from Federal to State governments, the transfer impact is null, and cost impacts are reflected in the other sections of this rule.
If regulations impose administrative costs on private entities, such as the time needed to read and interpret this proposed or final rule, we should estimate the cost associated with regulatory review. There is uncertainty involved with accurately quantifying the number of entities that will review the rule. However, for the purposes of this proposed rule we assume that on average, each of the 51 affected State Medicaid agencies will have one contractor per State review this proposed rule. This average assumes that some State Medicaid agencies may use the same contractor, others may use multiple contractors to address the various provisions within this proposed rule, and some State Medicaid agencies may perform the review in-house. We also assume that each affected managed care entity (estimated in the COI section to be 161 managed care entities) will review the proposed rule. Lastly, we assume that an average of two advocacy or interest group representatives from each State will review this proposed rule. In total, we are estimating that 314 entities (51 State Contractors + 161 Managed Care Entities + 102 Advocacy and Interest Groups) will review this proposed rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. We welcome any comments on the approach in estimating the number of entities which will review this proposed rule.
We also recognize that different types of entities are in many cases affected by mutually exclusive sections of this proposed rule, and therefore for the purposes of our estimate we assume that each reviewer reads approximately 50 percent of the rule. We seek comments on this assumption.
Using the wage information from the Bureau of Labor Statistics,
In determining the best way to promote beneficiary and interested parties' voices in State Medicaid program decision making and administration, we considered several ways of revising the MCAC structure and administration. We considered setting minimum benchmarks for each category of all types of MAC members, but we viewed it as too restrictive. We ultimately concluded that only setting minimum benchmarks (at least 25 percent) for beneficiary representation on the MAC and requiring representation from the other MAC categories would give States maximum flexibility in determining the exact composition of their MAC. However, we understand that some States may want us to set specific thresholds for each MAC category rather than determine those categories on their own.
We also considered having not having a separate BAG, but we ultimately determined that requiring States to establish a separate BAG assures that there is a dedicated forum for States to receive beneficiary input outside of the MAC. In the MAC setting, a beneficiary might not feel as comfortable speaking up among other Medicaid program interested parties. The BAG also provides an opportunity for beneficiaries to focus on the issues that are most important to them, and bring those issues to the MAC.
Finally, we also considered setting specific topics for the MAC to provide feedback. However, due to the range of issues specific to each State's Medicaid program, we determined it was most conducive to allow States work with their MAC to identify which topics and priority issues would benefit from interested parties' input.
We considered whether to codify the existing 86 percent performance level that was outlined in the 2014 guidance for both person-centered service plans and incident management systems. We did not choose this alternative due to feedback from States and other interested parties of the importance of these requirements, as well as concerns that an 86 percent performance level may not be sufficient to demonstrate that a State has met the requirements.
We considered whether to apply these requirements to section 1905(a) “medical assistance” State Plan personal care, home health, and case management services. We decided against this alternative based on State feedback that they do not have the same data collection and reporting capabilities for these services as they do for HCBS delivered under sections 1915(c), (i), (j), and (k) of the Act and because of differences between the requirements of those authorities and section 1905(a) State Plan benefits.
Finally, we considered allowing a good cause exception to the minimum performance level reporting requirements to both the person-centered service plan and the incident management system. We decided against this alternative because the 90 percent performance level is intended to account for various scenarios that might impact a State's ability to achieve these performance levels. Furthermore, there are existing disaster authorities that States could utilize to request a waiver of these requirements in the event of a public health emergency or a disaster.
We considered several alternatives to the proposed rule. We considered whether the requirements relating to the percent of payments going to the direct care workforce should apply to other services, such as adult day health, habilitation, day treatment or other partial hospitalization services, psychosocial rehabilitation services, and clinic services for individuals with mental illness. We decided against this alternative because the proposed services (homemaker, home health aide, and personal care) are those for which the vast majority of payment should be comprised of compensation for direct care workers and for which there would be low facility or other indirect costs. We also did not include other services for which the percentage might be variable due to the diversity of services included or for which worker compensation would be reasonably expected to comprise only a small percentage of the payment.
We considered whether to apply these payment adequacy requirements to section 1905(a) “medical assistance” State Plan personal care and home health services, but decided not to, based on State feedback that they do not have the same data collection and reporting capabilities for these services as they do for sections 1915(c), (i), (j), and (k) HCBS.
We considered whether other reporting requirements such as a State assurance or attestation or an alternative frequency of reporting could be used to determine State compliance but determined that the proposed requirement is necessary to demonstrate compliance.
We considered whether to require reporting at the delivery system, HCBS waiver program, or population level but decided against additional levels of reporting because it would increase reporting burden for States without providing additional information necessary for determining whether States meet the requirements at § 441.302(k).
No alternatives were considered.
We considered giving States the flexibility to choose which measures they would stratify and by what factors but decided against this alternative as discussed in the Mandatory Medicaid and CHIP Core Set Reporting proposed rule (see 87 FR 51313). We believe that consistent measurement of differences in health outcomes between different groups of beneficiaries is essential to identifying areas for intervention and evaluation of those interventions.
In developing this proposed rule, we considered multiple alternatives. We considered not proposing this rule and maintaining the status quo under current regulations at § 447.203 and 204. However, as noted throughout the Background and Provisions sections of this rule, since the 2011 proposed rule, we have received concerns from interested parties, including State agencies, about the administrative burden of completing AMRPs and questioning whether they are the most efficient way to determine access to care. These comments expressed particular concern about the AMRPs' value when they are required to accompany a proposed nominal rate reduction or restructuring, or where proposed rate changes are made via application of a previously approved rate methodology. At the same time, and as we have discussed, the Supreme
We considered, but did not propose, adopting a complaint-driven process or developing a Federal review process for assessing access to care concerns. Although such processes could further our goals of ensuring compliance with the access requirement in section 1902(a)(30)(A) of the Act, we concluded similar effects could be achieved through methods that did not require the significant amount of Federal effort that would be necessary to develop either or both of these processes. Additionally, a complaint-driven process would not necessarily ensure a balanced review of State-proposed payment rate or payment structure changes, and it is possible that a large volume of complaints could be submitted with the intended or unintended effect of hampering State Medicaid program operations. Therefore, the impact of adopting a complaint-driven process or developing a Federal review process for assessing access to care concerns may be negligible given existing processes. Instead, we believe that relying on existing processes that States are already engaged in, such as the ongoing provider and beneficiary feedback channels under paragraph (b)(7) in § 447.203 and the public process requirement for States submitting a SPA that proposed to reduce or restructure Medicaid service payments in § 447.204, would be more effective than creating a new process. While we are relying on existing public feedback channels and processes that States are already engaged in, we are seeking public comment regarding our alternative consideration to propose adopting a complaint driven process or developing a Federal review process for assessing access to care concerns.
We considered finalizing the 2018 proposed rule that would have provided exemptions to the AMRP process for States with high managed care penetration or finalizing the 2019 proposed rule that would have rescinded the AMRP requirements without substantive replacement. As described in the 2018 proposed rule, while we agreed that our experience implementing the AMRP process from the 2015 final rule with comment period raised questions about the benefit of the access analysis when States proposed nominal payment rate reductions or payment restructurings that were unlikely to result in diminished access to care, we did not believe maintaining the AMRP process was the best course of action.
We considered numerous variations of the individual provisions of this proposed rule. We considered, but did not propose, maintaining the benefits outlined in the current § 447.203(b)(5)(ii)(A) through (H) or requiring all mandatory Medicaid benefit categories be included in the comparative payment rate analysis proposed under § 447.203(b)(2). We also considered, but did not propose, including inpatient hospital behavioral health services and covered outpatient drugs including professional dispensing fees as additional categories of services subject to the comparative payment rate analysis proposed under § 447.203(b)(2). We considered, but did not propose, requiring States whose Medicaid payment rates vary by provider type, calculate an average Medicaid payment rate of all providers for each E/M CPT code subject to the comparative payment rate analysis. We also considered, but did not propose, different points of comparison other than Medicare under the comparative payment rate analysis proposed under § 447.203(b)(2) or using a peer payment rate benchmarking approach for benefit categories where Medicaid is the only or primary payer, or there is no comparable Medicare rate under the comparative payment rate analysis proposed under § 447.203(b)(2) and (3). We considered, but did not propose, varying timeframes for the comparative payment rate analysis proposed under § 447.203(b)(2). We also considered not proposing the payment rate transparency aspect of this rule proposed under § 447.203(b)(1), leaving the comparative payment rate analysis to replace the AMRP process as proposed under § 447.203(b)(2). With regard to the proposal in § 447.203(c), we considered, but did not propose, establishing alternative circumstances from those described in the 2017 SMDL for identifying nominal payment rate adjustments, establishing a minimum set of required data for States above 80 percent of the most recent Medicare payment rates after the proposed reduction or restructuring, using measures that are different from the proposed measures that would be reflected in the forthcoming template, allowing States to use their own unstructured data for States that fail to meet all three criteria in § 447.203(c)(1), and CMS producing and publishing the comparative payment rate analysis proposed in § 447.203(b).
We considered, but did not propose, maintaining the benefits outlined in the current § 447.203(b)(5)(ii)(A) through (H) or requiring all mandatory Medicaid benefit categories be included in the comparative payment rate analysis proposed under § 447.203(b)(2). Maintaining the benefits in current § 447.203(b)(5)(ii)(A) through (H) would have simplified the transition from the AMRP process to the payment rate transparency and comparative payment rate analysis requirements, if this proposed rule is finalized. However, our experience implementing the 2015 final rule with comment period, as well as interested parties' and States' feedback about the AMRP process, encouraged us to review and reconsider the current list of benefits subject to the AMRP process under current regulations § 447.203(b)(5)(ii)(A) through (H) to determine where we could decrease the level of effort required from States while still allowing ourselves an opportunity to review for access concerns. During our review of the current list of benefits under § 447.203(b)(5)(ii)(A) through (H), we considered, but did not propose, requiring all mandatory Medicaid benefit categories be included in the comparative payment rate analysis.
We also considered, but did not propose, including inpatient hospital behavioral health services and covered outpatient drugs including professional dispensing fees as additional categories of services subject to the comparative payment rate analysis proposed under § 447.203(b)(2). As previously described in section II. Of this proposed rule, we did not propose including inpatient behavioral health services as an additional category of service in the comparative payment rate analysis due to existing UPL and CAA payment data requirements for institutional services. The impact of including inpatient behavioral health services in the comparative payment rate analysis would have required duplicative effort by States to report the same information in a different format to us. Additionally, we considered, but did not propose, including covered outpatient drugs (including professional dispensing fees) as an additional category of service in the comparative payment rate analysis due to the complexity of drug pricing policies and use of rebate programs that does not fit into our proposed comparative payment rate analysis methodology that relies on E/M CPT/HCPCS codes to identify the services subject to the analysis.
We considered, but did not propose, requiring States whose Medicaid payment rates vary by provider type to calculate an average Medicaid payment rate of all provider types for each E/M CPT code subject to the comparative payment rate analysis. Rather than proposing States distinguish their Medicaid payment rates by each provider type in the comparative payment rate analysis, we considered proposing States calculate an average Medicaid payment rate of all providers for each E/M CPT code. This consideration would have simplified the comparative payment rate analysis because States would include a single, average Medicaid payment rate amount and only need to separately analyze their Medicaid payment rates for services delivered to pediatric and adult populations, if they varied. However, calculating an average for the Medicaid payment rate has limitations, including sensitivity to extreme values and inconsistent characterizations of the payment rate between Medicaid and Medicare. In this rule, we propose to characterize the Medicare payment rate as the non-facility payment rate listed on the Medicare PFS for the E/M CPT/HCPCS codes subject to the comparative payment rate analysis. If we were to propose the Medicaid payment rate be calculated as an average Medicaid payment rate of all provider types for the same E/M CPT/HCPCS code, then States' calculated average Medicaid payment rate could include a wide variety of provider types, from a single payment rate for physicians to an average of three payment rates for physicians, physician assistants, and nurse practitioners. This wide variation in how the Medicaid payment rate is calculated among States would provide a less meaningful comparative payment rate analysis to Medicare. The extremes and outliers that would be diluted by using an average are not necessarily the same for both Medicaid and Medicare, so even if both sides of the comparison used an average, we would not be able to look more closely at specific large differences between the respective rates. As previously noted in section II. of this proposed rule, we are seeking public comment on the proposed characterization of the Medicaid payment rate, which accounts for variation in payment rates for pediatric and adult populations and distinguishes payment rates by provider type, in the comparative payment rate analysis. Additionally, we are seeking public comment regarding our alternative consideration to propose requiring States whose Medicaid payment rates vary by provider type to calculate an average Medicaid payment rate of all provider types for each E/M CPT code subject to the comparative payment rate analysis.
We considered, but did not propose, requiring States to use a different point of comparison, other than Medicare, for certain services where Medicare is not a consistent or primary payer, such as pediatric dental services or HCBS. The impact of requiring a different point of comparison, other than Medicare, would have carried forward the current regulation requiring States to “include an analysis of the percentage comparison of Medicaid payment rates to other public (including, as practical, Medicaid managed care rates) and private health insurer payment rates within geographic areas of the State” in their AMRPs. As previously discussed in this rule, FFS States expressed concerns following the 2015 final rule with comment period that private payer payment rates were proprietary information and not available to them, therefore, the challenges to comply with current regulations would be carried forward into the proposed rule. Therefore, we also considered, but did not propose, using various payment rate benchmarking approaches for benefit categories where Medicaid is the only or primary payer, or there is no comparable Medicare rate. As previously noted in section II. of this proposed rule, we considered benchmarks based on national Medicaid payment averages for certain services included within the LTSS benefit category, benchmarks that use average daily rates for certain HCBS that can be compared to other State Medicaid programs, and benchmarks that use payment data specific to the State's Medicaid program for similarly situated services so that the service payments may be benchmarked to national average. Notwithstanding the previously described limitations of the alternative considered for situations where
We considered, but did not propose, various timeframes for the comparative payment rate analysis, including annual (every year), triennial (every 3 years), or quinquennial (every 5 years) updates after the initial effective date of January 1, 2026. As noted in section II. of this proposed rule, we did not propose an annual timeframe as we felt that an annual update requirement was too frequent due to many State's biennial legislative sessions that provide the Medicaid agency with authority it make Medicaid payment rate changes as well as create more or maintain a similar level of administrative burden of the AMRPs. While some States do have annual legislative sessions and may have annual Medicaid payment rate changes, we felt that proposing annual updates solely for the purpose of capturing payment rate changes in States that with annual legislative sessions would be overly burdensome and duplicative for States with biennial legislative sessions who do not have new, updated Medicaid payment rates to update in their comparative payment rate analysis. Therefore, for numerous States with biennial legislative sessions, the resulting analysis would likely not vary significantly from year to year. Additionally, the comparative payment rate analysis proposes to use the most recently published Medicare payment rates and we are cognizant that Medicare payment rate updates often occur on a quarterly basis. While Medicare often increases rates by the market basket inflation amount, as well as through rulemaking, it does not always result in payment increases for providers.
We considered, but did not propose, requiring the comparative payment rate analysis be submitted directly to us, as this would not achieve the public transparency goal of the proposed rule. As proposed in § 447.203(b)(3), we are requiring States develop and publish their Medicaid comparative payment rate analysis on the State's website in an accessible and easily understandable format. This proposal is methodologically similar to the current regulation, which requires AMRPs be submitted to us and publicly published by the State and CMS. We found this aspect of the rule to be an effective method of publicly sharing access to care information, as well as ensuring State compliance. As previously noted in section II. of this proposed rule, we are seeking public comment on the proposed requirement for States to publish their Medicaid FFS payment rates for all services and comparative payment rate analysis and payment rate disclosure information on the State's website under the proposed § 447.203(b)(1) and (3), respectively. Additionally, we are seeking public comment regarding our alternative consideration to propose requiring the comparative payment rate analysis be submitted directly to us and not publicly published.
We considered, but did not propose, that we produce and publish the comparative payment rate analysis proposed in § 447.203(b)(2) through (3) whereby we would develop reports for all States demonstrating Medicaid payment rates for all services or a subset for Medicaid services as a percentage of Medicare payment rates. Shifting responsibility for this analysis would remove some burden from States and allow us to do a full cross-comparison of State Medicaid payment rates to Medicare payment rates, while ensuring a consistent rate analysis across States. However, this approach would rely on T-MSIS data, which would increase the lag in available data due to the need for CMS to prepare it, and introduce uncertainty into the results due to ongoing variation in State T-MSIS data quality and completeness. Although our proposed approach still relies on State-supplied data, they are able to perform the comparisons on their own regardless of the readiness and compliance of any other State. Furthermore, we would need to validate its results with States and work through any discrepancies. Ultimately, we determined the increased lag time and uncertainty in results would diminish the utility of the rate analyses proposed in § 447.203(b), if performed by us instead of the States, to support our oversight of State compliance with section 1902(a)(30)(A) of the Act. As previously noted in section II. of this rule, we are seeking public comment on our proposal to require States to develop and publish a comparative payment rate analysis and payment rate disclosure as proposed in § 447.203(b)(2) and (3). Additionally, we are seeking public comment regarding our alternative consideration to propose that we produce and publish the comparative payment rate analysis and payment rate disclosure proposed in § 447.203(b)(2) and (3) for all States.
We considered, but did not propose, establishing alternative circumstances from the 2017 SMDL for identifying nominal payment rate adjustments when States propose a rate reduction or restructuring. We previously outlined in SMDL #17-004 several circumstances where Medicaid payment rate reductions generally would not be expected to diminish access: reductions necessary to implement CMS Federal Medicaid payment requirements; reductions that will be implemented as a decrease to all codes within a service category or targeted to certain codes, but for services where the payment rates continue to be at or above Medicare and/or average commercial rates; and reductions that result from changes implemented through the Medicare program, where a State's service payment methodology adheres to the Medicare methodology. This proposed rule would not codify this list of policies that may produce payment rate reductions unlikely to diminish access to Medicaid-covered services. We considered, but did not propose, setting a different percentage for the criteria that State Medicaid rates for each benefit category affected by the reductions or restructurings must, in the aggregate, be at or above 80 percent of the most recent comparable Medicare payment rates after the proposed reduction or restructuring as a threshold. We considered setting the threshold at 100 percent of Medicare to remain consistent with the 2017 SMDL. However, after conducting a literature review, we determined that 80 percent of the most recently published Medicare payment rates is currently the most reliable benchmark of whether a rate reduction or restructuring is likely to diminish access to care. We also considered, but did not propose, setting a different percentage for the criteria that proposed reductions or restructurings result in no more than 4 percent reduction of overall FFS Medicaid expenditures for a benefit category. We considered a variety of percentages, but determined that codifying the 4 percent threshold from the 2017 SMDL and proposed in the 2018 proposed rule
We considered, but did not propose, establishing a minimum set of required data for States above 80 percent of the most recent Medicare payment rates after the proposed reduction or restructuring regardless of the remaining criteria. This requirement would minimize administrative burden on States by not requiring States submit all items in § 447.203(c)(2) and establish a baseline for comparison if future rate reductions or restructurings are proposed that may lower the State's payment rates below 80 percent of the most recent Medicare payment rates. However, we determined that, while we believe 80 percent to be an effective threshold point, we did not want that to serve as the only trigger for additional analysis. As proposed, only States that do not meet all of the proposed requirements in § 447.203(c)(1) will have to submit the required data outlined in § 447.203(c)(2). As previously noted in section II. of this rule, we are seeking public comment on our proposal to require all three criteria described in § 447.203(c)(1)(i) through (iii) for assessing the effect of a proposed payment rate reduction or payment restructuring on access to care. Additionally, we are seeking public comment regarding our alternative consideration to propose establishing alternative circumstances from the 2017 SMDL for identifying nominal payment rate adjustments when States propose a rate reduction or restructuring.
We considered, but did not propose, allowing States to use their own unstructured data, similar to the AMRP process, for States that fail to meet all three criteria in § 447.203(c)(1), thereby eliminating the need for us to develop a template for States proposing rate reductions or restructurings. While this would reduce administrative burden on us and provide States with flexibility in determining relevant data for complying with statutory and regulatory requirements, we received feedback after the 2015 final rule with comment period that States found developing an AMRP from scratch with minimal Federal guidelines a challenging task and other interested parties noted that States had too much discretion in documenting sufficient access to care. Therefore, we proposed developing a template to support State analyses of rate reduction or restructuring SPAs that fail to meet the criteria in § 447.203(c)(1). As noted elsewhere in the preamble, if finalized, we anticipate releasing subregulatory guidance, including a template to support completion of the analysis that would be required under paragraph (c)(2), prior to the beginning date of the
After careful consideration, we ultimately determined that the requirements in proposed § 447.203(b) and (c) would strike a more optimal balance between alleviating State and Federal administrative burden, while ensuring a transparent, data-driven, and consistent approach to States' implementation and our oversight of State compliance with the access requirement in section 1902(a)(30)(A) of the Act.
As required by OMB Circular A-4 (available at
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that
For purposes of the RFA, approximately 95 percent of the health care industries impacted are considered small businesses according to the Small Business Administration's size standards with total revenues of $41 million or less in any 1 year.
According to the SBA's website at
Individuals and States are not included in the definition of a small entity. This rule will not have a significant impact measured change in revenue of 3 to 5 percent on a substantial number of small businesses or other small entities. All the industries combined, according to the 2012 Economic Census, earned approximately $46,771,961,000.00. Hence, all the costs combined, amounts to about 1 percent.
Therefore, as its measure of significant economic impact on a substantial number of small entities, HHS uses a change in revenue of more than 3 to 5 percent. We do not believe that this threshold will be reached by the requirements in this proposed rule. Therefore, the Secretary has certified that this proposed will not have a significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the Act. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. This proposed rule will not have a significant impact on the operations of small rural hospitals since small hospitals are not affected by the proposed rule. Therefore, the Secretary has certified that this proposed rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2023, that threshold is approximately $177 million. This proposed rule would not impose a mandate that will result in the expenditure by State, local, and Tribal Governments, in the aggregate, or by the private sector, of more than $177 million in any 1 year.
Several of the provisions in the proposed rule address gaps in existing regulations. In these cases, the costs for States to implement those proposals would be minimal. For the remaining areas of the proposed rule, we have sought to minimize burden whenever possible while still achieving the goals of this rulemaking. We further note that, if finalized, States would be able to claim administrative match for the work required to implement the proposals.
E.O. 13132 establishes certain requirements that an agency must meet when it issues a proposed rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This rule does not impose substantial direct costs on State or local governments, preempt State law, or otherwise have Federalism implications. As mentioned in the previous section of this rule, the costs to States by our estimate do not rise to the level of specified thresholds for significant burden to States. In addition, many proposals amend existing requirements or further requirements that already exist in statute, and as such would not create any new conflict with State law.
If the policies in this proposed rule are finalized, it will enable us to implement enhanced access to health care services for Medicaid beneficiaries across FFS, managed care, and HCBS delivery systems.
The analysis in section V. of this proposed rule, together with the rest of this preamble, provides a regulatory impact analysis. In accordance with the provisions of E.O. 12866, this proposed rule was reviewed by the Office of Management and Budget.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on XX XX, 20XX
Administrative practice and procedure, Consumer protection, Grant programs—health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirement.
Administrative practice and procedure, Grant programs—health, Health professions, Medicaid, Older adults, People with Disabilities, Reporting and recordkeeping requirements.
Administrative practice and procedure, Consumer protection, Grant programs—health, Health professions, Medicaid, Older adults, People with Disabilities, Reporting and recordkeeping requirements
Accounting, Administrative practice and procedure, Drugs, Grant programs—health, Health facilities, Health professions, Medicaid, Reporting and recordkeeping requirements, and Rural areas.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR Chapter IV as set forth below:
42 U.S.C. 1302.
(a)
(b)
(c)
(d)
(1) Minimum of 25 percent of committee members must be from the BAG.
(2) The remaining committee members must include representation of at least one from each of the following categories:
(A) State or local consumer advocacy groups or other community-based organizations that represent the interests of, or provide direct service, to Medicaid beneficiaries.
(B) Clinical providers or administrators who are familiar with the health and social needs of Medicaid beneficiaries and with the resources available and required for their care. This includes providers or administrators of primary care, specialty care, and long-term care.
(C) Participating Medicaid managed care plans, or the State health plan association representing such plans, as applicable; and
(D) Other State agencies that serve Medicaid beneficiaries (for example, foster care agency, mental health agency, health department, State agencies delegated to conduct eligibility determinations for Medicaid, State Unit on Aging), as ex-officio members.
(e)
(1) The MAC members described in paragraph (d)(1) of this section must also be members of the BAG.
(2) The BAG must meet separately from the MAC, on a regular basis, and in advance of each MAC meeting to ensure BAG member preparation for each MAC meeting.
(f)
(1) Develop and publish by posting publicly on its website, bylaws for governance of the MAC and BAG, a current list of MAC and BAG membership, and past meeting minutes of the MAC and BAG meetings, including a list of meeting attendees;
(2) Develop and publish by posting publicly on its website a process for MAC and BAG member recruitment and appointment and selection of MAC and BAG leadership;
(3) Develop, publish by posting publicly on its website, and implement a regular meeting schedule for the MAC and BAG; the MAC and BAG must each meet at least once per quarter and hold off-cycle meetings as needed.
(4) Make at least two MAC meetings per year open to the public and those meetings must include a dedicated time during the meeting for the public to make comments. The public must be adequately notified of the date, location, and time of each public MAC meeting at least 30 calendar days in advance. BAG meetings are not required to be open to the public, unless the State's BAG members decide otherwise. The same requirements would apply to States whose BAG meetings were determined, by its membership, to be open to the public;
(5) Offer a variety of in-person and virtual attendance options including, at a minimum telephone dial-in options at the MAC and BAG meetings for its members. If the MAC or BAG meeting is deemed open to the public, the State must offer at a minimum a telephone dial-in option for members of the public;
(6) Ensure meeting times and locations for MAC and BAG meetings are selected to maximize member attendance and may vary by meeting; and
(7) Facilitate participation of beneficiaries by ensuring that that meetings are accessible to people with disabilities, that reasonable modifications are provided when necessary to ensure access and enable meaningful participation, and communications with individuals with disabilities are as effective as with others, that reasonable steps are taken to provide meaningful access to individuals with Limited English Proficiency, and that meetings comply with the requirements at § 435.905(b) of this chapter and applicable regulations implementing the ADA, section 504 of the Rehabilitation Act, and section 1557 of the Affordable Care Act at 28 CFR part 35 and 45 CFR parts 84 and 92.
(g)
(1) Additions and changes to services;
(2) Coordination of care;
(3) Quality of services;
(4) Eligibility, enrollment, and renewal processes;
(5) Beneficiary and provider communications by State Medicaid agency and Medicaid managed care plans;
(6) Cultural competency, language access, health equity, and disparities and biases in the Medicaid program; or
(7) Other issues that impact the provision or outcomes of health and medical care services in the Medicaid program as by the MAC, BAG, or State.
(h)
(1) Recruitment of MAC and BAG members;
(2) Planning and execution of all MAC and BAG meetings and the production of meeting minutes that include actions taken or anticipated actions by the State in response to interested parties' feedback provided during the meeting. The minutes are to be posted on the State's website within 30 calendar days following each meeting. Additionally, the State must also produce and post on its website an annual report as specified in paragraph (i) of this section; and
(3) The provision of appropriate support and preparation (providing research or other information needed) to the Medicaid beneficiary MAC and BAG members to ensure meaningful participation. These tasks include—
(i) Providing staff whose responsibilities include facilitating MAC and BAG member engagement;
(ii) Providing financial support, if necessary, to facilitate Medicaid beneficiary engagement in the MAC and the BAG.
(iii) Attendance by at least one staff member from the State agency's executive staff at all MAC and BAG meetings.
(i)
(1) Provide MAC members with final review of the report;
(2) Ensure that the annual report of the MAC includes a section describing the activities, topics discussed, and recommendations of the BAG, as well as the State's responses to the recommendations; and
(3) Post the report to the State's website.
(j)
(a) * * *
(3) * * *
(i) The Medicaid Advisory Committee and Beneficiary Advisory Group that operate in accordance with § 431.12 of this subpart; or
42 U.S.C. 1302.
(a) [Reserved]
(b)
42 U.S.C. 1302.
(c) * * *
(1)
(3)
(ii)
(A) Complete a reassessment of functional need at least every 12 months for no less than 90 percent of the individuals continuously enrolled in the waiver for at least 365 days; and
(B) Review and revise, as appropriate, the person-centered service plan, based upon the reassessment of functional need, at least every 12 months for no less than 90 percent of the individuals continuously enrolled in the waiver for at least 365 days.
(iii)
(7)
(ii)
(iii)
(
(
(B) The State must:
(
(
(
(
(
(
(
(C) The process for handling grievances must:
(
(
(
(i) Who were neither involved in any previous level of review or decision-making related to the grievance nor a subordinate of any such individual;
(ii) Who are individuals who have the appropriate clinical and non-clinical expertise, as determined by the State; and
(iii) Who consider all comments, documents, records, and other information submitted by the beneficiary without regard to whether such information was submitted to or considered previously by the State.
(
(
(
(iv)
(B) The beneficiary may request expedited resolution of a grievance whenever there is a substantial risk that resolution within standard timeframes will adversely affect the beneficiary's health, safety, or welfare, as described in paragraph (c)(7)(v) of this section.
(v)
(B)
(
(C)
(
(
(D)
(
(
(
(vi)
(B)
(vii)
(B) The record of each grievance must contain, at a minimum, all of the following information:
(
(
(
(
(
(
(C) The record must be accurately maintained in a manner available upon request to CMS.
(viii)
The additions and revision read as follows:
(a) * * *
(6) Assurance that the State operates and maintains an incident management system that identifies, reports, triages, investigates, resolves, tracks, and trends critical incidents.
(i)
(A) Define critical incident to include, at a minimum—
(
(
(
(
(
(B) Use an information system, as defined in 45 CFR 164.304 and compliant with 45 CFR part 164, that, at a minimum—
(
(
(
(C) Require providers to report to the State, within State-established timeframes and procedures, any critical incident that occurs during the delivery of services authorized under section 1915(c) of the Act and as specified in the waiver participant's person-centered service plan, or occurs as a result of the failure to deliver services authorized under section 1915(c) of the Act and as specified in the waiver participant's person-centered service plan.
(D) Use claims data, Medicaid fraud control unit data, and data from other State agencies such as Adult Protective Services or Child Protective Services to the extent permissible under applicable State law to identify critical incidents that are unreported by providers and occur during the delivery of services authorized under section 1915(c) of the Act and as specified in the waiver participant's person-centered service plan, or occur as a result of the failure to deliver services authorized under section 1915(c) of the Act and as specified in the waiver participant's person-centered service plan.
(E) Ensure that there is information sharing on the status and resolution of investigations, such as through the use of information sharing agreements, between the State and the entity or entities responsible in the State for investigating critical incidents as defined in § 441.302(a)(6)(i)(A) if the State refers critical incidents to other entities for investigation;
(F) Separately investigate critical incidents if the investigative agency fails to report the resolution of an investigation within State-specified timeframes; and
(G) Demonstrate that it meets the requirements in paragraph (a)(6) of this section through the reporting requirement at § 441.311(b)(1).
(ii)
(A) Initiate an investigation, within State-specified timeframes, for no less than 90 percent of critical incidents;
(B) Complete an investigation and determine the resolution of the investigation, within State-specified timeframes, for no less than 90 percent of critical incidents; and
(C) Ensure that corrective action has been completed within State-specified timeframes, for no less than 90 percent of critical incidents that require corrective action.
(iii)
(h)
(k)
(1)
(i)
(A) Salary, wages, and other remuneration as defined by the Fair Labor Standards Act and implementing regulations (29 U.S.C. 201
(B) Benefits (such as health and dental benefits, sick leave, and tuition reimbursement); and
(C) The employer share of payroll taxes for direct care workers delivering services authorized under section 1915(c) of the Act.
(ii)
(A) A registered nurse, licensed practical nurse, nurse practitioner, or clinical nurse specialist who provides nursing services to Medicaid-eligible individuals receiving home and community-based services available under this subpart;
(B) A licensed or certified nursing assistant who provides such services under the supervision of a registered nurse, licensed practical nurse, nurse practitioner, or clinical nurse specialist;
(C) A direct support professional;
(D) A personal care attendant;
(E) A home health aide; or
(F) Other individuals who are paid to provide services to address activities of daily living or instrumental activities of daily living, behavioral supports, employment supports, or other services to promote community integration directly to Medicaid-eligible individuals receiving home and community-based services available under this subpart.
(G) A direct care worker may be employed by a Medicaid provider, State agency, or third party; contracted with a Medicaid provider, State agency, or third party; or delivering services under a self-directed service model.
(2)
(3)
(i) At least 80 percent of all payments with respect to services at § 440.180(b)(2) through (4) must be spent on compensation for direct care workers.
(ii) [Reserved]
(4)
(f) * * *
(6) The State must indicate the number of unduplicated beneficiaries to which it intends to provide waiver services in each year of its program. This number will constitute a limit on the size of the waiver program unless the State requests and the Secretary approves a greater number of waiver participants in a waiver amendment. If the State has a limit on the size of the waiver program and maintains a list of individuals who are waiting to enroll in the waiver program, the State must meet the reporting requirements at § 441.311(d)(1).
(a)
(b)
(i) The State must report, every 24 months, according to the format and specifications provided by CMS, on the results of an incident management system assessment to demonstrate that it meets the requirements in § 441.302(a)(6).
(ii) CMS may reduce the frequency of reporting to up to once every 60 months for States with incident management systems that are determined by CMS to meet the requirements in § 441.302(a)(6).
(2)
(i) Number and percent of critical incidents for which an investigation was initiated within State-specified timeframes;
(ii) Number and percent of critical incidents that are investigated and for which the State determines the resolution within State-specified timeframes;
(iii) Number and percent of critical incidents requiring corrective action, as determined by the State, for which the required corrective action has been completed within State-specified timeframes.
(3)
(i) Percent of beneficiaries continuously enrolled for at least 365 days for whom a reassessment of functional need was completed within the past 12 months. The State may report this metric for a statistically valid random sample of beneficiaries.
(ii) Percent of beneficiaries continuously enrolled for at least 365 days who had a service plan updated as a result of a re-assessment of functional need within the past 12 months. The State may report this metric for a statistically valid random sample of beneficiaries.
(4) The type, amount, and cost of services provided under the State plan.
(c)
(1)
(i) Must report every other year, according to the format and schedule prescribed by the Secretary through the process for developing and updating the measure set described in § 441.312(d), on all measures in the Home and Community-Based Services Quality Measure Set that are identified by the Secretary pursuant to § 441.312(d)(1)(ii) of this subpart.
(ii) May report on all other measures in the Home and Community-Based Services Quality Measure Set that are not described in § 441.312(d)(1)(ii) and (iii) of this subpart.
(iii) Must establish, subject to CMS review and approval, State performance targets for each of the measures in the Home and Community-Based Services Quality Measure Set that are identified by the Secretary pursuant to § 441.312(d)(1)(ii) and (iii) of this subpart and describe the quality improvement strategies that the State will pursue to achieve the performance targets.
(iv) May establish State performance targets for each of the measures in the Home and Community-Based Services Quality Measure Set that are not identified by the Secretary pursuant to § 441.312(d)(1)(ii) and (iii) of this subpart and describe the quality improvement strategies that the State will pursue to achieve the performance targets.
(2) Measures identified per § 441.312(d)(1)(iii) of this subpart will be reported by the Secretary on behalf of the State.
(3) In reporting on Home and Community-Based Services Quality Measure Set measures, the State may, but is not required to:
(i) Report on the measures identified by the Secretary pursuant to § 441.312(c) of this subpart for which reporting will be, but is not yet required (that is, reporting has not yet been phased-in).
(ii) Report on the populations identified by the Secretary pursuant to § 441.312(c) of this subpart for whom reporting will be, but is not yet required.
(d)
(1)
(A) Information on whether the State screens individuals on the list for eligibility for the waiver program;
(B) Whether the State periodically re-screens individuals on the list for eligibility; and
(C) The frequency of re-screening, if applicable.
(ii) Number of people on the list of individuals who are waiting to enroll in the waiver program, if applicable.
(iii) Average amount of time that individuals newly enrolled in the waiver program in the past 12 months were on the list of individuals waiting to enroll in the waiver program, if applicable.
(2)
(ii) Percent of authorized hours for homemaker services, home health aide services, or personal care services, as listed in § 440.180(b)(2) through (4), that are provided within the past 12 months. The State may report this metric for a statistically valid random sample of beneficiaries.
(e)
(1)
(2) [Reserved]
(f)
(2) The reporting requirements at paragraph (e) of this section are effective 4 years after the date of enactment of this paragraph; and in the case of a State that implements a managed care delivery system under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and includes HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care plan contract rating period that begins on or after 4 years after the date of enactment of this paragraph.
(a)
(b)
(c)
(1) Identify, and update at least every other year, beginning no later than December 31, 2025 and biennially thereafter, the quality measures to be included in the Home and Community-Based Services Quality Measure Set as defined in paragraph (b) of this section.
(2) Consult at least every other year with States and other interested parties identified in paragraph (g) of this section to—
(i) Establish priorities for the development and advancement of the Home and Community-Based Services Quality Measure Set;
(ii) Identify newly developed or other measures which should be added including to address any gaps in the measures included in the Home and Community-Based Services Quality Measure Set;
(iii) Identify measures which should be removed as they no longer strengthen the Home and Community-Based Services Quality Measure Set; and
(iv) Ensure that all measures included in the Home and Community-Based Services Quality Measure Set reflect an evidence-based process including testing, validation, and consensus among interested parties; are meaningful for States; are feasible for State-level, program-level, or provider-level reporting as appropriate.
(3) In consultation with States, develop and update, at least every other year, the HCBS Quality Measure Set using a process that allows for public input and comment as described in paragraph (d) of this section.
(d)
(1) Identification of all measures in the Home and Community-Based Services Quality Measure Set, including:
(i) Measures newly added and measures removed from the prior version of the Home and Community-Based Services Quality Measure Set;
(ii) The specific measures for which reporting is mandatory;
(iii) The measures for which the Secretary will complete reporting on behalf of States and the measures for which States may elect to have the Secretary report on their behalf; and
(iv) The measures, if any, for which the Secretary will provide States with additional time to report, as well as how much additional time the Secretary will provide, in accordance with paragraph (c) of this section.
(2) Technical information to States on how to collect and calculate the data on the Home and Community-Based Services Quality Measure Set.
(3) Standardized format and reporting schedule for reporting measure data required under this section.
(4) Procedures that State agencies must follow in reporting measure data required under this section.
(5) Identification of the populations for which States must report the measures identified by the Secretary under paragraph (e) of this section, which may include, but is not limited to beneficiaries—
(i) Receiving services through specified delivery systems, such as those enrolled in a managed care plan or receiving services on a fee-for-service basis;
(ii) Who are dually eligible for Medicare and Medicaid, including beneficiaries whose medical assistance is limited to payment of Medicare premiums or cost sharing;
(iii) Who are older adults;
(iv) Who have physical disabilities;
(v) Who have intellectual and development disabilities;
(vi) Who have serious mental illness; and
(vii) Who have other health conditions.
(6) Technical information on attribution rules for determining how States must report on measures for beneficiaries who are included in more than one population, as described in paragraph (d)(5) of this section, during the reporting period.
(7) The subset of measures among the measures in the Home and Community-Based Services Quality Measure Set that must be stratified by race, ethnicity, sex, age, rural/urban status, disability, language, Tribal status, or such other factors as may be specified by the Secretary and informed by consultation every other year with States and interested parties in accordance with paragraph (b)(2) and subsection (g) of this section.
(8) Describe how to establish State performance targets for each of the measures in the Home and Community-Based Services Quality Measure Set.
(e)
(f)
(g)
(1) State Medicaid Agencies and agencies that administer Medicaid-covered home and community-based services.
(2) Health care and home and community-based services professionals, including members of the allied health professions who specialize in the care and treatment of older adults, children and adults with disabilities, and individuals with complex medical needs.
(3) Health care and home and community-based services professionals (including members of the allied health professions), providers, and direct care workers who provide services to older adults, children and adults with disabilities, and individuals with complex medical and behavioral health care needs who live in urban and rural medically underserved communities or who are members of distinct population sub-groups at heightened risk for poor outcomes.
(4) Providers of home and community-based services.
(5) Direct care workers and national organizations representing direct care workers.
(6) Consumers and national organizations representing older adults, children and adults with disabilities,
(7) National organizations and individuals with expertise in home and community-based services quality measurement.
(8) Voluntary consensus standards setting organizations and other organizations involved in the advancement of evidence-based measures of health care.
(9) Measure development experts.
(10) Such other interested parties as the Secretary may determine appropriate.
(a) The State must operate a website consistent with § 435.905(b) of this chapter that provides the results of the reporting requirements specified at § 441.311. The State must:
(1) Include all content on one web page, either directly or by linking to individual managed care organization, prepaid ambulatory health plan, prepaid inpatient health plan, and primary care case management, as defined in part 438, entity websites;
(2) Include clear and easy to understand labels on documents and links;
(3) Verify no less than quarterly, the accurate function of the website and the timeliness of the information and links; and
(4) Include prominent language on the website explaining that assistance in accessing the required information on the website is available at no cost and include information on the availability of oral interpretation in all languages and written translation available in each non-English language, how to request auxiliary aids and services, and a toll-free and TTY/TDY telephone number.
(b) CMS must report on its website the results of the reporting requirements specified at § 441.311 that the State reports to CMS.
(c) These requirements are effective 3 years after the date of enactment of this paragraph; and in the case of the State that implements a managed care delivery system under the authority of sections 1915(a), 1915(b), 1932(a), and 1115(a) of the Act and includes HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care plan contract rating period that begins on or after 3 years after the date of enactment of this paragraph.
(c) * * *
The revisions and additions read as follows:
(d) * * *
(2) * * *
(v) Grievance process, as defined in § 441.301(c)(7) when self-directed PAS include services under a section 1915(c) waiver program.
(e)
(f)
(c) The quality assurance and improvement plan must comply with all components of §§ 441.311 and 441.312 and related reporting requirements relevant to the State's self-directed PAS program.
For States subject to the requirements of subpart J, the State must operate a website consistent with § 441.313.
(c)
(b) * * *
(2) * * *
(iv) Grievance process, as defined in § 441.301(c)(7).
(e) An incident management system in accordance with § 441.302(a)(6) is implemented.
(f) Payment rates are adequate to ensure a sufficient direct care workforce to meet the needs of beneficiaries and provide access to services in the amount, duration, and scope specified in the person-centered service plan, in accordance with § 441.302(k).
(i) Data and information as required in § 441.311.
(d) The State must implement the Home and Community-Based Services Quality Measure Set in accordance with § 441.312.
For States subject to the requirements of subpart K, the State must operate a website consistent with § 441.313.
(c) Reviewing the person-centered service plan. The State must ensure that the person-centered service plan is reviewed, and revised, as appropriate, based upon the reassessment of functional need as required in § 441.720, at least every 12 months, when the individual's circumstances or needs change significantly, and at the request of the individual. States must adhere to the requirements of § 441.301(c)(3).
The revision and additions read as follows:
(a) * * *
(1) * * *
(iii)
(v) A State must implement an incident management system in accordance with § 441.302(a)(6).
(vi) A State must assure payment rates are adequate to ensure a sufficient direct care workforce to meet the needs of beneficiaries and provide access to services in the amount, duration, and scope specified in the person-centered service plan, in accordance with § 441.302(k).
(vii) A State must assure the submission of data and information as required in § 441.311.
(b) * * *
(1) * * *
(i) Incorporate a continuous quality improvement process that includes monitoring, remediation, and quality improvement, including recognizing and reporting critical incidents, as defined in § 441.302(a)(6)(i)(A).
(v) Implementation of the Home and Community-Based Services Quality Measure Set in accordance with § 441.312.
For States subject to the requirements of subpart M, the State must operate a website consistent with § 441.313.
42 U.S.C. 1302, and 1396r-8, and Pub. L. 111-148.
(b)(1)
(2)
(i) Primary care services.
(ii) Obstetrical and gynecological services.
(iii) Outpatient behavioral health services.
(iv) Personal care, home health aide, and homemaker services, as specified in § 440.180(b)(2) through (4), provided by individual providers and providers employed by an agency.
(3)
(i) For the categories of services described in paragraph (b)(2)(i) through (iii) of this section, the comparative payment rate analysis must compare the State agency's Medicaid fee-for-service payment rates to the most recently published Medicare payment rates effective for the same time period for the evaluation and management (E/M) codes applicable to the category of service. The State must conduct the comparative payment rate analysis at the Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) code level, as applicable, using the most current set of codes published by CMS, and the analysis must meet the following requirements:
(A) The State must organize the analysis by category of service as described in paragraphs (b)(2)(i) through (iii) of this section.
(B) The analysis must clearly identify the Medicaid base payment rates for each E/M CPT/HCPCS code identified by CMS under the applicable category of service, including, if the rates vary, separate identification of the payment rates by population (pediatric and adult), provider type, and geographical location, as applicable.
(C) The analysis must clearly identify the Medicare non-facility payment rates effective for the same time period for the same set of E/M CPT/HCPCS codes, and for the same geographical location as the Medicaid base payment rates, that correspond to the Medicaid base payment rates identified under paragraph (b)(3)(i)(B) of this section, including, separate identification of the payment rates by provider type.
(D) The analysis must specify the Medicaid base payment rate identified under paragraph (b)(3)(i)(B) of this section as a percentage of the Medicare non-facility payment rate identified under paragraph (b)(3)(i)(C) of this section for each of the services for which the Medicaid base payment rate is published pursuant to paragraph (b)(3)(i)(B) of this section.
(E) The analysis must specify the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the Medicaid base payment rate is published pursuant to paragraph (b)(3)(i)(B) of this section.
(ii) For each category of services specified in paragraph (b)(2)(iv) of this section, the State agency is required to publish a payment rate disclosure that expresses the State's payment rates as the average hourly payment rates, separately identified for payments made to individual providers and to providers employed by an agency, if the rates vary. The payment rate disclosure must meet the following requirements:
(A) The State must organize the payment rate disclosure by category of service as specified in paragraph (b)(2)(iv) of this section.
(B) The disclosure must identify the average hourly payment rates by applicable category of service, including, if the rates vary, separate identification of the average hourly payment rates for payments made to individual providers and to providers employed by an agency, by population (pediatric and adult), provider type, and geographical location, as applicable.
(C) The disclosure must identify the number of Medicaid-paid claims and the number of Medicaid enrolled beneficiaries who received a service within a calendar year for each of the services for which the average hourly payment rates are published pursuant to paragraph (b)(3)(ii)(B) of this section.
(4)
(5)
(6)
(ii) The interested parties advisory group must include, at a minimum, direct care workers, beneficiaries, beneficiaries' authorized representatives, and other interested parties impacted by the services rates in question, as determined by the State.
(iii) The interested parties advisory group will advise and consult with the Medicaid agency on current and proposed payment rates, HCBS payment adequacy data as required at § 441.311(e), and access to care metrics described in § 441.311(d)(2), associated with services found at § 440.180(b)(2) through (4), to ensure the relevant Medicaid payment rates are sufficient to ensure access to personal care, home health aide, and homemaker services for Medicaid beneficiaries at least as great as available to the general population in the geographic area and to ensure an adequate number of qualified direct care workers to provide self-directed personal assistance services.
(iv) The interested parties advisory group shall meet at least every 2 years and make recommendations to the Medicaid agency on the sufficiency of State plan, 1915(c) waiver, and demonstration direct care worker payment rates, as applicable. The State agency will ensure the group has access to current and proposed payment rates, HCBS provider payment adequacy minimum performance and reporting standards as described in § 441.311(e), and applicable access to care metrics as described in § 441.311(d)(2) for HCBS in order to produce these recommendations. The process by which the State selects interested party advisory group members and convenes its meetings must be made publicly available.
(v) The Medicaid agency must publish the recommendations produced under paragraph (b)(6)(iv) of the interested parties advisory group consistent with the publication requirements described in paragraph (b)(1) of this section for payment rate transparency data, within 1 month of when the group provides the recommendation to the agency.
(c)(1)
(i) Medicaid payment rates in the aggregate (including base and supplemental payments) following the proposed reduction or restructuring for each benefit category affected by the proposed reduction or restructuring would be at or above 80 percent of the most recently published Medicare payment rates for the same or a comparable set of Medicare-covered services.
(ii) The proposed reduction or restructuring, including the cumulative effect of all reductions or restructurings taken throughout the current State fiscal year, would be likely to result in no more than a 4 percent reduction in aggregate fee-for-service Medicaid expenditures for each benefit category affected by proposed reduction or restructuring within a State fiscal year.
(iii) The public processes described in paragraph (c)(4) of this section and § 447.204 of this part yielded no significant access to care concerns from beneficiaries, providers, or other interested parties regarding the service(s) for which the payment rate reduction or payment restructuring is proposed, or if such processes did yield concerns, the State can reasonably respond to or mitigate the concerns, as appropriate, as documented in the analysis provided by the State pursuant to § 447.204(b)(3).
(2)
(i) A summary of the proposed payment change, including the State's reason for the proposal and a description of any policy purpose for the proposed change, including the cumulative effect of all reductions or restructurings taken throughout the current State fiscal year in aggregate fee-for-service Medicaid expenditures for each benefit category affected by proposed reduction or restructuring within a State fiscal year.
(ii) Medicaid payment rates in the aggregate (including base and supplemental payments) before and after the proposed reduction or restructuring for each benefit category affected by proposed reduction or restructuring, and a comparison of each (aggregate Medicaid payment before and after the reduction or restructuring) to the most recently published Medicare payment rates for the same or a comparable set of Medicare-covered services and, as reasonably feasible, to the most recently available payment rates of other health care payers in the State or the geographic area for the same or a comparable set of covered services.
(iii) Information about the number of actively participating providers of services in each benefit category affected by the proposed reduction or restructuring. For this purpose, an actively participating provider is a provider that is participating in the Medicaid program and actively seeing and providing services to Medicaid beneficiaries or accepting Medicaid beneficiaries as new patients. The State must provide the number of actively participating providers of services in each affected benefit category for each of the 3 years immediately preceding the State plan amendment submission date, by State-specified geographic area (for example, by county or parish), provider type, and site of service. The State must document observed trends in the number of actively participating providers in each geographic area over this period. The State may provide estimates of the anticipated effect on the number of actively participating providers of services in each benefit category affected by the proposed reduction or restructuring, by geographic area.
(iv) Information about the number of Medicaid beneficiaries receiving services through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring. The State must provide the number of beneficiaries receiving services in each affected benefit category for each of the 3 years immediately preceding the State plan amendment submission date, by State-specified geographic area (for example, by county or parish). The State must document observed trends in the number of Medicaid beneficiaries receiving services in each affected benefit category in each geographic area over this period. The State must provide quantitative and qualitative information about the beneficiary populations receiving services in the affected benefit categories over this period, including the number and proportion of beneficiaries who are adults and children and who are living with disabilities, and a description of the State's consideration of the how the proposed payment changes may affect access to care and service delivery for beneficiaries in various populations. The State must provide estimates of the anticipated effect on the number of Medicaid beneficiaries receiving services through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring, by geographic area.
(v) Information about the number of Medicaid services furnished through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring. The State must provide the number Medicaid services furnished in each affected benefit category for each of the 3 years immediately preceding the State plan amendment submission date, by State-specified geographic area (for example, by county or parish), provider type, and site of service. The State must document observed trends in the number of Medicaid services furnished in each affected benefit category in each geographic area over this period. The State must provide quantitative and qualitative information about the Medicaid services furnished in the affected benefit categories over this period, including the number and proportion of Medicaid services furnished to adults and children and who are living with disabilities, and a description of the State's consideration of the how the proposed payment changes may affect access to care and service delivery. The State must provide estimates of the anticipated effect on the number of Medicaid services furnished through the FFS delivery system in each benefit category affected by the proposed reduction or restructuring, by geographic area.
(vi) A summary of, and the State's response to, any access to care concerns or complaints received from beneficiaries, providers, and other interested parties regarding the service(s) for which the payment rate reduction or restructuring is proposed as required under § 447.204(a)(2).
(3)
(4)
(ii) States should promptly respond to public input through these mechanisms citing specific access problems, with an appropriate investigation, analysis, and response.
(iii) States must maintain a record of data on public input and how the State responded to this input. This record will be made available to CMS upon request.
(5)
(i) The State's corrective actions may address the access deficiencies through a variety of approaches, including, but not limited to: Increasing payment rates, improving outreach to providers, reducing barriers to provider enrollment, providing additional transportation to services, providing for telemedicine delivery and telehealth, or improving care coordination.
(ii) The resulting improvements in access must be measured and sustainable.
(6)
The revisions read as follows:
(a) * * *
(1) The data collected, and the State analysis performed, under § 447.203(c).
(b) The State must submit to CMS with any such proposed State plan amendment affecting payment rates documentation of the information and analysis required under § 447.203(c) of this chapter.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Proposed rule.
This proposed rule would advance CMS' efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and Children's Health Insurance Program (CHIP) managed care enrollees. The proposed rule would specifically address standards for timely access to care and States' monitoring and enforcement efforts, reduce burden for some State directed payments and certain quality reporting requirements, add new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization and specify the scope and nature of ILOS, specify medical loss ratio (MLR) requirements, and establish a quality rating system for Medicaid and CHIP managed care plans.
To be assured consideration, comments must be received at one of the addresses provided below, by July 3, 2023.
In commenting, please refer to file code CMS-2439-P.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
John Giles, (410) 786-5545, Medicaid Managed Care.
Laura Snyder, (410) 786-3198, Medicaid Managed Care State Directed Payments.
Tara Caulder, (410) 786-8252, Medicaid Managed Care State Directed Payments Value-Based Initiatives and Evaluation.
Alex Loizias, (410) 786-2435, Medicaid Managed Care State Directed Payments Contract Requirements.
Andrew Wilson, (410) 786-8515, Medicaid Managed Care State Directed Payments Medicare Fee Schedules and Appeals Process.
Carlye Burd, (720) 853-2780, Medicaid Managed Care Quality.
Amanda Paige Burns, (410) 786-8030, Medicaid Quality Rating System.
Joshua Bougie, (410) 786-8117, CHIP.
CMS proposes that the proposed new requirements would be applicable, and therefore, States required to comply by the effective date of the final rule or as otherwise specified in regulatory text.
As of September 2022, the Medicaid program provided essential health care coverage to more than 83 million
Ensuring beneficiaries can access covered services is a crucial element of the Medicaid program. Depending on the State and its Medicaid program structure, beneficiaries access their health care services using a variety of care delivery systems; for example, fee-for-service (FFS) and managed care, including through demonstrations and waiver programs. In 2020, 72
With a program as large and complex as Medicaid, to promote consistent access to health care for all beneficiaries across all types of care delivery systems in accordance with statutory requirements, access regulations need to be multi-factorial. Strategies to enhance access to health care services should reflect how people move through and interact with the health care system. We view the continuum of health care access across three dimensions of a person-centered framework: (1) enrollment in coverage; (2) maintenance of coverage; and (3) access to services and supports. Within each of these dimensions, accompanying regulatory, monitoring, and/or compliance actions may be needed to ensure access to health care is achieved and maintained.
In early 2022, we released a request for information (RFI)
As noted above, the first dimension of access focuses on ensuring that eligible people are able to enroll in the Medicaid program. Access to Medicaid enrollment requires that a potential beneficiary know if they are or may be eligible for Medicaid, be aware of Medicaid coverage options, and be able to easily apply for and enroll in coverage. The second dimension of access in this continuum relates to maintaining coverage once the beneficiary is enrolled in the Medicaid program initially. Maintaining coverage requires that eligible beneficiaries are able to stay enrolled in the program without interruption, or that they know how to and can smoothly transition to other health coverage, such as CHIP, Exchange coverage, or Medicare, when they are no longer eligible for Medicaid coverage. In September 2022, we published a proposed rule,
The third dimension, which is the focus of this proposed rule, is access to services and supports. This rule is focused on addressing additional critical elements of access: (1) potential access (for example, provider availability and network adequacy); (2) beneficiary utilization (the use of health care and health services); and (3) beneficiaries' perceptions and experiences with the care they did or did not receive. These terms and definitions build upon our previous efforts to examine how best to monitor access.
In addition to the three proposed rules (the Streamlining Eligibility & Enrollment proposed rule, this proposed rule on managed care, and Medicaid Program; Ensuring Access to Medicaid Services proposed rule), we are also engaged in non-regulatory activities (for example, best practices toolkits and technical assistance to States) to improve access to health care services across Medicaid delivery systems. As noted earlier, the Streamlining Eligibility & Enrollment proposed rule addresses the first two dimensions of access to health care: (1) enrollment in coverage and (2) maintenance of coverage. Through that proposed rule, we sought to streamline Medicaid, CHIP and BHP eligibility and enrollment processes, reduce administrative burden on States and applicants toward a more seamless eligibility and enrollment process, and increase the enrollment and retention of eligible individuals. Through the Ensuring Access to Medicaid Services proposed rule, and this proposed rule involving managed care, we outline additional proposed steps to address the third dimension of the health care access continuum: access to services, while also in this rule addressing quality and financing of services in the managed care context. We seek to address a range of access-related challenges that impact how beneficiaries are served by Medicaid across all of its delivery systems.
The use of managed care in Medicaid has grown from 81 percent in 2016 to 84 percent in 2020,
Under section 1915(a) of the Act, States can implement a voluntary managed care program by executing a contract with organizations that the State has procured using a competitive procurement process. To require beneficiaries to enroll in a managed care program to receive services, a State must obtain approval from CMS under two primary authorities:
• Through a State plan amendment (SPA) that meets standards set forth in section 1932(a) of the Act, States can implement a mandatory managed care delivery system. This authority does not allow States to require beneficiaries who are dually eligible for Medicare and Medicaid (dually eligible beneficiaries), American Indians/Alaska Natives (except as permitted in section 1932(a)(2)(C) of the Act), or children with special health care needs to enroll in a managed care program. State plans, once approved, remain in effect until modified by the State.
• We may grant a waiver under section 1915(b) of the Act, permitting a State to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, or children with special health care needs. After approval, a State may operate a section 1915(b) waiver for a 2-year period (certain waivers can be operated for up to 5
We may also authorize managed care programs as part of demonstration projects under section 1115(a) of the Act that include waivers permitting a State to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, and children with special health care needs. Under this authority, States may seek additional flexibility to demonstrate and evaluate innovative policy approaches for delivering Medicaid benefits, as well as the option to provide services not typically covered by Medicaid. Such demonstrations are approvable only if it is determined that the demonstration would promote the objectives of the Medicaid statute and the demonstration is subject to evaluation.
The above authorities all permit States to operate their Medicaid managed care programs without complying with the following standards of Medicaid law outlined in section of 1902 of the Act:
•
•
•
States that elect to operate a separate CHIP within a managed care delivery system do not need specific statutory authority to offer benefits through a managed care program. However, sections 2103(f)(3) and 2107(e)(1)(N) and (R) of the Act apply certain provisions of sections 1903 and 1932 of the Act related to Medicaid managed care to separate CHIPs. States that elect a Medicaid expansion CHIPs that operate within a managed care delivery system are subject to all requirements under section 1932 of the Act.
In the May 6, 2016
In the January 18, 2017
In the November 13, 2020
Since publication of the 2020 final rule, the COVID-19 public health emergency (PHE) challenged States' ability to ensure beneficiaries' access to high-quality care, ensure adequate provider payment during extreme workforce challenges, and provide adequate program monitoring and oversight. On January 28, 2021, Executive Order (E.O.) 14009,
In addition, this rule proposes new standards to help States improve their monitoring of access to care by requiring establishment of new standards for appointment wait times, use of secret shopper surveys, use of enrollee experience surveys, and requiring States to submit a managed care plan analysis of payments made by plans to providers, for specific services, to more closely monitor plans' network adequacy. It also proposes provisions that would reduce burden for States that choose to direct MCOs, PIHPs, or PAHPs in certain ways to use their capitation payments to pay specified providers specified amounts, address impermissible redistribution arrangements related to State directed payments, and add clarity to the requirements related to medical loss ratio calculations. To improve transparency and provide valuable information to enrollees, providers, and CMS, this rule proposes to enhance existing State website requirements for content and ease of use. Lastly, this proposed rule would make quality reporting more transparent and meaningful for driving quality improvement, reduce burden on certain quality reporting requirements, and establish State requirements for implementing a Medicaid and CHIP quality rating system aimed at ensuring monitoring of performance by Medicaid and CHIP managed care plans and empowering beneficiary choice in managed care.
Finally, we believe it is important to acknowledge the role of health equity within this proposed rule. Medicaid and CHIP are the primary source of health care coverage for over one in three people of color in this country. Consistent with Executive Order 13985
A key part of our approach will be to work with States to improve measurement of health disparities through the stratification of State reporting on certain measures to identify potential differences in access, quality, and outcomes based on demographic factors like race, ethnicity, age, rural/urban status, disability, language, sex, sexual orientation, and gender identity, as well as social determinants of health.
The “Medicaid Program and CHIP; Mandatory Medicaid and Children's Health Insurance Program (CHIP) Core Set Reporting” proposed rule appeared in the August 22, 2022
Measuring health disparities, reporting these results, and driving improvements in quality are cornerstones of the CMS approach to advancing health equity and also align with the CMS Strategic Priorities.
Throughout this document, the term “PAHP” is used to mean a prepaid ambulatory health plan that does not exclusively provide non-emergency medical transportation services. Whenever this document is referencing a PAHP that exclusively provides non-emergency medical transportation services, it is specifically addressed as a “Non-Emergency Medical Transportation (NEMT) PAHP.” Throughout this document, the use of the term “managed care plan” includes managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), and prepaid ambulatory health plans (PAHPs) and is used only when the provision under discussion applies to all three arrangements. An explicit reference is used in the preamble if the provision applies to primary care case management (PCCMs) or PCCM entities.
For CHIP, the preamble uses “CHIP” when referring collectively to separate child health programs and Medicaid expansion programs. We use “separate CHIP” specifically in reference to separate child health programs and also in reference to any proposed changes in subpart L of part 457, which are only applicable to separate child health programs operating in a managed care delivery system. Also note in this proposed rule, all proposed changes to Medicaid managed care regulations are equally applicable to Medicaid expansion managed care programs as described at § 457.1200(c).1. Access (42 CFR 438.2, 438.10, 438.66, 438.68, 438.206, 438.207, 438.214, 438.602, 457.1207, 457.1218, 457.1230, 457.1250, 457.1285)
In the 2016 final rule, we renamed and expanded § 438.66
One of the most commonly used enrollee experience survey in the health care industry, including for Medicare Advantage organizations, is the Consumer Assessment of Healthcare Providers and Systems (CAHPS®).
To reflect these proposals in the annual assessment of the operation of the managed care program report called the Managed Care Program Annual Report (MCPAR) required at § 438.66(e), we propose conforming edits in § 438.66(e)(2)(vii). We propose to include the results of an enrollee experience survey to the list of items that States must evaluate in their report and add “provider” before “surveys” to distinguish them from enrollee experience surveys. Additionally, consistent with the transparency proposals described in section I.B.1.f. of this section, we propose to revise § 438.66(e)(3)(i) to require that States post the report required in § 438.66(e)(1) on their website within 30 calendar days of submitting it to CMS. Currently § 438.66(e)(3)(i) only requires that the report be posted on the State's website but does not specify a timeframe; we believe that adding further specificity about the timing of when the report should be posted would be helpful to interested parties and bring consistency to this existing requirement. This proposal is authorized by section 1902(a)(6) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require.
For an enrollee experience survey to yield robust, usable results, it should be easy to understand, simple to complete, and readily accessible for all enrollees that receive it; therefore, we believe they should meet the interpretation, translation, and tagline criteria in § 438.10(d)(2). Therefore, we propose to add enrollee experience surveys as a document subject to the requirements in § 438.10(d)(2). This would ensure that enrollees that receive a State's enrollee experience survey would be fully notified that oral interpretation in any language and written translation in the State's prevalent languages would be readily available, and how to request auxiliary aids and services, if needed.
These proposals are authorized by section 1932(b)(5) of the Act which requires managed care organizations to demonstrate adequate capacity and services by providing assurances to the State and CMS that it has the capacity to serve the expected enrollment in its service area, including assurances that it offers an appropriate range of services and access to preventive and primary care services for the population expected to be enrolled in such service area, and maintains a sufficient number, mix, and geographic distribution of providers of services. The authority for our proposals is extended to prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs) through regulations based on our authority under section 1902(a)(4) of the Act. Because enrollee experience survey results would provide direct and candid input from enrollees, States and managed care plans could use the results to determine if their networks offer an appropriate range of services and access as well as if it provides a sufficient number, mix, and geographic distribution of providers to meet their enrollees' needs. Enrollee experience survey data would enable managed care plans to assess whether their networks
We remind States that in addition to the mandatory external quality review (EQR) activities under § 438.358(b), there is an existing optional EQR activity under § 438.358(c)(2) for the administration or validation of consumer or provider surveys of quality of care. States that contract with MCOs and use external quality review organizations (EQROs) to administer or validate the proposed enrollee experience surveys may be eligible to receive up to a 75 percent enhanced Federal match, pursuant to § 438.370, to reduce the financial burden of conducting or validating the proposed enrollee survey(s).
We request comment on the cost and feasibility of implementing enrollee experience surveys for each managed care program as well as the extent to which States already use enrollee experience surveys for their managed care programs.
We propose that States would have to comply with § 438.66(b) and (c) no later than the first managed care plan rating period that begins on or after 3 years after the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We have proposed this applicability date in § 438.66(f).
We did not adopt the managed care State monitoring requirements described at § 438.66 in the 2016 final rule for separate CHIPs because we wished to limit administrative burden on separate CHIP managed care plans, which typically serve smaller populations. Since we did not adopt MCPAR, we do not plan to adopt the new Medicaid enrollee experience survey requirements proposed at § 438.66(b) and (c) for separate CHIPs. However, States currently collect enrollee experience data for CHIP through annual CAHPS surveys as required at section 2108(e)(4) of the Act. Currently, there are no requirements for States to use these data to evaluate their separate CHIP managed care plans network adequacy or to make these survey results available to beneficiaries to assist in selecting a managed care plan. We believe that enrollee experience data can provide an invaluable window into the performance of managed care plans and assist States in their annual review and certification of network adequacy for separate CHIP MCOs, PIHPs, and PAHPs. For this reason, we propose to amend § 457.1230(b) to require States to evaluate annual CAHPS survey results as part of the State's annual analysis of network adequacy as described in § 438.207(d). Since States already collect CAHPS survey data for CHIP and would likely not need the same timeframe to implement as needed for implementing the proposed Medicaid enrollee experience surveys requirement, we propose for the provision at § 457.1230(b) to be applicable 60 days after the effective date of the final rule. However, we are open to a later applicability date such as 1, 2, or 3 years after the effective date of the final rule. We invite comment on the appropriate applicability date for this provision.
We also believe that access to enrollee experience data is critical in affording separate CHIP beneficiaries the opportunity to make informed decisions when selecting their managed care plan(s). To this end, we propose at § 457.1207 to require States to post comparative summary results of CAHPS surveys by managed care plan annually on State websites as described at § 438.10(c)(3). The posted summary results must be updated annually and allow for easy comparison between the managed care plans available to separate CHIP beneficiaries. We seek public comment on other approaches to including CHIP CAHPS survey data for the dual purposes of improving access to managed care services and enabling beneficiaries to have useful information when selecting a managed care plan.
In the 2020 final rule, we revised § 438.68(b)(1) and (2) by replacing the requirement for States to set time and distance standards with a more flexible requirement that States set a quantitative network adequacy standard for specified provider types. We explained that quantitative network adequacy standards that States may elect to use included minimum provider-to-enrollee ratios; maximum travel time or distance to providers; a minimum percentage of contracted providers that are accepting new patients; maximum wait times for an appointment; hours of operation requirements (for example, extended evening or weekend hours); and combinations of these quantitative measures. We encouraged States to use the quantitative standards in combination- not separately- to ensure that there are not gaps in access to, and availability of, services for enrollees. (85 FR 72802)
Key to the effectiveness of the Medicaid and CHIP program is ensuring that it provides timely access to high-quality services in a manner that is equitable and consistent. During the COVID-19 public health emergency (PHE), managed care plans have faced many challenges ensuring access to covered services and those challenges shed light on opportunities for improvement in monitoring timely access. These challenges include workforce shortages, changes in providers' workflows and operating practices, providers relocating leaving shortages in certain areas, and shifts in enrollee utilization such as delaying or forgoing preventive care. Some of these challenges may become permanent and thus, States and managed care plans need to adjust their monitoring, evaluation, and planning strategies to ensure equitable access to all covered services.
On February 17, 2022, we issued a request for information
Based on the RFI comments received, research, engagement with interested parties, and our experience in monitoring State managed care programs, we are persuaded about the need for increased oversight of network adequacy and overall access to care, and propose a new quantitative network adequacy standard. Specifically, we propose to redesignate existing § 438.68(e) regarding publication of network adequacy standards to § 438.68(g) and create a new § 438.68(e) titled “Appointment wait time standards.”
In § 438.68(e)(1)(i) through (iv), we propose that States develop and enforce wait time standards for routine appointments for four types of services: outpatient mental health and substance use disorder (SUD)-adult and pediatric, primary care- adult and pediatric, obstetrics and gynecology (OB/GYN), and an additional type of service determined by the State (in addition to the three listed) in an evidence-based manner for Medicaid. We include “If covered in the MCO's, PIHP's, or PAHP's contract” before the first three service types (paragraphs (e)(1)(i) through (iii)) to be clear that standards only need to be developed and enforced if the service is covered by the managed care plan's contract, but the forth service (paragraph (e)(1)(iv)) must be one that is covered by the plan's contract. For example, we understand that primary care and OB/GYN is likely not covered by a behavioral health PIHP; therefore, a State would not be required to set appointment wait time standards for primary care and OB/GYN for the behavioral health PIHP and would only have to set appointment wait time standards for mental health and SUD as well as one State-selected provider type. To ensure that our proposal to have States set appointment wait time standards for mental health and SUD as well as one State-selected provider type for behavioral PIHPs and PAHPs is feasible, we request comment on whether behavioral health PIHPs and PAHPs include provider types other than mental health and SUD in their networks. Although we believe behavioral health PIHPs and PAHPs may include other provider types, we want to validate our understanding. We propose to adopt the proposed wait time standards for separate CHIP through an existing cross-reference at § 457.1218. We are proposing primary care, OB/GYN, and mental health and SUD because they are indicators of core population health; therefore, we believe proposing to require States to set appointment wait time standards for them would have the most impact on access to care for Medicaid and CHIP managed care enrollees.
At § 438.68(e)(1)(iv), we propose that States select a provider type in an evidence-based manner to give States the opportunity to use an appointment wait time standard to address an access challenge in their local market. We are not proposing to specify the type of evidence to be used in this rule; rather, we defer to States to consider multiple sources, such as encounter data, appeals and grievances, and provider complaints, as well as to consult with their managed care plans to select a provider type. We believe proposing that States select one of the provider types subject to an appointment wait time standard would encourage States and managed care plans to analyze network gaps effectively and then innovate new ways to address the challenges that impede timely access. States would identify the provider type(s) they choose in existing reporting in MCPAR, per § 438.66(e), and the Network Adequacy and Access Assurances Report, per § 438.207(d).
To be clear that the appointment wait time standards proposed in § 438.68(e) cannot be the quantitative network adequacy standard required in § 438.68(b)(1), we propose to add “. . . , other than for appointment wait times . . .” in § 438.68(b)(1). We are not proposing to define routine appointments in this rule; rather, we defer to States to define it as they deem appropriate. We encourage States to work with their managed care plans and their network providers to develop a definition of “routine” that would reflect usual patterns of care and current clinical standards. We acknowledge that defining “urgent” and “emergent” for appointment wait time standards could be much more complex given the standards of practice by specialty and the patient-specific considerations necessary to determine those situations. We invite comments on defining these terms should we undertake additional rulemaking in the future. We clarify that setting appointment wait time standards for routine appointments as proposed at § 438.68(e)(1) would be a minimum; States are encouraged to set additional appointment wait time standards for other types of appointments. For example, States may consider setting appointment wait time standards for emergent or urgent appointments as well.
To provide States with flexibility to develop appointment wait time standards that reflect the needs of their Medicaid and CHIP managed care populations and local provider availability while still setting a level of consistency, we propose maximum appointment wait times at § 438.68(e)(1): State developed appointment wait times must be no longer than 10 business days for routine outpatient mental health and substance use disorder appointments in § 438.68(e)(1)(i) and no longer than 15 business days for routine primary care in § 438.68(e)(1)(ii) and OB/GYN appointments in § 438.68(e)(1)(iii). We are not proposing a maximum appointment wait time standard for the State-selected provider type. These proposed maximum timeframes were informed by standards for the individual insurance Marketplace established under the Affordable Care Act that will begin in 2024 of 10 business days for behavioral health and 15 business days for primary care services; we note that we elected not to adopt the Marketplace's appointment wait time standard of 30 business days for non-urgent specialist appointments as we believe focusing on primary care, OB/GYN, and mental health and SUD is the most appropriate starting place for Medicaid managed care standards. These proposed timeframes were also
In developing this proposal, we considered appointment wait time standards between 30-calendar days and 45-calendar days. Some interested parties stated that these standards would be more appropriate for routine appointments and would more accurately reflect current appointment availability for most specialties. However, we believe 30-calendar days and 45-calendar days as the maximum wait time may be too long as a standard; we understand it may be a realistic timeframe currently for some specialist appointments but we were not convinced that they should be the standard for outpatient mental health and substance use disorder, primary care, and OB/GYN appointments. We invite comment on aligning with the Marketplace standards at 10- and 15-business days, or whether wait time standards should differ, and if so, what standards would be the most appropriate.
To make the appointment wait time standards as effective as possible, we defer to States on whether and how to vary appointment wait time standards for the same provider type; for example, by adult versus pediatric, telehealth versus in-person, geography, service type, or other ways. However, wait time standards must, at a minimum, reflect the timing proposed in § 438.68(e)(1). We encourage States to consider the unique access needs of certain enrollees when setting their appointment wait time standards to facilitate obtaining meaningful results when assessing managed care plan compliance with the standards.
As a general principle, we seek to align across Medicaid managed care, CHIP managed care, the Marketplace, and Medicare Advantage (MA) when reasonable to build consistency for individuals that may change coverage over time and to enable more effective and standardized comparison and monitoring across programs. Proposing 90 percent compliance with 10- and 15- business day maximum appointment wait time standards would be consistent with standards set for Marketplace plans for plan year 2024.
To ensure that managed care plans' contracts reflect their obligation to comply with the appointment wait time standards, we propose to revise § 438.206(c)(1)(i) to include appointment wait time standards as a required provision in MCO, PIHP, and PAHP contracts for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1230(a). We believe this is necessary since our proposal at § 438.68(e)(1) to develop and enforce appointment wait time standards is a State responsibility; proposing this revision to § 438.206(c)(1)(i) would specify the corresponding managed care plan responsibility.
We propose to revise the existing applicability date in § 438.206(d) for Medicaid, which is applicable for separate CHIPs through an existing cross-reference at § 457.1230(a) and a proposed cross-reference at § 457.1200(d), to reflect that States would have to comply with § 438.206(c)(1)(i) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe this is a reasonable timeframe for compliance.
Current requirements at § 438.68(c)(1) and (2) for Medicaid, and through a cross-reference at § 457.1218 for separate CHIP, direct States to consider twelve elements when developing their network adequacy standards. We remind States that § 438.68(c)(1)(ix) includes the availability and use of telemedicine, e-visits, and/or other evolving and innovative technological solutions as an element that States must consider when developing their network adequacy standards. Services delivered via telehealth seek to improve a patient's health through two-way, real time interactive communication between the patient, and the provider. Services delivered in this manner can, for example, be used for assessment, diagnosis, intervention, consultation, and supervision across distances. Services can be delivered via telehealth across all populations served in Medicaid including, but not limited to children, individuals with disabilities, and older adults. States have broad flexibility to cover telehealth through Medicaid and CHIP, including the methods of communication (such as telephonic or video technology commonly available on smart phones and other devices) to use.
Current Medicaid regulations at § 438.68(e), and through a cross-reference at § 457.1218 for separate
At § 438.68(e)(2), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218, we propose that managed care plans would be deemed compliant with the standards established in paragraph (e)(1) when secret shopper results, described in section I.B.1.c. of this rule, reflect a rate of appointment availability that meets State established standards at least 90 percent of the time. By proposing a minimum compliance rate for appointment wait time standards, we would provide States with leverage to hold their managed care plans accountable for ensuring that their network providers offer timely appointments. Further, ensuring timely appointment access 90 percent of the time would be an important step toward helping States ensure that the needs of their Medicaid and CHIP populations are being met timely. As with any provision of part 438 and subpart L of part 457, we may require States to take corrective action to address noncompliance.
To ensure that appointment wait time standards would be an effective measure of network adequacy, we believe we need some flexibility to add provider types to address new access or capacity issues at the national level. Therefore, at § 438.68(e)(3), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218, we propose that CMS may select additional types of appointments to be added to § 438.68(e)(1) after consulting with States and other interested parties and providing public notice and opportunity to comment. From our experience with the COVID-19 PHE as well as multiple natural disasters in recent years, we believe it prudent to explicitly state that we may utilize this flexibility as we deem appropriate in the future.
We recognize that situations may arise when an MCO, PIHP, or PAHP may need an exception to the State established provider network standards, including appointment wait times. Section 438.68(d) currently provides that, to the extent a State permits an exception to any of the provider-specific network standards, the standard by which an exception would be evaluated and approved must be specified in the MCO, PIHP, or PAHP contract and must be based, at a minimum, on the number of providers in that specialty practicing in the MCO's, PIHP's, or PAHP's service area. We propose to make minor grammatical revisions to § 438.68(d)(1) by deleting “be” before the colon and inserting “be” as the first word of § 438.68(d)(1)(i) and (ii), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218. We also propose to add a new standard at § 438.68(d)(1)(iii) for Medicaid, and through an existing cross-reference at § 457.1218 for separate CHIP, for reviews of exception requests, which would require States to consider the payment rates offered by the MCO, PIHP, or PAHP to providers included in the provider group subject to the exception. Managed care plans sometimes have difficulty building networks that meet network adequacy standards due to low payment rates. We believe that States should consider whether this component is a contributing factor to a plan's inability to meet the standards required by § 438.68(b)(1) and (2) and (e), when determining whether a managed care plan should be granted an exception. We remind States of their obligation at § 438.68(d)(2) to monitor enrollee access on an ongoing basis to the provider types in managed care networks that operate under an exception and report their findings as part of the annual Medicaid MCPAR required at § 438.66(e).
Our proposal for States to develop and enforce appointment wait time standards proposed at § 438.68(e) and the accompanying secret shopper surveys of plan's compliance with them (described in section I.B.1.c. of this proposed rule) proposed at § 438.68(f) are authorized by section 1932(b)(5) of the Act, and is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act, and authorized for CHIP through section 2103(f)(3) of the Act. We believe that secret shopper surveys could provide unbiased, credible, and representative data on how often network providers are offering routine appointments within the State's appointment wait time standards and these data would aid managed care plans as they assess their networks, pursuant to § 438.207(b), and provide an assurance to States that their networks have the capacity to serve the expected enrollment in their service area and that it offers appropriate access to preventive and primary care services for their enrollees. States should find the results of the secret shopper surveys a rich source of information to assess compliance with the components of their quality strategy that address access to care and determine whether covered services are available within reasonable timeframes, as required in section 1932(c)(1)(A)(i) of the Act and required for CHIP through section 2103(f)(3) of the Act.
Section 1932(d)(5) of the Act requires that, no later than July 1, 2018, contracts with MCOs and PCCMs, as applicable, must include a provision that providers of services or persons terminated (as described in section 1902(kk)(8) of the Act) from participation under this title, title XVIII, or title XXI must be terminated from participating as a provider in any network. Although States have had to comply with this provision for several years, we believe we should reference this important provision in 42 CFR part 438, as well as use our authority under section 1902(a)(4) of the Act to apply it to PIHPs and PAHPs. To do this, we propose a new § 438.214(d)(2) to reflect that States must ensure through their MCO, PIHP, and PAHP contracts that providers of services or persons terminated (as described in section 1902(kk)(8) of the Act) from participation under this title, title XVIII, or title XXI must be terminated from participating as a provider in any Medicaid managed care plan network.
We propose that States would have to comply with § 438.68(b)(1), (e), and (g) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 3 years after the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We propose that States would have to comply with § 438.68(f) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule. We propose that States would have to comply with § 438 (d)(1)(iii) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 2
We recognize that in some States and for some services, Medicaid beneficiaries face significant gaps in access to care. Evidence suggests that in some localities and for some services, it takes Medicaid beneficiaries longer to access medical appointments compared to individuals with other types of health coverage.
To add a greater level of validity and accuracy to States' efforts to measure network adequacy and access, we propose to require States to use secret shopper surveys as part of their monitoring activities. Secret shopper surveys are a form of research that can provide high-quality data and actionable feedback to States and managed care plans and can be performed either as “secret” meaning the caller does not identify who they are performing the survey for or “revealed” meaning the caller identifies the entity for which they are performing the survey. While both types of surveys can produce useful results, we believe the best results are obtained when the survey is done as a secret shopper and the caller pretends to be an enrollee (or their representative) trying to schedule an appointment. Results from these surveys should be unbiased, credible, and reflect what it is truly like to be an enrollee trying to schedule an appointment, which is a perspective not usually provided by, for example, time and distance measures or provider-to-enrollee ratios. Many States and managed care plans currently use some type of survey to monitor access; however, we believe there should be some consistency to their use for Medicaid managed care programs to enable comparability.
To ensure consistency, we propose a new § 438.68(f), and propose to require that States use independent entities to conduct annual secret shopper surveys of managed care plan compliance with appointment wait time standards proposed at § 438.68(e) and the accuracy of certain data in all managed care plans' electronic provider directories required at § 438.10(h)(1). These proposed changes apply equally to separate CHIPs through existing cross-references at §§ 457.1218 and 457.1207. We believe that the entity that conducts these surveys must be independent of the State Medicaid or CHIP agency and its managed care plans subject to the survey to ensure unbiased results. Therefore, at § 438.68(f)(3)(i), we propose to consider an entity to be independent of the State if it is not part of the State Medicaid agency and, at § 438.68(f)(3)(ii), to consider an entity independent of a managed care plan subject to a secret shopper survey if the entity is not an MCO, PIHP, or PAHP; is not owned or controlled by any of the MCOs, PIHPs, or PAHPs subject to the surveys; and does not own or control any of the MCOs, PIHPs, or PAHPs subject to the surveys. Given the valuable data the proposed secret shopper surveys could provide States, we believe requiring the use of an independent entity to conduct the surveys would be critical to ensure unbiased results.
We also propose to require States to use secret shopper surveys to determine the accuracy of certain provider directory information in MCOs', PIHPs', and PAHPs' most current electronic provider directories at § 438.68(f)(1)(i). Since we believe that paper directory usage is dwindling due to the ever-increasing use of electronic devices and because electronic directory files are usually used to produce paper directories, we are not requiring secret shopper validation of paper directories. Rather, we propose in § 438.68(f)(1)(i)(A) through (C) to require surveys of electronic provider directory data for primary care providers, OB/GYN providers, and outpatient mental health and substance use disorder providers, if they are included in the managed care plan's provider directories. We are proposing these provider types because they are the provider types with the highest utilization in many Medicaid managed care programs.
To ensure that a secret shopper survey can be used to validate directory data for every managed care plan, we propose in § 438.68(f)(1)(i)(D) to require secret shopper surveys for provider directory data for the provider type selected by the State for its appointment wait time standards in § 438.68(e)(1)(iv). We recognize that the State-chosen provider type may vary across managed care plan types and thus, States may have to select multiple provider types to accommodate all of their managed care programs. For example, a State may select a provider type from their MCOs' directories that is not a provider type included in their mental health PIHP's directories; just as the State may select a provider type from their behavioral health PIHPs' directories that is not a provider type included in their dental PAHPs' directories. We note that the State-chosen provider type cannot vary among plans of the same type within the same managed care program. Although this degree of variation between States would limit comparability, we believe that the value of validating provider directory data outweighs this limitation and that having results for provider types that would be important to State specific access issues would be a rich source of data for States to evaluate managed care plan performance and require the impacted plan to implement timely remediation, if needed.
At § 438.68(f)(1)(ii)(A) through (D), we propose to require that States use
To maximize the value of using secret shopper surveys to validate provider directory data, identified errors must be corrected as quickly as possible. Therefore, at § 438.68(f)(1)(iii) and (iv) respectively, we propose that States must receive information on all provider directory data errors identified in secret shopper surveys no later than 3 business days from identification by the entity conducting the secret shopper survey and that States must then send that data to the applicable managed care plan within 3 business days of receipt. We also propose in § 438.68(f)(1)(iii) that the information sent to the State must be “sufficient to facilitate correction” to ensure that enough detail is provided to enable the managed care plans to quickly investigate the accuracy of the data and make necessary corrections. We note that States could delegate the function of forwarding the information to the managed care plans to the entity conducting the secret shopper surveys so that the State and managed care plans receive the information at the same time. This would hasten plans' receipt of the information as well as alleviate State burden. To ensure that managed care plans use the data to update their electronic directories, we propose at § 438.10(h)(3)(iii) to require MCOs, PIHPs, and PAHPs to use the information from secret shopper surveys required at § 438.68(f)(1) to obtain corrected information and update provider directories no later than the timeframes specified in § 438.10(h)(3)(i) and (ii), and included in separate CHIP regulations through an existing cross-reference at § 457.1207. While updating provider directory data after it has been counted as an error in secret shopper survey results would not change a managed care plan's compliance rate, it would improve provider directory accuracy more quickly and thus, improve access to care for enrollees.
To implement section 5123 of the Consolidated Appropriations Act of 2023,
Our proposals for a secret shopper survey of provider directory data proposed at § 438.68(f)(1) are authorized by section 1932(a)(5)(B)(i) of the Act for Medicaid and through section 2103(f)(3) of the Act for CHIP, which require each Medicaid MCO to make available the identity, locations, qualifications, and availability of health care providers that participate in their network. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. We propose that secret shopper surveys include verification of certain providers' active network status, street address, telephone number, and whether the provider is accepting new enrollees; these directory elements reflect the identity, location, and availability, as required for Medicaid in section 1932(a)(5)(B)(i) of the Act and required for CHIP through section 2103(f)(3) of the Act. Although the statute does not explicitly include “accurate” to describe “the identity, locations, qualifications, and availability of health care providers,” we believe it is the intent of the text and therefore, utilizing secret shopper surveys to identify errors in provider directories would help managed care plans ensure the accuracy of the information in their directories. Further, our proposal at § 438.10(h)(3)(iii) for managed care plans to use the data from secret shopper surveys to make timely corrections to their directories would also be consistent with statutory intent to reflect accurate identity, locations, qualifications, and availability information. Secret shopper survey results would provide vital information to help managed care plans fulfill their obligations to make the identity, locations, qualifications, and availability of health care providers that participate in the network available to enrollees and potential enrollees.
We believe using secret shopper surveys could also be a valuable tool to help States meet their enforcement obligations of appointment wait time standards, required in § 438.68(e). Secret shopper surveys are perhaps the most commonly used tool to assess health care appointment availability and can produce unbiased, actionable results. At § 438.68(f)(2), we propose to require States to determine each MCO's, PIHP's, and PAHP's rate of network compliance with the appointment wait time standards proposed in § 438.68(e)(1). We also propose in § 438.68(f)(2)(i) that, after consulting with States and other interested parties and providing public notice and opportunity to comment, we may select additional provider types to be added to secret shopper surveys of appointment wait time standards. We believe that after reviewing States' assurances of compliance and accompanying analyses of secret shopper survey results as proposed at § 438.207(d), and through an existing cross-reference at § 457.1230(b) for separate CHIP, we may propose additional provider types be subject to secret shopper surveys in future rulemaking.
In section I.B.1.b. of this proposed rule, we explained that States need to balance the use of telehealth with the availability of providers that can provide in-person care and enrollees' preferences for receiving care to ensure that they establish network adequacy standards under § 438.68(e) that accurately reflect the practical use of telehealth and in-person appointments in their State. To ensure that States reflect this, in § 438.68(f)(2)(ii), we propose that appointments offered via telehealth only be counted towards compliance with appointment wait time standards if the provider also offers in-person appointments and that telehealth visits offered during the secret shopper survey be separately identified in the survey results. We believe it would be appropriate to prohibit managed care plans from meeting appointment wait time standards with telehealth
Our proposal for secret shopper surveys of plans' compliance with appointment wait time standards proposed at § 438.68(f)(2) is authorized by section 1932(b)(5) of the Act for Medicaid and through section 2103(f)(3) of the Act for CHIP, because secret shopper surveys could provide unbiased, credible, and representative data on how often network providers are offering routine appointments within the State's appointment wait time standards. This data should aid managed care plans as they assess their networks, pursuant to § 438.207(b), and provide an assurance to States that their networks have the capacity to serve the expected enrollment in their service area. States should find the results of the secret shopper surveys a rich source of information to assess compliance with the components of their quality strategy that address access to care and determine whether covered services are available within reasonable timeframes, as required in section 1932(c)(1)(A)(i) of the Act for Medicaid and section 2103(f)(3) of the Act for CHIP.
It is critical that secret shopper survey results be obtained in an unbiased manner using professional techniques that ensure objectivity. To reflect this, we propose at § 438.68(f)(3) that any entity that conducts secret shopper surveys must be independent of the State Medicaid agency and its managed care plans subject to a secret shopper survey. In § 438.68(f)(3)(i) and (ii), we propose the criteria for an entity to be considered independent: Section 438.68(f)(3)(i) proposes that an entity cannot be a part of any State governmental agency to be independent of a State Medicaid agency and § 438.68(f)(3)(ii) proposes that to be independent of the managed care plans subject to the survey, an entity would not be an MCO, PIHP, or PAHP, would not be owned or controlled by any of the MCOs, PIHPs, or PAHPs subject to the surveys, and would not own or control any of the MCOs, PIHPs, or PAHPs subject to the surveys. We propose to define “independent” by using criteria that is similar, but not as restrictive, as the criteria used for independence of enrollment brokers and specified at § 438.810(b)(1). We believe this consistency in criteria would make it easier for States to evaluate the suitability of potential survey entities. We remind States that the optional EQR activity at § 438.358(c)(5) could be used to conduct the secret shopper surveys proposed at § 438.68(f) and for secret shopper surveys conducted for MCOs, States may be able to receive enhanced Federal financial participation (FFP), pursuant to § 438.370.
Secret shopper surveys can be conducted in many ways, using varying levels of complexity and gathering a wide range of information. We want to give States flexibility to design their secret shopper surveys to produce results that not only validate managed care plans' compliance with provider directory data accuracy as proposed at § 438.68(f)(1) and appointment wait time standards at § 438.68(f)(2), but also provide States the opportunity to collect other information that would assist them in their program monitoring activities and help them achieve programmatic goals. To provide this flexibility, we are proposing a limited number of methodological standards for the required secret shopper surveys. In § 438.68(f)(4), we propose that secret shopper surveys would have to be completed for a statistically valid sample of providers and: (1) use a random sample; and (2) include all areas of the State covered by the MCO's, PIHP's, or PAHP's contract. We believe these would be the most basic standards that all secret shopper surveys would have to meet to produce useful results that enable comparability between plans and among States. We propose in § 438.68(f)(4)(iii) that secret shopper surveys to determine plan compliance with appointment wait time standards would have to be completed for a statistically valid sample of providers to be clear that a secret shopper surveys must be administered to the number providers identified as statistically valid for each plan. To ensure consistency, equity, and context to the final compliance rate for each plan, we believe it would be important that inaccurate provider directory data not reduce the number of surveys administered. Therefore, as a practical matter, if the initial data provided by a State to the entity performing the survey does not permit surveys to be completed for a statistically valid sample, the State would need to provide additional data to enable completion of the survey for an entire statistically valid sample. We do not believe this provision would need to apply to secret shopper surveys of provider directory data proposed in paragraph (f)(1) since the identification of incorrect directory data is the intent of those surveys and should be reflected in a plan's compliance rate.
Because we believe secret shopper survey results can produce valuable data for States, managed care plans, enrollees and other interested parties, we propose at § 438.68(f)(5), that the results of these surveys would be reported to CMS and posted on the State's website. Specifically, at § 438.68(f)(5)(i), we propose that the results of the secret shopper surveys of provider directory data validation at § 438.68(f)(1) and appointment wait time standards at § 438.68(f)(2) would be reported to CMS annually using the content, form, and submission times proposed in § 438.207(d). At § 438.68(f)(5)(ii), we propose that States post the results on the State's website required at § 438.10(c)(3) within 30 calendar days of the State submitting them to CMS. We believe using the existing report required at § 438.207(d) would lessen burden on States, particularly since we published the Network Adequacy and Access Assurances Report template
We recognize that implementing secret shopper surveys would be a significant undertaking, especially for States not already using them; but we believe that the data produced by successful implementation of them would be a valuable addition to States' and CMS' oversight efforts. As always, technical assistance would be available to help States effectively implement and utilize secret shopper surveys. We invite comment on the type of technical assistance that would be most useful for States as well as States' best practices and lessons learned from using secret shopper surveys.
We also propose that States would have to comply with § 438.68(f) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule.
We believe there needs to be greater transparency in Medicaid and CHIP provider payment rates in order for States and CMS to monitor and mitigate payment-related access barriers. There is considerable evidence that Medicaid payment rates, on average, are lower than Medicare and commercial rates for the same services and that provider payment influences access, with low rates of payment limiting the network of providers willing to accept Medicaid patients, capacity of those providers who do participate in Medicaid, and investments in emerging technology among providers that serve large numbers of Medicaid beneficiaries. However, there is no standardized, comprehensive, cross-State comparative data source available to assess Medicaid and CHIP payment rates across clinical specialties, health plans, and States. Given that a critical component of building a managed care plan network is payment, low payment rates can harm access to care for Medicaid and CHIP enrollees in a number of ways. Evidence suggests that low Medicaid physician fees limit physicians' participation in the program, particularly for behavioral health and primary care providers.
We also believe that greater transparency and oversight is warranted as managed care payments have grown significantly as a share of total Medicaid payments; in FY 2021, the Federal government spent nearly $250 billion on payments to managed care plans.
To ensure comparability in managed care plans' payment analyses, we propose to require a payment analysis that managed care plans would submit to States per § 438.207(b)(3) and States would review and include in the assurance and analysis to CMS per § 438.207(d). Specifically, we propose to replace the periods at the end of § 438.207(b)(1) and (2) with semi-colons and add “and” after § 438.207(b)(2) to make clear that (b)(1) through (3) would all be required for Medicaid managed care, and for separate CHIP through an existing cross-reference at § 457.1230(b).
At § 438.207(b)(3) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose to require that MCOs, PIHPs, and PAHPs submit annual documentation to the State that demonstrates a payment analysis showing their level of payment for certain services, if covered by the managed care plan's contract. We
In § 438.207(b)(3)(i) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose to require that each MCO, PIHP, and PAHP would use paid claims data from the immediate prior rating period to determine the total amount paid for evaluation and management current procedural terminology (CPT) codes for primary care, OB/GYN, mental health, and SUD services. Due to the unique payment requirements in section 1902(bb) of the Act for Federally qualified health centers and rural health clinics, we propose in § 438.207(b)(3)(iv) to exclude these provider types from the analysis. We further propose that this analysis provide the percentage that results from dividing the total amount the managed care plan paid by the published Medicare payment rate for the same codes on the same claims. Meaning, the payment analysis would reflect the comparison of how much the managed care plan paid for the evaluation and managment CPT codes to the published Medicare payment rates including claim-specific factors such as provider type, geographic location where the service was rendered, and the site of service. In § 438.207(b)(3)(i)(A) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we also propose that the plans would include in the analysis separate total amounts paid and separate comparison percentages to Medicare for primary care, OB/GYN, mental health, and substance use disorder services for ease of analysis and clarity. Lastly in § 438.207(b)(3)(i)(B) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose that the percentages would have to be reported separately if they differ between adult and pediatric services. We believe the proposals in § 438.207(b)(3)(i)(A) and (B) would ensure sufficient detail in the data to enable more granular analysis across plans and States as well as to prevent some data from obscuring issues with other data. For example, if payments for adult primary care are significantly lower than pediatric primary care, providing separate totals and comparison percentages would prevent the pediatric data from artificially inflating the adult totals and percentages. We believe this level of detail would be necessary to prevent misinterpretation of the data.
We propose in § 438.207(b)(3)(ii) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), to require that the payment analysis provide the total amount paid for homemaker services, home health aide services, and personal care services and the percentage that results from dividing the total amount paid by the amount the State's Medicaid or CHIP FFS program would have paid for the same claims. We propose two differences between this analysis and the analysis in § 438.207(b)(3)(i): first, this analysis would use all codes for the services as there are no evaluation and management CPT codes for these LTSS; and second, we propose the comparison be to Medicaid or CHIP FFS payment rates, as applicable, due to the lack of comparable Medicare rates for these services. We propose these three services as we believe these have high impact to help keep enrollees safely in the community and avoid institutionalization. Again, we believe this analysis of payment rates would be important to provide States and CMS with information to assess the adequacy of payments to providers in managed care programs, particularly when enrollees have grievances with services approved in their care plans not being delivered or not delivered in the authorized quantity. We request comment on whether in-home habilitation provided to enrollees with IDD should be added to this analysis.
We believe that managed care plans could perform the analyses in § 438.207(b)(3)(i) and (ii) by: (1) Identifying paid claims in the prior rating period for each required service type; (2) identifying the appropriate codes and aggregating the payment amounts for the required service types; and (3) calculating the total amount that would be paid for the same codes on the claims at 100 percent of the appropriate published Medicare rate, or Medicaid/CHIP FFS rate for the analysis in § 438.207(b)(3)(ii), applicable on the date of service. For the aggregate percentage, divide the total amount paid (from 2. above) by the amount for the same claims at 100 percent of the appropriate published Medicare rate or Medicaid/CHIP FFS, as appropriate (from 3. above). We believe this analysis would require a manageable number of calculations using data readily available to managed care plans.
To ensure that the payment analysis proposed in paragraph (b)(3) is appropriate and meaningful, we propose at § 438.207(b)(3)(iii) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), to exclude payments for claims for the services in (b)(3)(i) for which the managed care plan is not the primary payer. A comparison to payment for cost sharing only or payment for a claim for which another payer paid a portion would provide little, if any, useful information.
The payment analysis proposed at § 438.207(b)(3) is authorized by sections 1932(c)(1)(A)(ii) and 2103(f)(3) of the Act, which requires States' quality strategies to include an examination of other aspects of care and service directly related to the improvement of quality of care. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. Because the proposed payment analysis would generate data on each managed care plan's payment levels for certain provider types as a percent of Medicare or Medicaid FFS rates, States could use the analysis in their examination of other aspects of care and service directly related to the improvement of quality of care, particularly access. Further, sections 1932(c)(1)(A)(iii) and 2103(f)(3) of the Act authorizes the proposals in this section as enabling States to compare payment data among managed care plans in their program could provide useful data to fulfill their obligations for monitoring and evaluating quality and appropriateness of care.
We also propose to revise § 438.207(f) to reflect that States would have to comply with § 438.207(b)(3) no later than the first rating period that begins on or after 2 years after the effective date
Currently at § 438.207(d), States are required to review the documentation submitted by their managed care plans, as required at § 438.207(b), and then submit to CMS an assurance of their managed care plans' compliance with §§ 438.68 and 438.206. To make States' assurances and analyses more comprehensive, we propose to revise § 438.207(d) to explicitly require States to include the results from the secret shopper surveys proposed in § 438.68(f) (see section I.B.1.c. of this proposed rule) and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b). We also propose to require States to include the payment analysis proposed in § 438.207(b)(3) (see section I.B.1.d. of this proposed rule) to their assurance and analyses reporting. Additionally, on July 6, 2022, we published a CIB
In § 438.207(d)(2) for Medicaid and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b), we propose that the States' analysis required in § 438.207(d)(1) must include the payment analysis required of plans in § 438.207(b)(3) and provide the elements specified in paragraphs (d)(2)(i) and (ii). Specifically, § 438.207(d)(2)(i) proposes to require States to include the data submitted by each plan and § 438.207(d)(2)(ii) proposes to require States to use the data from its plans' reported payment analysis percentages and weight them using the member months associated with the applicable rating period to produce a Statewide payment percentage for each service type. We believe these data elements would provide valuable new data to support States' assurances of network adequacy and access and we would revise the Network Adequacy and Access Assurances Report template published in July 2022 to add fields for States to easily report these data. We remind States that § 438.66(a) and (b) require States to have a monitoring system for all of their managed care programs and include all aspects, including the performance of their managed care plans in the areas of availability and accessibility of services, medical management, provider network management, and appeals and grievances. Accordingly, States should have ample data from their existing monitoring activities and which would be supplemented by the proposal requirements in this rule, to improve the performance of their managed care programs for all covered services, as required in § 438.66(c). Because concerns around access to primary care, mental health, and SUD services have been raised nationally, we expect States to review and analyze their plans' data holistically to provide a robust, comprehensive analysis of the adequacy of each plan's network and level of realistic access and take timely action to address deficiencies.
Section 438.207(d) was codified in 2002 (67 FR 41010) as part of the implementing regulations for section 1932(b)(5) of the Act “Demonstration of Adequate Capacity and Services.” In the 2016 final rule, we made minor revisions to the language but did not address the timing of States' submission of their assurance and analysis. Given the July 2022 release of the Network Adequacy and Access Assurances Report template for the assurance and analysis, we believe it would be appropriate to clarify this important aspect of the reporting requirement. To simplify the submission process and enable States and CMS to allot resources most efficiently, we propose to establish submission times in § 438.207(d)(3)(i) through (iii) that correspond to the times for managed care plans to submit documentation to the State in § 438.207(c)(1) through (3). Specifically for Medicaid, we propose that States submit their assurance and analysis at § 438.207(d)(3): (1) at the time it submits a completed readiness review, as specified at § 438.66(d)(1)(iii); (2) on an annual basis and no later than 180 calendar days after the end of each contract year; and (3) any time there has been a significant change as specified in § 438.207(c)(3) and with the submission of the associated contract. We also propose in § 438.207(d)(3) that States must post the report required in § 438.207(d) on their website within 30 calendar days of submission to CMS. We believe the information in this report would be important information for interested parties to have access to on a timely basis and 30 calendar days seems adequate for States to post the report after submitting.
Since we did not adopt the MCPAR requirements for separate CHIP managed care in the 2016 final rule, we are also not adopting the proposed submission timeframe at § 438.207(d)(3)(i). However, we propose for separate CHIPs to align with Medicaid for the proposed network adequacy analysis submission timeframes at § 438.207(d)(3)(ii) and (iii) through the existing cross-reference at § 457.1230(b).
In § 438.207(e), we propose a conforming revision to add a reference to the secret shopper evaluations proposed at § 438.68(f) as part of the documentation that States must make available to CMS, upon request, and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b). We believe this would be necessary as the current text of § 438.207(e) only addresses the documentation provided by the managed care plans.
Sections 1932(b)(5) and 2103(f)(3) of the Act require Medicaid and CHIP MCOs to demonstrate adequate capacity and services by providing assurances to the State and CMS, as specified by the Secretary, that it has the capacity to serve the expected enrollment in its service area, including assurances that it offers an appropriate range of services and access to preventive and primary care services for the population expected to be enrolled in such service area, and maintains a sufficient number, mix, and geographic distribution of providers of services. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. Our proposals to require States to include the secret shopper surveys proposed in § 438.68(f) as well as the reimbursment analysis proposed in § 438.207(b)(3) to their assurance and analyses reporting proposed at § 438.207(d) are authorized by section 1932(b)(5) of the Act for Medicaid and
We also propose to revise § 438.207(g) to reflect that States would have to comply with paragraph (d)(2) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule and paragraph (d)(3) no later than the first managed care plan rating period that begins on or after 1 year after the effective date of the final rule. We propose that States would not be held out of compliance with the requirements of paragraphs (e) of this section prior to the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule, so long as they comply with the corresponding standard(s) codified in paragraph (e) contained in the 42 CFR, parts 430 to 481, most recently published before the final rule. We propose that States would have to comply with paragraph (f) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe these are reasonable timeframes for compliance given the level of new burden imposed by each.
For FFS programs, we rely on § 447.203(b)(8) to require States to submit corrective action plans when access to care issues are identified. Because of the numerous proposals in this rule that would strengthen States' monitoring and enforcement of access requirements and the importance of timely remediation of access issues, we believe we should have a similar process set forth in part 438 for managed care programs. In § 438.68(e), we propose a process that would require States to carefully develop and enforce their managed care plans' use of appointment wait time standards to ensure access to care for Medicaid managed care enrollees. As proposed in a new § 438.207(f), when the State, MCO, PIHP, PAHP, or CMS identifies any access issues, including any access issues with the standards specified in §§ 438.68 and 438.206, the State would be required to submit a plan to remedy the access issues consistent with this proposal. If we determine that an access issue revealed under monitoring and enforcement rises to the level of a violation of access requirements under section 1932(c)(1)(A)(i) of the Act, as incorporated in section 1903(m)(2)(A)(xii) of the Act, we have the authority to disallow Federal financial participation (FFP) for the payments made under the State's managed care contract for failure to ensure adequate access to care. We intend to closely monitor any State remedy plans that would be needed under this proposal to ensure that both us and States would adequately and appropriately address emerging access issues in Medicaid managed care programs. Using § 447.203(b)(8) as a foundation, we propose to redesignate existing § 438.207(f) as § 438.207(g) and propose a new requirement for States to submit remedy plans in new § 438.207(f), titled Remedy plans
We propose in § 438.207(f)(1)(iii) to require States to ensure that improvements in access are measurable and sustainable. We believe it would be critical that the remedy plan produce measurable results in order to monitor progress and, ultimately, bring about the desired improvements in access under the managed care plan. We also propose that the improvements in access achieved by the actions be sustainable so that enrollees would be able to continue receiving the improved access to care and managed care plans would continue to ensure its provision. In paragraph (f)(1)(iv) of this section, we propose that States submit quarterly progress updates to CMS on implementation of the remedy plan so that we would be able to determine if the State was making reasonable progress toward completion and that the actions in the plan are effective. Not properly monitoring progress of the remedy plan could significantly lessen the effectiveness of it and allow missed opportunities to make timely revisions and corrections.
Lastly, in paragraph (f)(2) of this section we propose that if the remedy plan required in paragraph (f)(1) of this section does not address the managed care plan's access issue within 12 months, we may require the State to continue to take steps to address the
These proposals are authorized by section 1902(a)(4)(A) of the Act, which provides for methods of administration found necessary by the Secretary for the proper and efficient operation of the plan as we believe States taking timely action to address identified access issues is fundamental and necessary to the operation of an effective and efficient Medicaid program. The proposal for States to submit quarterly progress reports is authorized by section 1902(a)(6) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require. Lastly, we believe these proposals are also authorized by section 1932(c)(1)(A)(i) and (iii) of the Act which require States that contract with MCOs to develop and implement a quality assessment and improvement strategy that includes (and extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act): standards for access to care so that covered services are available within reasonable timeframes and in a manner that ensures continuity of care and adequate primary care and specialized services capacity and procedures for monitoring and evaluating the quality and appropriateness of care and services to enrollees and requirements for provision of quality assurance data to the State. Implementing timely actions to address managed care plan access issues would be an integral operational component of a State's quality assessment and improvement strategy.
In the 2016 final rule, we finalized § 438.10(c)(3) for Medicaid, which is included in separate CHIP regulations through cross-reference at § 457.1207, which required States to operate a website that provides specific information, either directly or by linking to individual MCO, PIHP, PAHP, or PCCM entity websites. A State's website may be the single most important resource for information about its Medicaid program and there are multiple requirements for information to be posted on a State's website throughout 42 CFR part 438. Current regulations at § 438.10(c)(6)(ii) require certain information to be “prominent and readily accessible” and § 438.10(a) defines “readily accessible” as “electronic information and services which comply with modern accessibility standards such as section 508 guidelines, section 504 of the Rehabilitation Act, and W3C's Web Content Accessibility Guidelines (WCAG) 2.0 AA and successor versions.” Despite these requirements, we have received input from numerous and varied interested parties since the 2016 final rule about how challenging it can be to locate regulatorily required information on some States' websites.
There is variation in how “user-friendly” States' websites are, with some States making navigation on their website fairly easy and providing information and links that are readily available and presenting required information on one page. However, we have not found this to be the case for most States. Some States have the required information scattered on multiple pages that requires users to click on many links to locate the information they seek. While such websites may meet the current minimum standards in part 438, they do not meet our intent of providing one place for interested parties to look for all required information. Therefore, we believe revisions are necessary to ensure that all States' websites required by § 438.10(c)(3) provide a consistent and easy user experience. We acknowledge that building websites is a complex and costly endeavor that requires consideration of many factors, but we believe that States and managed care plans share an obligation to build websites that quickly and easily meet the needs of interested parties without undue obstacles. We note that State and managed care plan websites must be compliant with civil rights laws, including the Americans with Disabilities Act (ADA), section 504 of the Rehabilibation Act, Title VI of the Civil Rights Act of 1964, and section 1557 of the Affordable Care Act. In this proposed rule, we believe that there are several minimal qualities that all websites should include, such as being able to:
• Function quickly and as expected by the user;
• Produce accurate results;
• Use minimal, logical navigation steps;
• Use words and labels that users are familiar with for searches;
• Allow access, when possible, without conditions such as establishment of a user account or password;
• Provide reasonably comparable performance on computers and mobile devices;
• Provide easy access to assistance via chat; and
• Provide multilingual content for individuals with LEP.
We also believe that States and managed care plans should utilize web analytics to track website utilization and inform design changes. States should create a dashboard to regularly quantify website traffic, reach, engagement, sticking points, and audience characteristics. Given the critical role that websites fill in providing necessary and desired program information, we believe proposing additional requirements on States' websites are appropriate.
We acknowledge that States and managed care plans may have information accessible through their websites that is not public facing; for example, enrollee specific protected health information. Proper security mechanisms should continue to be utilized to prevent unauthorized access to non-public facing information, such as the establishment of a user account and password or entry of other credentials. Data security must always be a priority for States and managed care plans and the proposals in § 438.10(c)(3) in no way diminish that obligation for States.
To increase the effectiveness of States' websites and add some consistency to website users' experence, we propose in § 438.10(c)(3) to revise “websites” to “web pages” in the reference to managed care plans. We propose this change to clarify that if States provide required content on their website by linking to individual MCO, PIHP, PAHP, or PCCM entity websites, the link on the State's site would have to be to the specific page that includes the requested information. We believe this would prevent States from showing links to a landing page for the managed care plan that then leaves the user to start searching for the specific information needed. Next, we propose to add “States must:” to paragraph (c)(3) before the items specified in new (c)(3)(i) through (iv). In § 438.10(c)(3)(i), we propose to require that all information, or links to the information, required in this part to be posted on the State's website, be available from one page. We believe that when website users have to do repeated searches or click through multiple pages to find information, they are more likely to give up trying to locate it. As such, we have carefully chosen the information that is required in 42 CFR part 438 to be posted on States' websites to ensure effective
At § 438.10(c)(3)(ii), we propose to require that States' websites use clear and easy to understand labels on documents and links so that users can easily identify the information contained in them. We believe that using terminology and the reading grade level consistent with that used in other enrollee materials, such as handbooks and notices, would make the website more familiar and easy to read for enrollees and potential enrollees. Similar to having all information on one page, using clear labeling would reduce the likelihood of users having to make unncessary clicks as they search for specific information.
In § 438.10(c)(3)(iii), we propose to require that States check their websites at least quarterly to verify that they are functioning as expected and that the information is the most currently available. Malfunctioning websites or broken links can often render a website completely ineffective, so monitoring a website's performance and content is paramount. While we are proposing that a State's website be checked for functionality and information timeliness no less than quarterly, we believe this is a minimum standard and that States should implement continual monitoring processes to ensure the accuracy of their website's performance and content.
Lastly, in § 438.10(c)(3)(iv), to enable maximum effectiveness of States' websites, we propose to require that States' websites explain that assistance in accessing the information is available at no cost to them, including information on the availability of oral interpretation in all languages and written translation in each prevalent non-English language, alternate formats, auxiliary aids and services, and a toll-free TTY/TDY telephone number. This proposal is consistent with existing information requirements in § 438.10(d) and section 1557 of the Affordable Care Act. Clear provision of this information would help to ensure that all users have access to States' websites and can obtain assistance when needed.
The Medicaid managed care website transparency revisions proposed at § 438.10(c)(3)(i) through (iv) would apply to separate CHIP through the existing cross-reference at § 457.1207.
To help States monitor their website for required content, we propose to revise § 438.602(g) to contain a more complete list of information. While we believe the list proposed in § 438.602(g) would help States verify their website's compliance, we clarify that a requirement to post materials on a State's website in 42 CFR part 438 or any other Federal regulation but omitted from § 438.602(g), is still in full force and effect. Further, requirements on States to post specific information on their websites intentionally remain throughout 42 CFR part 438 and are not replaced, modified, or superceded by the items proposed in § 438.602(g)(5) through (12). Currently § 438.602(g) specifies four types of information that States must post on their websites; we propose to add nine more as (g)(5) through (g)(13): (5) enrollee handbooks, provider directories, and formularies required at § 438.10(g), (h), and (i); (6) information on rate ranges required at § 438.4(c)(2)(iv); (7) reports required at §§ 438.66(e) and 438.207(d); (8) network adequacy standards required at § 438.68(b)(1) and (2), and (e); (9) secret shopper survey results required at § 438.68(f); (10) State directed payment evaluation reports required in § 438.6(c)(2)(v)(C); (11) links to all required Application Programming Interfaces including as specified in § 431.60(d) and (f); (12) quality related information required in §§ 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i); and (13) documentation of compliance with requirements in subpart K—Parity in Mental Health and Substance Use Disorder Benefits. Although we are proposing to itemize these nine types of information in § 438.602(g)(5) through (13), we note that all but the following three are currently required to be posted on States' websites: the report at § 438.207(d), secret shopper survey results at § 438.68(f), and State directed payment evaluation reports at § 438.6(c)(2)(v)(C). Lastly, in § 438.10(c)(3), we propose to make the list of website content more complete by removing the current references to paragraphs (g) through (i) only and including a reference to § 438.602(g) and “elsewhere in this part.”
We propose to revise § 438.10(j) to reflect that States would have to comply with § 438.10(c)(3) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule and that States would have to comply with § 438.10(d)(2) no later than the first managed care plan rating period that begins on or after 3 years after the effective date of the final rule. Lastly, we propose that States must comply with § 438.10(h)(3)(iii) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe these proposed compliance dates would provide reasonable time for compliance given the varying levels of State and managed care plan burden.
We propose to add § 438.602(j) to require States to comply with § 438.602(g)(5) through (13) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule. We believe this is a reasonable timeframe for compliance.
For separate CHIP managed care, we currently require States to comply with the transparency requirements at § 438.602(g) through an existing cross-reference at § 457.1285. We propose to align with Medicaid in adopting most of the consolidated requirements for posting on a State's website proposed at § 438.602(g)(5) through (13) for separate CHIP.
We propose to adopt the provision at § 438.602(g)(5) (which specifies that States must post enrollee handbooks, provider directories, and formularies on the State's website) because requirements at § 438.10(g) through (i) are currently required for separate CHIP through an existing cross-reference at § 457.1207.
We do not plan to adopt the provision at § 438.602(g)(6) (which requires that States must post information on rate ranges on their websites) because we do not regularly review rates for separate CHIP.
We propose to adopt the provision at § 438.602(g)(7) (which specifies that States must post their assurances of network adequacy on the State's website) since the proposed network adequacy reporting at § 438.207(d) would apply to separate CHIP through an existing cross-reference at § 457.1230(b) (see section I.B.1.e. of this proposed rule). Since we did not adopt the managed care program annual reporting requirements at § 438.66(e) for separate CHIP, we propose to exclude this reporting requirement at § 457.1230(b).
We propose to adopt the provision at § 438.602(g)(8) (which requires State network adequacy standards to be posted on the State's website) for separate CHIP because we propose to adopt the new appointment wait time reporting requirements through an existing cross-reference at § 457.1230(b) (see section I.B.1.e. of this proposed rule), though we propose to exclude references to LTSS as not applicable to separate CHIP.
We propose to adopt the provision at § 438.602(g)(9) (which specifies that States must post secret shopper survey results on the State's website) for separate CHIP network access reporting to align with our proposed adoption of
We do not propose to adopt the provision at § 438.602(g)(10) (which directs States to post SDP evaluation reports on the State's website) because State directed payments are not applicable to separate CHIP.
We propose to adopt the provision at § 438.602(g)(11) (which specifies that States must post required information for Application Programming Interfaces on the State's website) given the existing requirements at § 457.1233(d).
We propose to adopt the provision at § 438.602(g)(12) (which requires States to post quality-related information on the State's website) for separate CHIP as required through cross-references at § 457.1240(c) and (e), as well as the applicable EQR report through a cross-reference at § 457.1250(a). However, we propose to exclude the reference to § 438.362(c) since MCO EQR exclusion is not applicable to separate CHIP.
We propose to adopt the provision at § 438.602(g)(13) (which requires States to post documentation of compliance with parity in mental health and substance use disorder benefits on the State's website) for separate CHIP through the existing cross-reference at § 457.1285. However, we propose to replace the reference to subpart K of part 438 with CHIP parity requirements at § 457.496 in alignment with contract requirements at § 457.1201(l).
We propose to amend § 457.1285 to state, the State must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438 of this chapter, except that the terms of §§ 438.66(e), 438.362(c), 438.602(g)(6) and (10), 438.604(a)(2) and 438.608(d)(4) and references to LTSS of this chapter do not apply and that references to subpart K under part 438 should be read to refer to parity requirements at § 457.496.
Our proposals for requirements for States' websites at § 438.10(c)(3) and the list proposed in § 438.602(g) are authorized by sections 1932(a)(5)(A) and 2103(f)(3) of the Act for Medicaid and which require each State, enrollment broker, or managed care entity to provide all enrollment notices and informational and instructional materials in a manner and form which may be easily understood by enrollees and potential enrollees. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. We believe that our proposals would make States' websites easier to use by incorporating easily understood labels, having all information accessible from one page, verifying the accurate functioning of the site, and clearly explaining the availability of assistance—all of which would directly help States fulfill their obligation to provide informational materials in a manner and form which may be easily understood.
Throughout 42 CFR part 438, we use “behavioral health” to mean mental health and SUD. However, it is an imprecise term that does not capture the full array of conditions that are intended to be included, and some in the SUD treatment community have raised concerns with its use. It is important to use clear, unambiguous terms in regulatory text. Therefore, we propose to change “behavioral health” throughout 42 CFR part 438 as described here. In the definition of PCCM entity at § 438.2 and for the provider types that must be included in provider directories at § 438.10(h)(2)(iv), we propose to replace “behavioral health” with “mental health and substance use disorder;” for the provider types for which network adequacy standards must be developed in § 438.68(b)(1)(iii), we propose to remove “behavioral health” and the parentheses; and for the provider types addressed in credentialing policies at § 438.214(b), we propose to replace “behavioral” with “mental health.” We also propose in the definition of PCCM entity at § 438.2 to replace the slash between “health systems” and “providers” with “and” for grammatical accuracy.
Similarly, we also propose to change “psychiatric” to “mental health” in § 438.3(e)(2)(v) and § 438.6(e). We believe that “psychiatric” does not capture the full array of services that can be provided by IMDs.
These proposals are authorized by section 1902(a)(4)(A) of the Act, which provides for methods of administration found necessary by the Secretary for the proper and efficient operation of the plan, because use of clear, unambiguous terms in regulatory text is imperative for proper and efficient operation of the plan.
Section 1903(m)(2)(A) of the Act requires contracts between States and MCOs to provide payment under a risk-based contract for services and associated administrative costs that are actuarially sound. CMS has historically used our authority under section 1902(a)(4) of the Act to apply the same requirements to contracts between States and PIHPs or PAHPs. Under risk-based managed care arrangements with the State, Medicaid managed care plans have the responsibility to negotiate payment rates with providers. Subject to certain exceptions, States are generally not permitted to direct the expenditures of a Medicaid managed care plan under the contract between the State and the plan or to make payments to providers for services covered under the contract between the State and the plan (§§ 438.6 and 438.60, respectively). However, there are circumstances in which a State may believe that requiring managed care plans to make specified payments to health care providers is an important tool in furthering the State's overall Medicaid program goals and objectives; for example, funding to ensure certain minimum payments are made to safety net providers to ensure access to care, funding to enhance behavioral health care providers as mandated by State legislative directives, or funding for quality payments to ensure providers are appropriately rewarded for meeting certain program goals. Because this type of State direction reduces the plan's ability to effectively manage costs, CMS, in the 2016 final rule, established specific exceptions to the general rule prohibiting States from directing the expenditures of MCOs, PIHPs and PAHPs at § 438.6(c)(1)(i) through (iii). These exceptions came to be known as State directed payments (SDPs).
The current regulations at § 438.6(c) specify the parameters for how and when States may direct the expenditures of their Medicaid managed care plans and the associated requirements and prohibitions on such arrangements. Permissible SDPs include directives that certain providers of the managed care plan participate in value-based purchasing (VBP) models, that certain providers participate in multi-payer or Medicaid-specific delivery system reform or performance improvement initiatives, or that the managed care organization adhere to certain fee schedule requirements (for example, minimum fee schedules, maximum fee schedules, and uniform dollar or percentage increases). Among other requirements, § 438.6(c) requires SDPs to be based on the utilization and delivery of services under the managed care contract and expected to advance at least one of the objectives in the State's managed care quality strategy.
All SDPs must be included in all applicable managed care contract(s) and described in all applicable rate certification(s) as noted in § 438.7(b)(6).
Each SDP preprint submitted to CMS is reviewed by a Federal review team to ensure that the payments comply with the regulatory requirements in § 438.6(c) and other applicable law. The Federal review team consists of subject matter experts from various components and groups within CMS, which regularly include those representing managed care policy and operations, quality, and actuarial science. Over time, these reviews have expanded to include subject matter experts on financing of the non-Federal share and demonstration authorities when needed. The CMS Federal review team works diligently to ensure a timely review and that standard operating procedures are followed for a consistent and thorough review of each preprint. Most preprints are reviewed on an annual basis; SDPs that are for VBP arrangements, delivery system reform, or performance improvement initiatives and that meet additional criteria in the Federal regulations are eligible for multi-year approval.
CMS has issued guidance to States regarding SDPs on multiple occasions. In November 2017, CMS published the initial preprint form
Since § 438.6(c) was issued in the 2016 final rule, States have requested approval for an increasing number of SDPs. The scope, size, and complexity of the SDP arrangements submitted by States for approval has also grown steadily and quickly. In calendar year 2017, CMS received 36 preprints for our review and approval from 15 States. In contrast, in calendar year 2021, CMS received 223 preprints from 39 States. For calendar year 2022, CMS received 298 preprints from States. In total, as of December 2022, CMS has reviewed more than 1,100 SDP proposals and approved 993 proposals since the 2016 final rule was issued.
SDPs also represent a notable amount of spending. The Medicaid and CHIP Payment and Access Commission (MACPAC) reported that CMS approved SDP arrangements in 37 States, with spending exceeding more than $25 billion in 2020.
As the volume of SDP preprint submissions and total dollars flowing through SDPs continues to increase, CMS recognizes the importance of ensuring that SDPs are contributing to Medicaid quality goals and objectives as part of our review process, as well as ensuring that SDPs are developed and implemented with appropriate fiscal and program integrity guardrails. The proposed changes in this notice of proposed rulemaking are intended to ensure the following policy goals:
(1) Medicaid managed care enrollees receive access to high-quality care under SDP payment arrangements;
(2) SDPs are appropriately linked to Medicaid quality goals and objectives for the providers participating in the SDP payment arrangements; and
(3) CMS and States have the appropriate fiscal and program integrity guardrails in place to strengthen the accountability and transparency of SDP payment arrangements.
We are issuing this proposal based on our authority to interpret and implement section 1903(m)(2)(A)(iii) of the Act, which requires contracts between States and MCOs to provide
We did not adopt the Medicaid managed care SDP requirements described at § 438.6 in the 2016 final rule for separate CHIPs because there was no statutory requirement to do so and we wished to limit the scope of new regulations and administrative burden on separate CHIP managed care plans. For similar reasons, we are not proposing to adopt the new Medicaid managed care SDP requirements proposed at §§ 438.6 and 438.7 for separate CHIPs.
We are proposing to define State directed payments as a contract arrangement that directs an MCO's, PIHP's, or PAHP's expenditures under paragraphs (c)(1)(i) through (iii) of this section. We are proposing this definition as it is currently used by States and CMS in standard interactions as well as in published guidance to describe these contract requirements. Defining this term also improves the readability of the related regulations. We have also proposed to rename the header for this section to “
In addition, we are proposing several revisions to § 438.6 to further specify and add to the existing requirements and standards for SDPs. First, we are proposing revisions, including: expanding the scope of § 438.6(c) consistent with recent guidance; exempting SDPs that establish payment rate minimums at 100 percent of the Medicare rate from written prior approval; incorporating SDPs for non-network providers in certain circumstances; setting new procedures and timeframes for the submission of SDPs and related documentation; codifying and further specifying standards and documentation requirements on total payment rates; further specifying and strengthening existing requirements related to financing as well as the connection to the utilization and delivery of services; updating and providing flexibilities for States to pursue VBP through managed care; strengthening evaluation requirements and other areas; and addressing how SDPs are incorporated into capitation rates or reflected in separate payment terms. The proposed regulatory provisions include both new substantive standards and new documentation and contract term requirements. In addition, we are proposing a new appeal process for States that are dissatisfied with CMS's determination related to a specific SDP preprint and new oversight and monitoring standards. In recognition of the scope of changes we are proposing, some of which will require significant time for States to implement, we are proposing a series of applicability dates over a roughly 5-year period for compliance. These applicability dates are discussed later in section I.B.2.p. of this proposed rule.
We solicit feedback on our proposals.
A more detailed outline of the remaining parts of this section is provided below:
Under § 438.6(c), States are not permitted to direct the expenditures of a Medicaid managed care plan under the contract between the State and the plan unless it is an SDP that complies with § 438.6(c), is permissible in a specific provision under Title XIX, is permissible through an implementing regulation of a Title XIX provision related to payments to providers, or is a permissible pass-through payment that meets requirements in § 438.6(d). States are also not permitted to make payments directly to providers for services covered under the contract between the State and a managed care plan as specified in § 438.60.
In our November 2017 CMCS Informational Bulletin (CIB) entitled “Delivery System and Provider Payment Initiatives under Medicaid Managed Care Contracts,” we noted instances where States may include general contract requirements for provider payments that would not be subject to approval under § 438.6(c) as long as the State was not mandating a specific payment methodology or amounts under the contract.
The other scenario described the State contractually implementing a general requirement for Medicaid managed care plans to increase provider payment for covered services provided to Medicaid enrollees covered under the contract, where the State did not mandate a specific payment methodology or amount(s) and managed care plans retain the discretion for the amount, timing, and mechanism for making such provider payments. At the time, we believed that these areas of flexibility for the plan would be sufficient to exclude the State's contract requirement from the scope of § 438.6(c). However, as we have continued to review managed care contracts and rate certifications since November 2017, we have grown increasingly concerned that excluding the latter type of vague contractual requirement for increased provider payment from the requirements of § 438.6(c) created an unintended loophole in regulatory oversight, presenting a significant program integrity risk. For example, some States include general contract requirements for significant increases to provider payments that require the State to add money to the capitation rates paid to the managed care plans as part of rate development for a specific service (for example, hospital services) but without any further accountability to ensure that the additional funding included in the capitation payments is paid to providers for a specific service or benefit provided to a specific enrollee covered under the contract. While this is similar to the definition of pass-through payment in § 438.6(a), these contractual requirements do not meet all of the other requirements in § 438.6(d) to be permissible pass-through payments. We commonly refer to these types of contractual arrangements as “grey area payments” as they do not completely comply with § 438.6(c) nor § 438.6(d).
Upon reflection and based on our experience since the 2017 CIB, we concluded that general contractual requirements to increase provider payment rates circumvent the intent of the 2016 final rule and the subsequent 2017 Pass-Through Payment Final Rule to improve the fiscal integrity of the program and ensure the actuarial soundness of all capitation rates.
In January 2021, we published SMDL #21-001,
In § 438.6(c), States are permitted to direct managed care plans' expenditures under the contract as specified in § 438.6(c)(1)(i) through (iii), subject to written prior approval based on complying with the requirements in § 438.6(c)(2). In the preamble to the 2020 final rule, we noted our observation that a significant number of proposals submitted by States for review under § 438.6(c)(2) required managed care plans to adopt minimum fee schedules specified under an approved methodology in the Medicaid State plan. In response, we adopted several revisions to § 438.6(c) in the 2020 final rule.
This piece of the 2020 final rule was, in part, intended to eliminate unnecessary and duplicative review processes in an effort to promote efficient and effective administration of the Medicaid program. This rule improved States' efforts to timely implement certain SDP arrangements that meet their local goals and objectives without drawing upon State staff time unnecessarily. We continue to believe exempting payment arrangements based on an approved State plan rate methodology from written prior approval does not increase program integrity risk or create a lack of Federal oversight. We continue to review the corresponding managed care contracts and rate certifications which include these SDPs. The State plan review and approval process ensures that Medicaid State plan approved rates are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan, at least to the extent that such care and services are available to the general population in the geographic area, as required under section 1902(a)(30) of the Act.
As we have continued to review and approve SDPs since the 2020 final rule, we believe this same rationale applies to SDPs that adopt a minimum fee schedule using Medicare approved rates for providers that provide a particular service under the contract. Medicare rates are developed under Title XVIII of the Act and there are annual rulemakings associated with Medicare payment for benefits available under Parts A and B in the Medicare Fee-for-Service (FFS) program. Additionally, section 1852(a)(2) of the Act provides that Medicare Advantage plans pay out-of-network providers at least the amount payable under FFS Medicare for benefits available under Parts A and B, taking into account cost sharing and permitted balance billing.
Consistent with how we have considered State plan rates to be reasonable, appropriate, and attainable under §§ 438.4 and 438.5, Medicare approved rates too meet this same threshold. Therefore, we are proposing to exempt SDPs that adopt a minimum fee schedule based on total published Medicare payment rates from written prior approval as it would be unnecessary and duplicative. We propose to amend § 438.6(c) to provide specifically for SDPs that require use of a minimum fee schedule using FFS Medicare payment rates.
First, we propose to add a new definition to § 438.6(a) for “total published Medicare payment rate” as amounts calculated as payment for specific services that have been developed under Title XVIII Part A and Part B. We propose to re-designate the existing § 438.6(c)(1)(iii)(B) through (D) as § 438.6(c)(1)(iii)(C) through (E), respectively, and add a new § 438.6(c)(1)(iii)(B) explicitly recognizing SDP arrangements that are a minimum fee schedule using a total published Medicare payment rate in effect no more than 3 years prior to the start of the rating period as a permissible type of SDP. We are also proposing to revise proposed re-designated paragraph (c)(1)(iii)(C) to take into account the proposed new category of SDPs that use one or more total published Medicare payment rates. As part of the proposals for paragraphs (c)(1)(iii)(A) through (E), we also propose to streamline the existing regulation text to eliminate the phase “as defined in paragraph (a)” as unnecessary; we expect that interested parties and others who read these regulations will read them completely and recognize when defined terms are used.
We also propose to restructure § 438.6(c)(2) and amend its paragraph heading to
Our proposal to exempt certain SDPs from written prior approval from CMS is specific to SDPs that require the Medicaid managed care plan to use a minimum fee schedule that is equal 100 percent of the total published Medicare payment rate. SDP arrangements that use a different percentage (whether higher or lower than 100 percent) of a total published Medicare payment rate as the minimum payment amount or are simply based off of an incomplete total published Medicare payment rate would be included in the SDPs described in paragraph (c)(1)(iii)(C). Our review of SDPs includes ensuring that they will result in provider payments that are reasonable, appropriate, and attainable, and will not negatively impact access to care. Accordingly, we believe that SDPs that propose provider payment rates that are incomplete or either above or below 100 percent of total published Medicare payment rates may not always meet these criteria and thus, should remain subject to written prior approval by CMS.
We are also not proposing to remove the written prior approval requirement for SDPs for provider rates tied to a Medicare fee schedule in effect more than 3 years prior to the start of the rating period. This is reflected in our proposed revision to redesignated paragraph (c)(1)(iii)(C) to describe fee schedules for providers that provide a particular service under the contract using rates other than the State plan approved rates or one or more total published Medicare payment rates described in proposed new paragraph (c)(1)(iii)(B). We propose the limit of 3 years to be consistent with how § 438.5(c)(2) requires use of data that is at least that recent for rate development. Our review of SDPs includes ensuring that they will result in provider payments that are reasonable, appropriate, and attainable, and will not negatively impact access to care. Accordingly, we believe that SDPs that propose provider payment rates tied to a total published Medicare payment rate in effect more than 3 years prior to the start of the rating period may not always meet these criteria and thus, should remain subject to written prior approval by CMS.
We solicit public comments on our proposal to specifically address SDPs
We are also proposing to add new § 438.6(c)(5) (with the paragraph heading
The managed care contract would also need to identify the time period for which the Medicare fee schedule is in effect as well as the rating period for which it is used for the SDP. Consistent with § 438.6(c)(1)(iii)(B), the Medicare fee schedule must be in effect no more than 3 years prior to the start of the rating period for the services provided in the arrangement. This 3-year requirement is similar to § 438.5 rate setting, under which data that the actuary relies upon must be from the 3 most recent years that have been completed, prior to the rating period for which rates are being developed. For example, should a State seek to implement a § 438.6(c)(1)(iii)(B) fee schedule in calendar year 2025, the Medicare fee schedule must have been in effect for purposes of Medicare payment at least at the beginning of calendar year 2021.
Requiring sufficient language in the contract regarding the Medicare fee schedule would provide clarity to CMS, managed care plans, and providers regarding the explicit Medicare payment methodology being used under the contract. For broader discussion of § 438.6(c)(5), see section I.B.2.k. of this proposed rule.
We request comment on other material or significant information about a Medicare fee schedule that would need to be included to ensure the managed care contract sufficiently describes this type of SDP.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on our proposals.
We are proposing to remove the term “network” from the descriptions of SDP arrangements in current (and revised as proposed) § 438.6(c)(1)(iii). Existing regulations specify that for a State to require an MCO, PIHP or PAHP to implement a fee schedule under § 438.6(c)(1)(iii), the fee schedule must be limited to “network providers.” This limitation is not included in § 438.6(c)(1)(i) or (ii) for SDP arrangements that are VBP and multi-payer or Medicaid-specific delivery system reform or performance improvement initiatives. In our experience working with States, limiting the descriptions of SDP arrangements subject to § 438.6(c)(iii) to those that involve only network providers has proven to be too narrow and has created an unintended barrier to States' and CMS' policy goals to ensure access to quality care for beneficiaries.
In the 2016 final rule, we finalized current § 438.6(c)(1)(iii) to include “network” before “providers” in this provision.
In our work with States over the years, some States have noted concerns with the requirement that permissible SDPs only apply (or include) payments by Medicaid managed care plans to network providers. States have noted that limiting SDPs to network providers is impractical in large and diverse States. Several States had, prior to rulemaking, pre-existing contractual requirements with managed care plans that required a specific level of payment (such as the State's Medicaid FFS rates) for non-network providers. This aligns with our experience working with States as well, and we note section 1932(b)(2)(D) of the Act requires that non-network providers furnishing emergency services must accept as payment in full an amount equal to the Medicaid State plan rate for those services. Some States have historically required plans to pay non-network providers at least the Medicaid State plan approved rate or another rate established in the managed care contract. Many States with enrollees on their borders rely on providers in neighboring States to deliver specialty services, such as access to children's hospitals.
While we support States' and plans' efforts to develop strong provider networks and to focus their efforts on providers who have agreed to participate in plan networks, executing network agreements with every provider may not always be feasible for plans. For example, in large hospital systems, it may be impractical for every plan to obtain individual network agreements with each rounding physician delivering care to Medicaid managed care enrollees. In such instances, States may have an interest in ensuring that their Medicaid managed care plans pay non-network providers at a minimum level to avoid access to care concerns. We have also encountered situations in which States opt to transition certain benefits, which were previously carved out from managed care, from fee-for-service into managed care. In these instances, States would like to require their managed care plans to pay out-of-network providers a minimum fee schedule in order to maintain access to care while allowing plans and providers adequate time to negotiate provider agreements and provider payment rates for the newly incorporated services. Consequently, we are proposing these changes to provide States a tool to direct payment to non-network providers as well as network providers.
Therefore, we are proposing to remove the term “network” from the descriptions of permissible SDP arrangements in § 438.6(c)(1)(iii). Under this proposal, the permissible SDPs are described as payment arrangements or amounts “for providers that provide a particular service under the contract” and this will permit States to direct payments under their managed care contracts for both network and non-network providers, subject to the requirements in paragraph (c). We note
Finally, as pass-through payments (PTPs) are separate and distinct from SDPs, we are maintaining the phrase “network provider” in § 438.6(d)(1) and (6). Existing PTPs are subject to a time-limited transition period and in accordance with § 438.6(d)(3) and (5), respectively, hospital PTPs must be fully eliminated by no later than the rating period beginning July 1, 2027 and NF and physician services PTPs were required to have been eliminated by no later than the rating period July 1, 2022 with the exceptions of pass-through payments for States transitioning services and populations in accordance with § 438.6(d)(6). Therefore, we do not believe that it is appropriate or necessary to eliminate the word “network” from § 438.6(d).
We solicit public comments on our proposal. In particular, we seek comment on whether this change would result in negative unintended consequences.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
Since we established the ability for States to direct the expenditures of their managed care plans in the 2016 final rule, we have encouraged States to submit their requests for written prior approval 90 days in advance of the start of the rating period whenever possible. We also recommend that States seek technical assistance from CMS in advance of formally submitting the preprint for review to CMS for more complicated proposals to facilitate the review process.
Submitting 90 days in advance of the rating period provides CMS and the State time to work through the written prior approval process before the State includes the SDP in their managed care plan contracts and the associated rate certifications. If States include SDPs in managed care contracts and capitation rates before we issue written prior approval, any changes to the SDP made as a result of the review process would likely then necessitate contract and rate amendments,
Some States have not been successful in submitting their SDP preprints in advance of the rating period for a variety of reasons. Sometimes it is due to changes in program design, such as a new benefit linked to the SDP being added to the Medicaid managed care contract during the rating period. Other unforeseen changes, such as public health emergencies (PHE) or natural disasters, can also create circumstances in which States need to respond to urgent concerns around access to care by implementing an SDP during the rating period. While we recognize that from time to time there may be a circumstance that necessitates a late preprint submission, we have found that some States routinely submit SDP preprints at the very end of the rating period with implementation dates retroactive to the start of the rating period. We have provided repeated technical assistance to these States, and we published additional guidance in 2021
To make our processes more responsive to States' needs while ensuring that reviews linked to SDP approvals are not unnecessarily delayed, we propose a new § 438.6(c)(2)(viii)(A) through (C) to set the deadline for submission of SDP preprints that require written prior approval from CMS under paragraph (c)(2)(i) (redesignated from § 438.6(c)(2)(ii)). In § 438.6(c)(2)(viii)(A), we propose to require that all SDPs that require written prior approval from CMS must be submitted to CMS no later than 90 days in advance of the end of the rating period to which the SDP applies. This requirement applies if the payment arrangement for which the State is seeking written prior approval begins at least 90 days in advance of the end of the rating period. We strongly encourage all States to submit SDPs in advance of the start of the rating period to ensure CMS has adequate time to process the State's submissions and is able to support the State in incorporating these payments into their Medicaid managed care contracts and rate development. We are proposing to use a deadline of no later than 90 days prior to the end of the applicable rating period because we believe this minimum timeframe balances the need for State flexibility to address unforeseen changes that occur after the managed care plan contracts and rates have been developed with the need to ensure timely processing of managed care contracts and capitation rates. When a State fails to submit all required documentation for any SDP arrangement that requires written prior approval 90 days prior to the end of the rating period to which the SDP applies, the SDP would not be eligible for written prior approval; therefore, the State would not be able to include the SDP in its Medicaid managed care contracts and rate certifications for that rating period.
In § 438.6(c)(2)(viii)(B), we propose to address the use of shorter-term SDPs in response to infrequent events, such as PHEs and natural disasters, by permitting States to submit all required documentation before the end of the rating period for SDP proposals that would start less than 90 days before the end of the rating period. We believe this flexibility would be appropriate to allow States to effectively use SDPs during the final quarter of the rating period to address urgent situations that affect access to and quality of care for Medicaid managed care enrollees.
There are SDPs, such as VBP and delivery system reform, that can be approved under § 438.6(c)(3) for up to three rating periods. For these, we propose in § 438.6(c)(2)(viii)(C) that the same timeframes described in § 438.6(c)(2)(viii)(A) and (B) apply to the first rating period of the SDP.
To illustrate these timeframes, we are using an SDP eligible for annual approval that a State is seeking to include in their CY 2025 rating period. For example, under the current regulations, CMS would strongly recommend that a State seeking approval of an SDP for the calendar year (CY) 2025 rating period would ideally submit the preprint by October 3, 2024. However, under this proposal to revised § 438.6(c)(2)(viii), if the start of the SDP
We considered an alternative requiring all SDPs to be submitted prior to the start of the rating period for which the State was requesting written prior approval. This would be a notable shift from current practice, which requires all preprints be submitted prior to the end of the rating period. Requiring that States submit all preprints prior to the start of the rating period would reduce administrative burden and better align with the prospective nature of risk-based managed care. However, instituting such a deadline could potentially be too rigid for States that needed to address an unanticipated or acute concern during the rating period.
Lastly, we considered an alternative of requiring that States submit all SDPs in advance of the start of the payment arrangement itself. For example, a State may seek to start a payment arrangement halfway through the rating period (for example, an SDP for payments starting July 1, 2025 for States operating on a CY rating period). Under this alternative approach, the State would have to submit the preprint for prior approval before July 1, 2025 in order for it to be considered for written prior approval. This would provide additional flexibility for States establishing new SDPs, but would limit the additional flexibility for that SDP to that initial rating period. If the State wanted to renew the SDP the subsequent rating period (for example, CY 2026), it would have to resubmit the preprint before the start of that rating period.
As discussed in section I.B.2.p. of this proposed rule on Applicability and Compliance dates, we are proposing that States must comply with these new submission timeframes beginning with the first rating period beginning on or after 2 years after the effective date of the final rule. In the interim, we would continue our current policy of not accepting submissions for SDPs after the rating period has ended. We solicit public comment on our proposals and these alternatives, as well as additional options that would also meet our goals for adopting time limits on when an SDP can be submitted to CMS for written prior approval.
For amendments to approved SDPs, we propose at § 438.6(c)(2)(ix) to require all amendments to SDPs approved under § 438.6(c)(2)(i) (redesignated from § 438.6(c)(2)(ii)) to be submitted for written prior approval as well. We also propose at § 438.6(c)(2)(ix)(A) to require that all required documentation for written prior approval of such amendments be submitted prior to the end of the rating period to which the SDP applies in order for CMS to consider the amendment. To illustrate this, we again provide the following example for an SDP approved for one rating period (CY 2025). If that SDP was approved by CMS prior to the start of the rating period (December 31, 2024 or earlier) and it began January 1, 2025, then the State would have to submit any amendment to the preprint for that rating period before December 31, 2025. After December 31, 2025, CMS would not accept any amendments to that SDP for that CY 2025 rating period. The same would be true for an SDP that was approved for one rating period after the start of the rating period (for example, approval on October 1, 2025 for a CY 2025 rating period). the State would have until December 31, 2025 to submit any amendment to the preprint for CMS review; after December 31, 2025, CMS would not accept any amendments to that SDP for that rating period.
We further propose § 438.6(c)(2)(ix)(B) to set timelines for the submission of amendments to SDPs approved for multiple rating periods as provided in paragraph (c)(3). Under this proposal, § 438.6(c)(2)(ix)(A) and (B) would allow an amendment window for the proposal within the first 120 days of each of the subsequent rating periods for which the SDP is approved after the initial rating period. The amendment process for the first year of the multiple rating periods would work the same way as it would for any SDP approved for one rating period and be addressed by proposed paragraph (xi)(A). However, in recognition that the SDP is approved for multiple rating periods, we are proposing in § 438.6(c)(2)(ix)(B) that the State would be able to amend the approved preprint for the second (CY 2026 in our example) and third (CY 2027 in our example) rating periods within the first 120 days of the CY 2026 rating period (for example, by May 1, 2026). The requested amendment could not make any retroactive changes to the SDP for the CY 2025 rating period because the CY 2025 rating period would be closed in this example. The State would not be permitted to amend the payment arrangement after May 1, 2026 for the CY 2026 rating period. The State would be able to do the same for the CY 2027 rating period as well—amend the SDP within the first 120 days of the CY 2027 rating period, but only for the CY 2027 rating period and not for the concluded CY 2025 or CY 2026 rating periods.
As proposed, these deadlines are mandatory for written prior approval of an SDP or any amendment of an SDP. When a State fails to submit all required documentation for any amendments within these specified timeframes, the SDP would not be eligible for written prior approval. Therefore, the State would not be able to include the amended SDP in its Medicaid managed care contracts and rate certifications for that rating period. The State could continue to include the originally approved SDP as documented in the preprint in its contracts for the rating period for which the SDP was originally approved. We note that written prior approval of an SDP does not obligate a State to implement the SDP. If a State chose not to implement an SDP for which CMS has granted prior approval, elimination of an SDP would not require any prior approval, under our current regulations or this proposal. We solicit comment on this aspect of our proposal.
We are proposing regulatory changes in §§ 438.6(c)(5)(vi) and 438.7(c)(6) to require the submission of related contract requirements and rate certification documentation no later than 120 days after the start of the SDP or the date we granted written prior approval of the SDP, whichever is later. States should submit their rate certifications prior to the start of the rating period, and § 438.7(c)(2) requires that any rate amendments
We are making these proposed regulatory changes to institute submission timeframes to ensure efficient and proper administration of the Medicaid program. We had also considered an alternative of requiring that States submit all amendments to SDPs for written prior approval within either 120 days of the start of the payment arrangement or 120 days of CMS issuing written prior approval, whichever was later. To illustrate this, we again provide the following example for an SDP approved for one rating period (CY 2025). If that SDP was approved by CMS prior to the start of the rating period (December 31, 2024 or earlier) and it began January 1, 2025, then the State would have 120 days after the start of the payment arrangement (May 1, 2025) to submit any amendment to the preprint for that rating period. After May 1, 2025, CMS would not accept any amendments to that SDP for that CY 2025 rating period. If, however, that SDP were approved after the start of the rating period (for example, October 1, 2025 for a CY 2025 rating period); the State would have 120 days from that written prior approval (January 29, 2026) to submit any amendment to the preprint for CMS review; after January 29, 2026, CMS would not accept any amendments to that SDP for that rating period. Requiring that States submit any amendments to the SDP preprint within 120 days of either the start of the payment arrangement or the initial approval could reduce some administrative burden by limiting the time period for amendments to preprints. However, the time frame would be specific to each preprint, which could present some challenges in ensuring compliance. Additionally, it would not preclude States from submitting amendments after the end of the rating period; in fact, it may encourage States to submit SDP preprints toward the end of the rating period to preserve the ability to amend the preprint after the end of the rating period. CMS does not believe such practices are in alignment with the prospective nature of risk-based managed care. We solicit public comment on our proposals and these alternatives, as well as additional options that would also meet our goals for adopting time limits on when amendments to SDPs can be submitted to CMS for written prior approval.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on these proposals.
As noted earlier, both the volume of SDP preprints being submitted by States for approval and the total dollars flowing through SDPs have grown steadily and quickly since § 438.6(c) was promulgated in the 2016 final rule. MACPAC reported that CMS approved SDP arrangements in 37 States, with spending exceeding more than $25 billion.
As noted in the 2016 final rule, section 1903(m)(2)(A)(iii) of the Act requires that contracts between States and Medicaid managed care organizations for coverage of benefits use prepaid payments to the entity that are actuarially sound. By regulation based on section 1902(a)(4) of the Act, CMS extended the requirement for actuarially sound capitation rates to PIHPs and PAHPs. The regulations addressing actuarially sound capitation rates are at §§ 438.4 through 438.7.
Currently § 438.6(c)(2) specifies that SDPs must be developed in accordance with § 438.4, the standards specified in § 438.5 and generally accepted actuarial principles and practices. Under the definition in § 438.4, actuarially sound capitation rates are “projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the MCO, PIHP, or PAHP for the time period and the population covered under the terms of the contract . . .” Consistent with this
We note that, currently, § 438.6(c)(1)(iii)(A) describes an SDP that sets a minimum fee schedule using Medicaid State plan approved rates for a particular service. As proposed in section I.B.2.c, § 438.6(c)(1)(iii)(B) would describe an SDP that sets a minimum fee schedule using 100 percent of the total published Medicare payment rate that was in effect no more than 3 years prior to the start of the applicable rating period for a particular service. An SDP that sets a minimum fee schedule using Medicaid State plan approved rates for a particular service does not currently require prior written approval by CMS per § 438.6(c)(2)(ii), and we are proposing in § 438.6(c)(2)(i) to not require prior approval for an SDP that sets a minimum fee schedule using 100 percent of the total published Medicare payment rate. We also believe that both of these specific payment rates would be (and therefore meet the requirement that) reasonable, appropriate and attainable because CMS has reviewed and determined these payment rates to be appropriate under the applicable statute and implementing regulations for Medicaid and Medicare respectively. However, for other SDP arrangements, additional analysis and consideration is necessary to ensure that the payment rates directed by the State meet the standard of reasonable, appropriate and attainable.
The proposed standard at § 438.6(c)(2)(ii)(I) also includes a requirement that upon request from CMS, the State must provide documentation demonstrating the total payment rate for each service and provider class. While we are not proposing to require States to provide documentation in a specified format to demonstrate that the total payment rate is reasonable, appropriate and attainable for all services (see next section for documentation requirements for some SDPs), we intend to continue requesting information from all States for all SDPs documenting the different components of the total payment rate as described earlier in section I.B.2.f. of this proposed rule using a standardized measure (for example, Medicaid State plan approved rates or Medicare) for each service and each class included in the SDP. We formalized this process in the revised preprint form
We solicit comments on our proposed changes.
To explain and provide context for proposed new paragraph (c)(2)(iii), we discuss the historical use of the average commercial rate (ACR) benchmark for SDPs, the proposed payment limit for inpatient hospital services, outpatient hospital services, qualified practitioner services at academic medical centers and nursing facility services (including proposed definitions for these types of services) and some alternatives we are also considering, the proposed requirement for States to demonstrate the ACR, and the proposed requirements for States to demonstrate compliance with the ACR and total payment rate comparison requirement. We have included further sub-headers to help guide the reader through this section.
In late 2017, we received an SDP preprint to raise inpatient hospital payment rates broadly that would result in a total payment rate that exceeded 100 percent of Medicare rates in that State, but the payments would remain below the ACR for that service and provider class in that State. We had concerns about whether the payment rates were still reasonable, appropriate, and attainable for purposes of CMS approval of the SDP as being consistent with the existing regulatory requirement that all SDPs must be developed in accordance with § 438.4, the standards specified in § 438.5, and generally accepted actuarial principles and practices. We realized that approving an SDP that exceeded 100 percent of Medicare rates would be precedent-setting for CMS. We explored using an internal total payment rate benchmark that could be applied uniformly across all SDPs to evaluate preprints for approval and to ensure that payment rates projected to be paid to providers under the SDP(s) remained reasonable, appropriate, and attainable.
Medicare is a significant payer in the health insurance market, and Medicare reimbursement is a standardized benchmark used in the industry. Medicare reimbursement is also a benchmark used in Medicaid FFS, including the Upper Payment Limits (UPLs) that apply to classes of institutional providers, such as hospitals, nursing facilities, and intermediate care facilities for individuals with intellectual disabilities (ICFs/IID), that are based on Medicare payment rates. The UPLs apply an overall payment ceiling based on how much Medicare would have paid in total as a mechanism for determining economy and efficiency of payment for State plan services while allowing for facility-specific payments.
When considering the Medicaid FFS UPL methodologies, we had some concerns that applying the same standards for the total payment rate under SDPs to three classes based on ownership status, would not be appropriate for implementing the SDP requirements. In some States, SDPs have become a method to meet their quality and access goals in Medicaid managed care.
Currently, § 438.6(c)(2)(ii)(B) provides States with broader flexibility than what is required for FFS UPLs in defining the provider class for which States can implement SDPs. This flexibility has proven important for States to target their efforts to achieve their stated policy goals tied to their managed care quality strategy. For example, CMS has approved SDPs where States proposed and implemented SDPs that applied to provider classes defined by criteria such as participation in State health information systems. In other SDPs, the eligible provider class was established by participation in learning collaboratives which were focused on health equity or social determinants of health. In both cases, the provider class under the SDP was developed irrespective of the facility's ownership status. These provider classes can be significantly wider or narrower than the provider class definitions used for Medicaid UPL demonstrations in Medicaid FFS. Therefore, the provider classes in some approved SDPs did not align with the classes used in Medicaid FFS UPL demonstrations, which are only based on ownership or operation status (that is, State government-owned or operated, Non-State government-owned or operated, and privately-owned and operated facilities) and include all payments made to all facilities that fit in those ownership-defined classes. Not all providers providing a particular service in Medicaid managed care programs must be included in an SDP. Under § 438.6(c)(2)(ii)(B), States are required to direct expenditures equally, using the same terms of performance, for a
Without alignment across provider classes, CMS could have faced challenges in applying a similar standard of the Medicaid FFS UPL to each provider class that the State specified in the SDP irrespective of how each provider class that the State specified in the SDP compared to the ownership-defined classes used in the Medicaid FFS UPL. Given the diversity in provider classes States have proposed and implemented under SDPs approved by CMS at the time (and subsequently), combined with the fact that not all providers of a service under the contract are necessarily subject to the SDP, CMS had concerns that applying the Medicaid FFS UPL to each provider class under the SDP could have resulted in situations in managed care where provider payments under SDPs would not align with Medicaid FFS policy. In some instances, payments to particular facilities could potentially be significantly higher than allowed in Medicaid FFS, and in others, facility-specific payments could potentially be significantly lower than allowed in Medicaid FFS.
We note that States have been approved to make Medicaid FFS supplemental payments up to the ACR for qualified practitioners affiliated with and furnishing services (for example, physicians under the physician services benefit) in academic medical centers, physician practices, and safety net hospitals.
For these reasons, in 2018, CMS ultimately interpreted the current § 438.6(c)(2)(i) (which we propose to re-designate as § 438.6(c)(2)(ii)(I) and (J) along with revisions to better reflect our interpretation) to allow total payment rates in an SDP up to the ACR. The statutory and regulatory requirements for the UPL in Medicaid FFS do not apply to risk-based managed care plans; therefore, permitting States to direct MCOs, PIHPs, PAHPs to make payments higher than the UPL does not violate any Medicaid managed care statutory or regulatory requirements. We adopted ACR as the standard benchmark for all SDPs. this standard benchmark for all SDPs applied ACR more broadly (that is, across more services and provider types) than allowed under Medicaid FFS, due to the Medicare payment-based UPLs applicable in FFS. Our rationale in 2018 for doing so was that using the ACR allowed States more discretion than the Medicaid FFS UPL because it allows States to ensure that Medicaid managed care enrollees have access to care that is comparable to access for the broader general public. Also, we believed using the ACR presented the least disruption for States as they were transitioning existing, and often long-standing, pass-through payments
Therefore, since 2018, we have used the ACR as a benchmark for total payment rates for all SDP reviews. Under this policy, States have had to document the total payment rate specific to each service type included in the SDP and specific to each provider class identified. For example, if an SDP provides a uniform increase for inpatient and outpatient hospital services with two provider classes (rural hospitals and non-rural hospitals), the State would be required to provide an analysis of the total payment rate (average base rate paid by plans, the effect of the SDP, the effect of any other approved SDP(s), and the effect of any permissible pass-through payments) using a standardized measure (for example, Medicaid State plan approved rates or Medicare) for each service and each class included in the SDP. In the example above, the State would be required to demonstrate the total payment rates for inpatient services for rural hospitals, inpatient services for non-rural hospitals, outpatient services for rural hospitals and outpatient services for non-rural hospitals separately. We formalized this process in the revised preprint form
When a State has not demonstrated that the total payment rate for each service(s) and provider class(es) included in each SDP arrangement is at or below either the Medicare or Medicaid FFS rate (when Medicare does not cover the service), CMS has requested documentation from the State to demonstrate that the total payment rates that exceed the Medicare or the Medicaid FFS rate do not exceed the ACR for the service and provider class. CMS has worked with States to collect documentation on the total payment rate, which has evolved over time. CMS has not knowingly approved an SDP where the total payment rate, inclusive of all payments made by the plan to any providers included in the provider class for the same rating period, was projected to exceed the ACR.
While CMS has not knowingly approved an SDP that includes payment rates that are projected to exceed the ACR, States are increasingly submitting preprints that would push total payment rates up to the ACR. Therefore, we propose to move away from the use of an internal benchmark to a regulatory limit on the projected total payment rate, using the ACR for inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical center, and nursing facility services. We are also considering other potential options for this limit on total payment rate for these four services.
CMS believes that using the ACR as a limit is likely appropriate as it is generally consistent with the need for managed care plans to compete with commercial plans for providers to participate in their networks to furnish comparable access to care for inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical center and nursing facility services.
While Medicaid is a substantial payer for these services, it is not the most common payer for inpatient hospital, outpatient hospital and qualified practitioner services at an academic medical center. Looking at the National Health Expenditures data for 2020, private health insurance pays for 32 percent of hospital expenditures, followed by Medicare (25 percent) and Medicaid (17 percent). There is a similar breakdown for physician and clinical expenditures—private health insurance pays for 37 percent of physician and clinical expenditures, followed by Medicare (24 percent) and Medicaid (11 percent).
Based on both CMS' experience with SDPs for inpatient hospital services, outpatient hospital services and qualified practitioner services at an academic medical center as well as data from the National Health Expenditure survey and other external studies examining payment rates across the Medicaid, Medicare and commercial markets, we believe that for these three services, the ACR payment rate limit would likely be reasonable, appropriate and attainable while allowing States the flexibility to further State policy objectives through implementation of SDPs.
We also believe that this proposed ACR payment rate limit aligns with the SDP actions submitted to CMS. Based on our internal data collected from our review of SDPs, the most common services for which States seek to raise total payment rates up to the ACR are qualified practitioner services at academic medical centers, inpatient hospital services, and outpatient hospital services. Looking at approvals since 2017 through March 2022, we have approved 145 preprint actions that were expected to yield SDPs equal to the ACR: 33 percent of these payments are for professional services at academic medical centers; 18 percent of these payments are for inpatient hospital services; 17 percent of these payments are for outpatient hospital services; 2 percent are for nursing facilities. Altogether, this means that at least two thirds of the SDP submissions intended to raise total payment rates up to the ACR were for these four provider classes. While States are pursuing SDPs for other types of services, very few States are pursuing SDPs that increase total payment rates up to the ACR for those other categories or types of covered services.
While there have not been as many SDP submissions to bring nursing facilities up to a total payment rate near the ACR, there have been a few that have resulted in notable payment increases to nursing facilities. In the same internal analysis referenced above, 2 percent of the preprints approved that were expected to yield SDPs equal to the ACR were for nursing facilities. There have also been concerns raised as part of published audit findings about a particular nursing facility SDP.
For some services where Medicaid is the most common or only payer (such as HCBS,
We acknowledge that some States have had difficulty with providing payment rate analyses demonstrating that the total payment rate is below ACR, including for services other than
Therefore, we are not proposing at this time to establish in § 438.6(c)(2)(iii) payment rate ceilings for each SDP for services other than inpatient hospital services, outpatient hospital services, nursing facility services, or qualified practitioner services at academic medical centers that States include in SDPs. While SDPs for all other services will still need to meet the proposed standard at § 438.6(c)(2)(ii)(I) that the total payment rate for each SDP (meaning the payment rate to providers) is reasonable, appropriate and attainable, at this time we believe further research is needed before codifying a specific payment rate limit for these services to ensure that such limits do not result in inappropriately reducing payment rates and negatively affecting access to care. We will continue to review and monitor all payment rate information submitted by States for all SDPs as part of our oversight activities and to ensure managed care payments are reasonable, appropriate and attainable. Depending on our future experience, we may revisit this issue as necessary.
For clarity and consistency in applying these proposed new payment limits, we propose to define several terms in § 438.6(a), including a definition for “inpatient hospital services” that would be the same as specified at 42 CFR 440.10, “outpatient hospital services” that would be the same as specified in § 440.20(a) and “nursing facility services” that would be the same as specified at § 440.40(a). Relying on existing regulatory definitions will prevent confusion and provide consistency across Medicaid delivery systems.
We also propose definitions in § 438.6(a) for both “academic medical center” and “qualified practitioner services at an academic medical center” to clearly articulate which SDP arrangements would be limited based on the proposed payment rate. We propose to define “academic medical center” as a facility that includes a health professional school with an affiliated teaching hospital. We propose to define “qualified practitioner services at an academic medical center” as professional services provided by physicians and non-physician practitioners affiliated with or employed by an academic medical center.
At this time, we are not proposing to establish a payment rate ceiling for qualified practitioners that are not affiliated with or employed by an academic medical center. We have not seen a comparable volume or size of SDP preprints for provider types not affiliated with hospitals or academic medical centers, and we believe establishing a payment ceiling would likely be burdensome on States and could inhibit States from pursuing SDPs for providers such as primary care physicians and mental health providers and we seek comment on this issue. Depending on our future experience, we may revisit this policy choice in the future but until then, qualified practitioner services furnished at other locations or settings will be subject to the general standard we currently use that is proposed to be codified at § 438.6(c)(2)(ii)(I) that total payment rates for each service and provider class included in the SDP must be reasonable, appropriate and attainable.
We believe that establishing a total payment rate limit of the ACR for these four services appropriately balances the need for additional fiscal guardrails while providing States flexibility in pursuing provider payment initiatives and delivery system reform efforts that further advance access to care and enhance quality of care in Medicaid managed care. In our view, utilizing the ACR in a managed care delivery system is appropriate and acknowledges the market dynamics at play to ensure that managed care plans can build provider networks that are comparable to the provider networks in commercial health insurance and ensure access to care for managed care enrollees. However, we recognize that formally codifying a payment rate limit of ACR for these four service types may raise some questions. First, codifying a payment rate limit of ACR for these four service types may incent States and interested parties to implement additional payment arrangements that raise total payment rates up to the ACR for other reasons beyond advancing access to care and enhancing quality of care in Medicaid managed care. The majority of SDPs that increase total payment rates up to the average commercial rate are primarily funded by either provider taxes, IGTs, or a combination of these two sources of the non-Federal share. These SDPs represent some of the largest SDPs in terms of total dollars that are required to be paid in addition to base managed care rates. We are concerned about incentivizing States to raise total payment rates up to the ACR based on the source of the non-Federal share, rather than based on furthering goals and objectives outlined in the State's managed care quality strategy. To mitigate this concern, which is shared not only by CMS but oversight bodies and interested parties such as MACPAC,
In light of these concerns, we are considering alternatives to the ACR as a total payment rate limit for inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at an academic medical center for each SDP. we are considering including in the final rule establishing the total payment rate limit at the Medicare rate; this is a standardized benchmark used in the industry, and is often a standard utilized in Medicaid FFS under upper payment limit (UPL) demonstrations in 42 CFR part 447. The Medicare rate is also not based on proprietary commercial payment data, and the payment data could be verified and audited more easily than the ACR. If we did include in the final rule a total payment rate limit at the Medicare rate, this may limit the growth in payment rates more than limiting the total payment rate to the ACR. We are also considering, and soliciting feedback on, establishing a total payment rate limit for all services, not limited to just these four services, for all SDP arrangements described in § 438.6(c)(1)(i), (ii), and (iii)(C) through (E) at the Medicare rate in the final rule. We invite public comments on these alternatives.
We do have some concerns about whether Medicare is an appropriate payment rate limit for managed care payments given the concerns and limitations we noted earlier in the “Historical Use of the Average Commercial Rate Benchmark for SDPs” section of this proposed rule, such as provider class limitations. Additionally, Medicare payment rates are developed for a population that differs from the Medicaid population. For example, Medicaid covers substantially more pregnant women and children than Medicare. Although Medicaid FFS UPLs are calculated as a reasonable estimate of what Medicare would pay for Medicaid services and account for population differences across the programs, it can be a challenging exercise to do so accurately. Therefore, we seek public comment to further evaluate if Medicare would be a reasonable limit for the total provider rate for the four types of services delivered through managed care that we propose, all services, and/or additional types of services. We note that beneficiaries enrolled in a managed care plan are often more aligned with individuals in commercial health insurance (such as, adults and kids), whereas the FFS population is generally more aligned with the Medicare population (older adults and individuals with complex health care needs). To acknowledge the challenges in calculating the differences between the Medicaid and Medicare programs, we are also considering, and soliciting feedback on, whether the total payment rate limit for each SDP for these four services should be set at some level between Medicare and the ACR, or a Medicare equivalent of the ACR in the final rule. We invite public comments on these alternatives.
In considering these potential alternatives, we are also considering whether robust quality goals and objectives should be a factor in setting a total payment rate limit for each SDP for these four types of services. Specifically, we are also considering including in the final rule a provision permitting a total payment rate limit for any SDP arrangements described in paragraphs (c)(1)(i) and (ii) that are for any of these four services, at the ACR, while limiting the total payment rate for any SDP arrangements described in § 438.6(c)(1)(iii)(C) through (E), at the Medicare rate. As we noted earlier, CMS believes that establishing a total payment rate limit of the ACR for these four services provides States flexibility in pursuing provider payment initiatives and delivery system reform efforts that further advance access to care and enhance quality of care in Medicaid managed care. Under this alternative policy we are considering including in the final rule, there would be an additional fiscal guardrail compared to our proposal by limiting the total payment rate for these four services to ACR for value-based initiatives only and further limiting the total payment rate for these four services to the Medicare rate for fee schedule arrangements (for example, uniform increases, minimum or maximum fee schedules). This alternative acknowledges the importance of robust quality outcomes and innovative payment models and could incentivize States to consider quality-based payment models that can better improve health outcomes for Medicaid managed care enrollees. We invite public comments on whether this potential alternative should be included in the final rule.
For each of these alternatives, we acknowledge that some States currently have SDPs that have total payment rates up to the ACR. Therefore, these alternative proposals could be more restrictive, and States could need to reduce funding from current levels, which could have a negative impact on access to care and other health equity initiatives. we also seek public comment on whether or not CMS should consider a transition period in order to mitigate any disruption to provider payment levels if we adopt one of the alternatives for a total payment rate limit on SDP expenditures in the final rule.
We seek public comment on our proposal to establish a payment rate limit for SDP arrangements at the ACR for inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical center and nursing facility services. Additionally, we solicit public comment on the alternatives we are considering to establish a payment rate limit at the Medicare rate, a level between Medicare and the ACR, or a Medicare equivalent of the ACR for these four service types. We also solicit public comment on whether the final rule should include a provision establishing a total payment rate limit for any SDP arrangements described in paragraphs (c)(1)(i) and (ii) that are for any of these four services, at the ACR, while limiting the total payment rate for any SDP arrangements described in paragraph § 438.6(c)(1)(iii)(C) through (E), at the Medicare rate.
In order to ensure compliance with the provision currently proposed that the total payment rate for SDPs that require written prior approval from CMS for inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical centers and nursing facility services do not exceed the ACR for the applicable services subject to the SDP, CMS will need certain information and documentation from the State. Therefore, we propose in § 438.6(c)(2)(iii) that States provide two pieces of documentation: (1) an ACR demonstration; and (2) a total payment rate comparison to the ACR. We propose the timing for these submissions in § 438.6(c)(2)(iii)(C). The ACR demonstration would be submitted with the initial preprint submission (new, renewal, or amendment) following the applicability date of this section and then updated at least every 3 years, so long as the State continues to include the SDP in one or more managed care contracts. The total payment rate comparison to the ACR would be submitted with the preprint as part of the request for approval of each SDP and updated with each subsequent preprint submission (each amendment and renewal).
At § 438.6(c)(2)(iii)(A), we propose to specify the requirements for demonstration of the ACR if a State seeks written prior approval for an SDP that includes inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical center or nursing facility services. This demonstration must use payment data that: (1) is specific to the State; (2) is no older than the 3 most recent and complete years prior to the start of the rating period of the initial request following the applicability date of this section; (3) is specific to the service(s) addressed by the SDP; (4) includes the total reimbursement by the third party payer and any patient liability, such as cost sharing and deductibles; (5) excludes payments to FQHCs, RHCs and any non-commercial payers such as Medicare; and (6) excludes any payment data for services or codes that the applicable Medicaid managed care plans do not cover under the contracts with the State that will include the SDP. We consider Qualified Health Plans (QHPs) operating in the ACA Marketplace to be commercial payers for purposes of this proposed provision, and therefore, payment data from QHPs should be included when available.
At proposed § 438.6(c)(2)(iii)(A)(
At proposed § 438.6(c)(2)(iii)(A)(
We propose at § 438.6(c)(2)(iii)(A)(
During our reviews of SDP preprints since the 2016 final rule, it has become clear that requiring an ACR analysis that is specific both to the service and provider class can have deleterious effects when States want to target Medicaid resources to those providers serving higher volumes of Medicaid beneficiaries. For example, we have often heard from States that rural hospitals commonly earn a larger share of their revenue from the Medicaid program than they do from commercial payers. There is also evidence that rural hospitals tend to be less profitable than urban hospitals and at a greater risk of closure.
In another example to demonstrate the potential effects of requiring an ACR analysis that is specific to both the service and provider class level, a State could seek to implement an SDP that would provide different increases for different classes of hospitals (for example, rural and urban public hospitals would receive a higher percentage increase than teaching hospitals and short-term acute care hospitals). The SDP preprint could provide for separate additional increases for hospitals serving a higher percentage of the Medicaid population and certain specialty services and capabilities. However, if the average base rate that the State's Medicaid managed care plans paid was already above the ACR paid for services to one of the classes (for example, rural hospitals), the State could not apply the same increases to this class as it would the other classes, even if the average base rate paid for the one class was below the ACR when calculated across all hospitals. In this example, the State would be left with the option of either eliminating the one class (for example, rural hospitals) from the payment arrangement or withdrawing the entire SDP proposed preprint even if the State still had significant concerns about access to care as it related to the one class (for example, rural hospitals). The focus on the ACR for the service at the provider class level has the potential to disadvantage providers with less market power, such as rural hospitals or safety net hospitals, which typically receive larger portions of their payments from Medicaid than from commercial payers. These providers typically are not able to negotiate rates with commercial payers on par with providers with more market power.
To provide States the flexibility they need to design SDPs to direct resources as they deem necessary to meet their programmatic goals, we propose to require an ACR demonstration using payment data specific to the service type (that is, by the specific type of service). This would allow States to provide an ACR analysis at just the service level instead of at the service and provider class level. For example, States could establish a tiered fee schedule or series of uniform increases, directing a higher payment rate to facilities that provide a higher share of services to Medicaid enrollees than to the payment rate to facilities that serve a lower share of services to Medicaid enrollees. States would still have a limit of the ACR, but allowing this to be measured at the service level and not at
At § 438.6(c)(2)(iii)(B), we propose to specify the requirements for the comparison of the total payment rate for the services included in the SDP to the ACR for those services if a State seeks written prior approval for an SDP that includes inpatient hospital services, outpatient hospital services, qualified practitioner services at an academic medical center or nursing facility services. Under this proposal, the comparison must: (1) be specific to each managed care program that the SDP applies to; (2) be specific to each provider class to which the SDP applies; (3) be projected for the rating period for which written prior approval is sought; (4) use payment data that is specific to each service included in the SDP; and (5) include a description of each of the components of the total payment rate as defined in § 438.6(a) as a percentage of the average commercial rate, demonstrated pursuant to § 438.6(c)(2)(iii)(A), for each of the four categories of services (that is, inpatient hospital services, outpatient hospital services, nursing facility services or qualified practitioner services at an academic medical center) included in the SDP submitted to CMS for review and approval.
The proposed comparison of the total payment rate to the ACR would align with current practice with one exception. We are proposing to codify that the total payment rate comparison would be specific to each Medicaid managed care program to which the SDP under review would apply. Evaluating payment at the managed care program level would be consistent with the payment analysis described in section I.B.1.d. of this proposed rule. The total payment rate comparison proposed at § 438.6(c)(iii)(B) would be a more detailed analysis than is currently requested from States for SDP reviews. Under our proposal, these more detailed total payment rate comparisons would also have to be updated and submitted with each initial preprint, amendment and renewal per proposed § 438.6(c)(2)(iii)(C). In addition, we are proposing that the total payment rate comparison to ACR must be specific to both the service and the provider class; this is current practice today but differs from our proposal for the ACR demonstration, which is proposed to be service specific only.
We have proposed a set of standards and practices States must follow in conducting their ACR analysis. However, we are not proposing to require that States use a specific source of data for the ACR analysis. Further, at this time, we are not proposing to require States to use a specific template or format for the ACR analysis. In our experience working with States on conducting the analysis of the ACR, the availability of data differs by State and service. States are familiar with the process used for conducting a code-level analysis of the ACR for the qualified practitioner services at academic medical centers for Medicaid FFS.
Data for inpatient and outpatient hospital service payment rates tend to be more readily available in both the Medicare and commercial markets. States with SDPs for hospital services have provided analyses using hospital cost reports and all-payer claims databases. Others have relied on actuaries and outside consultants, which may have access to private commercial databases, to produce an ACR analysis. At times, States have purchased access to private commercial databases to conduct these analyses. We believe each of these approaches, provided the data used for the analyses meet the proposed requirements in § 438.6(c)(2)(iii), would be acceptable to meet our proposed requirements.
We propose at § 438.6(c)(2)(iii)(C) to require States to submit the ACR demonstration and the total payment rate comparison for review as part of the documentation necessary for written prior approval for payment arrangements, initial submissions or renewals, starting with the first rating period beginning on or after the effective date of this rule. The total payment rate comparison will need to be updated with each subsequent preprint amendment and renewal.
In recognition of the additional State resources required to conduct an ACR analysis, we propose to require that States update the ACR demonstration once every 3 years as long as the State continues to seek to include the SDP in the MCO, PIHP, or PAHP contract. This time period aligns with existing policy for ACR demonstrations for qualified practitioners in Medicaid FFS programs; specifically, those that demonstrate payment at the Medicare equivalent of the ACR.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on our proposals.
CMS agrees with some of these concerns; and therefore, we are considering, and invite comment on, potentially imposing a limit on the amount of SDP expenditures in the final rule based on comments received. Imposing such a limit could help to address and improve program and fiscal protections to address the oversight risks identified by oversight bodies, ensure that risk-based contracts are used as intended, and that managed care plans that are “at risk” truly have the ability to manage how their revenue is used to cover all reasonable, appropriate, and attainable costs under the terms of the contract. Such an approach could have potential negative impacts on access to care that would need to be balanced with the need for improved program and fiscal integrity. We seek public comment on whether we should adopt a limit on SDP expenditures in the final rule.
To minimize burden on States, a limit on SDP expenditures could be structured similarly to the proposed 5 percent limit for ILOS expenditures, based on the ILOS cost percentage, proposed in § 438.16(c)(1) (see section I.B.4.b. of this proposed rule). However, we question whether the five percent limit proposed for ILOSs would be a reasonable limit for SDPs given the expansive nature of and associated services impacted by SDPs. Rather, we believe 10 to 25 percent of total costs could be more realistic for limiting SDP expenditures. Like with the ILOS cost percentage, CMS would not approve the related managed care contracts if the limit on SDP expenditures were exceeded. We seek public comment on both the overall approach of using a percent of total costs as well as on the appropriateness of 10 to 25 percent or what a reasonable percentage limit for SDP expenditures could be. We believe a limit on SDP expenditures could be structured in the following ways and invite comment on them as well as if the SDP expenditures limit should be imposed on a rate cell basis instead to inform our deliberative process.
One way to impose a limit on total SDP expenditures could be as a portion of the total costs for each Medicaid managed care program. Under such an approach, States would be required to produce the same type of calculation for the final State directed payment cost percentage (see section I.B.2.j. of this proposed rule) except that for the numerator, States would be required to account for all SDPs applicable to that managed care program instead of just one SDP. Otherwise, the numerator and denominator would be calculated in the same manner as described for the final State directed payment cost percentage.
A second way to impose a limit on total SDP expenditures could be as a portion of the total costs for each Medicaid managed care program, but only focus on the costs related to inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at academic medical centers. Under this second approach, States would be required to produce the same type of calculation for the final State directed payment cost percentage (see section I.B.2.j. of this proposed rule) except the numerator would include all SDPs for inpatient hospital services, outpatient hospital services, nursing facility services and qualified practitioner services at an academic medical center applicable to that managed care program instead of just one SDP. Similarly, the denominator would only include the portion of total Medicaid managed care payments made from the State to the plan related to these four service types.
If we finalize a limit on SDP expenditures, States would need to submit documentation to CMS to demonstrate compliance. We believe that requiring this documentation be submitted with one of these existing submission requirements rather than submitting separately would increase program efficiencies and reduce administrative burden. We are considering, and invite comment on, whether documentation to comply with a limit on the amount of SDP expenditures should be submitted with the associated managed care plan contract that includes the SDP contractual arrangement, the associated rate certification, or the SDP preprint.
We seek comment on these alternatives, including perspectives on how well the alternatives address the concerns we have identified and potential consequences of using overall expenditure limits for SDPs.
From our experience in working with States, it has become clear that SDPs provide an important tool for States in furthering the goals and objectives of their Medicaid programs within a managed care environment. In finalizing the standards and limits for SDPs and pass-through payments in the 2016 and 2017 final rules, we intended to ensure that the funding that was included in Medicaid managed care rate development was done so appropriately and in alignment with Federal statutory requirements applicable to the Medicaid program. This includes Federal requirements for the source(s) of the non-Federal share of SDPs.
Section 1902(a)(2) of the Act and its implementing regulation in 42 CFR part 433, subpart B require States to share in the cost of medical assistance expenditures and permit other units of State or local government to contribute to the financing of the non-Federal share of medical assistance expenditures. These provisions are intended to safeguard the Federal-State partnership, irrespective of the Medicaid delivery system or authority (for example, FFS or managed care delivery system, and State plan, waiver, or demonstration authority), by ensuring that States are meaningfully engaged in identifying, assessing, mitigating, and sharing in the risks and responsibilities inherent in operating a program as complex and economically significant as Medicaid, and that States are accordingly motivated to administer their programs economically and efficiently (see, for example, section 1902(a)(4) of the Act).
There are several types of permissible means for financing the non-Federal share of Medicaid expenditures, including, but not limited to: (1) State general funds, typically derived from tax revenue appropriated directly to the Medicaid agency; (2) revenue derived from health care-related taxes when consistent with Federal statutory requirements at section 1903(w) of the Act and implementing regulations at 42 CFR part 433, subpart B; (3) provider-related donations to the State which must be “bona fide” in accordance with section 1903(w) of the Act and implementing regulations at 42 CFR part 433, subpart B;
Health care-related taxes and IGTs are a critical source of funding for many States' Medicaid programs, including for supporting the non-Federal share of many payments to safety net providers. Health care-related taxes made up approximately 17 percent ($37 billion) of all States' non-Federal share in 2018, the latest year for which data are available.
States first began to use health care-related taxes and provider-related donations in the mid-1980s as a way to finance the non-Federal share of Medicaid payments (Congressional Research Service, “Medicaid Provider Taxes,” August 5, 2016, page 2). Providers would agree to make a donation or would support (or not oppose) a tax on their activities or revenues, and these mechanisms (donations or taxes) would generate funds that could then be used to raise Medicaid payment rates to the providers. Frequently, these programs were designed to hold Medicaid providers “harmless” for the cost of their donation or tax payment. As a result, Federal expenditures rapidly increased without any corresponding increase in State expenditures, since the funds used to increase provider payments came from the providers themselves and were matched with Federal funds. In 1991, Congress passed the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments (Pub. L. 102-234, enacted December 12, 1991) to establish limits for the use of provider-related donations and health care-related taxes to finance the non-Federal share of Medicaid expenditures. Statutory provisions relating to health care-related taxes and donations are in section 1903(w) of the Act.
Section 1903(w)(1)(A)(i)(II) requires that health care-related taxes be broad-based as defined in section 1903(w)(3)(B), which specifies that the tax must be imposed with respect to a permissible class of health care items or services (as described in section 1903(w)(7)(A)) or with respect to providers of such items or services and generally imposed at least with respect to all items or services in the class furnished by all non-Federal, nonpublic providers or with respect to all non-Federal, nonpublic providers; additionally, the tax must be imposed uniformly in accordance with section 1903(w)(3)(C) of the Act. However,
In response to the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, we published the “Medicaid Program; Limitations on Provider-Related Donations and Health Care-Related Taxes; Limitations on Payments to Disproportionate Share Hospitals” interim final rule with comment period in the November 24, 1992
After the publication of the August 1993 final rule, we revisited the issue of health care-related taxes and provider-related donations in the “Medicaid Program; Health-Care Related Taxes” final rule (73 FR 9685) which published in the February 22, 2008
We reiterated this principle in the 2020 Medicaid managed care rule, noting “certain financing requirements in statute and regulation are applicable across the Medicaid program irrespective of the delivery system (for example, fee-for-service, managed care, and demonstration authorities), and are similarly applicable whether a State elects to direct payments under § 438.6(c)” (85 CFR 72765). Further, section 1903(m)(2)(A) of the Act limits FFP in prepaid capitation payments to MCOs for coverage of a defined minimum set of benefits to cases in which the prepaid payments are developed on an actuarially sound basis for assuming the cost of providing the benefits at issue to Medicaid managed care enrollees. CMS has extended this requirement, through rulemaking under section 1902(a)(4) of the Act, to the capitation rates paid to PIHPs and PAHPs under a risk contract as well.
As part of our review of SDP proposals, we are increasingly encountering issues with State financing of the non-Federal share of SDPs, including use of health care-related taxes and IGT arrangements that may not be in compliance with the underlying Medicaid requirements for non-Federal share financing. In January 2021, CMS released a revised preprint form that systematically collects documentation regarding the source(s) of the non-Federal share for each SDP and requires States to provide additional assurances and details specific to each financing mechanism, which has contributed to our increased awareness of non-Federal share financing issues associated with SDPs.
In recent years, we have identified instances in which States appear to be funding the non-Federal share of Medicaid SDP payments through health care-related tax programs that appear to involve an impermissible hold harmless arrangement. In these arrangements, with varying degrees of State awareness and involvement, providers appear to have pre-arranged agreements to redistribute Medicaid payments (or other provider funds that are replenished by Medicaid payments). These redistribution arrangements are not described on the States' SDP applications; if an SDP preprint stated that Medicaid payments ultimately would be directed to a recipient without being based on the delivery of Medicaid-covered services, we could not approve the SDP, because section 1903(a) of the Act limits Federal financial participation to expenditures for medical assistance and qualifying administrative activities (otherwise stated, FFP is not available in expenditures for payments to third parties unrelated to the provision of covered services or conduct of allowable administrative activities). Similarly, under 1903(w), FFP is not permissible in payments that would otherwise be matchable as medical assistance if the State share being matched does not comply with the conditions in section 1903(w), such as in the case of the type of hold harmless arrangement described above. The fact that these apparent hold harmless arrangements are not made explicit on SDP preprints should not affect our ability to disapprove SDPs when we cannot verify they do not employ redistribution arrangements.
These arrangements appear designed to redirect Medicaid payments away from the providers that furnish the greatest volume of Medicaid-covered services toward providers that provide fewer, or even no, Medicaid-covered services, with the effect of ensuring that taxpaying providers are held harmless for all or a portion of their cost of the health care-related tax. In the arrangements, a State or other unit of government imposes a health-care related tax, then uses the tax revenue to fund the non-Federal share of SDPs that require Medicaid managed care plans to pay the provider taxpayers. The taxpayers appear to enter a pre-arranged agreement to redistribute the Medicaid payments to ensure that all taxpayers, when accounting for both their original Medicaid payment (from the State through a managed care plan) and any redistribution payment received from another taxpayer(s) or other entity, receive back (and are thereby held harmless for) all or at least a portion of their tax amount.
Providers that serve a relatively low percentage of Medicaid patients or no Medicaid patients often do not receive enough Medicaid payments funded by a health care-related tax to cover the provider's cost in paying the tax. Providers in this position are unlikely to support a State or locality establishing or continuing a health care-related tax because the tax would have a negative financial impact on them. Redistribution arrangements like those just described seek to eliminate this negative financial impact or turn it into a positive financial impact for taxpaying providers, likely leading to broader support among the provider class of taxpayers for legislation establishing or continuing the tax. Based on limited information we have been able to obtain from providers participating in such arrangements, we believe providers with relatively higher Medicaid volume agree to redistribute some of their Medicaid payments to ensure broad support for the tax program, which ultimately works to these providers' advantage since the tax supports increased Medicaid payments to them (even net of Medicaid payments that they redistribute to other providers) compared to payment amounts for delivering Medicaid-covered services they would receive in the absence of the tax program. These redistribution arrangements therefore help ensure that State or local governments are successful in enacting or continuing provider tax programs.
The Medicaid statute in 1903(w) does not permit us to provide FFP in expenditures under any State payment proposal that would distribute Medicaid payments to providers based on the cost of a health care-related tax instead of based on Medicaid services, so payment redistribution arrangements often occur without notice to CMS (and possibly States) and are not described as part of a State payment proposal submitted for CMS review and approval (see, section 1903(w)(4) of the Act). Given that we cannot knowingly approve awarding FFP under this scenario, we believe that it would be inconsistent with the proper and efficient operation of the Medicaid State plan to approve an SDP when we know the payments would be funded under such an arrangement. For example, we would not approve an SDP that would require payment from a Medicaid managed care plan to a hospital that did not participate in Medicaid, in any amount. Nor would we approve an SDP that would require payment from a Medicaid managed care plan (that is, a Medicaid payment) to a hospital with a low percentage of Medicaid revenue based on the difference between the hospital's total cost of a health care-related tax and other Medicaid payments received by the hospital. As a result, the redistribution arrangements seek to achieve what cannot be accomplished explicitly through a CMS-approved payment methodology (that is, redirecting Medicaid funds to hold taxpayer providers harmless for their tax cost, with a net effect of directing Medicaid payments to providers based on criteria other than their provision of Medicaid-covered services).
Redistribution arrangements undermine the fiscal integrity of the Medicaid program and are inconsistent with existing statutory and regulatory requirements prohibiting hold harmless arrangements. Currently, § 433.68(f)(3), implementing section 1903(w)(4)(C) of the Act, provides that a hold harmless arrangement exists where a State or other unit of government imposing a health care-related tax provides for any direct or indirect payment, offset, or waiver such that the provision of the payment, offset, or waiver directly or indirectly guarantees to hold taxpayers harmless for all or any portion of the tax amount. The February 2008 final rule on health care-related taxes specified that hold harmless arrangements prohibited by § 433.68(f)(3) exist “[w]hen a State payment is made available to a taxpayer or a party related to the taxpayer (for example, as a nursing home resident is related to a nursing home), in the
We stated that the addition of the words “or indirectly” in the regulation indicates that the State itself need not be involved in the actual redistribution of Medicaid funds for the purpose of returning tax amounts to taxpayers in order for the arrangement to qualify as a hold harmless (73 FR 9694). We further explained in the same preamble that we used the term “reasonable expectation” because “State laws were rarely overt in requiring that State payments be used to hold taxpayers harmless” (73 FR 9694). Hold harmless arrangements need not be overtly established through State law or contracts, but can be based upon a reasonable expectation that certain actions will take place among participating entities to return to taxpaying providers all or any portion of their tax amounts. The redistribution arrangements detailed earlier constitute a hold harmless arrangement described in section 1903(w)(4) of the Act and implementing regulations in part 433. Such arrangements require a reduction of the State's medical assistance expenditures as specified by section 1903(w)(1)(A)(iii) of the Act and § 433.70(b).
Approving an SDP under which the State share is funded through an impermissible redistribution agreement would also be inconsistent with “proper and efficient administration” of the Medicaid program within the meaning of section 1902(a)(4) of the Act, as it would result in expenditures for which FFP would ultimately have to be disallowed, when it would be more efficient to not allow such expenditures to be made in the first place. We therefore also rely on our authority under section 1902(a)(4) of the Act to specify methods of administration that are necessary for proper and efficient administration in support of the authority we proposed to make explicit in § 438.6 to disapprove an SDP when we are aware the State share in the SDP would be based on an arrangement that violates section 1903(w) of the Act. We note that in addition to the foregoing, SDPs that are required by Medicaid managed care contracts must be limited to payments for services that are covered under the Medicaid managed care contract and meet the definition of medical assistance under section 1903(a) of the Act. Thus, to the extent the funds are not used for medical assistance, but diverted for another purpose, matching as medical assistance would not be permissible.
In the past, we have identified instances of impermissible redirection or redistribution of Medicaid payments and have taken action to enforce compliance with the statute. For example, the Board upheld our decision to disallow a payment redirection arrangement in a State under a FFS State plan amendment, citing section 1903(a)(1) of the Act, among other requirements (HHS, Board Decision No. 2103, July 31, 2007). Specifically, the Board found that written agreements among certain hospitals redirected Medicaid payments. The payments were not retained by the hospitals to offset their Medicaid costs, as required under the State plan. Instead, pre-arranged agreements redirected Medicaid payments to other entities to fund non-Medicaid costs. In its decision, the Board stated, “Hence, they were not authorized by the State plan or Medicaid statute[.]” When providers redistribute their Medicaid payments for purposes of holding taxpayers harmless or otherwise, in effect, the State's claim for FFP in these provider payments is not limited to the portion of the payment that the provider actually retains as payment for furnishing Medicaid-covered services, but also includes the portion that the provider diverts for a non-Medicaid activity ineligible for FFP (for example, holding other taxpayers harmless for their tax costs). This payment of FFP for non-qualifying activities also has the effect of impermissibly inflating the Federal matching rate that the State receives for qualifying Medicaid expenditures above the applicable, statutorily-specified matching rate (see, for example, sections 1903(a), 1905(b), 1905(y), and 1905(z) of the Act).
Ensuring permissible non-Federal share sources and ensuring that FFP is only paid to States for allowable Medicaid expenditures is critical to protecting Medicaid's sustainability through responsible stewardship of public funds. State use of impermissible non-Federal share sources often artificially inflates Federal Medicaid expenditures. Further, these arrangements reward providers based on their ability to fund the State share, and disconnect the Medicaid payment from Medicaid services, quality of care, health outcomes, or other Medicaid program goals. Of critical concern, it appears that the redistribution arrangements are specifically designed to redirect Medicaid payments away from Medicaid providers that serve a high percentage of Medicaid beneficiaries to providers that do not participate in Medicaid or that have relatively lower Medicaid utilization.
States have cited challenges with identifying and providing details on redistribution arrangements when we have requested such information during the review of SDPs. The current lack of transparency prevents both CMS and States from having information necessary for reviewing both the proposed non-Federal share financing source and the proposed payment methodology to ensure they meet Federal requirements. Some States have also expressed concerns with ongoing oversight activities in which CMS is attempting to obtain information that may involve arrangements to which only private entities are a party. We are only interested in any business arrangements among private entities that could result in a violation of Federal statutory and regulatory requirements.
As noted above, we recognize that health care-related taxes can be critical tools for financing payments that support the Medicaid safety net, but they must be implemented in accordance with applicable statutory and regulatory requirements. This proposed rule would ensure that CMS and States have necessary information about any arrangements in place that would redistribute Medicaid payments and make clear that we have the authority to disapprove proposed SDPs if States identify the existence of such an arrangement or do not provide required information or ensure the attestations are made and available as required under proposed paragraph (c)(2)(ii)(H). The proposed new attestation requirement would help ensure appropriate transparency regarding the use of Medicaid payments and any relationship to the non-Federal share source(s), and aims to do so without interfering with providers' normal business arrangements.
All Federal legal requirements for the financing of the non-Federal share, including but not limited to, 42 CFR part 433, subpart B, apply regardless of delivery system, although currently,
We also propose to revise § 438.6(c)(2)(ii) to ensure transparency regarding the use of SDPs and to ensure that the non-Federal share of SDPs is funded with a permissible source. Under our proposal, States would be required to ensure that each participating provider in an SDP arrangement attests that it does not participate in any hold harmless arrangement with respect to any health care-related tax as specified in § 433.68(f)(3) in which the State or other unit of government imposing the tax provides for any direct or indirect payment, offset, or waiver such that the provision of the payment, offset, or waiver directly or indirectly guarantees to hold the provider harmless for all or any portion of the tax amount. Such hold harmless arrangements include those that produce a reasonable expectation that taxpaying providers would be held harmless for all or a portion of their cost of a health care-related tax. States would be required to note in the preprint their compliance with this requirement prior to our written prior approval of any contractual payment arrangement directing how Medicaid managed care plans pay providers. States would comply with this proposed requirement by obtaining each provider's attestation or requiring the Medicaid managed care plan to obtain each provider's attestation. We also propose, at § 438.6(c)(2)(ii)(H) to require that the State ensure that such attestations are available upon CMS request.
Under this proposal, CMS may deny written prior approval of an SDP if it does not comply with any of the standards in § 438.6(c)(2), including the financing of the non-Federal share is not fully compliant with all Federal legal requirements for the financing of the non-Federal share and/or the State does not require an attestation from each provider receiving a payment based on the SDP that it does not participate in any hold harmless arrangement. As part of our proposed restructuring of § 438.6(c)(2), these provisions would apply to all SDPs, regardless of whether written prior approval is required. We rely on our authority in section 1902(a)(4) of the Act to require methods of administration as are found by the Secretary to be necessary for the proper and efficient operation of the Medicaid State Plan to propose these requirements for ensuring that the source of the non-Federal share of the financing for SDPs is consistent with section 1903(w) of the Act. It is consistent with the economic and efficient operation of the Medicaid State Plan to ensure that State expenditures are consistent with the requirements to obtain FFP, and thereby avoid the process of recouping FFP when provided inappropriately, which is needlessly burdensome for States and CMS. Given that all Federal legal requirements for the financing of the non-Federal share, including but not limited to, 42 CFR part 433, subpart B, apply regardless of delivery system, we also solicit public comment on whether the proposed changes in § 438.6(c)(2)(ii)(G) and (H) should be incorporated more broadly into 42 CFR part 438.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on these proposals.
A fundamental requirement of SDPs is that they are payments related to the delivery of services under the contract. In the 2016 final rule, we stated how we believe that actuarially sound payments, which are required under section 1903(m)(2)(A)(iii) for capitation payments to MCOs and under part 438 regulations for capitation payments to risk-based PIHPs and PAHPs, must be based on the provision of covered benefits and associated administrative obligations under the managed care contract (81 FR 27588). This requirement that SDPs be tied to the utilization and delivery of covered benefits differentiates SDPs from pass-through payments. We described the differences between pass-through payments and SDPs in the 2016 final rule and in the 2017 Pass-Through Payment Rule, where we noted, that pass-through payments are not consistent with our regulatory standards for actuarially sound rates because they do not tie provider payments with the provision of services (81 FR 27587 through 27592, 82 FR 5415).
The current regulations at § 438.6(c)(2)(ii)(A) require that States demonstrate in writing that SDPs that require prior written approval be based on the utilization and delivery of services to Medicaid enrollees covered under the managed care plan contract. We have interpreted this requirement to mean that SDPs must be conditioned upon the utilization or delivery of services during the rating period identified in the preprint for which the State is seeking written prior approval. Requiring SDPs to be based on the utilization and delivery of services is a fundamental and necessary requirement for ensuring the fiscal and program integrity of SDPs, but we believe further clarification is necessary due to the variety of payment mechanisms that States use in their SDP arrangements. In particular, ensuring that payments are based on the delivery of services in SDPs that are fee schedule requirements described in § 438.6(c)(1)(iii) is relatively straightforward since fee schedules explicitly link a rate to each
For SDPs that are fee schedule requirements described in § 438.6(c)(1)(iii), the tie to utilization and delivery of services means that States require managed care plans to make payments when a particular service was delivered during the rating period for which the SDP was approved. Thus, the State could not, under our interpretation of the requirement, require managed care plans to make payments for services that were delivered outside of the approved rating period. However, in working with States, we found that this was not always understood. We therefore clarified this in SMDL #21-001,
We propose to codify this clarification in a new § 438.6(c)(2)(vii)(A) for SDPs described in § 438.6(c)(1)(iii)—that is, minimum fee schedules, maximum fee schedules, and uniform increases. As proposed, § 438.6(c)(2)(vii)(A) would require that any and all payments made under the SDP are conditioned on the utilization and delivery of services under the managed care plan contract for the applicable rating period only. This would preclude States from making any SDP payment based on historical or any other basis that is not tied to the delivery of services to the rating period itself.
Our proposal also addresses SDPs that require reconciliation. In SMDL #21-001,
To illustrate our concern and need for the proposed regulatory requirement, we share the following example for a State that has an SDP approved to require a uniform increase to be paid for inpatient hospital services for CY 2020. During CY 2020, the State's contracted managed care plans pay the inpatient hospital claims at their negotiated rates for actual utilization and report that utilization to the State via encounter data. Concurrently, the State directs its managed care plans, via the SDP, to make a separate uniform increase in payment to the same inpatient hospital service providers, based on historical CY 2019 utilization. Under this example, the increase in January CY 2020 payment for the providers is made based on January CY 2019 data, the increase in February CY 2020 payment is based on February CY 2019 data, and so forth. This pattern of monthly payments continues throughout CY 2020. After the rating period ends in December 2020, and after a claims runout period that can be as long as 16 months, the State then in mid-CY 2021 or potentially early 2022, reconciles the amount of CY 2019-based uniform increase payments to the amount the payments should be based on CY 2020 claims. The State then requires its managed care plans to make additional payments to, or recoup payments from, the hospitals for under- or over-payment of the CY 2019-based uniform increase.
In the inpatient hospital uniform increase example above, the State may initially account for the SDP in the CY 2020 rate certification and, after the rating period is over, the State submits an amendment to their rate certification to revise the total dollar amount dedicated to the SDP and the capitation rates to reflect the SDP provider payments that were made based on actual utilization in the CY 2020 rating period—thereby, making the managed care plans “whole” and removing risk from the managed care plans participating in the SDP. We do not find these practices consistent with the nature of risk-based managed care.
Capitation rates must be actuarially sound as required by section 1903(m)(2)(A)(iii) of the Act
We have previously issued regulations and guidance in response to payments we found to be inconsistent with the statute concerning actuarial soundness. In the 2016 rule we noted our belief that the statutory requirement that capitation payments to managed care plans be actuarially sound requires that payments under the managed care contract align with the provision of services under the contract. We further noted that based on our review of capitation rates, we found pass-through payments being directed to specific providers that generally were not directly linked to the delivered services or the outcomes of those services; thereby noting that pass-through payments are not consistent with actuarially sound rates and do not tie provider payments with the provision of services
States use retrospective reconciliations even though there are less administratively burdensome ways to ensure payment rates for specific services are at or above a certain level. States could accomplish this through the establishment of a minimum fee schedule, which we propose to define in § 438.6(a) as any contract requirement where the State requires a MCO, PIHP, or PAHP to pay no less than a certain amount for a covered service(s). If a State's intent is to require that managed care plans pay an additional amount per service delivered, States could accomplish this through the establishment of a uniform increase, which we propose to define in § 438.6(a) as any contract requirement where the State requires a MCO, PIHP, or PAHP to pay the same amount (the same dollar or the same percentage increase) per covered service(s) in addition to the rates the managed care plan negotiated with providers. In addition to being less administratively burdensome, both options would provide more clarity to providers on payment rates and likely result in more timely payments than a retrospective reconciliation process. Both options would also allow States' actuaries to include the SDPs into the standard capitation rate development process using the same utilization projections used to develop the underlying capitation rates. States can require both minimum fee schedules and uniform increases under current regulations.
We believe requiring managed care plans to make interim payments based on historical utilization and then reconciling to actual utilization instead suggests an intent by State to ensure payment of a specific aggregate amount to certain providers or, in some cases, removal of all risk related to these SDPs from managed care plans. We believe prohibiting this practice and removing post-payment reconciliation processes as we propose in § 438.6(c)(2)(vii)(B) would alleviate actuarial and oversight concerns as well as restore program and fiscal integrity to these kinds of payment arrangements.
CMS is proposing to prohibit the use of post-payment reconciliation processes for SDPs; specifically, that States establishing fee schedules under § 438.6(c)(1)(iii) cannot require that plans pay providers using a post-payment reconciliation process. It is not uncommon for States to pair SDPs requiring plans to pay providers using a post-payment reconciliation process with a separate payment term described later in section I.B.2.l. However, post-payment reconciliation process and separate payment terms are not the same. Separate payment terms are payments made to the plan in addition to the capitation rates to account for any portion of the cost of complying with the SDP not already accounted for in the capitation rates. In contrast, the post-payment reconciliation process that we are proposing to prohibit here directs how the plans pay providers. In both cases, CMS has raised concerns about the removal of risk from the plan and their use by some States in ways that are contrary to the risk-based nature of Medicaid managed care. However, as discussed later, while CMS has a strong preference that SDPs be included as adjustments to the capitation rates since that method is most consistent with the nature of risk-based managed care, we believe separate payment terms can be a useful tool for States to be able to make targeted investments in response to acute concerns around access to care. In contrast, we do not see the same kind of benefit to the Medicaid program in allowing States to require that plans pay providers using a post-payment reconciliation process. We believe that there are methods for providing sufficient guardrails around the use of separate payment terms that lessen the risks associated with the use of separate payment terms as we have proposed and described in section I.B.2.1. of this proposed rule.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on our proposals.
We are also proposing several changes to § 438.6(c) to address how VBP initiatives, which include value-based purchasing, delivery system reform, and performance improvement initiatives as described in § 438.6(c)(1)(i) and (ii), can be tied to delivery of services under the Medicaid managed care contract as well as to remove barriers that prevent States from using SDPs to implement these initiatives. Currently § 438.6(c)(2)(ii)(A) requires SDPs to be based on the utilization and delivery of services, so SDPs that require use of VBP initiatives must base payment to providers on utilization and delivery of services. Further, § 438.6(c)(2)(iii)(A) requires States to demonstrate in writing that the SDP will make participation in the VBP initiative available, using the same
In an effort to remove provisions that are barriers to implementation of VBP initiatives, add specificity to the types of arrangements that can be approved under § 438.6(c), and to strengthen the link between SDPs that are VBP initiatives and quality of care, we are proposing the following changes to the requirements that are specific to SDPs that involve VBP initiatives:
(1) Remove the existing requirements at § 438.6(c)(2)(iii)(C) that currently prohibit States from setting the amount or frequency of the plan's expenditures.
(2) Remove the existing requirements at § 438.6(c)(2)(iii)(D) that currently prohibit States from recouping unspent funds allocated for these SDPs.
(3) Redesignate § 438.6(c)(2)(iii)(B) with revisions and clarifications to § 438.6(c)(2)(vi)(B). The provision addresses how performance in these types of arrangements is measured for participating providers.
(4) Adopt a new § 438.6(c)(2)(vi)(C) to establish requirements for use of population-based and condition-based payments in these types of SDP arrangements. As discussed in section I.B.2.f of this proposed rule, we are proposing to adopt requirements for provider payment rates used in SDP arrangements through revisions to § 438.6(c)(2)(iii).
Currently, § 438.6(c)(2)(iii)(C) prohibits States from setting the amount or frequency of expenditures in SDPs that are VBP initiatives. In the 2015 proposed rule,
Currently, § 438.6(c)(2)(iii)(D) prohibits States from recouping any unspent funds allocated for SDP arrangements from managed care plans when the SDP arrangement is for VBP, delivery system reform, or performance improvement initiatives. In the 2015 proposed rule, we explained that because funds associated with delivery system reform or performance initiatives are part of the capitation payment, any unspent funds would remain with the MCO, PIHP, or PAHP. We believed this was important to ensure that the SDPs made to providers were associated with a value relative to innovation and Statewide reform goals and not simply an avenue for States to provide funding increases to specific providers. However, allowing managed care plans to retain unspent funds when providers fail to achieve performance targets can create perverse incentives for States and managed care plans. States have described to us that they are often not incentivized to establish VBP arrangements with ambitious performance or quality targets if those arrangements result in managed care plans profiting from weak provider performance. Although States attempt to balance setting performance targets high enough to improve care quality and health outcomes but not so high that providers are discouraged from participating or so low that they do not result in improved quality or outcomes,
To expand the types of VBP initiatives that would be allowed under § 438.6(c)(1)(i) and (ii) and ensure a focus on value over volume, we are also proposing additional revisions in § 438.6(c)(2)(vi) to distinguish between performance-based payments and the use of proposed population-based or condition-based payments to providers.
The existing regulations at § 438.6(c)(1)(i) and (ii) were intended both to incent State activities that promote certain performance targets as well as to facilitate and support delivery system reform initiatives within the managed care environment to improve health care outcomes. We recognize that certain types of multi-payer or Medicaid-specific initiatives, such as patient-centered medical homes (PCMH), broad-based provider health information exchange projects, and delivery system reform projects to improve access to services, among others, may not lend themselves to being conditioned upon provider performance during the rating period.
We believe the best way to address the limitations in current regulation text is to specify different requirements for VBP initiatives that condition payment upon performance from ones that are population or condition-based. Therefore, we propose to use new § 438.6(c)(2)(vi)(B) for requirements for SDPs that condition payment on performance. We are also proposing to adopt additional requirements in addition to redesignating the provision currently at § 438.6(c)(2)(iii)(B) to newly proposed § 438.6(c)(2)(vi)(B)(
We further propose to add new § 438.6(c)(2)(vi)(C) to describe the requirements for SDPs that are population-based payments and condition-based payments.
Currently, our policy is that the performance measurement period for SDPs that condition payment based upon performance must overlap with the rating period in which the payment for the SDP is made. However, we have found that States frequently experience delays in obtaining performance-based data due to claims run out time and the time needed for data analyses and validation of the data and the results. All of this can make it difficult, if not impossible, to comply with this requirement. Therefore, we propose to permit States to use a performance measurement period that precedes the start of the rating period in which payment is delivered by up to 12 months. Under this aspect of our proposal, States would be able to condition payment on performance measure data from time periods up to 12 months prior to the start of the rating period in which the SDP is paid to providers. We believe that this flexibility would allow States adequate time to collect and analyze performance data for use in the payment arrangement and may incentivize States to adopt more VBP initiatives. We solicit comment on whether 12 months is an appropriate time period to allow for claims runout and data analysis, or if the time period that the performance period may precede the rating period should be limited to 6 months or extended to 18 or 24 months, or if the performance period should remain consistent with the rating period. We also propose that the performance measurement period must not exceed the length of the rating period. We believe this would make it clear to States that although we propose to extend the length of time between provider performance and payment for administrative simplicity, we are not extending the performance measurement time. Finally, we are also proposing that all payments would need to be documented in the rate certification for the rating period in which the payment is delivered. We also believe identifying which rating period the payments should be reflected in is important since up to 2 rating periods may be involved between
In a December 2020 report,
We propose to define a “population-based payment” at § 438.6(a) as a prospective payment for a defined Medicaid service(s) for a population of Medicaid managed care enrollees covered under the contract attributed to a specific provider or provider group. We propose to define a “condition-based payment” as a prospective payment for a defined set of Medicaid service(s), that are tied to a specific condition and delivered to Medicaid managed care enrollees. One example of a population-based payment would be an SDP that is a primary care medical home (PCMH) and directs managed care plans to pay prospective per member per month (PMPM) payments for care management to primary care providers, where care management is the service being delivered under the contract and covered by the PMPM. An attributed population could also be condition-based. For example, States could direct managed care plans to pay a provider or provider group a PMPM for Medicaid enrollees with a specific condition when the enrollee is attributed to the provider or provider group for treatment for that condition.
At § 438.6(c)(2)(vi)(C)(
We have seen States submit proposals for VBP initiatives that include prospective PMPM population-based payments with no direct tie to value or quality of care and paid in addition to the contractually negotiated rate. Because population-based payments should promote higher quality and coordination of care to result in improved health outcomes, we believe it is imperative that these type of PMPM payments are used to ensure that enrollees are receiving higher quality and coordinated services to increase the likelihood of enrollees experiencing better outcomes. Therefore, we propose to add § 438.6(c)(2)(vi)(C)(
We recognize the importance of providing a regulatory pathway for States to implement SDPs that are VBP initiatives designed to promote higher quality care in more effective and efficient ways at a lower cost. Because quality of care and provider
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on these proposals.
We are proposing several changes to the SDP regulations in § 438.6(c) to support more robust quality improvement and evaluation. Existing regulations at § 438.6(c)(2)(ii)(C) and (D) specify that to receive written prior approval, States must demonstrate in writing, amongst other requirements, that the State expects the SDP to advance at least one of the goals and objectives in the State's managed care quality strategy and has an evaluation plan that measures the degree to which the SDP advances the identified goals and objectives. We issued guidance in November 2017
In order to monitor the extent to which an SDP advances the identified goals and objectives in a State's managed care quality strategy, we request that States submit their SDP evaluation results from prior rating periods to aid our review of preprint submissions that are renewals of an existing SDP. If an SDP proposal meets regulatory requirements but the State is unable to provide the requested evaluation results, we will usually approve a renewal of the SDP with a “condition of concurrence” that the State submit evaluation results with the following year's preprint submission for renewal of the SDP for the following rating period. For example, one common condition of concurrence for year two preprints is the provision of SDP evaluation results data for year one of the SDP with the year three preprint submission.
In 2021, CMS conducted an internal analysis to assess the effectiveness of SDP evaluation plans in measuring progress toward States' managed care quality strategy goals and objectives and whether SDP evaluation findings provided us with sufficient information to analyze whether an SDP facilitated quality improvement. We analyzed data from 228 renewal preprints submitted by 33 States between April 2018 and February 2021. Over half (63 percent) of the evaluation plans submitted were incomplete, and only 43 percent of the renewal preprints included any evaluation results. Our analysis also found only a 35 percent compliance rate with conditions of concurrence requesting States submit SDP evaluation results with the preprint for the following rating period. Our policy goals in this area are frustrated by the lack of a regulation requiring submission of these evaluation results. By adopting requirements for submission of evaluation plans and reports, we intend to increase compliance and improve our oversight in this area.
As the volume of SDP preprint submissions and total dollars flowing through SDPs continues to increase, we recognize the importance of ensuring that SDPs are contributing to Medicaid quality goals and objectives, and recognize that meaningful evaluation results are critical for ensuring that these payments further improvements in quality of care. Moreover, consistent submission of evaluation results is important for transparency and for responsiveness to oversight bodies. Consistent with our internal findings, other entities, including MACPAC
We are proposing a number of regulatory changes to enhance CMS's
In an effort to strengthen reporting and to better monitor the impact of SDPs on quality and access to care, we propose at § 438.6(c)(2)(iv) that the State must submit an evaluation plan for each SDP that requires written prior approval that includes four specific elements. We specify that our proposal is to establish minimum content requirements for SDP evaluation plans but is not intended to limit States in evaluating their SDP arrangements. Currently, § 438.6(c)(2)(ii)(D) requires that States develop an evaluation plan that measures the degree to which the arrangement advances at least one of the goals and objectives in the State's managed care quality strategy (which is required by § 438.340).
We propose at § 438.6(c)(2)(iv)(A) that the evaluation plan must identify at least two metrics that would be used to measure the effectiveness of the payment arrangement in advancing the identified goal(s) and objective(s) from the State's managed care quality strategy on an annual basis. In addition, proposed paragraph (c)(2)(vi)(C)(
We propose at § 438.6(c)(2)(iv)(A)(
Concerns around access to primary care, maternal health, and behavioral health have been raised nationally. The current administration considers increasing access to care for these services to be a national priority. We encourage States to implement SDPs for these services and providers to improve access. We also encourage States to include measures that focus on primary care and behavioral health in their evaluation plans when relevant. This could include using existing measures from the Medicaid and CHIP Child and Adult Core Sets
It is crucial to monitor and evaluate the impact of SDP implementation, and as such we propose at § 438.6(c)(2)(iv)(B) to require States to include baseline performance statistics for all metrics that would be used in the evaluation since this data must be established in order to monitor changes in performance during the SDP performance period. We believe this proposal is particularly necessary since we found in our internal study that, among the SDP evaluation plan elements, a baseline statistic(s) was the most commonly missing element. We propose the requirements at § 438.6(c)(2)(iv)(B) in an effort to ensure that States' evaluation plans produce reliable results throughout the entirety of the SDP's implementation.
Measurable SDP evaluation performance targets that demonstrate performance relative to the baseline measurement allow States to determine whether the payment arrangement is having the intended effect and helping a State make progress toward its quality goals. Our internal analysis showed that nearly 20 percent of performance measures selected by States were not specific or measurable. Therefore, at § 438.6(c)(2)(iv)(C), we also propose to require that States include measurable performance targets relative to the baseline statistic for each of the selected measures in their evaluation plan.
Overall, we believe that the proposed regulations at § 438.6(c)(2)(iv) would ensure that States collect and use stronger data for developing and evaluating payment arrangements to meet the goals of their Medicaid programs and would also be responsive to recommendations for more clarity for SDP evaluation plans. However, we
Finally, we are proposing to amend § 438.6(c)(2)(ii)(D) to further require the evaluation plan include all the elements outlined in paragraph (c)(2)(iv). These proposed changes in § 438.6(c)(2)(ii)(D) and the new proposed requirements in § 438.6(c)(2)(iv) would further identify the necessary components of a State's evaluation plans for SDPs and make clear that we have the authority to disapprove proposed SDPs if States fail to provide in writing evaluation plans for their SDPs that comply with these regulatory requirements.
Section 1902(a)(6) of the Act requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require. Our proposal to add new § 438.6(c)(2)(v) to require that States submit to CMS, for specified types of SDPs that have a final State directed payment cost percentage that exceeds 1.5 percent, an evaluation report using the evaluation plan the State outlined under proposed § 438.6(c)(2)(iv). As proposed in § 438.6(c)(2)(v), the proposed evaluation reporting requirement is limited to States with SDPs that require prior approval. We recognize that submitting an evaluation report would impose some additional burden on States, so we propose this risk-based approach to identify when an evaluation report must be submitted to CMS based on the actual total amount that is paid as a separate payment term described in § 438.6(c)(6) or portion of the actual total portion of capitation payments attributable to the SDP, as a percentage of the State's total Medicaid managed care program costs for each managed care program. This approach would allow States and CMS to focus resources on payment arrangements with the highest financial risk. We have selected the 1.5 percent as it aligns with existing Medicaid managed care policy for when rate amendments are necessary (often referred to as a
We propose to define “final State directed payment cost percentage” in § 438.6(a) as the annual amount calculated, in accordance with paragraph (c)(7)(iii) of this section, for each State directed payment and each managed care program. In § 438.6(c)(7)(iii)(A), we propose for SDPs requiring prior approval that the final SDP cost percentage numerator be calculated as the portion of the total capitation payments that is attributable to the State directed payment and, actual total amount that is paid as a separate payment term described in § 438.6(c)(6), for each managed care program. In § 438.6(c)(7)(iii)(B), we propose the final SDP cost percentage denominator be calculated as the actual total capitation payments, defined at § 438.2, for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the actual total amount of State directed payments that are paid as a separate payment term as described in paragraph (c)(6). To calculate the numerator for a minimum or maximum fee schedule type of SDP that is incorporated into capitation rates as an adjustment to base capitation rates, an actuary should calculate the absolute change that the SDP has on base capitation rates. Over time, as the SDP is reflected in the base data and incorporated into base capitation rates, it is possible that the absolute effect may decrease or no longer be apparent, and the numerator may decrease to zero. We solicit comment on whether the numerator for a minimum or maximum fee schedule SDP that is incorporated into capitation rates as an adjustment to base capitation rates should be calculated in a different manner (for example, estimating a portion of the capitation rates resulting from the SDP). We do not believe that it is necessary to propose regulation text to codify this approach as we intend to issue additional guidance in the Medicaid Managed Care Rate Development Guide in accordance with § 438.7(e). We also solicit comment on whether we should codify this in regulation text. We believe this proposed numerator and denominator would provide an accurate measurement of the final expenditures associated with a SDP and total program costs in each managed care program in a risk-based contract.
We believe the final SDP cost percentage should be measured distinctly for each managed care program and SDP, as reflected in the definition proposed for this term. This is appropriate because capitation rates are typically developed by program, SDPs may vary by program, and each managed care program may include differing populations, benefits, geographic areas, delivery models, or managed care plan types. For example, one State may have a behavioral health program that covers care to most Medicaid beneficiaries through PIHPs, a physical health program that covers physical health care to children and pregnant women through MCOs, and a program that covers physical health and MLTSS to adults with a disability through MCOs. Another State may have several different managed care programs that serve similar populations and provide similar benefits through MCOs, but the delivery model and geographic areas served by the managed care programs vary. We addressed managed care program variability within the 2016 final rule when we noted that “This clarification in the regulatory text to reference “managed care program” in the regulatory text is to recognize that States may have more than one Medicaid managed care program—for example physical health and behavioral health . . .” (81 FR 27571). Therefore, we believe it would be contrary to our intent if States were to develop a final SDP cost percentage by aggregating data from more than one managed care program since that would be inconsistent with rate development, the unique elements of separate managed care programs, and the SDPs that vary by managed care program. We note here that we intend to use this application of managed care program in other parts of this section of this proposed rule, including, but not limited to, the discussion of calculating the total payment rate in section I.B.2.f. of this proposed rule, measurement of performance for certain VBP arrangements discussed in section I.B.2.i. of this proposed rule and separate payment terms in section I.B.2.i. of this proposed rule.
With § 438.6(c)(7)(i), we propose that the final State directed payment cost percentage be calculated on an annual basis and recalculated annually to ensure consistent application across all States and managed care programs. To
Although all States would be required to develop and document evaluation plans in compliance with the provisions proposed in § 438.6(c)(2)(iv), the proposed regulation at § 438.6(c)(2)(v) requires submission of the evaluation report for an SDP based on whether the SDP results in a final SDP cost percentage greater than 1.5 percent. In recognition that the final SDP cost percentage report represents additional State burden and that many States may choose to evaluate their SDPs regardless of the final SDP cost percentage, we propose § 438.6(c)(7) which requires States to submit the final SDP cost percentage report, only if a State wishes to demonstrate that it is below 1.5 percent. With this proposed reporting requirement, States would be required to provide the final SDP cost percentage report to demonstrate that an SDP is exempt from the proposed evaluation report requirement. For SDP arrangements that do not exceed the threshold, States would not be required to submit evaluation results under proposed new paragraph § 438.6(c)(2)(v), but we would encourage States to monitor the evaluation results of all of their SDPs. We recognize that in order to monitor the 1.5 percent threshold, we would need a reporting mechanism by which States would be required to calculate and provide the final SDP cost percentage to CMS. Therefore, we propose a requirement (at new § 438.6(c)(7)(iv)) that the State submit the final State directed payment cost percentage annually to CMS for review, when the final State directed payment cost percentage does not exceed 1.5 percent and the State has not voluntarily submitted the evaluation report, as a separate report concurrent with the rate certification submission required in § 438.7(a) no later than 2 years after the completion of each 12-month rating period that included a State directed payment. We believe that it is appropriate for States' actuaries to develop a separate report to document that the final State directed payment cost percentage does not exceed 1.5 percent, rather than including it in a rate certification, because the final State directed payment cost percentage may require alternate data compared to the base data that were used for prospective rate development, given the timing of base data requirements as outlined in § 438.5(c)(2). We note that this proposal is similar to the concurrent submission for the proposed MLR reporting at § 438.74 and proposed ILOS projected and final cost percentage reporting at § 438.16(c). We considered proposing that States submit the final SDP report to CMS upon completion of the report, separately and apart from the rate certification. However, we believe there should be consistency across States for when this report is submitted to CMS for review, and we believe receiving this report and the rate certification at the same time would enable CMS to review them concurrently.
As the proposed denominator for the final SDP cost percentage would be based on the actual total capitation payments and the actual total State directed payments paid as a separate payment term (see section I.B.2.l. of this proposed rule for details on this proposal for separate payment terms) paid by States to managed care plans, we recognize that calculating the final SDP cost percentage would take States and actuaries some time. For example, changes to the eligibility file and revised rate certifications for rate amendments may impact the final capitation payments that are a component of the calculation. Given these factors, we believe that 2 years is an adequate amount of time to accurately perform the calculation. Under this proposal, for example, the final SDP cost percentage report for a managed care program that uses a calendar year 2024 rating period would be submitted to CMS with the calendar year 2027 rate certification.
For the evaluation reports, we propose to adopt three requirements in § 438.6 (c)(2)(v)(A). First, in § 438.6(c)(2)(v)(A)(
States consistently have difficulty providing evaluation results in the first few years after implementation of an SDP due to the time required for complete data collection. Our internal analysis found that States' ability to provide evaluation results improved over time. Although only 21 percent of proposals included evaluation results in year two, 55 percent of proposals included results data in year three, and 66 percent of year 4 proposals included the results of the evaluation. For this reason, we considered but ultimately did not propose that States submit an annual evaluation. Therefore, we propose at § 438.6(c)(2)(v)(B) to require States to submit the first evaluation report no later than 2 years after the conclusion of the 3-year evaluation period and that subsequent evaluation reports would have to be submitted to CMS every 3 years after.
In § 438.6(c)(2)(v)(A)(
After submission of the initial evaluation report, States would be required to submit subsequent evaluation reports every 3 years. This means that States would submit the second evaluation report with the SDP preprint submission for the first rating period beginning 9 years after the applicability date for the evaluation plan; this evaluation report would contain results from years four through six after the applicability date for the
We recognize and share the concerns that oversight bodies have expressed regarding the extent to which CMS uses evaluation results to inform SDP written prior approval decisions. In response to these concerns and as a part of the proposed revisions to § 438.6(c)(2)(ii), which include the standards that all SDPs must meet, we are proposing a new standard at § 438.6(c)(2)(ii)(F) requiring that all SDPs must result in achievement of the stated goals and objectives in alignment with the State's evaluation plan. We believe that the proposed changes would help us to better monitor the impact of SDPs on quality and access to care and would help standardize our review of SDP proposal submissions under § 438.6(c) while allowing us to disapprove SDPs that do not meet their stated quality goals and objectives.
We are also making a concurrent proposal at § 438.358(c)(7) to include a new optional EQR activity to support evaluation requirements, which would give States the option to leverage a CMS-developed protocol or their EQRO to assist with evaluating SDPs. We believe this proposed optional activity would reduce burden associated with these new requirements and is discussed in more detail in section I.B.5.c.3 of this proposed rule. we are considering, and invite public comment on, requiring that States procure an independent evaluator for SDP evaluations in the final rule based on comments received. In consideration of the myriad of new proposed requirements within this proposed rule, we weighed the value of independent evaluation with increased State burden. We are concerned that it would be overly burdensome for States to procure independent evaluators for SDPs due, in part, to the timing of the final SDP cost percentage submission. In section I.B.2. of this proposed rule, we are proposing that the final SDP cost percentage be submitted 2 years following completion of the applicable rating period, and we propose here that if the final SDP cost percentage exceeds the 1.5 percent, States would be required to submit an evaluation. While we encourage all States to evaluate their SDPs, it could be difficult and time consuming to procure an independent evaluator in a timely manner solely for the purpose of the SDP evaluation since States would not know definitely whether an evaluation is required until 2 years following the rating period. We solicit comment on whether we should consider a requirement that States use an independent evaluator for SDP evaluations.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on our proposals and the alternatives under consideration.
SDPs are contractual obligations in which States direct Medicaid managed care plans on how or how much to pay specified provider classes for certain Medicaid-covered services. The current heading for § 438.6(c) describes paragraph (c) as being about delivery system and provider payment initiatives under MCO, PIHP, or PAHP contracts. Further, the regulation refers to SDPs throughout as provisions in the contract between the MCO, PIHP or PAHP and the State that direct expenditures by the managed care plan (that is, payments made by the managed care plan to providers). SDPs are to be included in a State's managed care rate certification per § 438.7(b)(6) and final capitation rates for each MCO, PIHP, and PAHP must be identified in the applicable contract submitted for CMS review and approval per § 438.3(c)(1)(i). Thus, every SDP must be documented in the managed care contract and actuarial rate certification.
Previous guidance issued to States, including in the January 2022 State Guide to CMS Criteria for Medicaid Managed Care Contract Review and Approval (State Guide), indicates that contractual requirements for SDPs should be sufficiently detailed for managed care plans to operationalize each payment arrangement in alignment with the approved preprint(s).
To reduce this risk and improve the clarity of SDPs for managed care plans, we propose to codify at § 438.6(c)(5) minimum requirements for the content of a Medicaid managed care contract that includes one or more SDP contractual requirement(s). We believe these minimum requirements for SDP contract terms would assist States when developing their contracts, ensure that managed care plans receive necessary information on the State's intent and direction for the SDP, facilitate CMS' review of managed care contracts, and ensure compliance with the approved SDP preprint. At § 438.6(c)(5)(i) through (v), we propose to specify the information that must be documented in the managed care contract for each SDP. Proposed § 438.6(c)(5)(i) would require the State to identify the start date and, if applicable, the end date within the applicable rating period. While most SDPs, particularly long-standing contractual requirements, are in effect throughout the entire rating period, some SDPs begin in the middle of the rating period or are for a limited period of time within a rating period. This requirement would ensure that the time period for which the SDP applies is clear to the managed care plans.
Proposed § 438.6(c)(5)(ii) would require the managed care contract to
Proposed § 438.6(c)(5)(iii) would require the State to include a description of each payment arrangement in the managed care contract. This will ensure compliance with the written prior approval issued by CMS and provide clear direction to plans while also assisting CMS in its review and approval of Medicaid managed care contracts. For each type of payment arrangement, we are proposing to require that specific elements be included in the contract at a minimum. For SDPs that are minimum fee schedule arrangements, we propose that the contract must include: in § 438.6(c)(5)(iii)(A)(1), the fee schedule the plan must ensure payments are at or above; in paragraph (c)(5)(iii)(A)(2), the procedure and diagnosis codes to which the fee schedule applies; and in paragraph (c)(5)(iii)(A)(3), the applicable dates of service within the rating period for which the fee schedule applies. We are proposing the requirement at paragraph (c)(5)(iii)(A)(3) so that it is clear that payment can only be triggered based on service delivery within the applicable rating period.
For minimum fee schedules set at the State plan approved rate as described in § 438.6(c)(1)(iii)(A), we propose to require at § 438.6(c)(5)(iii)(A)(4) that the contract reference the applicable State plan page, the date it was approved, and a link to where the currently approved State plan page is posted online when possible. For minimum fee schedules set at the Medicare rate as described in § 438.6(c)(1)(iii)(B), we propose to require at § 438.6(c)(5)(iii)(A)(5), that the contract include the Medicare fee schedule and any specific information necessary for implementing the payment arrangement. For example, Medicare updates their fee schedules annually using a calendar year but Medicaid managed care contracts may not be based on a calendar year, such as those that use a State fiscal year. Therefore, States would have to identify the publication year of the Medicare fee schedule being required by the SDP. As another example, the Medicare physician fee schedule includes factors for different geographic areas of the State to reflect higher cost areas; the Medicaid managed care contract would have to specify if the plans are required to apply those factors or use an average of those factors and pay the same rate irrespective of the provider's geographic region.
For uniform increases as described in paragraph (c)(1)(iii)(D), we propose at § 438.6(c)(5)(iii)(B)(1) through (5) to require the contract to include: (1) whether the uniform increase will be a specific dollar amount or a specific percentage increase over negotiated rates; (2) the procedure and diagnosis codes to which the uniform increase will be applied; (3) the specific dollar amount of the increase or percent of increase, or the methodology to establish the specific dollar amount or percentage increase; (4) the applicable dates of service within the rating period for which the uniform increase applies; and (5) the roles and responsibilities of the State and the plan, as well as the timing of payment(s), and any other significant relevant information.
For maximum fee schedules as described in paragraph (c)(1)(iii)(E), we propose at § 438.6(c)(5)(iii)(C)(1) through (4) to require the contract to include: (1) the maximum fee schedule the plan must ensure payments are below; (2) the procedure and diagnosis codes to which the fee schedule applies; (3) the applicable dates of service within the rating period for which the fee schedule applies; and (4) details of the State's exemption process for plans and providers to follow if they are under contract obligations that result in the need to pay more than the maximum fee schedule. We believe an exemption process is necessary for payment arrangements that limit how much a managed care plan can pay a provider to ensure that the MCO, PIHP, or PAHP retains the ability to reasonably manage risk and has discretion in accomplishing the goals of the contract.
For contractual obligations described in paragraph (c)(1)(i) and (ii) that condition payment based upon performance, we propose at § 438.6(c)(5)(iii)(D)(
For contractual obligations described in paragraphs (c)(1)(i) and (ii) that are population or condition-based payments as defined in § 438.6(a), we propose at § 438.6(c)(5)(iii)(E) to require the contract to describe: (1) the Medicaid covered service(s) that the population or condition-based payment is made for; (2) the time period that the population-based or condition-based payment covers; (3) when the population-based or condition-based payment is to be made and how frequently; (4) a description of the attribution methodology, if one is used, which must include at a minimum the data used, when the panels will be established, how frequently those panels will be updated, and how that attribution model will be communicated to providers; and (5) the roles and responsibilities of the State and the plan in operationalizing the attribution methodology if an attribution methodology is used.
Proposed § 438.6(c)(5)(iv) would require that the State include in the managed care contract any encounter reporting and separate reporting requirements that the State needs in order to audit the SDP and report provider-level payment amounts to CMS as required in § 438.6(c)(4).
Proposed § 438.6(c)(5)(v) would require that the State indicate in the contract whether the State would be using a separate payment term as defined in § 438.6(a) to implement the SDP. This information would provide additional clarity for oversight purposes for both States and CMS.
Finally, we propose to require in § 438.6(c)(5)(vi) that all SDPs must be specifically described and documented in MCO, PIHP, and PAHP contracts no later than 120 days after the start of the SDP or approval of the SDP under § 438.6(c)(2)(i), whichever is later. This timeframe is consistent with the timeframe being proposed for documenting separate payment terms in the managed care contract under § 438.6(c)(6)(v). We believe that
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comments on our proposals.
In accordance with § 438.4(a), actuarially sound capitation rates are projected to provide for all reasonable, appropriate and attainable costs that are required under the terms of the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract, and capitation rates are developed in accordance with the requirements in § 438.4(b) to be approved by CMS. This includes the requirement in § 438.4(b)(1) that the capitation rates must be developed with generally accepted actuarial principles and practices and in § 438.4(b)(7) they must meet any applicable special contract provisions as specified in § 438.6, to ensure that all SDPs, which are contractual arrangements, are considered as the actuary develops actuarially sound capitation rates. (Similarly, withhold and incentive arrangements and pass-through payments must be taken into account when capitation rates are developed.) We are not proposing changes to the requirements for actuarially sound capitation rates; therefore, we will retain and reaffirm here applicability of the requirements of that SDPs must be developed in such a way as to ensure compliance with § 438.4 and the standards specified in § 438.5 and specify further that SDPs must also be developed in such a way to ensure compliance with § 438.7 and § 438.8.
We solicit public comments on our proposal.
The most common structure for separate payment terms is a State first establishes a finite and predetermined pool of funding that is paid by the State to the plan(s) separately and in addition to the capitation payments for a specific SDP. The pool of funds is then disbursed regularly throughout the rating period (for example, quarterly) based on the services provided in that portion of the rating period (for example, quarter) to increase total provider payments or reach a specific payment rate target. Typically, States divide the dedicated funding pool into equal allotments (for example, four if making quarterly payments to their plans). They then review the encounter data for the service(s) and provider class identified in the approved preprint for the quarter that has just ended and divide the allotment by the total service utilization across all providers in the defined class (for example, inpatient discharges for all rural hospitals) to determine a uniform dollar amount to be paid in addition to the initial payment by the managed care plan for rendered services. The State will then pay the quarterly allotment to the managed care plans, separate from the capitation rate payment, and direct them to use that allotment for additional retroactive payments to providers for the utilization that occurred in the quarter that just ended. The State will repeat this process each quarter, with the uniform increase changing for each quarter depending on utilization but being paid uniformly to providers in the defined class for the services within that quarter (for example, inpatient discharges for rural hospitals). Other
As noted earlier, separate payment terms are paid separate and apart from capitation rate payments; they are not included in capitation rates. The development of the separate payment term is frequently done by the State rather than the State's actuaries; CMS has never required actuaries to certify the reasonableness of the amount of the separate payment term, but only that the separate payment term is consistent with what was approved in the SDP preprint. However, CMS has always required that separate payment terms be documented in the State's rate certification and that SDPs, including those that utilize separate payment terms, must be developed in accordance with § 438.4 and the standards in §§ 438.5, 438.7 and 438.8. CMS has asked actuaries to document the separate payment terms in the State's rate certification because they are required payments for services under the risk-based contract.
Depending on the size and scope of the SDP and the provider payment rates assumed in the capitation rate development, separate payment terms can have a significant impact on the assessment of the actuarial soundness of the rates. In some cases, capitation rates may not be sufficient without taking separate payment terms into account. When examined in conjunction with the capitation rates, CMS has found that amounts included in separate payment terms can, when combined with capitation payment amounts, represent a significant portion of the total payment made under the Medicaid managed care contract. For example, in one State, the separate payment term for an SDP for inpatient hospital services represented 40 percent of the total amount paid in certain rate cells.
In some cases, the provider payment rates assumed in the development of the capitation rates, absent the SDP paid through a separate payment term to the plan(s), are so low that the capitation rates would likely not be actuarially sound. In the example above, considering how low the payment rates were absent the SDP paid to the plans through a separate payment term in this State, it would be difficult for an actuary to determine that the capitation rates are actuarially sound. However, the additional payments made as part of the SDP for these providers raise the effective provider payment rates, and after considering all payments made to the plan (the base capitation rates and the separate payment term payments for the SDP) the actuary may be able to determine that the capitation rates are actuarially sound. This is not the case for all States and for all SDPs; however, this example highlights the need to account for the impact of separate payment terms on the assessment of the actuarial soundness of the capitation rates. Additionally, since the contract requires that the managed care plans pay the SDP to providers, the separate payment term must be included within the actuarial certification for the rates to be considered actuarially sound as defined in § 438.4(a). For this reason, we consider separate payment terms part of the contract with the managed care plans that is subject to the requirements of section 1903(m)(2)(A) of the Act, and a necessary part of certifying the actuarial soundness of capitation rates under this provision. As such, we propose to regulate them under this authority.
Over time, the number of SDPs approved by CMS using separate payment terms has increased substantially. According to our internal analysis, 41.5 percent of all SDPs that CMS has reviewed and approved from May 2016 through March 2022 were included in the State's rate certification submission as a separate payment term. While there has been some fluctuation over time in this trend, the share of SDPs that use separate payment terms has increased from 42 percent of all SDPs that began in calendar year 2020 to 55 percent of all SDPs that began in calendar year 2021.
In our January 2021 SMDL, we published additional guidance on SDPs, and expressed our growing concern with the increased use of separate payment terms.
To better understand why States choose to pay plans for their SDPs through a separate payment term, we started collecting information from States as part of the revised preprint form published in January 2021. States were required to start using this revised preprint for SDP requests for rating periods beginning on or after July 1, 2021. In the revised preprint form, States must identify if any portion of the SDP would be included in the rate certification as a separate payment term and if so, to provide additional justification as to why this is necessary and what precludes the State from covering the costs of SDPs as an adjustment to the capitation rates paid to managed care plans.
From the data we have collected as well as discussions with States, we have noted that there are a number of reasons why States use separate payment terms. For example, States have noted particular challenges with including VBP arrangements in capitation rates. They have asserted that it is difficult to project individual provider level performance in a way that lends itself to inclusion in standard rate development practices. Additionally, performance measurement often does not align with States' rating periods, further complicating the standard rate development process.
Several States also noted that even for fee schedule-based SDPs, such as uniform payment increases, incorporation into standard rate development practices presents challenges. States assert that using a separate payment term offers administrative simplicity to the State agency in administering the SDPs because distributing a pre-determined amount of funding among the plans is much easier than relying on actuarial projections. Further, the use of a separate payment term also promotes the ease of tracking and verification of accurate payment to providers from the managed care plans required under the SDP. This is particularly important when States are implementing legislative directives that require an appropriation of funding be dedicated to a specific purpose. State legislatures, in some instances, have identified a specific dollar amount that they want to invest in increasing reimbursement for a particular service, potentially to respond to an acute concern around
States have also noted that utilization often cannot be predicted adequately; thus, including dedicated funding into base rates may not always result in the funding being distributed as intended by the legislature. Absent the ability to use separate payment terms, States are likely to resort to requiring plans to make interim payments based on historical utilization and then reconciling to current utilization, often after the end of the rating period, to ensure that all of the funding was used as directed by the legislature. As noted in section I.B.2.h. of this proposed rule, we have significant concerns with this practice in States that already require plans to make interim payments based on historical utilization and then reconcile to current utilization. As part of this proposed rulemaking, we have proposed to prohibit such payment methodologies in § 438.6(c)(2)(vii).
States also stated that separate payment terms reduce the burden on managed care plans by limiting the need to update claims systems. In fact, one State noted that they shifted from incorporating a particular SDP as an adjustment to capitation rates to implementing the SDP through a separate payment term because their managed care plans did not have the ability to update or modify their claims payment systems in a manner that would ensure accurate payment of the increases required under the State's SDP if the funding was built into the capitation payment. The State noted that the managed care plans had dedicated significant technical resources and still could not implement the changes needed accurately.
As noted earlier, CMS has a strong preference that SDPs be included as adjustments to the capitation rates since that method is most consistent with the nature of risk-based managed care. However, we recognize that States believe there is utility in the use of separate payment terms for specific programmatic or policy goals. We believe separate payment terms are one tool for States to be able to make targeted investments in response to acute concerns around access to care. However, we continue to believe that, while separate payment terms often retain risk for the providers as opposed to guaranteeing them payment irrespective of the Medicaid services they deliver to Medicaid managed care enrollees, there is often little or no risk for the plans related to separate payment terms under an SDP, which is contrary to the nature of risk-based managed care.
Therefore, we believe that it is necessary to establish regulatory requirements regarding the use of separate payment terms to fulfill our obligations for fiscal and programmatic oversight. Because the use of separate payment terms is limited to SDPs that must be tied to utilization and delivery of services to Medicaid enrollees under the managed care contract and the potential impact of separate payment terms on the assessment of actuarial soundness and certification of capitation rates, we consider separate payment terms part of the contract with the a managed care plan that is subject to 1903(m)(2)(A) requirements, and we propose to regulate them under this authority. States are generally not permitted to direct the expenditures of a Medicaid managed care plan under the contract between the State and the plan or to make payments to providers for services covered under the contract between the State and the plan (§§ 438.6 and 438.60) unless SDP requirements are satisfied.
First, we propose to amend § 438.6(a) to define “separate payment term” as a pre-determined and finite funding pool that the State establishes and documents in the Medicaid managed care contract for a specific SDP for which the State has received written prior approval. Payments made from this funding pool are made by the State to the MCOs, PIHPs or PAHPs exclusively for SDPs for which the State has received written prior approval and are made separately and in addition to the capitation rates identified in the contract as required under § 438.3(c)(1)(i).
CMS recognizes that some separate payment terms in the past may not have fit this definition. For example, one State makes one payment monthly that is inclusive of both the capitation payment and the separate payment term. The State then contractually requires the managed care plans to hold a portion of the monthly payment in a reserve that the State later directs the plans how to pay to providers under an approved SDP. In this example, the State initially indicated to CMS that the SDP was accounted for through adjustments to base data in capitation rates. However, the State later agreed with CMS that the contractual requirement to hold a portion of the monthly payment in a reserve that the State later directed was more in alignment with separate payment terms. To be clear, such a practice would not be considered an adjustment to base rates or part of capitation rate development under this proposed rule; instead it would, under our proposed rule, fall under the proposed definition of a separate payment term and would have to comply with all proposed requirements for SDPs and separate payment terms in the proposed revisions to § 438.6(c).
We propose a new § 438.6(c)(6) that would specify requirements for the use of separate payment terms. First, we propose a new § 438.6(c)(6)(i) to require that all separate payment terms are reviewed and approved as part of the review of the SDP in § 438.6(c)(2). This is effectively current practice today; when a State indicates that an SDP is included in the applicable rate certification(s) through a separate payment term, the approved preprint is checked to ensure that it also indicates that the SDP utilizes a separate payment term. This requirement would codify this operational practice. We believe reviewing and approving the separate payment term as part of the SDP review and approval process would be mutually beneficial for CMS and States because they are inextricably linked given the proposed definition of a separate payment term. We believe this would also enable us to track of the use of separate payment terms more quickly and accurately.
Because we are proposing to require that separate payment terms are approved as part of the review and approval of the SDPs in § 438.6(c)(2)(i) (redesignated from 438.6(c)(2)(ii)), we believe we should explicitly address those SDPs that do not require written prior approval to ensure clarity for States. Therefore, we propose a new requirement at § 438.6(c)(6)(ii) that would expressly prohibit States from using separate payment terms to fund SDPs that are exempted from the written prior approval process—specifically, minimum fee schedules using State plan approved rates in § 438.6(c)(1)(iii)(A) and minimum fee schedules using approved Medicare fee schedules, as
At § 438.6(c)(6)(iii), we propose to require that each separate payment term be specific to both an individual SDP approved under § 438.6(c)(2)(i) (redesignated from 438.6(c)(2)(ii)) and to each Medicaid managed care program to provide clarity in the contract for the plan and facilitate State and Federal oversight of such terms. SDPs approved under § 438.6(c)(2) can apply to more than one Medicaid managed care program. Requiring that each separate payment term be specific to both the SDP approved under § 438.6(c)(2)(i) (redesignated from 438.6(c)(2)(ii)) and each Medicaid managed care program would facilitate monitoring and oversight help ensure clarity and consistency between the approval of the separate payment term and the SDP, the managed care plan contract, and the rate certification.
Additionally, we are proposing a new requirement at § 438.6(c)(6)(iv) that the separate payment term would not exceed the total amount documented in the written prior approval for each SDP for which we have granted written prior approval. Under current practice, the total dollar amount for the separate payment term has acted as a threshold to ensure alignment between the rate certification and the SDP; States that documented more for the separate payment term in the rate certification(s) than the total dollars documented in the preprint under current practice have to either revise the rate amendment so that the total dollars for the separate payment term does not exceed what was captured in the preprint or submit an amendment to the preprint. If States choose to amend the preprint under current practice, the State is required to explain the cause of the increase (for example, a change in payment methodology, or expansion of the provider class); and then verify that the payment analysis has not changed or if it has, then update the payment analysis to ensure that the total payment rate is still reasonable, appropriate and attainable.
We have also considered requiring that the separate payment term must equal exactly the total amount documented for each SDP for which we have granted written prior approval. Instead of acting as a maximum, the total dollar amount for the separate payment term would act as both a minimum and a maximum; the State's contract and rate certifications would have to include exactly the total dollar amount identified in the SDP approved by CMS. We did not propose this alternative as we are concerned that requiring the total amount for the separate payment term to act as both a minimum and maximum could be too administratively burdensome; however, we solicit comments on both our proposal to require that the total dollars documented in the SDP approved by CMS under (c)(2) would act as a maximum as well as this alternative option of the total dollars documented in the SDP approved by CMS under (c)(2)(i) as both a minimum and a maximum.
Historically, separate payment terms have only been documented in the State's preprint review and in the State's rate certifications; the details of when and how these payments would be made by the State to the plans was often not clear to CMS or the plans. This lack of clarity presents significant oversight concerns for these separate payment terms because it makes tracking the payments made from the State to the plan difficult to identify, particularly on the CMS-64 form on which States claim FFP. It also presents challenges for ensuring timely payment to plans and, ultimately, providers. CMS believes that just as the final capitation rates must be specifically identified in the applicable contract submitted for CMS review and approval, so too should separate payment terms associated with SDPs.
As previously noted in this section, CMS maintains that while there is risk for the providers as opposed to guaranteeing them payment irrespective of the Medicaid services they deliver to Medicaid managed care enrollees, there is often little or no risk for the plans related to the SDP to the extent it is included in contracts as a separate payment term, which is contrary to the nature of risk-based managed care. This becomes even more concerning when States retroactively amend the separate payment term, sometimes even after the end of the rating period.
To illustrate this, we provide the following examples. Example 1: States that include SDPs into their contracts and rate certifications through separate payment terms must have the total dollars for the separate payment term certified in the rate certification(s). The State would then look at the utilization over a defined period, for example, one quarter, and divide one-fourth of the total dollars certified in the separate payment term by the utilization during that quarter to determine a uniform dollar amount increase. Example 1 illustrates a common practice for SDPs that use separate payment terms: it allows the uniform dollar amount applied to utilization to vary from one quarter to another, but it ensures that the total dollars dedicated to the State directed payment are fully expended.
Example 2 not only removes all risk from the plans for the SDP, but also removes all risk from the providers when the actuary recertifies a total dollar amount later, often after all the payments under the separate payment
To curtail these concerning practices, we propose to require as part of § 438.6(c)(6)(v) that States must document the separate payment term in the State's managed care contracts no later than 120 days after the start of the payment arrangement or written prior approval of the SDP, whichever is later. We believe that proposing to require States to document the separate payment term within these timeframes is reasonable given that the contract amendment would only have to document the separate payment term and the related SDP; the contract action could be submitted to CMS in draft form so long as it included all of the required elements. CMS would not require a final signed copy of the amendment within this proposed 120-day timeframe; however, States would still be required to submit a final signed contract action prior to CMS' approval of the managed care contract.
To further the fiscal and programmatic integrity of separate payment terms, we propose in § 438.6(c)(6)(v)(A) to prohibit States from amending the separate payment term after CMS approval except to account for an amendment to the payment methodology that is first approved by CMS as an amendment to the approved State directed payment. We recognize that a change in payment methodology would potentially result in the need to amend the separate payment term as it could impact the total dollar amount. However, to avoid the current practice where States include a total dollar amount in the rate certification(s) other than what is in the approved SDP preprint, CMS is proposing to require that CMS first approve the amendment to the preprint before the separate payment term can be amended. We believe this proposal would also ensure that some level of risk is maintained and that States do not retroactively add additional funding with the goal of removing all risk from the SDP arrangement. Such actions do not align with the fundamental principles of Medicaid managed care.
Alternatively, we are also considering including a proposal to permit amendments to the separate payment term to account for a change in the total aggregate dollars to be paid by the State to the plan where there is no change in the non-Federal portion of the total aggregate dollars. We are considering this alternative in recognition that the Federal portion of the total aggregate dollars may fluctuate due to Federal statute changes that are outside the State's control. We acknowledge that due to this, the total dollars, which includes the Federal share, cannot be perfectly predicted by States at the start of a State's rating period. We did not include this alternative proposal out of concern that it may have negative unintended consequences. We solicit comment on both the exception we are proposing and this alternative additional exception that we are considering.
To improve transparency of States' use of separate payment terms and to ensure that managed care plans have clear information on the contractual requirements associated to State directed payments linked to a separate payment term, in § 438.6(c)(6)(v)(B)(
To reflect our proposals discussed above that would require States to document separate payment terms in their managed care rate certifications, we propose changes to § 438.7. Specifically, we propose to add a new § 438.7(f) that would require the State, through its actuary, to certify the total dollar amount for each separate payment term as detailed in the State's Medicaid managed care contract, consistent with the requirements of § 438.6(c)(6). Requiring that all separate payment terms be included in the rate certification to plans is also current practice today and provides a complete picture of all payments made by States to plans under risk contracts.
We also propose to codify many existing practices that we currently employ when reviewing State directed payments that use separate payment terms. In § 438.7(f)(1), we propose that the State may pay each MCO, PIHP, or PAHP a different amount under the separate payment term compared to other MCOs, PIHPs, or PAHPs so long as the aggregate total dollars paid to all MCOs, PIHPs, and PAHPs does not exceed the total dollars of the separate payment term for each respective Medicaid managed care program included in the Medicaid managed care contract. In § 438.7(f)(2), we propose that the State, through its actuary, would have to provide an estimate of the impact of the separate payment term on a rate cell basis, as paid out per the SDP approved by CMS under § 438.6(c)(2)(i). Both of these proposed regulatory requirements are part of current operational practice today as documented in the Medicaid Managed Care Rate Development Guide.
Finally, we are proposing at § 438.7(f)(4) to require States to submit a rate certification or rate certification amendment incorporating the separate payment term within 120 days of either the start of the payment arrangement or written prior approval of the SDP, whichever is later. This proposal is aligned with the proposed contract requirement in § 438.6(c)(6)(v).
As previously noted we strongly prefer that SDPs be included as adjustments to capitation rates since that method is most consistent with the nature of risk-based managed care. Our
Another alternative CMS is considering, and invites comment on, is further prohibiting the use of separate payment terms not only to SDPs described in paragraphs (c)(1)(iii)(A) and (B), but to all SDPs described in paragraph (c)(1)(iii). Under this alternative, States would only be able to use separate payment terms for value-based initiatives described in paragraphs (c)(1)(i) and (ii). This alternative would still allow States to use separate payment terms for some payment arrangements and could incentivize States to consider quality-based payment models that can better improve health outcomes for Medicaid managed care enrollees. this proposal recognizes the difficulties that States and their actuaries may face in incorporating some value-based payment initiatives into capitation rate development as compared to fee schedules as described in paragraph (c)(1)(iii).
For each of these two alternatives, we acknowledge that some States currently use separate payment terms. Therefore, these alternative proposals could cause some disruptions as States evaluate changes to SDPs. If CMS adopts one of the alternatives for a total payment rate limit on SDP expenditures in the final rule, we also seek public comment on whether or not CMS should consider a transition period in order to mitigate any disruptions.
We seek public comment on whether either of these alternative approaches we are considering should be adopted in the final rule, as well as comments on our proposals.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comment on our proposals.
We also propose three additional changes to § 438.7(c) to address adjustments to managed care capitation rates that are used for SDPs. Specifically, we propose to add a new regulatory requirement at § 438.7(c)(5) specifying that retroactive adjustments to capitation rates resulting from an SDP must be the result of an approved SDP being added to the contract, an amendment to an already approved SDP, a State directed payment described in § 438.6(c)(1)(iii)(A) or (B), or a material error in the data, assumptions, or methodologies used to develop the initial rate adjustment such that modifications are necessary to correct the error. This requirement would align with the proposed requirement at § 438.6(c)(6)(v)(A). We believe this proposed regulatory requirement is necessary to ensure the fiscal integrity of SDPs and their impact on rate development. While not as frequent, we have also observed States, through their actuaries, submitting amendments to rates for SDPs included through adjustments to base rates that do not reflect changes in payment methodology, changes in benefit design, or general actuarial practices, but instead appear to be related to financing of the non-Federal share. We do not view such actions as consistent with the prospective and risk-based nature of Medicaid managed care. It also creates significant administrative burden for both States and the Federal government, by delaying review of associated rate certifications.
Additionally, we propose a new regulatory requirement at § 438.7(c)(4) that States must submit a revised rate certification for any changes in the capitation rate per rate cell, as required under § 438.7(a) for any special contract provisions related to payment in § 438.6 not already described in the rate certification, regardless of the size of the change in the capitation rate per rate cell. States are permitted the flexibility under § 438.7(c)(3) to increase or decrease the capitation rate per rate cell up to 1.5 percent during the rating period without submitting a revised rate certification for rate changes unrelated to special contract provisions, including SDPs, and ILOSs as proposed in section I.B.4.e. of this proposed rule. We believe that providing this same flexibility for changes to rates for special contract provisions, including SDPs, is incongruent with the existing requirement at § 438.7(b)(6) that the rate certification include a description of any of the special contract provisions related to payment in § 438.6 that are applied in the contract. In addition, we believe it is also inconsistent with ensuring appropriate program integrity, such as the 105 percent threshold in 438.6(b)(2) and existing and proposed SDP standards. Therefore, our proposal here addresses and clarifies this requirement.
Finally, we propose a new regulatory requirement at § 438.7(c)(6) to require that States must submit the required rate certification documentation for SDPs incorporated through adjustments to base rates (either the initial rate certification or a revised rate certification) no later than 120 days after either the start date of the SDP approved under § 438.6(c)(2)(i) (redesignated from § 438.6(c)(2)(ii)) or 120 days after the date CMS issued written prior approval of the SDP, whichever is later.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comment on our proposals.
As outlined under § 438.6(c), SDPs are arrangements that allow States to require managed care plans to make specified payments to healthcare providers when the payments support overall Medicaid program goals and objectives (for example, funding to ensure certain minimum payments are made to safety net providers to ensure access or quality payments to ensure providers are appropriately rewarded for meeting certain program goals). Section 438.6(c) was issued by CMS because this type of State direction of managed care payment goes against the general premise of managed care in which a contracted organization assumes risk from the State for the delivery of care to its beneficiaries. As a result, we established a process whereby States must submit a “preprint” form to CMS to document how the SDP complies with the Federal requirements outlined in § 438.6(c). If the proposal does comply, we issue written prior approval. Subsequent to written prior approval, the SDP is permitted to be included in the relevant managed care organization contract and rate certification documents. This process is required by CMS for most SDPs.
As discussed throughout this proposed rule, the volume of State
Based on our review of SDP prior approval requests, we have observed that States use SDPs not only as routine payment mechanisms, such as to set minimum fee schedules or provide uniform increases, but also for more complex payment arrangements, such as to implement Total Cost of Care (TCOC) programs, and multi-metric and multi-year VBPs. CMS provides technical assistance to States at all stages of SDP development to help States develop SDP arrangements that meet their programmatic goals and comply with § 438.6(c). This technical assistance can involve both verbal and written assistance, as well as the exchange of CMS-generated question sets and State responses. The State responses are shared internally with Federal review partners who provide subject matter expertise, which may include those representing managed care policy and operations, quality, and actuarial science, which is then shared with the State to inform SDP revisions and ensure compliance with the regulations.
Providing this technical assistance has become increasingly challenging as the number and complexity of States' SDP requests has increased. To date, when CMS and States have found themselves unable to reach agreement on an SDP proposal and we are unable to issue prior written approval, States have agreed to withdraw the submission. However, as SDPs have matured as a State tool, they have outgrown this informal process of State rescission. The proposals in this rule would further specify and strengthen the SDP regulations and we believe it is appropriate to begin formally disapproving proposals that cannot comply with the regulations.
A disapproval for an SDP could be issued for many reasons, including impermissible financing of the non-Federal share, failure to show improvement in the proposed quality evaluation report in the timeframe required, or non-compliance with the controlling regulations in part 438. To be consistent with other CMS processes which issue formal disapprovals, such as those for SPA submissions and disallowances of State Medicaid claims, there should be a formal process for States to appeal should CMS issue disapproval of written prior approval for a State's SDP proposal. The alternative is that a State may seek redress in the courts, which can be costly and slow for both CMS and the States. We believe that States will benefit from and appreciate an established, consistent administrative process with which they are familiar.
Under our authority under section 1902(a)(4) of the Act to establish methods for proper and effective operations in Medicaid, we propose to add a new § 430.3(d) that would explicitly permit disputes that pertain to written disapprovals of SDPs under § 438.6(c) to be heard by the Health and Human Services (HHS) Department Appeals Board (the Board) in accordance with procedures set forth in 45 CFR part 16. As described in that section, the Board is comprised of members appointed by the HHS Secretary it conducts
Applying those procedures to CMS's decision to deny a State's SDP request, the State would have 30 days to appeal to the Board after an appellant receives a final written decision from CMS communicating a disapproval of a State directed payment. The case would then be assigned a presiding Board member who would preside over procedural matters and conduct record development in the case. Within 10 days of receiving the notice of appeal, the Board would assess the filing for completeness and jurisdiction. If it is found to be appropriately filed, the Board would acknowledge the notice and outline the next steps in the case. Under existing 45 CFR 16.16, the Board may even allow additional parties to participate if there is a “clearly identifiable and substantial interest in the outcome of the dispute” in the discretion of the Board. The State would then have 30 days to file its appeal brief, which would contain its argument for why the final decision of CMS was in error, and its appeal file, which would include the documents on which its arguments are based. Then, CMS would have 30 days to submit its brief in response to the State's brief as well as any additional supporting documentation not already contained in the record. The State would be given fifteen days to submit its optional reply.
Under the Board's process, parties would be encouraged to work cooperatively to develop a joint appeal file and stipulate to facts alleviating the need to submit documentation. At any time, the Board may request additional documentation or information, request additional briefings, hold conferences, set schedules, issue orders to show cause, and take other steps as appropriate to “develop a prompt, sound decision” per existing 45 CFR 16.9. Although there is no general right to a hearing in cases heard under 45 CFR part 16, States appealing a CMS disapproval of a proposed State directed payment under this proposed process could request a hearing or oral argument, or the Board may call for one
As an alternative to our proposal described above to use the Board for such decisions, we also considered permitting appeals of SDP written disapprovals to be heard by the CMS Offices of Hearings and Inquiries (OHI) and the CMS Administrator for final agency action, as governed by part 430, subpart D. The current jurisdiction of OHI stems from section 1902 of the Act, under which it hears appeals arising from decisions to disapprove Medicaid State Plan material under § 430.18 or to withhold Federal funds under § 430.35 for noncompliance of a State Plan. The OHI process is overseen by a presiding officer who makes a recommendation to the Administrator, who issues the final decision. The process is initiated upon issuance of a written disapproval.
If we were to use this process for disapproval of SDPs, the hearing officer would mail the State a notice of hearing or opportunity for hearing related to an SDP disapproval that is also published in the
Under this process, the State and CMS would be given 15 days to provide comment and information regarding the removal of an issue. Before the hearing, other individuals or groups would be able to petition to join the matter as a party within 15 days after notice is posted in the
At the hearing, parties would make opening statements, submit evidence, present and cross-examine witnesses, and present oral arguments.
We believe the Board would be the most appropriate entity to hear appeals of disapprovals of SDPs proposals for the following reasons. Foremost, while both the Board's and OHI's processes can resolve disputes, we believe the Board's shorter goal resolution time of 6 to 9 months would better facilitate timely approval of managed care plan contracts and the payment of capitation payments. Medicaid managed care uses a prospective payment system of capitation payments and anything that delays approval of the managed care plans' contracts can have a significant adverse impact on a State's managed care program. Additionally, the Board's processes have the added flexibilities of allowing for mediation under 45 CFR 16.18, as well as not requiring, but allowing, a hearing, as described in 45 CFR 16.11. These differences in the Board regulations give additional options and possible efficiencies to the parties. Therefore, while we believe both processes would be adequate for appeals of any disapproval of a State directed payment, for the reasons described above, we believe the processes under the Board would be the most appropriate proposal for inclusion in § 430.3(d).
We seek public comment on whether the Board or OHI appeals processes would best serve the purposes of resolving disputes fairly and efficiently.
Many States with managed care programs are using the authority in § 438.6(c) to direct managed care plans' payments to certain providers. States' increasing use of these arrangements has been cited as a key area of oversight risk for CMS. Several oversight bodies, including MACPAC, OIG, and GAO, have authored reports focused on CMS oversight of SDPs.
As discussed in section I.B.3. of this proposed rule, CMS' current review and approval process for SDPs is prospective; that is, we do not consistently nor systematically review the actual amounts that States provide to managed care plans for these SDPs
We concur with the oversight bodies that it is important that we gain more information and insight into actual SDP spending to help us fulfill our oversight and monitoring obligations. We propose two approaches, one near term and one longer term, for collecting both aggregate and provider-level information. The first proposal would use existing MLR reporting as a vehicle to collect actual expenditure data associated with SDPs. Specifically, in § 438.8(k), we propose to require that managed care plans include SDPs and associated revenue as separate lines in their MLR reports to States; specifically, the amount of payments to providers made under SDPs that direct the managed care plan's expenditures as specified in § 438.6(c) and the payments from the State to the managed care plans for expenditures related to these SDPs. In turn, we propose to require that managed care plan-level SDP expenditure reporting be explicitly reflected in States' annual summary MLR reporting to CMS, as required under § 438.74. See section I.B.3. of this proposed rule for more information about these proposals.
We also propose to establish a new requirement at § 438.6(c)(4) for States to annually submit data, no later than 180
We propose to develop and provide the form through which the reporting would occur so that there would be one uniform template for all States to use. We propose in § 438.6(c)(4) the minimum data fields that would need to be collected to provide the data needed to perform proper oversight of SDPs. Proposed § 438.6(c)(4)(i) through (v) outlines the minimum data fields: provider identifiers, enrollee identifiers, managed care plan identifiers, procedure and diagnosis codes, and allowed, billed, and paid amounts. Paid amounts would include the amount that represents the managed care plan's negotiated payment amount, the amount of the State directed payments, the amount for any pass-through payments under § 438.6(d), and any other amounts included in the total paid to the provider. When contemplating the FFS supplemental payment reporting, we considered how States should have the information being requested readily available, “[i]ncluding the provider-specific payment amounts when approved supplemental payments are actually made and claimed for FFP, as the aggregate expenditures reported on the CMS-64 comprise the individual, provider-specific payment amounts”.
We recognize that there are existing data collection processes and systems established between CMS and States that could likely support this SDP reporting, and would like to rely on these systems to the extent they could help minimize additional or duplicative reporting by States. For instance, we considered the existing system and reporting structure that States are using for FFS supplemental payment reporting. The Consolidated Appropriations Act (CAA) of 2021 established new reporting requirements for Medicaid FFS supplemental payments under both State plan or demonstration authorities consistent with section 1902(a)(30)(A) of the Act.
Under these FFS requirements, each quarter, each State must submit reports on supplemental payment data through the Medicaid Budget and Expenditure System (MBES), as a requirement for a State plan or State plan amendment that would provide for a supplemental payment. The data collection involves both narrative information, as well as quantitative, provider-specific data on supplemental payments. The narrative information includes descriptions of the supplemental payment methodology, determination of eligible providers, description of the timing of the payments, and justification for compliance with section 1902(a)(30)(A) of the Act. The quantitative, provider-specific data collection includes detailed provider-specific accounting of supplemental payments made within the quarter, including: provider name, provider ID number, and other provider identifiers; Medicaid authority (FFS or demonstration authority); Medicaid service category for the supplemental payments; aggregate base payments made to the provider; and aggregate supplemental payments made to the provider, which will reflect the State's claim for Federal financial participation.
This supplemental payment reporting is included in the MBES to capture the entire set of data reporting elements required in section 1903(bb)(1)(B) of the Act in one central location. MBES is familiar to States, in part because of State's quarterly expenditure reporting on the CMS-64 form. We can view additional reporting of provider-specific base and supplemental FFS payment amount information in MBES in the context of actual State expenditures for Medicaid. We could consider taking a similar approach for SDPs by adding reporting in MBES to capture provider-specific SDP data.
As another option, we considered encounter data reported through T-MSIS as the method for collecting SDP provider-specific payment amounts. Specifically, T-MSIS could work well for SDPs that are specifically tied to an encounter or claim, such as minimum fee schedules or uniform dollar or percentage increases. Current regulations at § 438.242(c)(3) require States to submit all enrollee encounter data, including the allowed amount and paid amounts, and these paid amounts should be inclusive of State directed payments that are tied to an encounter or claim. We could build additional data fields in T-MSIS to capture more details about the paid amount, including the amount that was the managed care plan's negotiated payment amount, the amount of the State directed payments, the amount for any pass-through payments under § 438.6(d), and any other amounts included in the total payment amount paid to the provider. This level of detail would provide the information we need for analysis and
Lastly, we considered whether to utilize a separate reporting mechanism for this new reporting of SDP provider-level data. For example, we could explore building a new reporting portal, similar to the one developed for the submission of the Managed Care Program Annual Report. However, this would take considerable time and resources to develop and would be separate and distinct from all other SDP data, making it more difficult to perform comprehensive analyses. We also considered whether to permit States to submit the proposed reporting using a Word or Excel template sent to a CMS mailbox. While this would be the fastest way to collect the data, it too presents challenges for integrating the data with other data collected by CMS for analyses.
Because we believe T-MSIS to be the most efficient option, we propose in § 438.6(c)(4) to require States to submit data to T-MSIS as the method for collecting provider-specific payment amounts under SDPs. As specified in proposed § 438.6(c)(4)(i)(E), provider-specific paid amounts would include a plan's negotiated payment amount, the amount of the State directed payments, the amount for any pass-through payments under § 438.6(d), and any other amounts included in the total paid to the provider. States would submit this data to CMS no later than 180 days after each rating period. We believe 180 days permits adequate time for claims run out, submission of the necessary data to the State, and for the State to format the data for submission to CMS. We also propose in § 438.6(c)(4) that States would have to comply with this new reporting requirement after the rating period that begins after we release reporting instructions for submitting the information required by this proposal. We seek public comment on our proposal to use T-MSIS for this new reporting, or whether another reporting vehicle such as MBES, or other alternatives described in this proposed rulemaking would be better suited for SDP reporting. We also seek comment on how T-MSIS or another reporting vehicle could support capturing value-based payment arrangements in which payment is not triggered by an encounter or claim.
We also propose a conforming requirement at § 438.6(c)(5)(iv) to align with the proposal in § 438.6(c)(4); proposed paragraph (c)(5)(iv) would require States to document any reporting requirements necessary to comply with § 438.6(c)(4) in their managed care contracts.
We consider these data reporting proposals to be a two-prong approach, with the MLR proposed requirements explained in section I.B.3. of this proposed rule serving as a short-term step and the provider-specific data reporting proposed here being a longer-term initiative. We believe this would ensure the appropriate content and reporting while also giving States sufficient time to prepare for each proposal based on the level of new burden. While some managed care plans and States may assert that these proposals increase administrative burden unnecessarily, we believe that the increased transparency associated with these enhanced standards would benefit both State and Federal government oversight of SDPs. Implementing these proposals for State and managed care plan reporting of actual SDP expenditures would provide CMS more complete information when evaluating, developing, and implementing possible changes to Medicaid payment policy and fiscal integrity policy.
For discussion on the proposed applicability dates for the proposals outlined in this section, see section I.B.2.p. of this proposed rule.
We solicit public comment on these proposals.
We propose that States and managed care plans would have to comply with § 438.6(a), (c)(1)(iii), (c)(2)(i), (c)(2)(ii)(A) through (C), (c)(2)(ii)(E), (c)(2)(ii)(G), (c)(2)(ii)(I) through (J), (c)(2)(vi)(A), (c)(3), (c)(6)(i) through (iv), and 438.7(c)(4), (c)(5), and (f)(1) through (3) upon the effective date of the final rule, as these proposals are either technical corrections or clarifications of existing policies and standards. We propose that States and managed care plans would have to comply with § 438.6(c)(2)(iii), (vi)(B), (vi)(C)(
We further propose that States and managed care plans would have to comply with § 438.6(c)(2)(ii)(D), (F), (c)(2)(iv), (c)(2)(v), and (c)(7) no later than the first rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 3 years after the effective date of the final rule as we believe States will need a sufficient period of time to address the policy elements within these proposals and operationalize them via various reporting, documentation and submission processes. For § 438.6(c)(2)(ii)(D) and (F), (c)(2)(iv) and (v), and (c)(7), we are considering requiring compliance for the first rating period beginning on or after 1 year, or 2 years after the effective date of the final rule, but we are proposing the first rating period beginning on or after 3 years after the effective date of the final rule because we believe it strikes a balance between the work States would need to do to comply with these proposals and the urgency with which we believe these proposals should be implemented in order to strengthen and ensure appropriate and efficient operation of the Medicaid program. We solicit comment on the proposal and alternatives.
We propose that States and managed care plans would have to comply with §§ 438.6 (c)(5)(vi), and (c)(6)(v), and 438.7(c)(6) and (f)(4) no later than the first rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 4 years after the effective date of the final rule. Because these proposals establish new submission
Finally, as outlined in proposed § 438.6(c)(4), States would be required to submit the initial TMSIS report subsequent to the first rating period following the release of CMS guidance on the content and form of the report.
We have proposed these applicability dates in §§ 438.6(c)(4) and (c)(8), and 438.7(g).
We solicit public comment on these proposals.
In the 2016 final rule, we finalized Medicaid and CHIP managed care regulations in §§ 438.8(k) and 457.1203(f) respectively, that require managed care plans to annually submit reports of their MLR to States, and, at §§ 438.74 and 457.1203(e) respectively, we require States to submit annually a summary of those reports to CMS. These sections were issued based on our authority under sections 1903(m)(2)(A)(iii), 1902(a)(4), and 2101(a) of the Act based on the rationale that actuarially sound capitation rates must be utilized for MCOs, PIHPs, and PAHPs. Additionally, actuarial soundness requires that capitation payments cover reasonable, appropriate, and attainable costs in providing covered services to enrollees in Medicaid managed care programs. We propose to amend our requirements under the same authority and rationale that we describe below.
Medical loss ratios are one tool that CMS and States can use to assess whether capitation rates are appropriately set by generally illustrating how capitation funds are spent on claims and quality improvement activities as compared to administrative expenses. More specifically, MLR calculation and reporting can be used to demonstrate that adequate amounts of the capitation payments are spent on services for enrollees. With MLR reporting, States have more information to understand how the capitation payments made for enrollees in managed care programs are expended, resulting in responsible fiscal stewardship of total Medicaid and CHIP expenditures.
Medicaid and CHIP managed care MLR reporting requirements align, generally, with Marketplace standards for Qualified Health Plans (QHPs) and Medicare Advantage standards for Medicare Advantage organizations (MAOs). As we noted in the preamble to the 2015 managed care proposed rule,
In general, Medicaid and CHIP managed care MLR reporting requirements have remained aligned over time with the Marketplace MLR requirements; however, CMS finalized some regulatory changes for QHP MLR reporting in 45 CFR 158.140, 158.150, and 158.170 effective July 1, 2022.
• Requirements for clinical or quality improvement standards for provider incentive arrangements;
• Prohibited administrative costs in quality improvement activity (QIA) reporting; and
• Additional requirements for expense allocation methodology reporting.
In addition, we propose changes to specify timing of updates to credibility adjustment factors; when Medicaid and CHIP managed care plans are required to resubmit MLR reports to the State; the level of data aggregation required for State MLR summary reports to CMS; contract requirements related to reporting of overpayments; and new reporting requirements for SDPs.
We are revising standards for provider incentives to remain consistent with our goals of alignment with the Marketplace when appropriate, and to ensure that capitation rates are actuarially sound and based on reasonable expenditures for covered services under the contract. Under section 1903(m)(2)(A)(iii) of the Act and implementing regulations, FFP is not available for State expenditures incurred for payment (as determined under a prepaid capitation basis or under any other risk basis) for services provided by a managed care plan unless the prepaid payments are made on an actuarially sound basis. This requirement is made applicable to PIHPs and PAHPs under authority in section 1902(a)(4) of the Act. As specified in current regulations at § 438.4(a), actuarially sound Medicaid capitation rates are projected to provide for all reasonable, appropriate, and attainable costs as well as the operation of the MCO, PIHP, or PAHP required under the terms of the contract.
While Medicaid managed care plans are required to calculate and report an MLR to the State, States are not required to establish a minimum MLR requirement; although under current regulations at § 438.4(b)(9), capitation rates must be developed in a way that the managed care plan would reasonably achieve an MLR of at least 85 percent. Under current regulations at § 438.8(c), if a State elects to require that their managed care plans meet a minimum MLR requirement, the minimum must be set to at least 85 percent. Further, under § 438.8(j), States may establish a remittance arrangement based on an MLR requirement of 85 percent or higher. As a general matter, remittance arrangements based on minimum MLRs may provide value to States by requiring managed care plans to remit a portion of their capitation payments to States when spending on covered services and QIAs is less than the minimum MLR requirements.
At existing §§ 438.3(i)(1) and 457.1201(h), respectively, Medicaid and CHIP managed care plan contracts must require compliance with the provider plan incentive requirements in §§ 422.208 and 422.210.
As part of our Medicaid managed care program integrity oversight efforts, CMS recently conducted several in-depth reviews of States' oversight of managed care plan MLR reporting. These reviews included examinations of the contract language for provider incentive arrangements between managed care plans and network providers. As part of these reviews, CMS identified several examples of managed care plan practices that could make an incentive payment inappropriate to include in the numerator. For example, there were inconsistent documentation and contracting practices for incentive payments in contracts between some Medicaid managed care plans and their network providers, including State acceptance of attestations of these arrangements from senior managed care plan leadership when contract documentation was lacking. These reviews also noted that many managed care plans' contracts with network providers did not base the incentive payments on a requirement for the providers to meet quantitative clinical or quality improvement standards or metrics. In fact, examination of these contracts between managed care plans and their network providers revealed that some managed care plans did not require a provider to improve their performance in any way to receive an incentive payment. Additionally, many of the incentive arrangements were not developed prospectively with clear expectations for provider performance. Finally, we identified provider incentive performance periods that did not align with the MLR reporting period and provider incentive contracts that were signed after the performance period ended.
Based on these reviews, we are concerned that if a provider incentive arrangement is not based on basic core contracting practices (including sufficient supporting documentation and clear, prospective quantitative quality or performance metrics), it may create an opportunity for a managed care plan to more easily pay network providers solely to expend excess funds to increase their MLR numerator under the guise of paying incentives. This potential loophole could also be used to help managed care plans avoid paying remittances. Also, this practice could artificially inflate future capitation rates. To address these concerns, we are proposing additional requirements on provider incentive arrangements in § 438.3(i).
In a new § 438.3(i)(3) and (4) for Medicaid, and included in separate CHIP regulations through an existing cross-reference at § 457.1201(h), we propose to require that the State, through its contract(s) with a managed care plan, must include specific provisions related to provider incentive contracts. Specifically, the proposed changes would require in § 438.3(i)(3)(i) and (ii) that incentive payment contracts between managed care plans and network providers have a defined performance period that can be tied to the applicable MLR reporting period(s), and such contracts must be signed and dated by all appropriate parties before the commencement of the applicable performance period. We also propose, in § 438.3(i)(3)(iii), that all incentive payment contracts must include well-defined quality improvement or performance metrics that the provider must meet to receive the incentive payment. In addition, in § 438.3(i)(3)(iv), we propose that incentive payment contracts must specify a dollar amount that can be clearly linked to successful completion of these metrics as well as a date of payment. We note that managed care plans would continue to have flexibility to determine the appropriate quality improvement or quantitative performance metrics to include in the incentive payment contracts. In addition, the proposed changes would also require in § 438.3(i)(4)(i) that the State's contracts must define the documentation that the managed care plan must maintain to support these arrangements. In § 438.3(i)(4)(ii), we propose that the State must prohibit managed care plans from using attestations as documentation to support the provider incentive payments. In § 438.3(i)(4)(iii), we propose that the State's contracts require that managed care plans must make the incentive payment contracts and supporting documentation available to the State both upon request and at any routine frequency that the State establishes. Finally, we propose that States and managed care plans would have to comply with § 438.3(i)(3) and (4) no later than the rating period for contracts with MCOs, PIHPs, and PAHPs beginning on or after 60 days following the effective date of the final rule as we believe this is a reasonable timeframe for compliance. Therefore, we have proposed this applicability date in § 438.3(v) for Medicaid, and through a proposed cross-reference at § 457.1200(d) for separate CHIPs, and we seek public comment on this proposal. Other changes proposed to § 438.3(v) are outlined in section I.B.4.i. of this proposed rule.
We also propose to amend § 438.608 to cross-reference these requirements in the program integrity contract requirements section. Specifically, we propose to add a new § 438.608(e) that notes the requirements for provider incentives in § 438.3(i)(3) and (4). This proposed requirement is equally
Effective July 1, 2022, the Marketplace regulations at 45 CFR 158.140(b)(2)(iii) were revised to require issuers to tie provider bonuses and incentives payments to clearly-defined, objectively measurable, and well-documented clinical or quality improvement standards for these costs to qualify as expenditures in the MLR numerator. In contrast, current Medicaid and CHIP managed care regulations for provider incentive arrangements do not require these payments to be based on quality or performance metrics. This inconsistency hinders the comparison of MLR data between the Marketplace issuers and Medicaid and CHIP managed care plans, which is important given the high number of health plans that are both sold in the Marketplace and Medicaid managed care plans as well as the frequent churn of individuals between Marketplace, Medicaid, and CHIP coverage. To address the potential for inappropriate inflation of the MLR numerator as well as facilitate data comparability, we propose in § 438.8(e)(2)(iii)(A) for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1203(c), to require that for a provider bonus or incentive payment to be included in the MLR numerator, the provider bonus or incentive arrangement would have to require providers to meet clearly-defined, objectively measurable, and well-documented clinical or quality improvement standards to receive the bonus or incentive payment. This change would prohibit Medicaid and CHIP managed care plans from including provider bonus or incentive payments that are not based on clinical or quality improvement standards in their MLR numerator, which would improve the accuracy of their MLR, as well as other components of managed care programs that rely on reported MLRs, such as capitation rate development and remittances. Further, a consistent methodology across multiple markets would allow for administrative efficiency for the States as they monitor their Medicaid and CHIP programs, and for issuers and managed care plans to collect and measure data necessary to calculate an MLR and provide reports.
We believe that by requiring States' contracts with managed care plans to specify how provider bonus or incentive payment arrangements would be structured in managed care plans' provider contracts, transparency around these arrangements would improve. In addition, by requiring the contracts to include more specific documentation requirements, CMS and States would be better able to ensure that provider bonus or incentive payments are not being used either to inappropriately increase the MLR to avoid paying potential remittances, inflate future capitation rates, or to simply move funds from a Medicaid managed care plan to an affiliated company. The proposals would increase transparency into provider bonuses and incentives, improve the quality of care provided by ensuring that bonuses and incentives are paid to providers that demonstrated furnishing high-quality care, and protect Medicaid and CHIP programs against fraud and other improper payments. We are seeking comment on these proposed requirements, including whether any additional documentation requirements should be specified in regulation. We propose that States and managed care plans would be required to comply with these requirements 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative compliance date of no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we are concerned this is not soon enough. We seek comment on this proposal.
The preamble to the Marketplace regulations that took effect on July 1, 2022 indicated that examinations of MLR reporting of issuers found “wide discrepancies in the types of expenses that issuers include in QIA expenses” and that inconsistency “creates an unequal playing field among issuers” (87 FR 692). Therefore, to provide further clarity on the types of costs that may be included in MLR calculations in the future, CMS modified Marketplace regulations for QIA expenditures in 45 CFR 158.150(a), effective July 1, 2022, to prohibit the inclusion of indirect or overhead expenses that do not directly improve health care quality when reporting QIAs.
In Medicaid and separate CHIP regulations at §§ 438.8(e)(3) and 457.1203(c) respectively, we included QIA activities that meet the Marketplace MLR requirements, but we did not explicitly include a prohibition on managed care plans including indirect or overhead expenses when reporting QIA costs in the MLR because the commercial regulations did not have this exclusion at the time. As a result, the current Medicaid MLR regulations do not require managed care plans to exclude indirect or overhead QIA expenditures. For example, expenditures for facility maintenance, utilities, or marketing may be included in the MLR even though these expenses do not directly improve health care quality. As a result, Medicaid or CHIP managed care plans may include these types of costs as QIA costs in the MLR numerator, which could result in inappropriately inflated MLRs, and a different standard existing in the Marketplace and Medicaid and CHIP markets. This difference in standards could pose a potential administrative burden for managed care plans that participate in both Medicaid and CHIP and the Marketplace because managed care plans may include different types of expenses in reporting QIA.
To align Medicaid and CHIP MLR QIA reporting requirements with the Marketplace requirements and to improve clarity on the types of QIA expenditures that should be included in the MLR numerator, we propose to amend § 438.8(e)(3)(i) for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1203(c), to add a reference to the Marketplace regulation that prohibits the inclusion of overhead or indirect expenses that are not directly related to health care quality improvement. This change would provide States with more detailed QIA information to improve MLR reporting consistency, allow for better MLR data comparisons between the Marketplace and Medicaid and CHIP markets, and reduce administrative burden for managed care plans that participate in both Medicaid and CHIP and the Marketplace. We propose that these requirements would be effective 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative effective date of no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we are concerned this is not soon enough. We seek
As specified in current regulations at §§ 438.8(k)(1)(vii) and 457.1203(f) respectively, Medicaid and CHIP managed care plans must provide a report of the methodology or methodologies that they used to allocate certain types of expenditures for calculating their MLR. Examples of these types of expenditures include overhead expenses such as facility costs or direct expenses such as employee salaries. If a plan operates multiple lines of business, for example in both Medicaid and the Marketplace, it must indicate in the Medicaid MLR report how the share of certain types of costs were attributed to the Medicaid line of business. However, the Medicaid MLR regulations in § 438.8(g) and (k)(1)(vii) do not require managed care plans to submit information about the types of expenditures allocated to the Medicaid line of business and do not require managed care plans to specify how each type of expenditure was allocated to the Medicaid MLR.
Recent CMS State-level Medicaid MLR reviews noted a lack of expense allocation information in managed care plans' MLR reports to States. Specifically, CMS determined that several plans operated in multiple markets, for example, Medicaid and Medicare Advantage, and failed to adequately describe how certain costs that may apply across multiple lines of business were allocated to the Medicaid MLR report. Examples of these expenses include: quality improvement expenses, taxes, licensing or regulatory fees, and non-claims costs. The impact of this lack of transparency is that it may be impossible for a State to determine if the managed care plan's allocation of the applicable expenses to the Medicaid line of business was reasonable. For example, if a managed care plan operating in multiple markets does not provide information on how quality improvement activity expenses were allocated to the Medicaid MLR, the State will be unable to determine if the MLR numerator is inappropriately inflated.
The Marketplace regulations in 45 CFR 158.170(b) require significantly more detail for expense allocation in QHPs' MLR reporting. Specifically, § 158.170(b) requires a description of the types of expenditures that were allocated, how the expenses met the criteria for inclusion in the MLR, and the method(s) used to aggregate these expenses. We propose to require in § 438.8(k)(1)(vii) for Medicaid, which is included in CHIP regulations through an existing cross-reference at § 457.1203(f), that managed care plans must include information that reflects the same information required under Marketplace requirements in the MLR report that they submit to the State. Specifically, in § 438.8(k)(1)(vii), we propose to add to the existing text that plans' descriptions of their methodology must include a detailed description of the methods used to allocate expenses, including incurred claims, quality improvement expenses, Federal and State taxes and licensing or regulatory fees, and other non-claims costs, as described § 158.170(b). These revisions would improve State MLR oversight by providing States with more detailed information to ensure the appropriateness of managed care plans' expense allocation. These proposed requirements would align with Marketplace regulations and reduce administrative burden for managed care plans. We propose that States and managed care plans would be required to comply with these requirements 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative compliance date of no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we are concerned that is not soon enough. We seek comment on this proposal.
Section 2718(c) of the Public Health Service Act charged the National Association of Insurance Commissioners (NAIC) with developing uniform methodologies for calculating measures of the expenditures that make up the MLR calculation, and to address the special circumstances of smaller plans. The NAIC model regulation allows smaller plans to adjust their MLR calculations by applying a “credibility adjustment.” Under §§ 438.8(h) and 457.1203(c) respectively, Medicaid and CHIP managed care calculated MLRs may be adjusted using credibility factors to account for potential variability in claims due to random statistical variation. These factors are applied to plans with fewer enrollees to adjust for the higher impact of claims variability on smaller plans. As stated in § 438.8(h)(4), CMS is responsible for developing and publishing these factors annually for States and managed care plans to use when reporting MLRs for plans with fewer enrollees. In the 2015 Medicaid and CHIP managed care proposed rule (80 FR 31111), we proposed adopting a credibility adjustment methodology along with assurances to monitor and reevaluate credibility factors “in light of developing experience with the Affordable Care Act reforms.” In the 2015 proposed rule (80 FR 31111), we also proposed to update the credibility adjustment method within the parameters of the methodology proposed in that proposed rule. We finalized this proposal without revision in the 2016 final rule (81 FR 27864). The Medicaid managed care credibility adjustment factors were published on July 31, 2017 at
Since this publication of the credibility adjustment factors in 2017, the factors have not changed. The factors were originally developed using a statistical model applying the Central Limit Theorem (80 FR 31111). This model produced credibility factors that were not expected to change annually. Therefore, we believe that annual updates to these factors are not required, and we propose to modify § 438.8(h)(4) for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1203(c), to remove “On an annual basis.” If we determine that the factors need to be updated, we would use the methodology specified at § 438.8(h)(4)(i) through (vi). We are not proposing any revisions to § 438.8(h)(4)(i) through (vi) in this rule. We propose that these changes would be effective 60 days after the effective date of this final rule as we believe this timeframe is reasonable. We seek comment on this proposal.
Medicaid and CHIP managed care plans are required to resubmit MLR reports to States under certain circumstances. In the 2015 managed care proposed rule preamble, we noted that States may make retroactive changes to capitation rates that could affect the MLR calculation for a given MLR reporting year and that when that occurred, the MCO, PIHP, or PAHP would need to recalculate the MLR and provide a new report with the updated figures (80 FR 31113). We also indicated that “In any instance where a State makes a retroactive change to the capitation payments for an MLR reporting year where the report has already been submitted to the State, the
As part of our Medicaid MLR report compliance reviews, we have heard from several States that MLR reports from MCOs, PIHPs, or PAHPs are often resubmitted to the State. These resubmissions usually resulted from payments the State made to the managed care plan as part of the retroactive eligibility review process. As part of this process in these States, the State reviews beneficiary eligibility records to determine if an individual qualifies for retroactive eligibility. If an enrollee qualifies for retroactive eligibility, the State modifies the number of capitation payments that were made to a plan; however, the State does not retroactively modify the capitation rate for a group of members. When a State modifies the number of payments, but not the rate of payment to a managed care plan, we believe that it is unnecessary for a plan to resubmit the MLR to the State. For separate payment terms, only used for SDPs, the proposed regulation changes would require the State to document in the managed care plan contracts the total dollars that the State would pay to the plans for the individual State directed payment; the timing and frequency of payments that would be made under the separate payment term from the State to the plans; a description or reference to the contract requirement for the specific State directed payment for which the separate payment term would be used; and any reporting that the State requires to ensure appropriate reporting of the separate payment term for purposes of MLR reporting under § 438.8. If the State modifies a separate payment term, the MLR would need to be resubmitted to the State. See further details in section I.B.2.l. of this proposed rule.
We propose to amend § 438.8(m) for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1203(f), to specify that an MCO, PIHP, or PAHP would only be required to resubmit an MLR report to the State when the State makes a retroactive change to capitation rates. Specifically, we propose to replace “payments” with “rates” and to insert “retroactive rate” before the word “change.” These changes would decrease administrative burden for both managed care plans and States by reducing the number of MLR report submissions while retaining our original intent. We propose that these changes would be effective 60 days after the effective date of this final rule as we believe this timeframe is reasonable to alleviate State and plan administrative burden. We considered an alternative effective date no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we do not believe additional time is necessary. We seek comment on this proposal.
As specified in existing requirements at §§ 438.8(k) and 457.1203(f) respectively, Medicaid and CHIP managed care plans are required to submit detailed MLR reports to States, and States, as required in § 438.74 for Medicaid and § 457.1203(e) for separate CHIP, must submit a summary description of those reports to CMS. In the preamble to the 2015 managed care proposed rule (80 FR 31113), we described the term “summary” as meaning an abbreviated version of the more detailed reports required from managed care plans in § 438.8(k), but did not refer to a Statewide aggregation of data across managed care plans. The proposed regulatory text for § 438.74 did not include the words “for each” and was finalized as proposed. In our compliance reviews of State summary MLR reports, several States provided MLR data aggregated over the entire State and neglected to provide the abbreviated MLR report for each plan. These submissions of MLR summary reports that omitted information by plan indicate States' confusion with what is required for these reports.
To correct this issue, we propose to amend § 438.74(a) for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1203(e), to note explicitly that State MLR summary reports must include the required elements for each MCO, PIHP, or PAHP that is contracted with the State. To specify that the MLR information would have to be reported for each managed care plan, we propose in § 438.74(a)(1) to replace “the” with “each” before “report(s).” In addition, in § 438.74(a)(2), we propose to add language to specify that the information listed as required in the summary description must be provided for each MCO, PIHP, or PAHP under contract with the State. These changes would specify that States must provide MLR information for each managed care plan in their annual summary reports to CMS. We propose that States and managed care plans would be required to comply with these changes 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative compliance date of no later than the rating period for MCO, PIHP and PAHP contracts beginning on or after 60 days following the effective date of the final rule; however, we are concerned this is not soon enough. We seek comment on this proposal.
In the 2016 final rule, we aimed to strengthen State and Medicaid and CHIP managed care plan responsibilities to protect against fraud and other overpayments in State Medicaid and CHIP programs, in part, by enhancing reporting requirements to support actuarial soundness payment provisions and program integrity efforts (81 FR 27606). Overpayments are defined in § 438.2 as any payment made to a network provider by a MCO, PIHP, or PAHP to which the network provider is not entitled under Title XIX of the Act or any payment to a MCO, PIHP, or PAHP by a State to which the MCO, PIHP, or PAHP is not entitled under Title XIX of the Act. These overpayments may be the result of fraud, waste, abuse, or other billing errors. Regardless of cause, overpayments should be excluded from the capitation rate because they do not represent reasonable, appropriate, or attainable costs.
The 2016 final rule also enhanced the integrity of capitation payments, in part, by requiring at § 438.608(d)(3) for Medicaid, and included in separate CHIP regulations through an existing cross-reference at § 457.1285, that State contracts with managed care plans include provisions specifying that managed care plans must report the recoveries of overpayments annually. This reporting to the State is critical to the actuarial soundness of capitation rates because managed care plans must exclude overpayments from their incurred claims, which is also a key element in the numerator of the MLR calculation. As required in § 438.5(b)(5), States must consider Medicaid managed
This proposed rule seeks to modify § 438.608(a)(2), which requires managed care plan contracts to include a provision for the prompt reporting of all overpayments identified or recovered (specifying those due to potential fraud) to the State; and § 438.608(d)(3), which requires managed care plan contracts to include annual reports on plan recoveries of overpayments. Both proposed changes are included in separate CHIP regulations through an existing cross-reference at § 457.1285. The proposed changes aim to ensure that Medicaid and CHIP managed care plans report comprehensive overpayment data to States in a timely manner, which would better position States to execute program integrity efforts and develop actuarially sound capitation rates.
Current regulations at § 438.608(a)(2) require that States include a provision in their contracts with managed care plans for the prompt reporting to the State of all overpayments identified or recovered, specifying the overpayments due to potential fraud. However, the term “prompt” is not defined. Although a time period is not defined, prompt reporting of identified or recovered overpayments is important because it can enable a State to expeditiously take action against a provider to prevent further inappropriate activity, including potential fraud. With prompt reporting of managed care plan overpayments, the State is better equipped to identify similar overpayments and prevent future overpayments across its networks and managed care programs.
CMS' oversight efforts and other program integrity reviews have revealed that States interpret the promptness requirement under § 438.608(a)(2) inconsistently. For example, some States do not define “prompt” in managed care plan contracts, instead deferring to managed care plans' interpretation of the timeframe to report overpayments; this lack of definition can result in inconsistent overpayment reporting among managed care plans and States. Our reviews also revealed that some States do not use a consistent timeframe across managed care plan contracts when requiring the reporting of overpayments. As a result, managed care plans may not report identified or recovered overpayments within a timeframe that enables States to effectively and swiftly investigate and take appropriate administrative action against providers that may be committing fraudulent activities across networks and managed care programs.
We believe that establishing a uniform definition of the term “prompt” would provide clarity to States and managed care plans, thereby enhancing ongoing communication between managed care plans and States, particularly as it relates to program integrity practices. Therefore, we propose to amend § 438.608(a)(2) for Medicaid, and included in separate CHIP regulations through an existing cross-reference at § 457.1285, to define “prompt” as within 10 business days of identifying or recovering an overpayment. We believe 10 business days would provide a managed care plan sufficient time to investigate overpayments and determine whether they are due to potential fraud or other causes, such as billing errors, and also quickly provide the State with awareness to mitigate other potential overpayments across its networks and managed care programs. With a clear and consistent overpayment reporting requirement, States would be better equipped to: direct managed care plans to look for specific network provider issues, identify and recover managed care plan and fee-for-service claims that are known to be unallowable, take corrective actions to correct erroneous billing practices, or consider a potential law enforcement referral. We are seeking public comment on the proposed 10 business day timeframe and whether reporting should be from date of identification or recovery, or instead on a routine basis, such as monthly. We propose that States and managed care plans would be required to comply with these requirements 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative effective date of no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we do not believe additional time is necessary. We seek comment on this proposal.
The overpayment reporting provisions in 42 CFR part 438, subpart H require managed care plans to recover the overpayments they identify, and in turn, report those identified overpayments to the State for purpose of setting actuarially sound capitation rates. In the 2015 proposed rule, we stated that “MCOs, PIHPs, and PAHPs must report improper payments and recover overpayments they identify from network providers. States must take such recoveries into account when developing capitation rates. Therefore, capitation rates that include the amount of improper payments recovered by an MCO, PIHP, or PAHP as projected costs would not be considered actuarially sound.” (80 FR 31119). It was our expectation that “such recoveries” include recoveries of all identified overpayments. This intent is also reflected in § 438.608(a)(2), which states that managed care plans must report both “identified or recovered” overpayments to the State. However, the words “identified or” were omitted from the related regulatory text at § 438.608(d)(3). Program integrity reviews and investigations conducted since the 2016 final rule have found that language in § 438.608(d)(3) providing that managed care plans only report “recovered overpayments” has created an unintentional effect of managed care plans' reporting partial overpayment data for capitation rate calculations. This omission may have also disincentivized managed care plans from investing in the resources necessary to recover identified overpayments in the interest of maintaining a higher MLR. For example, we have identified instances in which managed care plans identified an overpayment, but did not recover the entire overpayment from the provider due to negotiating or settling the overpayment to a lesser amount. In other cases, managed care plans identified an overpayment that was resolved by applying an offset to future payments to the provider instead of recovering the full overpayment in the impacted rating period. These situations resulted in the managed care plans only reporting a relatively small or no overpayment recovery amount to the State in the impacted rating period, instead of the full amount of the identified overpayment. This inconsistent reporting does not reflect our original intent in imposing the current requirements in § 438.608(d)(3), and prevents the State from accounting
To address these issues, we propose to revise § 438.608(d)(3) for Medicaid and separate CHIP regulations through an existing cross-reference at § 457.1285, to specify our original intent that any overpayment (whether identified or recovered) must be reported by Medicaid or CHIP managed care plans to the State. Through this proposed change, we believe that managed care plans and States would have more consistency in the overpayment reporting requirements at § 438.608(a)(2) and (d)(3) by requiring reporting to the State all overpayments, whether identified or recovered. By ensuring that both identified and recovered overpayments are reported, States and CMS would be more assured that capitation rates account for only reasonable, appropriate, and attainable costs covered under the contract. We propose that States and managed care plans would be required to comply with these requirements 60 days after the effective date of this final rule as we believe these proposals are critical for fiscal integrity in Medicaid and CHIP. We considered an alternative effective date no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we are concerned that is not soon enough. We seek comment on this proposal.
Many States are using the authority in § 438.6(c) to direct Medicaid managed care plans' payments to certain providers. See section I.B.2.e. of this proposed rule for more information. States' increasing use of SDP arrangements has been cited as a key area of oversight risk for CMS. Several advisory and oversight bodies, including MACPAC, the HHS OIG, and GAO, have authored reports focused on CMS oversight of SDPs.
SDPs also represent a notable amount of spending. MACPAC reported that CMS approved SDP arrangements in 37 States, with spending exceeding more than $25 billion for SDPs through 2020.
Under our current review and approval process for SDPs we ask States to estimate projected SDP expenditures, but we do not review the actual amounts that States provide to Medicaid managed care plans for these payment arrangements, and we do not review the actual amounts that Medicaid managed care plans pay to providers. We retrospectively review SDP actual amounts as part of State-level MLR reviews and in-depth reviews of State expenditures where Federal dollars are at risk, known as Financial Management Reviews; however, these reviews are limited to only a few States each year. We do not conduct other formal retrospective reviews of actual SDP expenditures. Thus, we rarely confirm with States that SDP actual spending amounts were reasonably consistent with the CMS-approved estimated amounts. Instead, we require States to provide the estimated total payment amounts for these arrangements as part of the current approval process. We are also aware that some States are permitting managed care plans to retain a portion of SDPs for administrative costs when plans make these payments to providers. Because States are not required to provide the actual expenditures associated with these arrangements in any separate or identifiable way, we cannot determine exactly how much is being paid under these arrangements and whether Federal funds are at risk for impermissible or inappropriate payment.
We propose new reporting requirements for Medicaid SDPs in §§ 438.8 and 438.74 to align with the reporting that is currently required for Medicaid FFS supplemental payments. CMS FFS supplemental payment guidance notes that “[i]nformation about all supplemental payments under the State plan and under demonstration is necessary to provide a full picture of Medicaid payments.”
To address the need for additional information on the actual amounts paid as SDPs, we propose to require Medicaid managed care plans to include SDPs and associated revenue as separate lines in the MLR reports required at § 438.8(k). The managed care MLR reporting requirements at § 438.8(k) were codified in the 2016 final rule, and States have substantial experience in obtaining and reviewing MLR reports from their managed care plans. To date, our MLR guidance has not addressed the inclusion of SDPs in the MLR; this proposal would specify these requirements by amending § 438.8(k) to ensure that Medicaid SDPs would be separately identified in annual MLR reporting.
Specifically, at § 438.8(e)(2)(iii)(C), we propose to require that managed care plan expenditures to providers that are directed by the State under § 438.6(c), including those that do and do not require prior CMS approval, must be included in the MLR numerator. In § 438.8(f)(2)(vii), we propose to require that State payments made to Medicaid MCOs, PIHPs, or PAHPs for approved arrangements under § 438.6(c) be included in the MLR denominator as premium revenue. We propose that States and managed care plans are required to comply with these changes in § 438.8(e)(2)(iii)(C) and (f)(2)(vii) 60 days after the effective date of the final rule as we believe these proposals are critical for fiscal integrity in Medicaid. We considered an alternative compliance date of no later than the rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 60 days following the effective date of the final rule; however, we are concerned this is not soon enough, given the fiscal integrity risks that are involved. We seek comment on this proposal.
We also propose to require that the managed care plans' MLR reports to States as required in § 438.8(k) include two additional line items. The first item at § 438.8(k)(1)(xiv) requires reporting of Medicaid managed care plan
For separate CHIPs, we do not propose to adopt the new reporting requirements at § 438.8(k)(1)(xiv) and (xv) because SDPs are not applicable to separate CHIP managed care plans. For this reason, we propose to amend § 457.1203(f) to exclude any references to SDPs for managed care plan MLR reporting. For clarity, we also propose to make a technical change at § 457.1203(f) to include the word “in” before the cross-reference to § 438.8.
To assist in CMS oversight of these arrangements, the plan-level SDP expenditure reporting should be reflected in States' annual summary MLR reports to CMS. As part of States' annual summary MLR reporting that is required under § 438.74, we propose to require two additional line items. The first item at § 438.74(a)(3)(i) requires State reporting of the amount of payments made to providers that direct Medicaid MCO, PIHP, or PAHP expenditures under § 438.6(c). The second item at § 438.74(a)(3)(ii) requires State reporting of the amount of payments, including amounts included in capitation payments, that the State makes to Medicaid MCOs, PIHPs, or PAHPs for approved SDPs under § 438.6(c). We propose, in § 438.74(a)(4), that States would be required to comply with § 438.74(a)(3) no later than the rating period for contracts with MCOs, PIHPs, and PAHPs beginning on or after 60 days following the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We considered an alternative effective date where States would comply with the new requirement 60 days after the effective date of this final rule. However, we were concerned this may not be a reasonable timeline for compliance as these changes may require States to make changes to financial reporting systems and processes. We seek public comment on this proposal.
We do not propose to adopt the new SDP reporting requirements for separate CHIPs at § 438.74 since expenditures under § 438.6(c) are not applicable to separate CHIP managed care plans. However, since existing separate CHIP regulations at § 457.1203(e) currently cross-reference to the reporting requirements at § 438.74, we propose to amend § 457.1203(e) to exclude any references to SDPs in State MLR reporting.
While some managed care plans and States may oppose these proposals as increasing administrative burden, we believe that the increased transparency associated with these enhanced standards would benefit both State and Federal government oversight of SDPs. Implementing these new requirements for both State and managed care plan reporting of actual SDP expenditures would support CMS' understanding of provider-based payment across delivery systems.
In the 2016 final rule, we finalized § 438.3(e) for Medicaid, which was included in separate CHIP regulations through cross-reference at § 457.1201(e), and specified in § 438.3(e)(2) that managed care plans have flexibility under risk contracts to provide a substitute service or setting for a service or setting covered under the State plan, when medically appropriate and cost effective, to enrollees at the managed care plan and enrollee option (81 FR 27538 and 27539). A substitute service or setting provided in lieu of a covered State plan service or setting under these parameters is known as an “in lieu of service or setting” (ILOS). In the 2015 notice of proposed rulemaking, we stated that, under risk contracts, managed care plans have historically had the flexibility to offer an ILOS that meets an enrollee's needs (80 FR 31116). Within the 2016 final rule, we clarified that this ILOS authority continues to exist for States and managed care plans, subject to § 438.3(e)(2). We believe ILOS authority is inherent in a risk contract in accordance with section 1903(m)(2)(A) of the Act which addresses risk-based capitation payments, which are defined in § 438.2. Additionally, we rely on the authority in section 1902(a)(4) of the Act to establish methods for proper and effective operations in Medicaid with respect to PIHPs and PAHPs. ILOSs are incorporated into the applicable States' contracts with its managed care plans and associated capitation rates, and are subject to CMS review and approval in accordance with § 438.3(a) and § 438.7(a) respectively.
ILOSs are utilized by States and their managed care plans to strengthen access to, and availability of, covered services and settings, or reduce or prevent the need for covered services and settings. As outlined in the guidance issued on January 7, 2021
To ensure clarity on the use of the term “in lieu of service or setting” and the associated acronym “ILOS,” we propose to add a definition in § 438.2 for Medicaid to define an “in lieu of service or setting (ILOS)” as a service or setting that is provided to an enrollee as a substitute for a covered service or setting under the State plan in accordance with § 438.3(e)(2) and acknowledge that an ILOS can be used as an immediate or longer term substitute for a covered service or setting under the State plan, or when the ILOS can be expected to reduce or prevent the future need to utilize State plan-covered service or setting. For separate CHIP, we propose to align by adding “In lieu of service or setting (ILOS) is defined as provided in § 438.2 of this chapter” to the definitions at § 457.10. Given this proposed definition and associated acronym, we also propose several conforming changes in § 438.3(e)(2). We propose to revise § 438.3(e)(2) to remove “services or settings that are in lieu of services or settings covered under the State plan” and replace it with “an ILOS”. We propose to revise § 438.3(e)(2)(i) and (ii) to remove “alternative service or setting” and replace it with “ILOS.” In § 438.3(e)(2)(iii), we propose to remove “in lieu of services” and replace it with “ILOS is”, and remove the “and” at the end of this requirement given new requirements that will be proposed. We propose to revise § 438.3(e)(2)(iv) to remove “in lieu of services are” and replace it with “the ILOS is, and add the term “and settings” after “covered State plan covered services” to accurately reflect that ILOSs are substitute services and settings for State plan services and settings. Additionally, we added an “and” at the end of this requirement given a new proposed addition of § 438.3(e)(2)(v) that is described later in this section. The proposed changes at § 438.3(e) are equally applicable to separate CHIP managed care plan contract requirements through the existing cross-reference at § 457.1201(e).
Because we are making numerous proposals related to ILOSs, we believe adding a cross reference in § 438.3(e)(2)(v) to a new section would make it easier for readers to locate all of the provisions in one place and the designation flexibility of a new section would enable us to better organize the provisions for readability. To do this, we propose to create a new § 438.16 titled
We acknowledge that one of the most commonly utilized ILOSs is inpatient mental health or substance use disorder treatment provided during a short term stay (no more than 15 days during the period of the monthly capitation payment) in an institution for mental diseases (IMD). Due to the statutory limitation on coverage of services provided in an IMD in accordance with language in section 1905(a) of the Act following section 1905(a)(30) of the Act, our ability to permit States to make a monthly Medicaid capitation payment for an enrollee who receives services in an IMD is limited as outlined in § 438.6(e), and uniquely based on the nature of risk-based payment (see 80 FR 31116 for further details on this policy). Other than as an ILOS, in accordance with §§ 438.3(e)(2) and 438.6(e), FFP is not available for any medical assistance under Title XIX for services provided to an individual, ages 21 to 64, who is a patient in an IMD facility. We are not proposing changes regarding the coverage of short term stays in an IMD as an ILOS, or payments to MCOs and PIHPs for enrollees who are a patient in an IMD in § 438.6(e) (see 81 FR 27555 through 27563 for further details on the existing policy). In acknowledgement of the unique parameters necessary for coverage of services provided in IMDs as an ILOS, given the statutory limitations, we do not believe § 438.16 should apply to a short term IMD stay as an ILOS. For example, a short term stay in an IMD as an ILOS is excluded from the calculation for an ILOS cost percentage, described in further detail in section I.B.4.b. of this proposed rule, as the costs of a short term IMD stay must not be used in rate development given the statutory limitation, and instead States must use the unit costs of providers delivering the same services included in the State plan as required in § 438.6(e). Additionally, as described in § 438.6(e), States may only make a monthly capitation payment to an MCO or PIHP for an enrollee aged 21 to 64 receiving inpatient treatment in an IMD when the length of stay in an IMD is for a short term stay of no more than 15 days during the period of the monthly capitation payment. Therefore, we propose to add § 438.3(e)(2)(v) to explicitly provide an exception from the applicability of § 438.16 for short term stays, as specified in § 438.6(e), for inpatient mental health or substance use disorder treatment in an IMD. This proposal does not replace or alter existing Federal requirements and limitations regarding the use of short term IMD stays as an ILOS, or the availability of FFP for capitation payments to MCOs and PIHPs for enrollees who utilize an IMD.
We do not propose to adopt the IMD exclusion for separate CHIP since there are no similar payment restrictions for stays in an IMD in separate CHIP. As long as a child is not applying for or renewing their separate CHIP coverage while a resident of an IMD, the child remains eligible for separate CHIP and any covered State plan services or ILOSs while in an IMD consistent with the
States and managed care plans will continue to be obligated to comply with other applicable Federal requirements for all ILOS, including short term IMD stays. This includes, but is not limited to, those requirements outlined in §§ 438.3(e)(2), 438.6(e), and 438.66. As required in § 438.66(a) through (c), States must establish a system to monitor performance of their managed care programs. When ILOSs are included in a managed care plan's contract, they too must be part of the State's monitoring activities. As part of such monitoring, States must ensure that all ILOSs, including short term stays in an IMD, are medically appropriate, cost effective, and at the option of the enrollee and managed care plan.
We believe ILOSs can give States and managed care plans opportunities to strengthen access to care, address unmet needs of Medicaid and CHIP enrollees, and improve the health of Medicaid and CHIP beneficiaries. However, we believe it is necessary to implement appropriate Federal protections to ensure the effective and efficient use of Medicaid and CHIP resources, particularly since these services and settings are not State plan-covered services and settings furnished under managed care plan contracts, and we rely on the authority in sections 1902(a)(4) and 2101(a) of the Act to establish methods for proper and effective operations in Medicaid and CHIP respectively. Therefore, to ensure States and managed care plans utilize ILOSs effectively and in a manner that best meets the needs of the enrollees as well as that related Federal expenditures are reasonable and appropriate, we propose several key requirements in § 438.16.
We believe that a limitation on the types of substitute services or settings that can be offered as an ILOS would be a key protection to ensure an ILOS is an appropriate and efficient use of Medicaid and CHIP resources, and we believe this is a reasonable method to ensure proper and effective operations in Medicaid and CHIP in accordance with authority in sections 1902(a)(4) and 2101(a) of the Act, respectively. We believe that the services and settings that could be provided as an ILOS should be consistent with the services and settings that could be authorized under the Medicaid or CHIP State plan or a program authorized through a waiver under section 1915(c) of the Act. As further described in section I.B.4.a. of this proposed rule, we believe the only Medicaid exception should be a short term stay in an IMD for the provision of inpatient mental health or substance use disorder treatment, which already has appropriate safeguards per requirements outlined in § 438.6(e). Therefore, we propose to require in § 438.16(b) that an ILOS must be approvable as a service or setting through a State plan amendment, including sections 1905(a), 1915(i), or 1915(k) of the Act, or a waiver under section 1915(c) of the Act. For example, personal care homemaker services are approvable as a covered service in a waiver under section 1915(c) of the Act, and would be an approvable ILOS if it is a medically appropriate and cost effective substitute for a service or setting covered under the State plan.
For separate CHIP, we similarly propose that ILOSs must be consistent with services and settings approvable under sections 2103(a) through (c), 2105(a)(1)(D)(ii), and 2110(a) of the Act as well as the services and settings identified in § 438.16(b). For this reason, we propose to adopt the requirements proposed at § 438.16(b) by amending § 457.1201(e) to include a new cross-reference to § 438.16(b). We also remind States that the use of an ILOS does not absolve States and managed care plans of their responsibility to comply with other Federal requirements. States must ensure that contracts with managed care plans comply with all applicable Federal and State laws and regulations in accordance with §§ 438.3(f) and 457.1201(f). For example, with the exception of short term IMD stays as described in section I.B.4.a. of this proposed rule, ILOSs must adhere to general prohibitions on payment for room and board under Title XIX of the Act. Additionally, States and managed care plans must ensure access to emergency services in accordance with the Emergency Medical Treatment and Labor Act and compliance with the Americans with Disabilities Act and Section 504 of the Rehabilitation Act. Moreover, consistent with § 438.208(c)(3), States must comply with person-center planning requirements as applicable.
Because ILOSs are provided as substitutes for State plan-covered services and settings, we believe that we have an obligation to ensure appropriate fiscal protections for Medicaid and CHIP investments in ILOSs, and that there should be a limit on the amount of expenditures for ILOSs to increase accountability, reduce inequities in the services and settings available to beneficiaries across managed care and fee-for-service delivery systems, and ensure enrollees receive State plan-covered services and settings. We rely on the authority in section 1902(a)(4) of the Act to establish methods for proper and efficient operations in Medicaid and section 2101(a) of the Act for establishing efficient and effective health assistance in CHIP. To determine a reasonable limit on expenditures for ILOSs, we propose to limit allowable ILOS costs to a portion of the total costs for each managed care program that includes ILOS(s), hereinafter referred to as an ILOS cost percentage. States claim FFP for the capitation payments they make to managed care plans. Capitation payments are based on the actuarially sound capitation rates as defined in § 438.2, for Medicaid, and rates are developed with “actuarially sound principles” as required for separate CHIP at § 457.1203(a). The utilization and cost associated with ILOSs are accounted for in the development of Medicaid and separate CHIP capitation rates in accordance with §§ 438.3(e)(2)(iv) and 457.1201(e) respectively. Therefore, we propose in § 438.16(c), that the ILOS cost percentage must be calculated based on capitation rates and capitation payments as outlined in further detail in this section. In section I.B.2.l. of this proposed rule, CMS proposes requirements for State directed payments as a separate payment term, and we also believe these costs should be accounted for in the denominator of the ILOS cost percentage as these are payments made by the State to the managed care plans. The reporting requirements in this proposal are authorized by sections 1902(a)(6) and 2107(b)(1) of the Act which require that States provide reports, in such form and containing such information, as the Secretary may from time to time require.
Given that actuarially sound capitation rates are developed prospectively based on historical utilization and cost experience, as further defined in § 438.5, we believe that an ILOS cost percentage and associated expenditure limit should be measured both on a projected basis when capitation rates are developed and on a final basis after capitation payments are made by States to the managed care plans. Therefore, we propose to define both a “projected ILOS cost percentage” and “final ILOS cost percentage” in § 438.16(a) as the amounts for each managed care program that includes ILOS(s) using the calculations proposed in § 438.16(c)(2)
For separate CHIP, we require States at § 457.1203(a) to develop capitation rates consistent with actuarially sound principles, but at § 457.1203(b) we allow for States to establish higher capitation rates if necessary to ensure sufficient provider participation or provider access or to enroll providers who demonstrate exceptional efficiency or quality in the provision of services. While we do not impose a similar limit for incentive arrangements in separate CHIP capitation rates as we do for Medicaid capitation rates, we wish to align with Medicaid in limiting projected and final ILOS cost percentages to 5 percent of capitation payments for separate CHIPs. For this reason, we propose to amend § 457.1203(b) to adopt 5 percent ILOS cost percentage limits by amending § 457.1201(c) to include a new cross-reference to § 438.16(c)(1).
We also propose, in § 438.16(c)(1)(ii), that the State's actuary would have to calculate the projected ILOS cost percentage and final ILOS cost percentage on an annual basis and recalculate these projections annually to ensure consistent application across all States and managed care programs. Furthermore, to ensure that the projected ILOS cost percentage and final ILOS cost percentage would be developed in a consistent manner with how the associated ILOS costs would be included in rate development, we propose at § 438.16(c)(1)(iii) to require that the projected ILOS cost percentage and the final ILOS cost percentage would have to be certified by an actuary and developed in a reasonable and appropriate manner consistent with generally accepted actuarial principles and practices. An “actuary” is defined in § 438.2 as an individual who meets the qualification standards established by the American Academy of Actuaries for an actuary and follows the practice standards established by the Actuarial Standards Board, and who is acting on behalf of the State to develop and certify capitation rates. Therefore, we believe that the actuary that would certify the projected and final ILOS cost percentages should be the same actuary that developed and certified the capitation rates that included ILOS(s). For separate CHIP, we do not require actuarial certification of capitation rates and are not adopting the requirement at § 438(c)(1)(iii). We propose to amend § 457.1201(c) to exclude requirements for certification by an actuary. However, we remind States that separate CHIP rates must be developed using “actuarially sound principles” in accordance with § 457.1203(a).
We propose at § 438.16(c)(2), that the projected ILOS cost percentage would have to be calculated by dividing the portion of the total capitation payments that would be attributable to all ILOSs, excluding short term stays in an IMD as specified in § 438.6(e), for each managed care program (numerator) by the projected total capitation payments for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the projected total State directed payments that are paid as a separate payment term as described in § 438.6(c)(6) (denominator). We also propose, at § 438.16(c)(3), that the final ILOS cost percentage would have to be calculated by dividing the portion of the total capitation payments that is attributable to all ILOSs, excluding a short term stay in an IMD as specified in § 438.6(e), for each managed care program (numerator) by the actual total capitation payments for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the actual total State directed payments that are paid as a separate payment term as described in § 438.6(c)(6) (denominator). We believe these proposed numerators and denominators for the projected and final ILOS cost percentages would be an accurate measurement of the projected and final expenditures associated with ILOSs and total program costs in each managed care program in a risk-based contract. For separate CHIP, we propose to align with the projected and final ILOS cost percentage calculations by amending § 457.1201(c) to include cross-references to § 438.16(c)(2) through (3). However, since pass-through payments and State directed payments are not applicable to separate CHIP, we propose to exclude all references to pass-through payments and State directed payments at § 457.1201(c).
We considered proposing that the actual expenditures of the managed care plans for ILOSs and total managed care program costs, tied to actual paid amounts in encounter data, be the numerator and denominator for the final
We believe the projected ILOS cost percentage should be included in the rate certification for each managed care program that includes ILOS(s) and any subsequent revised rate certification (for example, rate amendment) as applicable, such as those that change the ILOSs offered, capitation rates, pass-through payments and/or State directed payments. As previously described in this section, we propose at § 438.16(c)(1)(iii) that the actuary who certifies the projected ILOS cost percentage would have to be the same actuary who develops and certifies the associated Medicaid capitation rates and the State directed payments paid as a separate payment term (see section I.B.2.l. of this proposed rule for details on this proposal for separate payment terms). We also believe that including this percentage within the rate certification would reduce administrative burden for States and actuaries while also ensuring consistency between how this percentage would be calculated and how ILOS costs would be accounted for in rate development. Therefore, we propose to require, at § 438.16(c)(5)(i), that States annually submit to CMS for review the projected ILOS cost percentage for each managed care program as part of the Medicaid rate certification required in § 438.7(a). For separate CHIP, we do not require actuarial certification of capitation rates or review by CMS, and for this reason we do not adopt the new requirement proposed at § 438.16(c)(5)(i) for separate CHIP.
As the proposed denominator for the final ILOS cost percentage, in § 438.16(c)(3)(i), would be based on the actual total capitation payments and the State directed payments paid as a separate payment term (see section I.B.2.l. of this proposed rule for details on this proposal for separate payment terms) paid by States to managed care plans, we recognize that calculating the final ILOS cost percentage would take States and actuaries some time. For example, changes to the eligibility file and revised rate certifications for rate amendments may impact the final capitation payments that are a component of the calculation. We also believe documentation of the final ILOS cost percentage is a vital component of our monitoring and oversight as it would ensure that the expenditures for ILOSs comply with the proposed 5 percent limit; and therefore, must be submitted timely. Given these factors, we believe that 2 years is an adequate amount of time to accurately perform the calculation. Therefore, we propose, at § 438.16(c)(5)(ii), to require that States must submit the final ILOS cost percentage report to CMS with the rate certification for the rating period beginning 2 years after the completion of each 12-month rating period that included an ILOS(s). Under this proposal, for example, the final ILOS cost percentage report for a managed care program that uses a calendar year 2024 rating period would be submitted to CMS with the calendar year 2027 rate certification. For separate CHIP, we do not require review of capitation rates by CMS and do not propose to adopt the requirements at § 438.16(c)(5)(ii) for separate CHIP.
We considered requiring the final ILOS cost percentage be submitted to CMS within 1 year after the completion of the rating period that included ILOS(s) to receive this data in a more timely fashion. However, we were concerned this may not be adequate time for States and actuaries given the multitude of factors described previously in this section. We request comment on whether our assumption that 1 year is inadequate is correct.
We also believe that it is appropriate for States' actuaries to develop a separate report to document the final ILOS cost percentage, rather than including it in a rate certification, because the final ILOS cost percentage may require alternate data compared to the base data that were used for prospective rate development, given the timing of base data requirements as outlined in § 438.5(c)(2). However, this final ILOS cost percentage could provide details that should inform prospective rate development, such as through an adjustment outlined in § 438.5(b)(4), so we believe it should be submitted along with the rate certification. We note that this proposal is similar to the concurrent submission necessary for the MLR reporting at § 438.74. We considered proposing that States submit this report separately to CMS upon completion. However, we believe there should be consistency across States for when this report is submitted to CMS for review, and we believe receiving this report and the rate certification at the same time would enable CMS to review them concurrently. For these reasons, we propose, at § 438.16(c)(5)(ii), to require that States submit the final ILOS cost percentage annually to CMS for review as a separate report concurrent with the rate certification submission required in § 438.7(a). We intend to issue additional guidance on the standards and documentation requirements for this report. For separate CHIP, we do not require review of capitation rates by CMS and do not propose to adopt the requirements at § 438.16(c)(5)(ii) for separate CHIP.
We believe there must be appropriate transparency on the managed care plan costs associated with delivering ILOSs to aid State oversight and monitoring of ILOSs, and to ensure proper and effective operations in Medicaid in accordance with authority in section 1902(a)(4) of the Act. Therefore, we propose, in § 438.16(c)(4), that States provide to CMS a summary report of the actual managed care plan costs for delivering ILOSs based on claims and encounter data provided by the managed care plans to States. We also believe this summary report should be developed concurrently and consistently with the final ILOS cost percentage to ensure appropriate fiscal safeguards for each managed care program that includes ILOS(s). We believe this summary report should be developed for each managed care program consistent with the rationale described in section I.B.4.b. of this proposed rule for developing the ILOS cost percentage for each managed care program. Therefore, in § 438.16(a), we propose to define a “summary report for actual MCO, PIHP and PAHP ILOS costs” and propose that this summary report be calculated for each managed
To balance States' administrative burden with ensuring fiscal safeguards and enrollee protections related to ILOSs, we believe it would be appropriate to use a risk-based approach for States' documentation and evaluation requirements. This proposed reporting requirement is authorized by sections 1902(a)(6) and 2107(b)(1) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require. Therefore, we propose that the ILOS documentation States would have to submit to CMS, as well as an evaluation States would have to complete, would vary based on a State's projected ILOS cost percentage for each managed care program. We believe the projected ILOS cost percentage would be a reasonable proxy for identifying States that offer a higher amount of ILOSs, in comparison to overall managed care program costs, and likely could have a corresponding higher impact to Federal expenditures. As we considered the types of State activities and documentation that could vary under this proposed risk-based approach, we considered which ones would be critical for all States to undertake for implementation and continual oversight of the use of ILOSs, but would not require our review unless issues arose that warranted additional scrutiny. We propose that documentation requirements for States with a projected ILOS cost percentage that is less than or equal to 1.5 percent would undergo a streamlined review, while States with a higher projected ILOS cost percentage would have more robust documentation requirements. Additionally, we propose States with a higher final ILOS cost percentage would be required to submit an evaluation of ILOSs to CMS. These parameters are explained further in sections I.B.4.d. and g. of this proposed rule.
As we considered a reasonable percentage for this risk-based approach, we evaluated flexibilities currently offered in part 438 to assess if similar thresholds would be reasonable for this purpose. These flexibilities included the opportunity available to States to adjust rates without the requirement for a revised rate certification. Specifically, we are referring to the 1 percent flexibility for States that certify rate ranges in accordance with § 438.4(c)(2)(iii) and the 1.5 percent flexibility for States that certify capitation rates in accordance with § 438.7(c)(3). An additional flexibility currently available to States relates to incentive arrangements. In accordance with § 438.6(b)(2), total payment under States' managed care plan contracts with incentive arrangements are allowed to be no greater than 105 percent of the approved capitation payments attributable to the enrollees or services covered by the incentive arrangement. As we evaluated a reasonable and appropriate threshold to utilize for this risk-based approach, we explored utilizing similar flexibilities of 1 percent, 1.5 percent and 5 percent, and also considered 2.5 percent as a mid-point in this 5 percent range.
We do not believe 5 percent is a reasonable percentage for this risk-based approach as this is the proposed limit for the projected and final ILOS cost percentages described in this section. We believe a greater degree of State documentation, and CMS oversight, is necessary for States that offer ILOSs that represent a higher share of overall managed care program costs, and likely have a corresponding higher impact on Federal expenditures. In the 2020 final rule, we finalized § 438.4(c)(2)(iii) to permit States that certify rate ranges to make rate adjustments up to 1 percent without submitting a revised rate certification. Our rationale was that States using rate ranges were already afforded additional flexibility given the certification of rate ranges so it was not appropriate to utilize the same 1.5 percent flexibility that is offered to States that certify capitation rates (85 FR 72763). We do not believe a similar rationale is appropriate or relevant for this proposal, and thus, we do not believe 1 percent would be the most appropriate threshold. We are also concerned that utilizing 2.5 percent for a risk-based approach would result in inadequate Federal oversight to ensure program integrity, such as fiscal safeguards and enrollee protections related to ILOSs. We believe 1.5 percent, a de minimis amount, is appropriate to propose for utilization of a risk-based approach for States' documentation and evaluation requirements, and associated CMS review, as ILOS expenditures less than or equal to 1.5 percent would likely be a relatively minor portion of overall managed care program expenditures. Therefore, we propose 1.5 percent for this risk-based approach in § 438.16(d)(2); States with a projected ILOS cost percentage that exceeds 1.5 percent would be required to adhere to additional requirements described in sections I.B.4.d. and g. of this proposed rule. For separate CHIP, we propose to adopt the new documentation requirements for States with a cost percentage that exceeds 1.5 percent at § 438.16(d)(2) by amending § 457.1201(e) to include a cross-reference to § 438.16(d)(2).
Consistent with the ILOS definition proposed in § 438.2, ILOSs are immediate or longer term substitutes for State plan-covered services and settings, or when the ILOSs can be expected to reduce or prevent the future need to utilize the covered services and settings under the State plan. They can be utilized to improve enrollees' health care outcomes, experience, and overall care; however, ILOSs are an option and not a requirement for managed care plans. While ILOSs are offered to Medicaid and CHIP enrollees at the option of the managed care plan, the provision of an ILOS is also dependent on the enrollees' willingness to use the ILOS instead of the State plan-covered service or setting. Medicaid managed care enrollees are entitled to receive covered services and settings under the State plan consistent with section 1902(a)(10) of the Act. As ILOSs can be offered as substitutes for covered State plan services and settings that Medicaid enrollees are otherwise entitled to, we believe that it is of the utmost importance that we identify the enrollee rights and managed care protections for individuals who are offered or opt to use an ILOS instead of receiving State plan-covered service or setting. To ensure clarity for States, managed care plans, and enrollees on the rights and protections afforded to enrollees who are eligible for, offered, or receive an ILOS, we propose to add new § 438.3(e)(2)(ii)(A) and (B) under § 438.3(e)(2)(ii) to specify our meaning of enrollee rights and protections that are not explicitly stated elsewhere in part 438. We believe it would be appropriate to add this clarity to § 438.3(e)(2)(ii) as these are not new rights or protections, but rather, existing rights and protections that we believe
We propose to specify, in § 438.3(e)(2)(ii)(A), that an enrollee who is offered or utilizes an ILOS would retain all rights and protections afforded under part 438, and if an enrollee chooses not to receive an ILOS, they would retain their right to receive the service or setting covered under the State plan on the same terms as would apply if an ILOS was not an option. We believe this proposed addition would ensure clarity that the rights and protections guaranteed to Medicaid managed care enrollees under Federal regulations remain in full effect when an enrollee is eligible to be offered or elects to receive an ILOS. For example, enrollees retain the right to make informed decisions about their health care and to receive information on available treatment options and alternatives as required in § 438.100(b)(2)(iii). To ensure that enrollee rights and protections would be clearly and consistently provided to enrollees, we propose to revise § 438.10(g)(2)(ix) to explicitly require that the rights and protections in § 438.3(e)(2)(ii) be included in enrollee handbooks if ILOSs are added to a managed care plan's contract. For separate CHIP, enrollee rights and protections are unique from those offered to Medicaid enrollees, and are instead located under subparts K and L of part 457. To acknowledge these differences, we propose to amend § 457.1207, (which includes an existing cross-reference to § 438.10) to reference instead to the separate CHIP enrollee rights and protections under subparts K and L of part 457. Protections to ensure that managed care enrollees have the ability to participate in decisions regarding their health care, and have avenues to raise concerns including their right to appeals related to adverse benefit determinations and grievances are critical to ensure that ILOSs are utilized in a reasonable, appropriate, and effective manner.
We believe safeguards and protections for enrollees that elect to use an ILOS should be specified, particularly since ILOS costs can vary compared to costs for the State plan service or setting for which it is a substitute. Specifically, we want to make clear that the provision or offer of an ILOS may not be used coercively or with the intent to interfere with the provision or availability of State plan-covered service and setting that an enrollee would otherwise be eligible to receive. Therefore, we propose to add § 438.3(e)(2)(ii)(B) to ensure that an ILOS would not be used to reduce, discourage, or jeopardize an enrollee's access to services and settings covered under the State plan, and a managed care plan may not deny an enrollee access to a service or setting covered under the State plan on the basis that an enrollee has been offered an ILOS as a substitute for a service or setting covered under the State plan, is currently receiving an ILOS as a substitute for a service or setting covered under the State plan, or has utilized an ILOS in the past. While ILOSs can be effective substitutes for services and settings covered under the State plan, we want to ensure consistent and clear understanding for enrollees, States, and managed care plans on how ILOSs can be appropriately utilized to meet an enrollee's needs.
For separate CHIP, we propose to adopt the enrollee rights and protections at § 438.3(e)(2)(ii)(A) and (B) through an existing cross-reference at § 457.1201(e). However, separate CHIP enrollee rights and protections are unique from those offered to Medicaid enrollees and are instead located under subparts K and L of part 457. To acknowledge these differences, we propose to amend § 457.1201(e), which already includes a cross-reference to § 438.3(e) to State, “An MCO, PIHP, or PAHP may cover, for enrollees, services that are not covered under the State plan in accordance with § 438.3(e) of this chapter . . . except . . . that references to enrollee rights and protections under part 438 should be read to refer to the rights and protections under subparts K and L of this part.”
We believe that a strong foundation built on these enrollee rights and protections would also ensure that ILOSs may have a positive impact on enrollees' access to care, health outcomes, experience, and overall care. As such, we believe these enrollee rights and protections must be clearly documented in States' managed care plan contracts. Therefore, we propose this documentation requirement in § 438.16(d)(1)(v). For separate CHIP, we propose to adopt the requirement for enrollee rights and protections for ILOSs to be documented in managed care plan contracts by amending § 457.1201(e) to include a cross-reference to § 438.16(d)(1)(v).
In § 438.3(e)(2)(i), managed care plans may cover an ILOS if the State determines the ILOS is medically appropriate and cost effective substitute for a covered State plan service or setting. This policy is consistent with authority in section 1902(a)(4) of the Act to establish methods for proper and efficient operations in Medicaid as well as the nature of capitation payments based on risk-based capitation rates recognized in section 1903(m)(2)(A) of the Act. We interpret medically appropriate and cost effective substitute to mean that an ILOS may serve as an immediate or longer term substitute for a covered service or setting under the State plan, or when the ILOS can be expected to reduce or prevent the future need to utilize a covered service or setting under the State plan. We believe this is a reasonable interpretation in acknowledgement that health outcomes from any health care services and settings may also not be immediate. We offer the following examples to illustrate the difference between an ILOS that is an immediate versus longer term substitute for a State plan service or setting, or when the ILOS can be expected to reduce or prevent the future need to utilize a covered service or setting under the State plan.
For example, transportation to and services provided at a sobering center could be offered as a medically appropriate and cost effective immediate substitute for target populations for specific State plan services or settings, such as an emergency room visit or hospital inpatient stay. Alternatively, we can envision target populations for which an ILOS, such as housing transition navigation services, might serve as a longer term substitute for a covered State plan service or setting, or when the ILOS can be expected to reduce or prevent the need to utilize the covered service or setting under the State plan, such as populations with chronic health conditions and who are determined to be at risk of experiencing homelessness. The managed care plan might choose to offer medically tailored meals to individuals with a diabetes diagnosis and poorly managed A1C levels. While not an immediate substitute for a State plan-covered service such as emergency room visits or inpatient hospital stays, medically tailored meals consistently provided to the individual over a period of time could contribute to improved management of the diabetes. In the long term, improved management might lead to fewer complications related to diabetes and consequentially, fewer emergency room visits and inpatient stays thereby demonstrating the ILOS was both medically appropriate and cost effective for the individual.
We believe it is important to ensure appropriate documentation to support a State's determination that an ILOS is a medically appropriate and cost effective substitute, either long or short term, for a State plan-covered service or setting.
In our experience reviewing managed care plan contracts, States have not always provided sufficient detail in their managed care plan contracts for Federal review. For example, some contracts have included only general language that ILOSs are provided at the option of the managed care plan and have not clearly identified each ILOS that the State has authorized in sufficient detail. We believe clarity is needed to ensure accountability and transparency in managed care plan contracts. Therefore, we propose § 438.16(d)(1)(i) and (ii) to require that States would include within each managed care plan contract that includes ILOS(s), the name and definition for each ILOS and clearly identify the State plan-covered service or setting for which each ILOS has been determined to be a medically appropriate and cost effective substitute by the State. For separate CHIP, we propose to adopt the new documentation requirements at § 438.16(d)(1)(i) and (ii) by amending § 457.1201(e) to include the cross-reference. By requiring that this information be clearly identified in the contract, we believe that managed care plans would have sufficient detail on the ILOSs to be able to utilize ILOSs appropriately while enabling States and CMS to more effectively monitor each ILOS over time. We also believe including this level of detail in the contract would be an appropriate fiscal protection to ensure that capitation rates are developed in an actuarially sound manner in accordance with § 438.4 for Medicaid, and developed with actuarially sound principles in accordance with § 457.1203(a) for separate CHIP. Actuarially sound capitation rates, as defined in § 438.4(a) for Medicaid, and actuarially sound principles as defined at § 457.10 for CHIP, are projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract. Additionally, for Medicaid, such capitation rates must be developed in accordance with the requirements in § 438.4(b), including the requirements that the actuarially sound capitation rates must be appropriate for the populations to be covered and the services to be furnished under the contract as required in § 438.4(b)(2).
The existing regulation § 438.3(e)(2)(i) indicates that a managed care plan may offer an ILOS if the State determines that the ILOS is a medically appropriate and cost-effective substitute for a covered service or setting under the State plan. As noted in section I.B.4.a of this proposed rule, we are proposing a definition of ILOS in § 438.2 to specify that ILOSs may be determined to be cost effective and medically appropriate as immediate or longer-term substitutes for State plan-covered services and settings, or when the ILOSs can be expected to reduce or prevent the future need to utilize State plan-covered services and settings. Current regulations do not require States or managed care plans to document any details related to the determination of medical appropriateness and cost effectiveness, either broadly or for a specific enrollee who is offered an ILOS. For managed care plans to appropriately offer ILOSs to enrollees consistent with the State's determination of medical appropriateness and cost effectiveness, States would have to identify the target populations for each ILOS using clear clinical criteria. Prospective identification of the target population for an ILOS would also be necessary to ensure capitation rates are developed in an actuarially sound manner in accordance with § 438.4, including the requirements that the actuarially sound capitation rates must be appropriate for the populations to be covered and the services to be furnished under the contract as required in § 438.4(b)(2) and meet the applicable requirements of part 438, including ILOS requirements as required in § 438.4(b)(6). For these reasons, we propose a new requirement at § 438.16(d)(1)(iii) to require States to document within each managed care plan contract the clinically defined target population(s) for which each ILOS has been determined to be a medically appropriate and cost effective substitute. For separate CHIP, we propose to adopt the new documentation requirements at § 438.16(d)(1)(iii) by amending § 457.1201(e) to include the cross-reference. We propose the phrase “clinically defined target populations” as we believe that States would have to identify a target population for each ILOS that would have to be based on clinical criteria. This would not preclude States from using additional criteria to further target certain clinically defined populations for ILOSs.
While States may establish target population(s) for which an ILOS is medically appropriate, we believe that the actual determination of medical appropriateness should be completed by a provider, for each enrollee, using their professional judgement, and assessing the enrollee's presenting medical condition, preferred course of treatment, and current or past medical treatment to determine if an ILOS is medically appropriate for that specific enrollee. Therefore, we propose, at § 438.16(d)(1)(iv), to require that the managed care plan contract document a process by which a licensed network or managed care plan staff provider would have to determine that an ILOS is medically appropriate for a specific enrollee. Under this proposal, this determination and documentation could be done by either a licensed network provider or a managed care plan staff provider to ensure States and managed care plans have capacity to implement this requirement, consistent with State standards. For separate CHIP, we propose to adopt the new documentation requirements at § 438.16(d)(1)(iv) by amending § 457.1201(e) to include the cross-reference. The provider would have to document the determination of medical appropriateness within the enrollee's records, which could include the enrollee's plan of care, medical record (paper or electronic), or another record that details the enrollee's care needs. This documentation would have to include how each ILOS would be expected to address those needs.
As discussed in section I.B.4.b. of this proposed rule, we propose a risk-based approach based on a State's projected ILOS cost percentage, for State documentation and evaluation requirements of ILOSs that would require standard streamlined documentation to CMS for States with a
While we believe that a risk-based approach for States' ILOS documentation and evaluation requirements is a reasonable and appropriate balance of administrative burden and fiscal safeguards, we always reserve the right to ask for additional documentation from a State as part of our review and approval of the managed care plan contracts and rate certifications as required respectively in §§ 438.3(a) and 438.7(a), and we are not precluded from doing so by our proposal to add § 438.16(d)(2)(i) through (ii). Therefore, we propose to require at § 438.16(d)(3) that any State must provide additional documentation, whether part of the managed care plan contract, rate certification, or supplemental materials, if we determine that the requested information would be pertinent to the review and approval of a contract that includes ILOS(s). For separate CHIP, we propose to adopt the new documentation requirements at § 438.16(d)(3) by amending § 457.1201(e) to include the cross-reference, except that references to rate certifications do not apply.
In accordance with existing regulations at § 438.3(e)(2)(iv), States are required to ensure the utilization and actual cost of ILOSs are taken into account in developing the benefit component of the capitation rates that represents covered State plan services, unless a statute or regulation explicitly requires otherwise. Additionally, through existing regulations at § 438.4(b)(6), States' actuaries are required to certify that Medicaid capitation rates have been developed in accordance with the ILOS requirements outlined in § 438.3(e). We relied on authority in section 1903(m)(2)(A)(iii) of the Act and regulations based on our authority under section 1902(a)(4) of the Act, to establish actuarially sound capitation rates. While ILOS utilization and actual costs, when allowed, are included in rate development, the existing regulations at § 438.3(c)(1)(ii) do not clearly acknowledge the inclusion of ILOSs in the final capitation rates and related capitation payments. Existing regulations at § 438.3(c)(1)(ii) require that the final capitation rates must be based only upon services covered under the State plan and additional services deemed by the State to be necessary to comply with the requirements of part 438 subpart K (Parity in Mental Health and Substance Use Disorder Benefits), and represent a payment amount that is adequate to allow the managed care plan to efficiently deliver covered services to Medicaid-eligible individuals in a manner compliant with contractual requirements. As an ILOS is not a managed care plan requirement, but rather offered at the option of the managed care plan, it would not be included within the requirement in § 438.3(c)(2)(ii) related to contractual requirements. We propose to revise § 438.3(c)(1)(ii) to include “ILOS” to ensure clarity on this matter. This technical change would be included in separate CHIP regulations through an existing cross-reference at § 457.1201(c). We consider this a technical correction to § 438.3(c)(1)(ii) as §§ 438.3(e)(2)(iv) and 438.4(b)(6) clearly denote the inclusion of ILOSs in rate development and we believe this was inadvertently excluded from the final regulatory text in the 2016 final rule.
Additionally, we propose to revise § 438.7(b)(6) and the proposed § 438.7(c)(4) (see section I.B.2.l. of this proposed rule) to add “ILOS in § 438.3(e)(2)” to ensure any contract provision related to ILOSs must be documented in all rate certifications submitted to CMS for review and approval. We believe this is necessary to ensure compliance with proposed new regulatory requirements in § 438.16(c)(1)(i) and (c)(4)(i), described in section I.B.4.b. of this proposed rule, to ensure that the projected ILOS cost percentage documented in the rate certification would not exceed the proposed 5 percent limit. This is a similar approach to the current requirements in § 438.7(b)(6) which require a revised rate certification for any change to a contract provisions related to payment in § 438.6, including incentive arrangements that have a similar 5 percent limit in accordance with § 438.6(b)(2). We intend to issue additional guidance in the Medicaid Managed Care Rate Development Guide, in accordance with § 438.7(e), on the Federal standards and documentation requirements for adequately addressing ILOSs in all rate certifications. For separate CHIP, we do not plan to adopt the proposed change at § 438.7(b)(6) since rate certifications are not applicable to separate CHIP.
As risk-based capitation rates are developed prospectively, States' actuaries will make initial assumptions regarding managed care plan and enrollee utilization of ILOSs and associated costs. Since ILOS are offered at the option of the managed care plan and Medicaid enrollee, States and their actuaries should closely monitor whether managed care plans elect to offer these ILOs and enrollees utilize these ILOSs. States' actuaries should assess if adjustments to the actuarially sound capitation rates are necessary in accordance with §§ 438.4, 438.7(a) and 438.7(c)(2). For example, a rate adjustment may be necessary if managed care plan actual uptake of
In the 2016 final rule, we clarified the term “monitoring” to include oversight responsibilities, and we required standard data elements that a State's monitoring system must collect to inform performance improvement efforts for its managed care program(s). We wish to continue to strengthen State and CMS oversight of each Medicaid managed care program with the addition of proposed text to explicitly address States' monitoring of ILOSs. We rely on the authority in section 1902(a)(4) of the Act to establish methods for proper and effective operations in Medicaid.
Currently, § 438.66 requires that States establish a system to monitor performance of managed care programs broadly, § 438.66(b) outlines the data elements that a State's system must collect, § 438.66(c) establishes expectations for State use of such data for performance improvement, and § 438.66(e) requires States to provide a report on and assessment of each managed care program. When ILOSs are included in a managed care plan's contract, they too must be included in the State's monitoring activities required in § 438.66(b) and (c). We believe States must ensure appropriate monitoring, evaluation, and oversight of ILOSs. We believe additional protections are necessary to ensure the delivery of ILOSs. In the 2015 notice of proposed rulemaking, we proposed expanded State monitoring requirements in § 438.66 and noted that our experience since the 2002 final rule has shown that strong State management and oversight of managed care is important throughout a program's evolution, but is particularly critical when States transition large numbers of beneficiaries from FFS to managed care or when new managed care plans are contracted (see 80 FR 31158). We subsequently finalized these requirements in the 2016 final rule. We believe that this logic is also applicable when a State expands the use of ILOSs as we have seen in recent years. Therefore, our proposals in this section further strengthen these existing Federal requirements related to States' monitoring activities for each managed care program.
As with all covered services and settings, States and their managed care plans must comply with all enrollee encounter data requirements in §§ 438.242 and 438.818. We rely on authority in section 1903(m)(2) of the Act to require sufficient encounter data and a level of detail specified by the Secretary. Complete, accurate, and validated encounter data would also support the evaluation and oversight of ILOS proposals described in sections I.B.4.g. and h. of this proposed rule, and ensure appropriate rate development, as described in section I.B.4.e. of this proposed rule. In § 438.242(c)(2), we require that contracts between a State and its managed care plans provide for the submission of enrollee encounter data to the State at a frequency and level of detail to be specified by CMS and the State, based on program administration, oversight, and program integrity needs. Further, at § 438.242(d), States must review and validate that encounter data collected, maintained, and submitted to the State by the managed care plan is a complete and accurate representation of the services and settings provided to enrollees. Because ILOSs may not be easily identifiable in CPT® and Healthcare Common Procedure Coding System (HCPCS), we believe it is imperative that States identify specific codes and modifiers, if needed, for each ILOS and provide that information to its managed care plans to ensure consistent use. For example, the use of a modifier is useful when a State needs to separately identify an ILOS from a State plan-covered service or setting that may utilize the same HCPCS code. We propose in § 438.16(d)(1)(vi), to require that States include a contractual requirement that managed care plans utilize the specific codes established by the State to identify each ILOS in enrollee encounter data. States could require the use of specific HCPCS or CPT codes and modifiers, if needed, that identify each ILOS. To the extent possible, we encourage States to work towards the development of standard CPT® and HCPCS codes for ILOSs, and States may wish to collaborate with appropriate interested groups. For separate CHIP, while the provisions at § 438.66 are not applicable, we propose to adopt the new coding requirements at § 438.16(d)(1)(vi) by amending § 457.1201(c) to include the cross-reference.
We considered allowing States to include this level of data outside of the managed care plan contract, such as in a provider manual or similar documents; however, those documents are frequently not readily available to interested parties and some are not made publicly available. We believe requiring specific codes to be in the managed care plan contracts would ensure that we can easily identify ILOSs in T-MSIS data, support program integrity activities, and ensure that the information is publicly available as required at § 438.602(g)(1). For these reasons, we believe requiring the codes in the managed care plan contract would be the most appropriate and efficient option. We also believe this proposal would ensure that ILOSs are easily identifiable in the base data utilized for development of capitation rates in accordance with rate development standards described in § 438.5(c), and the associated development of the projected and final ILOS cost percentage which are built off of capitation rates and capitation payments as proposed in section I.B.4.b. of this proposed rule.
States are required to submit an annual performance report to CMS for each Medicaid managed care program administered by the State in accordance with § 438.66(e)(1), known as the MCPAR. In § 438.66(e)(2), we specify the content of the MCPAR, including § 438.66(b)(11) that specifies accessibility and availability of covered services in the managed care plan contract. As ILOSs are substitutes for State plan-covered services and settings, we believe States should already be reporting on ILOSs in MCPAR, but to improve clarity for States, we propose to add an explicit reference. Therefore, we propose a minor revision to § 438.66(e)(2)(vi) to add the phrase “including any ILOS.” To facilitate States' reporting of their monitoring activities and findings for ILOSs in MCPAR, we intend to update the MCPAR report template to enable States to easily and clearly include ILOS data throughout the report. We believe that it is important for States to monitor trends related to the availability and accessibility of ILOSs given the unique and innovative nature of some ILOSs, and we believe using MCPAR would be an efficient way for States to report their activities.
As part of Federal monitoring and oversight of Medicaid and CHIP programs, we regularly require States to submit evaluations to CMS that analyze cost or cost savings, enrollee health outcomes or enrollee experiences for a specific Medicaid or CHIP benefit, demonstration, or managed care program. For example, as set forth in an SMDL
With § 438.16(e)(1)(i) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose that an evaluation be completed separately for each managed care program that includes an ILOS. We considered allowing States to evaluate ILOSs across multiple managed care programs to reduce State administrative burden and alleviate potential concerns regarding sample size for the evaluation. We further considered permitting States to self-select the appropriate level at which to evaluate ILOSs including for each managed care program, across managed care programs, or by managed care plan contract. However, in our experience, a State with multiple managed care programs (for example, behavioral health, physical health, etc.) could have differing enrollee eligibility criteria, populations, covered benefits, managed care plan types, delivery models, geographic regions, or rating periods among the separate managed care programs. Including more than one managed care program in an evaluation would likely impact evaluation rigor and could dilute or even alter evaluation results due to the variability among managed care programs. As States would be required to provide the ILOS cost percentage for each managed care program, we believe that it is necessary for the evaluation to also be conducted at the individual program level as it is one measure to aid in evaluating the overall impact of the ILOSs. For these reasons, we believe it would be critical for States to provide separate evaluations for each managed care program that includes ILOSs. We seek public comment on whether the evaluation should be completed for each managed care program, across multiple managed care programs, each managed care plan contract, or at a level selected by the State.
Since these proposed retrospective evaluations would utilize complete encounter data, we considered several options for the length of the evaluation period. Often, evaluation reports are required on an annual basis, such as MCPAR in § 438.66(e) or the Network Adequacy and Access Assurances report in § 438.207(d). We considered requiring an annual submission for the report required in § 438.16(e)(1), but believed that encounter data would be insufficient to result in meaningful analysis. We also considered a 3-year evaluation period, which may be sufficient for ILOSs that are immediate substitutes, but enrollees may need to receive longer term substitutes for a period of several years in order for a State to have robust data. We also considered a 10-year period, but we concluded that seemed to be an unreasonably long time to obtain information on the efficient and effective use of these unique services and settings. We concluded that a 5-year period would provide sufficient time to collect complete data. Therefore, we propose in § 438.16(e)(1)(ii) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, that a State's retrospective evaluation would have to use the 5 most recent years of accurate and validated data for the ILOSs. We believe the 5-year period would allow managed care plans and enrollees to become comfortable with the available ILOSs and opt to provide or receive them, thus generating the necessary data for the evaluation. Even for ILOSs that are longer term substitutes, we believe a 5-year period would be sufficient to permit robust data collection for cost effectiveness and medical appropriateness. We request comment on the appropriate length of the evaluation period.
By proposing that retrospective evaluations be completed using the five most recent years of accurate and validated data for the ILOS(s), we recognize that we need to also propose the scope of the evaluation. We considered permitting States to identify an appropriate 5-year evaluation period, but ultimately decided against this as it could create a perverse incentive to identify a favorable evaluation period for each ILOS in order to circumvent the termination process proposed in § 438.16(e)(2)(iii) and described in section I.B.4.h. of this proposed rule. We also considered if the evaluation period should begin with the first year that a State exceeds the 1.5 percent final ILOS cost percentage threshold, but decided against this option as we believe it is necessary for evaluation rigor to establish an early or, ideally pre-intervention, baseline from which to evaluate the impact of a new ILOS over time. We concluded that States' evaluations should be retroactive to the first complete rating period following the effective date of this provision in which the ILOS was included in the managed care plan contracts and capitation rates; we propose this in § 438.16(e)(1)(iv) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP. We believe that our proposed approach is aligned with identified best practices for evaluation. We would encourage States to consider developing a preliminary evaluation plan for each ILOS as part of the implementation process for a new ILOS and any time States significantly modify an existing ILOS. We request comment on the appropriate timing of an ILOS evaluation period.
To ensure some consistency and completeness in the retrospective evaluations, we believe there should be a minimum set of required topics to be included. First, in § 438.16(e)(1)(ii) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose to require that States must utilize data to at least evaluate cost, utilization, access, grievances and appeals, and quality of care for each ILOS. Similar elements are
Similarly, we propose in § 438.16(e)(1)(iii)(B) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to require that States evaluate trends in managed care plan and enrollee use of each ILOS. We believe that it is necessary to understand actual utilization of each ILOS in order to evaluate enrollee access to ILOSs and related trends that occur over time. Trends in enrollee utilization of ILOSs could also be compared to data related to State plan services and settings utilization to determine if there is a correlation between utilization of certain ILOSs and decreased or increased utilization of certain State plan services and settings. Trends in utilization of ILOSs may also help identify when enrollees choose not to utilize an ILOS to help States and managed care plans assess future changes in authorized ILOSs. We believe this is a key evaluation element necessary to determine if the ILOS was cost effective.
Critical to the authority for the allowable provision of ILOSs, is a State determination that an ILOS is a cost effective and medically appropriate substitute for a covered service or setting under the State plan as required in § 438.3(e)(2)(i). Therefore, we believe States should evaluate whether, after 5 years, its determinations are still accurate given actual enrollee utilization and experience. To achieve this, we propose § 438.16(e)(1)(iii)(C) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, which would require that States use encounter data to evaluate if each ILOS is a cost effective and medically appropriate substitute for the identified covered service or setting under the State plan or a cost effective measure to reduce or prevent the future need to utilize the identified covered service or setting under the State plan. We have included the following example to identify how a State could use encounter data to evaluate the medical appropriateness of an ILOS. A State may initially determine that the provision of air filters as an ILOS is a medically appropriate substitute service for individuals with an asthma diagnosis for emergency department visits, inpatient and outpatient services, and HCBS for activities of daily living (ADLs). After analyzing the actual encounter data, the State may discover that the provision of air filters to the target population did not result in decreased utilization of a State plan service such as emergency department, inpatient and outpatient services, nor HCBS for ADLs. In this instance, the evaluation results would demonstrate that the ILOS as currently defined was not cost effective for the target population of individuals as currently defined.
As ILOSs are services and settings provided to Medicaid and CHIP managed care enrollees in lieu of State plan-covered services and settings, we believe that it is important for States to evaluate the quality of care provided to enrollees who utilized ILOSs to ensure that the ILOS(s) are held to the same quality standards as the State plan services and settings enrollees would otherwise receive. Quality of care is also a standard domain within evaluations of Medicaid and CHIP services, Medicaid and CHIP managed care plans, and Medicaid and CHIP programs as demonstrated by the ubiquitous use of the National Committee for Quality Assurance (NCQA) Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and Healthcare Effectiveness Data and Information Set (HEDIS) measure set which includes standardized and validated quality of care measures for use by States and managed care plans operating within Medicaid and CHIP managed care environments. Accordingly, in § 438.16(e)(1)(iii)(D) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose that States evaluate the impact of each ILOS on quality of care. We believe that States should use validated measure sets, when possible, to evaluate the quality of care of ILOSs, though we do not want to stifle State innovation in this area so we are not proposing to require it. We considered proposing to require that States procure an independent evaluator for ILOS evaluations. In consideration of the myriad of new proposed requirements within this proposed rule, we weighed the value of independent evaluation with increased State burden. We are concerned that it would be overly burdensome for States to procure independent evaluators for ILOS(s) due, in part, to the timing of the final ILOS cost percentage submission. In section I.B.4.b. of this proposed rule, we are proposing that the final ILOS cost percentage be submitted 2 years following completion of the applicable rating period, and we propose here that if the final ILOS cost percentage exceeds the 1.5 percent, States would be required to submit an evaluation. While States should conduct some evaluation planning efforts, it could be difficult and time consuming to procure an independent evaluator in a timely manner solely for the purpose of the ILOS evaluation since States would not know definitely whether an evaluation is required until 2 years following the rating period. We solicit comment on whether we should consider a requirement that States use an independent evaluator for ILOS evaluations.
We believe that States should, to the extent possible, leverage existing quality improvement and evaluation processes for the retrospective ILOS evaluation. Through §§ 438.364(a) and 457.1250(a), we require States to partner with an EQRO to produce an annual technical report that summarizes findings related to each MCO's, PIHP's, PAHP's, or PCCM entity's performance relative to quality, timeliness, and access to health care services furnished to Medicaid and CHIP enrollees. Through these existing EQR activities at § 438.364(b), and, if finalized, the newly proposed optional activity at § 438.64(c)(7), discussed in
The elements we have proposed in the evaluation should communicate a complete narrative about the State, managed care plans, and enrollees' experience with ILOSs. As key thresholds and limits on ILOSs, the projected and final ILOS cost percentages would be another element that CMS would consider as part of the overall mosaic to understand the impact that an ILOS might have on each managed care program. Although the final ILOS cost percentage is proposed to be submitted with the rate certification submission required in § 438.7(a) for the rating period beginning 2 years after each rating period that includes ILOS(s), we believe it is important to the completeness of the retrospective evaluation, that all final ILOS cost percentages available be included. Therefore, we propose in § 438.16(e)(1)(iii)(E) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, that States provide the final ILOS cost percentage for each year in their retrospective evaluation, consistent with the report proposed in § 438.16(c)(5)(ii), (described in section I.B.4.b. of this proposed rule) with a declaration of compliance with the allowable 5 percent threshold proposed in § 438.16(c)(1)(i). We believe this necessary documentation of State compliance would be appropriate to be documented in the evaluation alongside the other data we have proposed to ensure a fulsome evaluation that accurately demonstrates whether the ILOS(s) are an appropriate and efficient use of Medicaid and CHIP resources.
In section I.B.4.c. of this rule, we proposed to identify enrollee rights and protections for individuals who are offered or who receive an ILOS, and in section I.B.4.f. of this proposed rule we outlined requirements for States' monitoring of enrollee rights and protections. To determine if States have appropriately safeguarded and adequately monitored enrollee rights and protections, we propose in § 438.16(e)(1)(iii)(F) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to require States to evaluate appeals, grievances, and State fair hearings data, reported separately for each ILOS, including volume, reason, resolution status, and trends. As ILOSs are substitutes for covered State plan services and settings, and are offered at the option of the managed care plan, we believe it would be important to evaluate appeals, grievances, and State fair hearing trends to ensure that enrollees' experience with ILOSs is not inconsistent or inequitable compared to the provision of State plan services and settings. We acknowledge that we already require for Medicaid, through § 438.66(e)(2)(v), that States include an assessment of the grievances, appeals, and State fair hearings annually in MCPAR. But the information we propose that States submit with the ILOS retrospective evaluation is different as it would be specific to each ILOS compared to the summary level information required by MCPAR. We believe collecting these data by ILOS will help evaluate the quality of care and enrollee experience related to the provision of each ILOS.
Finally, we believe an evaluation of the impact ILOSs have on health equity efforts is a critical component to measure enrollee experience, health outcomes, and whether ILOSs are an appropriate and efficient use of Medicaid and CHIP resources. As ILOSs can be an innovative option States may consider employing in Medicaid and CHIP managed care programs to address SDOHs and HRSNs, we also believe it is critical to measure their impact on improving population health and reducing health disparities. We propose in § 438.16(e)(1)(iii)(G) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to require States to evaluate the impact of each ILOS on health equity efforts undertaken by the State to mitigate health disparities. To do this, managed care plans should submit enrollee encounter data, to the extent possible, that includes comprehensive data on sex (including sexual orientation and gender identity), race, ethnicity, disability status, rurality and language spoken. We remind managed care plans of their obligations in §§ 438.242(c)(3) and 457.1233(d) to submit all enrollee encounter data that States are required to report to CMS under § 438.818; currently, T-MSIS provides fields for sex, race, ethnicity, disability status, and language spoken.
To allow adequate time for claims run-out and the evaluation to be conducted, we propose in § 438.16(e)(1)(iv) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to require that States submit a retrospective evaluation to CMS no later than 2 years after the completion of the first 5 rating periods that included the ILOS following the effective date of this provision, if finalized. This 2-year timeframe is similar to the timeframe utilized for independent assessments to evaluate programs authorized by waivers approved under section 1915(b) of the Act.
While we believe many ILOSs can be sufficiently validated as medically appropriate and cost effective substitutes within 5 years, we know that some may not. To fulfill our program monitoring obligations, we believe we must be able to require additional evaluations if the initial evaluation demonstrates deficiencies. We propose in § 438.16(e)(1)(v) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to explicitly assert our right to require States to provide additional 5-year retrospective evaluations. We believe that this could be a necessary flexibility when additional evaluation time might be needed, such as to demonstrate that an ILOS acting as a longer term substitute for a covered State plan service or setting is cost effective and medically appropriate. We also believe we may need to utilize this flexibility when a State substantially revises the ILOSs that are options within a managed care program.
For CHIP, our typical mechanism for retrospective managed care cost evaluation is through the CHIP Annual Report Template System (CARTS). We recognize that CARTS is completed annually by States and that our proposed timeframe for the retrospective evaluation is for a period of 5 years, but we considered whether it would be less burdensome to States to incorporate the CHIP ILOS retrospective evaluation into CARTS rather than as a stand-alone report. We seek public comment on whether or not the proposed retrospective evaluation should be incorporated into CARTS for CHIP ILOSs.
If a State determines that an ILOS is no longer a medically appropriate or cost effective substitute or the State identifies another area of noncompliance in the provision of ILOSs, we believe CMS must be promptly notified. We rely on the authority in sections 1902(a)(4) and 2101(a) of the Act to establish methods for proper and effective operations in Medicaid and CHIP, and sections 1902(a)(6) and 2107(b)(1) of the Act which require that States provide reports, in such form and containing such information, as the Secretary may from time to time require. We propose,
We believe a termination process for ILOSs is critical to properly safeguard the health and safety of Medicaid and CHIP enrollees. Therefore, we propose a Federal oversight process at § 438.16(e)(2)(ii) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, which would permit CMS to terminate the use of an ILOS, if we determine noncompliance or receive State notification of noncompliance as proposed in § 438.16(e)(2)(i). In § 438.16(e)(2)(iii) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose a process for termination of an ILOS that would apply when a State terminates an ILOS, a managed care plan elects to no longer offer an ILOS to its enrollees, or CMS notifies the State that it must terminate an ILOS. In any of these events, we propose that the State would be required to submit an ILOS transition plan to CMS for review and approval within 15 calendar days of the decision by the State to terminate an ILOS, a managed care plan notifying the State it will no longer offer an ILOS, or receipt of notice from CMS to terminate. In addition to 15 calendar days, we also considered 30, 60, and 90 calendar days, but ultimately decided on the former option. We recognize that 15 calendar days is a rapid submission timeline, but we firmly believe that such a transition plan would need to be implemented immediately following an ILOS termination to safeguard enrollee health and safety, and to maintain the integrity and efficient operation of the Medicaid program in accordance with sections 1902(a)(4) and 2101(a) of the Act. Given the submission timeline and that ILOSs are provided at the option of the managed care plan, we believe States should prepare an ILOS transition plan as part of the implementation process for any new ILOSs. The process for termination proposed at § 438.16(e)(2)(iii) is the same, regardless of whether the State, managed care plan or CMS terminates the ILOS as the potential risks to enrollees are the same irrespective of which entity directs termination of the ILOS.
In § 438.16(e)(2)(iii)(A) through (D) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose the elements States should include in the transition plan for the ILOS. We believe that a transition plan is necessary to protect the health and well-being of Medicaid and CHIP enrollees for whom the sudden termination of an ILOS, without an adequate transition plan, could have a significant negative impact. We rely on the authority in sections 1902(a)(4) and 2101(a) of the Act to establish methods for proper and effective operations in Medicaid and CHIP, and sections 1902(a)(6) and 2107(b)(1) of the Act which require that States provide reports, in such form and containing such information, as the Secretary may from time to time require. In § 438.16(e)(2)(iii)(A) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, we propose to require that States establish a process to notify enrollees that the ILOS they are currently receiving will be terminated as expeditously as the enrollee's health condition requires. We also propose, in § 438.16(e)(2)(iii)(B) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to require that States create and make publicly available a transition of care policy, not to exceed 12 months, to arrange for State plan services and settings to be provided timely and with minimal disruption to the care for any enrollees receiving an ILOS at the time of termination. From the period of notification onward, we would expect that a State and its managed care plans cease provision of the ILOS to any new enrollees. Together, we believe that these two actions would ensure adequate beneficiary protections, including adequate beneficiary notice and access to medically appropriate State plan-covered services and settings in a timely fashion.
In addition to enrollee focused activities, we propose that the transition plan also include administrative actions that States would take to remove a terminated ILOS from the applicable managed care plan contract(s) and capitation rates. ILOSs must be authorized and identified in the managed care plan contract consistent with § 438.3(e)(2)(iii) and § 457.1201(e), and we believe it is equally important to ensure any terminated ILOS is removed from the managed care plan contract (and rate certification if necessary) to ensure clarity on contractual obligations and appropriate program integrity. We propose, in § 438.16(e)(2)(iii)(C) for Medicaid, and through a proposed cross-reference at § 457.1201(e) for separate CHIP, to direct States to remove the ILOS from the applicable managed care plan contracts and submit a modified contract to CMS for review and approval as required for Medicaid in § 438.3(a). Similarly, we permit States, through §§ 438.3(e)(2)(iv) and § 457.1201(e), to account for the utilization and actual cost of ILOSs in developing the component of the capitation rates that represents the covered State plan services, unless a statute or regulation explicitly requires otherwise. As part of the transition plan, States would be required to provide an assurance that it would submit the necessary contract amendment, and outline a reasonable timeline for submitting the contract amendment to CMS for review and approval. In the event that an ILOS is terminated from the managed care plan contract, the State and its actuary, should evaluate if an adjustment(s) to the capitation rates is necessary to ensure Medicaid capitation rates continue to be actuarially sound, such as if the programmatic change would have a material impact to the rate development. As outlined in § 438.4 for Medicaid, actuarially sound capitation rates must be appropriate for the populations to be covered and the services to be furnished under the managed care plan contract, and the State's actuary must ensure that the capitation rates continue to be actuarially sound given any change to
For separate CHIPs, States must develop capitation rates consistent with actuarially sound principles as required at § 457.1203(a). We also believe that in the event a CHIP ILOS is terminated, a State should evaluate if an adjustment to the capitation rate is needed to account for the removal of ILOS utilization and cost from the managed care plan contract. For this reason, we propose to adopt § 438.16(e)(2)(iii)(D) for separate CHIP through a new cross-reference at § 457.1201(e). However, we note that the requirements at § 438.7 are not applicable for 42 CFR part 457.
We propose that States and managed care plans would be required to comply with the provisions outlined in §§ 438.2, 438.3(c)(1)(ii) and (e)(2)(i) through (iv), 438.10(g)(2)(ix), 438.66(e)(2)(vi) and applicable cross-references for separate CHIP at §§ 457.10, 457.1201(c) and (e), and 457.1207 no later than the effective date of the final rule. We believe this is appropriate as these proposals are technical corrections or clarifications of existing requirements. Additionally, we propose that States and managed care plans would have to comply with §§ 438.3(e)(2)(v), 438.16, 438.7(b)(6) no later than the rating period for contracts with MCOs, PIHPs, and PAHPs beginning on or after 60 days following the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We propose to revise § 438.3(v) to add this proposed date, remove “July 1, 2017,” and update “2015” and referenced citations; and add 438.7(g)(1) and 438.16(f). We propose to adopt the applicability date at § 438.16(f) for separate CHIP by adding § 457.1200(d).
Regulations at § 438.330 establish the Quality Assessment and Performance Improvement (QAPI) programs that States must require of Medicaid managed care plans (that is, MCOs, PIHPs, and PAHPs). Section 438.330(d) describes the performance improvement projects (PIPs) that States must require of Medicaid managed care plans as part of the QAPI program. Medicare Advantage (MA) plans are subject to similar (but not identical) requirements at § 422.152. Section 422.152 outlines the quality improvement program requirements for MA organizations, including the development and implementation of a Chronic Care Improvement Program (CCIP). Previously, CMS required MA organizations to develop and implement Quality Improvement Project (QIPs), which were an organization's initiatives focusing on specified clinical and nonclinical areas and were expected to have a favorable effect on health outcomes and enrollee satisfaction. However, CMS found the implementation of the QIP and CCIP requirements had become burdensome and complex, and removed the requirements for the QIP. With the removal of the QIP requirement with the 2019 Final Rule (83 FR 16440), we are proposing to update our regulations at § 438.330(d)(4) which still reference a QIP as a substitute for a PIP in managed care plans exclusively serving dually eligible individuals.
Through previous rulemaking, in the 2016 final rule (81 FR 27682), we implemented a policy, at § 438.330(d)(4), to allow States to permit Medicaid managed care plans exclusively serving dually eligible individuals to substitute an MA plan's quality improvement project (QIP) conducted under § 422.152(d) in the place of a Medicaid PIP, to prevent unnecessary duplication and increase flexibility for plans and States. Subsequently, in the final rule “Medicare Programs; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs and the PACE Program,” we removed the QIP from the requirements for MA organizations at § 422.152, because we determined that they did not add significant value and many were duplicative of existing activities, such as the Chronic Care Improvement Program (CCIP) (83 FR 16669). Due to an oversight at that time, we neglected to remove a reference to the QIP from § 438.330(d)(4) to conform with the changes at § 422.152. We are now proposing to replace the outdated reference at § 438.330(d)(4) to § 422.152(d) (which previously described the now-removed QIP), with a reference to the CCIP requirements for MA organizations in § 422.152(c). This change would allow States to permit a Medicaid managed care plan exclusively serving dually eligible individuals to substitute an MA organization CCIP, conducted in accordance with the requirements at § 422.152(c), for one or more of the PIPs required under § 438.330(d). We believe the CCIP meets the same intent of the current regulation as an appropriate substitute for a PIP based on the quality improvement standards in a CCIP, including the identification of intervention goals and objectives, the collection and analysis of valid and reliable data, the assessment of performance and outcomes using quality indicators and measures, systematic and ongoing follow-up for increasing or sustaining improvement, and the reporting of results to CMS. We believe that permitting such a substitution would also maintain the intent of the current regulation to prevent unnecessary duplication and increase flexibility for plans and States, while allowing Medicaid managed care plans to maintain robust health improvement initiatives for dually enrolled individuals. Since the change to remove QIPs has been in place since 2019, we expect some States to already have CCIPs in place in lieu of QIPs, and therefore, are proposing that States must comply with this update in § 438.330(d)(4) no later than the rating period for contracts beginning after the effective date of the final rule in the applicability date provision at § 438.310(d)(1). We note this proposed change does not apply to separate CHIP because we did not apply § 438.330(d)(4) to separate CHIP in the 2016 final rule, and because § 457.310(b)(2) does not allow for concurrent health coverage in separate CHIP.
Current regulations at § 438.340, which are included in separate CHIP regulations through an existing cross-reference at § 457.1240(e), set forth requirements for States to draft and
First, we are proposing to increase the opportunity that interested parties have to provide input into States' managed care quality strategy. Current regulations at § 438.340(c)(1) require that States make their quality strategy available for public comment when it is first adopted and when revisions are made. However, the current regulations do not require that the quality strategy be posted for public comment at the three-year renewal mark if significant changes have not been made. We are proposing to revise § 438.340(c)(1) to require that States make their quality strategy available for public comment at the 3-year renewal, regardless of whether or not the State intends to make significant changes, as well as whenever significant changes are made. The proposed change would promote transparency and give interested parties an opportunity to provide input on changes they think should be made to the quality strategy, even if the State itself is not proposing significant changes. Consistent with current policy, States will retain discretion under the proposed rule to define the public comment process. This proposed change would apply equally to separate CHIP through the existing cross-reference at § 457.1240(e).
Second, we are proposing to revise § 438.340(c)(2)(ii) to clarify that the State Medicaid agency must post on its website the results of its 3-year review. The current regulations make clear at § 438.340(c)(2) that the review must include an evaluation, conducted within the previous 3 years, of the effectiveness of the quality strategy and that the results of the review must be made available on the State's website, but do not specifically state that the full evaluation must be posted on the website. Proposed revisions at § 438.340(c)(2)(ii) make clear that the evaluation, as part of the review, must be posted. We note that current § 438.340(c) allows for States to post the evaluation on the website as a standalone document or to include the evaluation in the State's updated and finalized quality strategy, which is required to be posted under § 438.340(d). The proposed change at § 438.340(c)(2)(ii) would apply equally to separate CHIP through the existing cross-reference at § 457.1240(e). For additional information on the components and purpose of the managed care quality strategy, see the Quality Strategy Toolkit, available at
Third, we are proposing to clarify when States must submit a copy of their quality strategy to CMS. Current regulations at § 438.340(c)(3) require that States submit to CMS a copy of their initial quality strategy for feedback and a copy of the revised quality strategy whenever significant changes are made. The current regulations do not require States to submit to CMS subsequent versions of their quality strategy unless the State has made significant changes to the document or to their Medicaid program. We are proposing to modify § 438.340(c)(3)(ii) to require that States, prior to finalizing a revised or renewed quality strategy as final, submit a copy of the revised strategy to CMS at minimum every 3 years, following the review and evaluation of the strategy described at § 438.340(c)(2), in addition to when significant changes are made. These proposed changes would allow CMS the opportunity to provide feedback periodically to help States strengthen their managed care quality strategies before they are finalized, whether or not significant changes are made to a State's strategy or to their Medicaid program. We propose to include this requirement into the provision at § 438.340(c)(3)(ii) for Medicaid by adding § 438.340(c)(3)(ii)(A) through (C), which would apply to separate CHIP through an existing cross-reference at § 457.1240(e). We are proposing at § 438.310(d)(2) for Medicaid, and through a proposed amendment at § 457.1200(d) to include a cross-reference to § 438.310(d) for separate CHIP, that States must comply with updates to § 438.340 no later than 1 year from the effective date of the final rule, which we believe would give States time to update internal processes accordingly.
Finally, we are proposing a technical correction to § 438.340(c)(3)(ii) to correct an internal citation related to State-defined significant changes. Currently, § 438.340(c)(3)(ii) references significant changes “as defined in the State's quality strategy per paragraph (b)(11) of this section[.]” However, § 438.340(b)(10) contains the information on a State's definition of a significant change. Therefore, we are proposing to replace “paragraph (b)(11)” with “paragraph (b)(10)” in § 438.340(c)(3)(ii). This proposed change would apply equally to separate CHIP through the existing cross-reference at § 457.1240(e).
Current regulations at §§ 438.350, 438.354, 438.358, 438.360, 438.364, and 457.1250 provide requirements for the annual External Quality Review (EQR) on quality, timeliness, and access to the health care services furnished to Medicaid and CHIP beneficiaries enrolled in managed care. The regulations set forth the EQR-related activities that States or a qualified EQR organization (EQRO) must perform, and the information that must be produced from an EQR and included in an annual detailed EQR technical report. States must submit to CMS an annual EQR technical report, which must include, among other things, a description of data, including validated performance measurement data for certain mandatory EQR-related activities. The regulations also delineate the circumstances in which States may use the results from a Medicare or private accreditation review in lieu of conducting an EQR for a given managed care entity. The EQR requirements in 438 Subpart E apply to each MCO, PIHP, and PAHP that has a contract with a State Medicaid or CHIP agency as well as certain PCCM entities
In the final 2016 final rule, we added a definition of “primary care case management entity” in §§ 438.2 and 457.10 to recognize a new type of primary care case management system in Medicaid and CHIP. Previously, the regulations recognized, and continue to recognize, a primary care case manager (PCCM) as a physician or a physician group practice or, at State option, a physician assistant, nurse practitioner, or certified nurse-midwife that contracts with the State to furnish case management services to Medicaid beneficiaries. The 2016 final rule added the term “PCCM entity,” which is defined in §§ 438.2 and 457.10 as an organization that provides one or more additional specified functions in addition to primary care case management services, for example, intensive case management, development of care plans, execution of contracts with and/or oversight responsibilities for other FFS providers, and review of provider claims, utilization and practice patterns, among others. We further recognized in the 2016 final rule that some PCCM entities have contracts with the State that provide financial incentives for improved quality outcomes. Per current § 438.310(c)(2), such PCCM entities are subject to a number of the requirements in 42 CFR part 438, subpart E (relating to Quality Measurement and Improvement and External Quality Review) to which PCCMs are not similarly subject.
Of particular relevance to this proposed rule, the regulations have long provided that States are not required to perform an annual EQR of the State's PCCMs. However, in the 2016 final rule, we provided at §§ 438.350 and 457.1250(a) that States are required to conduct an annual EQR of PCCM entities operating under a risk-bearing contract described in § 438.310(c)(2). We reasoned at the time that, while PCCMs traditionally are paid a per capita fee to provide case management services for Medicaid beneficiaries and otherwise are reimbursed for services rendered on a fee-for-service (FFS) basis, such PCCM entities function more like a managed care entity because their contracts include shared financial risk, and thus should be subject to the EQR requirements.
The 2016 final rule also provided for CMS review of States' contracts with their PCCM entities under § 438.3(r). Our reviews of these contracts have led us to reevaluate the policy to require an annual EQR of PCCM entities described in § 438.310(c)(2), as these contracts exhibit wide variability in the size, structure, and scope of case management and other services provided by risk-bearing PCCM entities. This variation calls into question the appropriateness of EQR as an oversight tool for many of the PCCM entities. For example, the scope of services for some of these PCCM entities may yield little to no data for EQR. In addition, some PCCM entities are a single provider or a small provider group, and we believe the cost and burden imposed by the EQR process may disincentivize them from entering into risk-bearing contracts with States aimed at improving quality and outcomes in the fee-for-service delivery system. We do not believe the EQR requirement should be a barrier for these types of PCCM entities to establish arrangements aimed at quality improvement when States have additional quality monitoring and oversight tools that may be sufficient (for example, QAPI program reviews described at § 438.330(e)).
Therefore, we propose to remove PCCM entities described in § 438.310(c)(2) from the managed care entities subject to EQR under § 438.350. Other requirements in 42 CFR part 438, subpart E that currently apply to risk-bearing PCCM entities described at § 438.310(c)(2) are not impacted by this proposed rule.
We propose conforming amendments to remove reference to PCCM entities described in § 438.310(c)(2) in §§ 438.310(b)(5), 438.358(a)(1), 438.364(a)(3) through (6), and 438.364(c)(2)(ii), and to remove the reference to § 438.350 from § 438.310(c)(2). We also propose removing the current provision at § 438.358(b)(2) that applies risk-bearing PCCM entities to the mandatory EQR activities, to conform with the proposed changes at § 438.350, and reserve this provision for future use. We maintain that EQROs must be independent from any PCCM entities they review at the State's discretion, as currently required under § 438.354(c), and propose a modification at § 438.354(c)(2)(iii) to clarify this. We note that these changes, if finalized, would be effective as of the effective date of the final rule. For separate CHIP, we likewise propose to exclude all PCCM entities from EQR requirements by removing the cross-reference to § 438.350 at § 457.1201(n)(2), by removing the reference to PCCM entities entirely from § 457.1250(a), and removing the cross-reference to § 457.1250(a) for quality requirements applicable to PCCM entities at § 457.1240(f).
The current regulations provide that most EQR activities are performed using information derived from the preceding 12 months, but do not clearly indicate to which 12-month period the activity should pertain. Specifically, the current regulations at § 438.358(b)(1) (which apply to separate CHIP through § 457.1250(a)) require validation of information collected or calculated during “the preceding 12 months” for three of the mandatory EQR activities (validation of performance improvement projects, validation of performance measurement data, and validation of network adequacy activities). The optional EQR activities described in § 438.358(c) also must be performed using information derived “during the preceding 12 months”. In addition, we do not currently specify in the regulations when the EQR activity must take place relative to the finalization and posting of the annual report. The result is a lack of uniformity in the review periods included in States' annual EQR technical reports each year. In some cases, for example, States have
We propose to add a new paragraph (a)(3) in § 438.358 to define the 12-month review period for all but one the EQR-related activities described in § 438.358(b)(1) and the optional activities described in § 438.358(c). The one exception is the activity described in § 438.350(b)(1)(iii), which requires a review within the previous 3 years. Under proposed § 438.358(a)(3), the 12-month review period for the applicable EQR activities begins on the first day of the most recently concluded contract year or calendar year, whichever is nearest to the date of the EQR-related activity.
We understand that most performance measures run on a calendar year, while performance improvement projects and network adequacy assessments typically align with the contract year. Under the proposed rule, the 12-month review period for EQR activities does not have to be the same. For example, if an EQRO begins the performance measurement validation activity in July of 2022, and the State calculates performance measures on the calendar year, the review period for the performance measurement validation activity would be January 1 through December 31, 2021. Similarly, if the EQRO validates PIPs in November 2021 and the most recent contract year ended in March 2021, the review period for the EQRO would be March 2020-March 2021.
We are also proposing to require at § 438.358(b)(1) and (c) that the EQR-related activities must be performed in the 12 months preceding the finalization and publication of the annual report. We believe these two proposed changes would result in more recent data being publicly posted in the annual EQR technical reports, and also would create more consistency among States regarding the time period represented by the data. Consistency in what data is reported could help make the EQR technical reports a more meaningful tool for monitoring quality between plans within and between States.
As noted, the proposed clarification of the 12-month review period for the applicable EQR-related activities described in § 438.350(b)(1) and (c) would be effectuated at proposed § 438.358(a)(3). We propose conforming changes to § 438.358(b)(1)(i), (ii) and (iv), and (c) to reference the EQR review period proposed at § 438.358(a)(3). We propose to modify the language at § 438.350(b)(1) and (c) to indicate that the EQR-related activities must be performed in the 12 months preceding the finalization of the annual reports. These proposed changes would apply equally to separate CHIP EQR requirements for MCOs, PIHPs, and PAHPS through an existing cross-reference to Medicaid's EQR-related activities in § 438.358 at § 457.1250(a). We are proposing that States must comply with these updates to § 438.358 no later than December 31, 2025, and are proposing to codify this applicability date at § 438.310(d)(3) for Medicaid, and through a proposed amendment at § 457.1200(d) to include a cross-reference to § 438.310(d) for separate CHIP. This applicability date aligns with the new annual due date for EQR technical reports as proposed at § 438.364(c)(2)(i), which we believe provides States sufficient time to make any contractual or operational updates following the final rule.
We are proposing to add a new optional EQR activity to support States in their evaluations to learn more about quality outcomes and timeliness of and access to care in managed care plans and programs. Specifically, we believe the existing or proposed evaluation requirements included in this proposed rule for quality strategies at § 438.340(c)(2)(i), State Directed Payments (SDPs) at § 438.6(c)(2)(iv) and (v), and In Lieu of Services or Settings (ILOSs) at § 438.16(e)(1) may be implemented using this new EQR activity. We currently require at § 438.340(c)(2)(i) that States review their quality strategy at a minimum every 3 years, and that this review include an evaluation of the effectiveness of the quality strategy conducted within the previous 3 years. In this proposed rule, we are proposing new requirements related to the evaluation of SDPs at § 438.6(c)(2)(iv) and (v) and ILOSs at § 438.16(e)(1), described in more detail in sections I.B.2.j. and I.B.4.g. We discuss at length the challenges States have demonstrated regarding the SDP evaluation plans and results in section I.B.2.j. of this proposed rule, which indicates to us that States would likely benefit from additional technical assistance and support in conducting evaluations under the newly proposed SDP and ILOS requirements. Additionally, CMS' reviews of State quality strategy evaluations have revealed many challenges for States and a similar need for greater technical assistance. For this reason, we propose to add a new optional EQR activity at § 438.358(c)(7) to assist in evaluations of quality strategies, SDPs, and ILOSs, that pertain to outcomes, quality, or access to health care services. We are focusing the scope of the EQR optional activity to activities permissible under the statutory authority at Section 1932(c)(2) of the Act, which requires external review of the quality outcomes and timeliness of, and access to, the items and services for which the organization is responsible under the contract. We believe by adding this optional activity, States, their agent, or an EQRO could use the accompanying protocol that CMS would develop (in coordination with the National Governors Association in accordance with § 438.352) to assist with evaluation activities related to quality strategies, SDPs, and ILOS, that are within the scope of EQR. We also believe EQROs may be well positioned to help with evaluations since their qualifications, as required under § 438.354(b), include research design and methodology, including statistical analysis, and quality assessment and improvement methods. We believe this optional activity would provide States critical technical assistance via a CMS-developed protocol that would enable more robust evaluations, which could lead to greater transparency and quality improvement in States' implementation of their quality strategy, SDPs and ILOSs. It could also reduce burden by allowing States to receive an enhanced match for activities carried out by an EQRO under this optional activity in accordance with section 1903(a)(3)(C)(ii) of the Act.
For separate CHIP, we did not adopt the proposed evaluation of SDPs at § 438.6(c)(2)(iv) and (v) (see sections I.B.2.a. and I.B.2.j. of this proposed rule). For this reason, we propose to amend separate CHIP EQR requirements at § 457.1250(a) to exclude references to § 438.6. However, we proposed to adopt the new ILOS retrospective evaluation requirements at § 438.16(e)(1) through our proposed cross-reference at § 457.1201(e) (see section I.B.4.g. of this proposed rule). Since section 2103(f)(3) of the Act requires external review of CHIP managed care plans, we also believe that CHIP EQROs are well positioned to assist with the proposed ILOSs evaluations and agree it would be beneficial to States to have this optional
Current § 438.360 provides an option for States to exempt MCOs, PIHPs, or PAHPs from EQR-related activities that would duplicate activities conducted as a part of either a Medicare review of a Medicare Advantage (MA) plan or a private accreditation review. Section 438.360(a)(1) requires that, in order for a State to exercise this option with respect to private accreditation, the plan accreditation must be from a private accrediting organization recognized by CMS “as applying standards at least as stringent as Medicare under the procedures in § 422.158 of this chapter[.]” Section 422.158 describes the procedures for private, national accreditation organizations (PAOs) to apply for approval of accreditation as a basis for deeming compliance with Medicare requirements, also referred to as “deeming authority.” Sections 422.156 and 422.157 discuss conditions and applications of the deeming authority, under which a PAO may accredit MA plans for the purposes of deeming compliance with one or more specific areas of the MA program. The implementation of this current requirement at § 438.360(a)(1) has meant that PAOs must obtain deeming authority from CMS as a prerequisite for the States to use the PAO's plan accreditation review for the purposes of nonduplication of mandatory EQR activities. This means the PAO must obtain and periodically renew their MA deeming authority from CMS even if it is solely for the purpose of providing States the opportunity to use their reviews of a Medicaid managed care plans in lieu of conducting a similar EQR-related activity.
We believe the current regulation creates an unnecessary administrative burden on both CMS and PAOs and may restrict the availability of the EQR nonduplication option for States. We also do not believe that the current requirement is compelled under the statute. The statutory basis for the nonduplication provision, found at section 1932(c)(2)(B) of the Act, states, a State may provide that, in the case of a Medicaid managed care organization that is accredited by a private independent entity (
Therefore, we propose at § 438.360(a)(1) to remove the requirement that PAOs must apply for MA deeming authority from CMS in order for States to rely on PAO accreditation reviews in lieu of EQR activities. We are proposing conforming changes to the title of § 438.362(b)(2) to remove language specific to Medicare Advantage deeming. Additionally, we are proposing to remove the requirements for PAOs related to MA deeming authority at § 438.362(b)(2)(i). This proposal would remove paragraph (b)(2)(i)(B) and modify paragraph (b)(2)(i) to include current § 438.362(b)(2)(i)(A). We believe this proposed change will reduce administrative burden among the private accreditation industry, as well as create more flexibility for States to leverage PAO reviews for nonduplication. We note that under § 438.360(a)(2) States will still be required to ensure the review standards used by any PAO are comparable to standards established through the EQR protocols under § 438.352, and pursuant to § 438.360(c), will need to explain the rationale for the State's determination that the activity is comparable in their quality strategy at § 438.340. If finalized, these changes would be effective as of the effective date of the final rule.
The current regulations at § 438.364, included in separate CHIP programs through an existing cross-reference at § 457.1250(a), describe what information must be included in the annual EQR technical reports as well as the public availability of the reports. While the information currently provided in the EQR technical reports is useful to CMS in our work with States to improve beneficiary access to and quality of care provided through a managed care delivery system, we believe these reports could and should provide additional information useful to both CMS and the public.
Current regulations at § 438.364(a)(2) describe the information the State must include in the annual EQR technical report for each EQR-related activity. Under § 438.364(a)(2)(iii), the EQR technical reports must include a description of data obtained, including validated performance measurement data for each PIP validation and performance measurement validation activity at § 438.358(b)(1)(i) and (ii), respectively. The current regulations, however, limit the data included in the reports to performance measurement data; the regulations do not require that other types of data that may be used to measure the outcomes associated with a PIP, such as percentages of enrollees that participated in the PIP or data on patient satisfaction based on services received from the plan, be included in the annual reports. The result is that reports often focus on whether the methods used to implement or evaluate the PIP were validated, but do not include the measurable data reflecting the outcomes of the PIP. Additionally, the regulations do not currently require the reports to include any data obtained from the mandatory network adequacy validation activity.
We believe validation alone is insufficient to provide CMS and interested parties with insight into plan performance on PIPs or States' effectiveness in driving quality improvement through PIPs. We also believe data on network adequacy validation is critical to understanding plan performance regarding timeliness and access to care. Therefore, we are proposing to revise § 438.364(a)(2)(iii) in two ways: (1) to require that the EQR technical reports include “any outcomes data and results from quantitative assessments” for the applicable EQR activities in addition to whether or not the data has been validated, and (2) to require this type of data from the mandatory network adequacy validation activity to also be included the EQR technical report. We believe this change will result in more meaningful EQR technical reports because they will include, in addition to validation information, the data demonstrating the outcome of PIPs and the results of quantitative assessments that determined plan compliance with
In addition to the proposed regulations in this section, we are considering adding guidance in the EQR protocols, described under § 483.352, for States to stratify performance measures collected and reported in the EQR technical reports under the performance measure validation activity. We believe stratification of performance measure data in EQR technical reports would support States' efforts to monitor disparities and address equity gaps. Stratifying performance measure data also aligns with proposed requirements for the mandatory reporting of Medicaid and CHIP Core Sets and proposed requirements in the MAC QRS proposed under new 42 CFR part 438 subpart G. We seek comment on how CMS could best support States in these efforts using future guidance we develop in the EQR protocols.
We currently require at § 438.364(c) that EQR technical reports be completed and available on the State's website required under § 438.10(c)(3) no later than April 30th of each year. However, we understand that most States with managed care programs use Healthcare Effectiveness Data and Information Set (HEDIS) measures. HEDIS measures represent the majority of measures included in the performance measure validation EQR activity. Data on these measures from the previous calendar year are audited and finalized in June annually. We therefore are proposing to revise § 438.364(c)(1) and (c)(2)(i) to change the April 30th date to December 31st. We believe this proposed change would align better with the HEDIS timeframes because the EQR performance measurement activity could then follow the HEDIS audit. We considered aligning the EQR technical report posting date with the end of the Federal fiscal year on September 30th. However, we believe States and EQROs need more time to complete the EQR activities after receiving audited HEDIS data. We also believe December 31st is most appropriate because performance measurement data is most often calculated on a calendar year, so the December 31st date would result in data being at most 1 year old at the time the reports are posted on the State's website. We believe this change, coupled with those discussed in section I.B.5.c.2. of this proposed rule regarding changes to the EQR review period, would improve the utility of the technical reports for States, CMS and interested parties by making the data reported in them more current. The proposed changes at § 438.364(c)(1) and (c)(2)(i) for Medicaid would apply to separate CHIP through an existing cross-reference at § 457.1250(a).
We seek comment on changing the posting date to December 31st annually. We also seek comment on whether additional time beyond December 31st is needed by States, and if so, how much time and why, or whether the posting date should remain at April 30th of each year, or a date between April 30th and December 31st and why. We are proposing at § 438.310(d)(3) for Medicaid, and through a proposed amendment at § 457.1200(d) to include a cross-reference to § 438.310(d) for separate CHIP, that States come into compliance with this new due date by December 31, 2025, which we believe would provide enough time for contractual and operational updates.
Current regulations do not require States to notify CMS that their EQR technical report has been completed and posted on the State's website. We propose to revise § 438.364(c)(2)(i) to require that States notify CMS within 14 calendar days of posting their EQR technical reports on their website, for example, by providing CMS with a link to the report. Section 401 of the Children's Health Insurance Reauthorization Act (CHIPRA) of 2009 (Pub. L. 111-3, enacted February 4, 2009) and section 2701 of the ACA require that CMS review and aggregate data from these reports in an annual report to the Secretary by September 30th. This proposed change would facilitate our review and aggregation of the required data and ensure that all States' data are included in the annual report. We are proposing that the notice to CMS be provided “in a form and manner determined by CMS.” However, we seek comment on whether we should require that this notice be provided via email or some other mode of communication. The proposed revisions at § 438.364(c)(2)(i) would apply to separate CHIP through an existing cross-reference at § 457.1250(a). We note that this requirement be effective as of the effective date of the final rule, which we do not believe will impose a great burden on States since most States already notify CMS when their EQR technical reports are posted by email.
Currently, States are encouraged, but not required, to retain EQR technical reports from previous years on their websites. We are proposing to require States maintain at least the previous 5 years of EQR technical reports on their website. Retaining at least 5 years of past EQR technical reports would provide administrative efficiencies and additional transparency by allowing CMS to use historical data and information within the annual EQR technical reports for the purposes of reviewing States' managed care program and plan performance during contract renewals and waiver renewals. In addition, having archived reports would provide other interested parties insight into historical plan performance. In addition, section 1915(b) waivers can be approved for up to 5 years, and section 1115 demonstrations are often approved for 5 years, providing additional support for 5 years being an appropriate timeframe for this requirement.
We understand that almost half of States already retain at least 2 years' worth of EQR technical reports based on a review of State websites in 2022, and we seek comment on whether archiving 5 years of reports would pose a significant burden on States. We propose to add this provision to the requirements at § 438.364(c)(2) for Medicaid, which would apply to separate CHIP through an existing cross-reference at § 457.1250(a).
We are proposing that States must comply with this update to § 438.364(c)(2)(iii) no later than December 31, 2025, and are proposing to codify this applicability date at § 438.310(d)(3) for Medicaid, and through a proposed amendment at § 457.1200(d) to include a cross-reference to § 438.310(d) for separate CHIP. This applicability date aligns with the new proposed due date for the EQR technical reports, which we believe would provide the time needed to update websites accordingly.
We are proposing a technical change at § 438.352 to eliminate the apostrophe from National Governors Association to align with the correct name of the organization.
In the 2016 final rule we established the authority to require States to operate a Medicaid managed care quality rating system (QRS) at § 438.334 and adopted the requirement for this provision, excluding provisions regarding consultation with the Medical Care Advisory Committee, to apply to separate CHIP at § 457.1240(d). We use the term “Medicaid and CHIP Managed Care Quality Rating System” (“MAC QRS”) for this proposed rule in line with the terminology used in the 2020 final managed care rule (85 FR 72754). The MAC QRS requirements currently include public posting of quality ratings on the State's website, which is intended to provide beneficiaries and their caregivers with a web-based interface to compare Medicaid and CHIP managed care plans based on assigned performance indicators and ratings. As described in previous rulemaking, the policy objectives of the MAC QRS are threefold: (1) to hold States and plans accountable for the care provided to Medicaid and CHIP beneficiaries; (2) to empower beneficiaries with useful information about the plans available to them; and (3) to provide a tool for States to drive improvements in plan performance and the quality of care provided by their programs. Managed care is the dominant delivery system in the Medicaid program; of the 80.8 million individuals covered by Medicaid as of July 1, 2020, 67.8 million (84 percent) were enrolled in a type of managed care.
Current requirements at § 438.334(b)(1) for Medicaid, which is adopted by cross-reference at § 457.1240(d) for separate CHIP, provide that CMS, in consultation with States and other interested parties, including beneficiaries, managed care plans, external quality review organizations (EQROs), tribal organizations, and beneficiary advocates (hereafter referred to as “interested parties”), will develop a MAC QRS framework that includes quality measures and a methodology for calculating quality ratings. The current regulations also provide States the option to either use the CMS-developed framework or establish an alternative QRS that produces substantially comparable information about plan performance, subject to our approval. Furthermore, the current regulations require that we develop a minimum set of mandatory quality measures that must be used, regardless of whether a State chooses to implement the CMS-developed QRS or an alternative QRS; this supports the goal of State-to-State comparisons of plan performance while reducing plan burden through standardization. The current regulations also require the MAC QRS framework to align, where appropriate, with other CMS managed care rating approaches (such as the Medicaid Scorecard initiative, the Medicare Advantage (MA) and Part D 5-star and the Qualified Health Plan (QHP) quality rating systems) as a way to reduce State and plan burden across quality reporting systems.
Since these regulations were issued, we have used a variety of forums to engage in robust consultation with interested parties to develop the framework of the MAC QRS to fulfill our obligation under § 438.334(b)(1) for Medicaid and under § 457.1240(d) for separate CHIP. These forums included beneficiary interviews, workgroup meetings, listening sessions, user testing of a MAC QRS prototype, and in-depth interviews with participants from State Medicaid programs, managed care plans, and EQROs. Through these extensive consultations, which took place between 2018 and 2022 and are summarized below, we learned about current State quality measure collection and reporting efforts and beneficiary needs and preferences related to the selection of a health plan. What we learned informed the MAC QRS framework proposed in this rulemaking. We summarize our consultation activities here:
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Based on this consultation, we are now proposing a MAC QRS framework that includes mandatory measures, a rating methodology (either the CMS-developed methodology or an alternate methodology approved by CMS), and a mandatory website display format; the website display would be an additional third component of the MAC QRS framework. We are proposing that States must include the mandatory measures under the MAC QRS framework but that States may also include additional measures without implementing an alternative QRS. This would change the current regulations that include both mandatory and non-mandatory measures in the CMS-developed framework. We are also proposing the initial mandatory measure set that States must use regardless of whether they use the MAC QRS framework or a CMS-approved alternative QRS, as well as a subregulatory process under which CMS would engage regularly with interested parties in order to update the mandatory measure set over time.
Additionally, after consulting with prospective MAC QRS users, we now believe displaying quality ratings alone would not be useful in selecting a health plan without additional context about Medicaid and CHIP as well as other information about health plans. We are therefore proposing website display requirements as a new component of the overall framework, and propose that the MAC QRS website include information that draws from existing State data and information to ensure a State's MAC QRS is a meaningful and usable tool for beneficiaries. Finally, in light of the diverse starting points from which States will begin to implement their MAC QRS, we are proposing to delay the deadline by which States must come into compliance with several of the requirements of the proposed MAC QRS framework to provide States with more time to implement the more complex requirements, including certain interactive display features. Importantly, States can use the optional EQR activity at § 438.358(c)(6) to assist with the quality rating of MCOs, PIHPs, and PAHPs. This could reduce burden by allowing States to receive an enhanced match for certain, limited activities carried out by an EQRO under this optional activity in accordance with section 1903(a)(3)(C)(ii) of the Act.
This proposal is made under our authority to implement and interpret in sections 1932(c)(1), 1932(a)(5)(C) and 2103(f)(3) of the Act, which provide that States that contract with MCOs for Medicaid managed care and CHIP, respectively, must develop and implement a quality assessment and improvement strategy that examines standards for access to care as well as other aspects of care and services directly related to the improvement of quality of care (including grievance procedures and information standards) and must provide comparative information on available plans related to health plan benefits and cost-sharing, service area, and available quality and performance indicators. As with most other requirements for managed care plans, we rely on section 1902(a)(4) of the Act to extend the same requirements to PIHPs and PAHPs that apply to MCOs in a Medicaid managed care program and on section 2103(f)(3) of the Act to extend the same requirements that apply to MCOs in CHIP to PIHPs and PAHPs. Throughout this section of the proposed rule, we note how the proposed Medicaid managed care regulations in part 438, subpart G (related to the MAC QRS) would apply equally to separate CHIP by a proposed cross-referenced added to § 457.1240(d).
The proposed set of minimum quality measures are intended to evaluate performance on quality of care, access to services, and outcomes. By measuring performance annually on specific quality measures (that is, mandatory measures adopted by us and any additional measures elected by the State), States will have information and data to monitor and evaluate performance of their managed care plans.
In exercising our authority under sections 1932(c)(1) and 2103(f)(3) of the Act, CMS may not implement standards for the implementation of a quality assessment or improvement strategies unless the Secretary implements such standards in consultation with the States. To fulfill this requirement, we have engaged in robust consultation with States, as described in section I.B.6.a. of this proposed rule, on the design of the MAC QRS, including the mandatory measure set, methodology, and display requirements. Going forward, we are proposing to continue to engage in consultation prior to making updates to the three components of the MAC QRS framework. In section I.B.6.e.3. of this proposed rule, we discuss our proposal for a subregulatory process through which we will continue to consult with States and interested parties to update the mandatory measure set; in section I.B.6.f. of this proposed rule, we discuss our proposal to continue to consult with States and interested parties to update the MAC QRS methodology, and in section I.B.6.g. of this proposed rule, we discuss our proposal to consult with States and interested parties to update our proposed website display requirements.
We are proposing to create a new subpart G in 42 CFR part 438 to implement the MAC QRS framework required under § 438.334 of the current regulations and establish the standards which States must meet for CMS to approve adoption of an alternative QRS and related requirements. Existing regulations at § 438.334 are redesignated to newly-created proposed sections in Subpart G with proposed revisions, discussed in detail below in this proposed rule. For separate CHIP, we propose to adopt the new provisions of
There are some technical and other terms relevant to our proposed regulations. Therefore, we propose the following definitions at § 438.500(a) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d). Some proposed definitions are discussed in more detail later in this proposed rule in connection with other proposed regulation text related to the definition.
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Currently, § 438.334(a) lays out the general rule for the MAC QRS, including general requirements for States contracting with MCOs, PIHPs and/or PAHPs to furnish services to Medicaid beneficiaries. These requirements also apply to separate CHIP through a cross-reference to § 438.334 at § 457.1240(d). Specifically, § 438.334(a) requires States to adopt a quality rating system using the CMS framework or an alternative quality rating system and to implement such quality rating system within 3 years of the date of the final rule published in the
We are also proposing for Medicaid, as a general rule, that States provide a support system for beneficiaries or users of a State's MAC QRS, leveraging existing State resources. In our user testing, described in greater detail in I.B.6.g. of this proposed rule, users responded positively to the availability of live consumer assistance through telephone or online chat, which 83 percent of participants found useful as it helped them navigate the MAC QRS website and get the information they were looking for right away. Per § 438.71, States are currently required to develop and implement a beneficiary support system. The elements of the beneficiary support system are identified at § 438.71(b)(1) as including choice counseling for all beneficiaries in § 438.71(b)(1)(i), assistance for enrollees in understanding managed care in § 438.71(b)(1)(ii), and assistance related to the receipt of long-term services and supports at § 438.71(b)(1)(iii). Currently, § 438.2 provides that choice counseling means the provision of information and services designed to assist beneficiaries in making enrollment decisions and includes answering questions and identifying factors to consider when choosing among managed care plans and primary care providers. Choice counseling does not include making recommendations for or against enrollment into a specific MCO, PIHP, or PAHP. We believe that this existing support is an appropriate system for States to build upon to assist beneficiaries in using and understanding the information in the MAC QRS to select a managed care plan. In a new § 438.505(a)(3), we are therefore proposing for Medicaid that States would be required to use the beneficiary support system implemented under current § 438.71 to provide choice counseling to all beneficiaries, and assistance for enrollees on understanding how to use the managed care quality rating system to select a managed care plan, including the receipt of long-term services and supports. With the support system already in place, we believe States could leverage existing resources by developing new scripts and training existing staff. We discuss the importance of providing this assistance in section I.B.6.g. of this proposed rule where we provide an overview of the input we received from beneficiaries. However, since a beneficiary support system is not required for separate CHIP, we do not propose to adopt this provision for subpart L of part 457.
The current regulations at § 438.334(b)(1) for Medicaid, and applied by cross-reference at § 457.1240(d) for separate CHIP, require the MAC QRS framework to align, where appropriate, with the QHP quality rating system, the MA and Part D quality rating system and other related CMS quality rating approaches as a way to reduce State burden across Federal quality reporting systems. We believe this requirement should
Finally, current regulations at § 438.334(a) for Medicaid managed care programs (applied to separate CHIP through a cross-reference in § 457.1240(d)) apply the requirements for the MAC QRS to each State contracting with an MCO, PIHP or PAHP to furnish services to Medicaid or CHIP beneficiaries. We are proposing to revise this to refer to “an applicable managed care plan as described in paragraph (b) of this section” in proposed § 438.505(a), and add an applicability provision at new § 438.505(b) stating that the provisions of newly-proposed subpart G apply to States contracting with MCOs, PIHPs, and PAHPs for the delivery of services covered under Medicaid. The proposed provisions at § 438.505(a) and (b) are also proposed to apply to separate CHIP through a cross-reference at § 457.1240(d), but excluding all references to beneficiary support systems. We note that the current and proposed regulations in Subpart G do not apply to PCCM entities, consistent with current regulations at §§ 438.10(c)(2) and 457.1207; non-emergency medical transport PAHPs are also not included in the MAC QRS, in accordance with §§ 438.9 and 457.1206(b). In addition, our proposal for the MAC QRS framework excludes contracts between States and MA Dual Eligible Special Needs Plans (D-SNP) where the contract is only for the D-SNP to provide Medicaid coverage of Medicare cost sharing for the D-SNP enrollees; this is reflected in proposed § 438.505(b).
The current regulations at § 438.334(b)(1) direct CMS, after consulting with States and other interested parties, to identify a mandatory set of QRS quality measures that align, where appropriate, with the MA and Part D and QHP quality rating systems and other related CMS quality rating approaches, and to provide an opportunity for public notice and comment on such mandatory measures. In this section we discuss the standards that guided CMS in identifying the initial mandatory measures and propose an initial mandatory measure set. We seek comment on our proposed initial mandatory measure set, which we will finalize in the preamble of the final rule. Under this proposal, we would not duplicate the list of the mandatory measures and specifications in regulation text in light of the regular updates and revisions contemplated by the rules we are proposing for ongoing maintenance of the MAC QRS. We also propose a subregulatory process to modify the mandatory measure set over time, including proposing to codify the standards that guided development of the proposed initial mandatory measure set.
Three distinct considerations guided the process of selecting individual measures to establish a concise proposed initial mandatory measure set. We are proposing at § 438.510(c)(1)-(3) to codify these three considerations as standards that we would apply in the future to determine when to add measures to the mandatory measure set, when to make substantive updates to an existing mandatory measure, and in some circumstances, when to remove a measure from the mandatory measure set. Specifically, a measure is only included in our proposed initial mandatory measure set and would only be added in the future if (1) it meets five of the six measure inclusion criteria proposed in this section; (2) it would contribute to balanced representation of beneficiary subpopulations, age groups, health conditions, services, and performance areas (for example, preventive health, long term services and supports, etc.) within a concise set of mandatory measures; and (3) the burdens associated with including the measure do not outweigh the benefits to the overall quality rating system framework of including the new measure based on the measure inclusion criteria we are proposing. Under our proposal, and as discussed in section I.B.6.e.4. of this proposed rule, a measure would be added to the mandatory set if it meets each of these three standards. To determine whether a measure meets these standards, CMS would rely on the input received throughout the subregulatory process proposed in § 438.510(b) and discussed in section I.B.6.e.3. of this proposed rule and other relevant research and information. Similarly, a measure would be removed from the mandatory measure set if it no longer met these standards. This approach would ensure that each of the three proposed standards are met.
Using the MAC QRS goals described in section I.B.6.a. of this proposed rule as a guidepost during our discussion with States and other interested parties, we identified and refined six measure inclusion criteria: (1) is the measure meaningful and useful for beneficiaries and their caregivers when choosing a managed care plan; (2) does the measure align with other CMS rating programs described in § 438.505(c) of this chapter; (3) does the measure assess health plan performance in at least one of the following areas: customer experience, access to services, health outcomes, quality of care, health plan administration, and health equity; (4) does the measure provide an opportunity for managed care plans to influence their performance on the measure; (5) is the measure based on data that are readily available, or available without undue burden on States and plans, such that it is feasible to report by most States and managed care plans; and (6) does the measure demonstrate scientific acceptability, meaning that the measure, as specified, produces consistent and credible results.
We used these six criteria to assess hundreds of measures suggested throughout our engagement with interested parties. We explain each proposed criterion here and describe how we assessed measures suggested during our engagement with interested parties against the criteria to select the proposed initial mandatory measure set of 18 measures, displayed in Table 1. In doing so, we also show how we would make future updates to the mandatory measure list using these criteria.
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Using feedback throughout our consultations related to the mandatory measure list, we assessed our list of suggested measures to identify the extent to which each measure met these inclusion criteria. During the same consultations, we received feedback (and our own evaluation showed) that while each of the six criteria were important to consider, it would be difficult for a measure to meet all six criteria. For instance, we found that requiring all six criteria could prevent the inclusion of either measures that are meaningful to beneficiaries but not commonly used by States, or measures aligned with State priorities for managed care quality and plan performance, but less useful to beneficiaries. We are therefore proposing in § 438.510(c)(1) that a measure must meet at least five of the six measure inclusion criteria to be considered against our other standards and included in the mandatory measure set in the future. We seek comment on the six criteria we are proposing to evaluate prospective measures for the mandatory measure set, and whether there are additional objective measure inclusion criteria that we should use to evaluate quality measures for inclusion as mandatory measures. Additionally, we seek comment on our proposal to require measures to meet five out of the six proposed criteria, and whether that threshold produces a sufficient number of measures to consider for the MAC QRS. Finally, we seek comment on the extent to which the measures in our proposed measure set meet the proposed measure inclusion criteria, including the reasons and/or supporting data for why the measure meets or does not meet the criteria. In our review of measures and development of the list of mandatory measures, we believe that each meets at least 5 if not all 6 of the criteria proposed at § 438.510(c)(1).
Through our work to develop the proposed mandatory measure set, we found that many measures meet at least five of the six measure inclusion criteria, and without additional guardrails in place we believe the set would quickly expand and become burdensome to States and plans. States
To maintain a concise measure set, we are proposing to codify two additional measure inclusion standards in § 438.510(c)(2) and (3). These two additional standards reflect the feedback we received on maintaining a “concise” mandatory measure list and provide a process by which to identify further distinctions among measures that meet our inclusion criteria and to consider the measure set as a whole as part of the selection process. First, in § 438.510(c)(2), we propose that a measure must contribute to balanced representation of beneficiary subpopulations, age groups, health conditions, services, and performance areas that are assessed within a concise mandatory measure set. We have included as part of our standard proposed in § 438.510(c)(2) that the overall measure set should be “concise,” given the feedback we received on limiting the number of measures in the mandatory measure set. we established and intend to maintain a goal of no more than 20 measures for the initial mandatory measure set. However, the proposed rule would retain flexibility for the number of measures to increase as the mandatory set is updated over time. we would consider each suggested measure in relation to other suggested measures and the overall mandatory measure set to identify those that are very similar or duplicative, keeping in mind the need for a mandatory measure set that is both representative and concise.
Second, we propose in § 438.510(c)(3) that a measure would be added to the mandatory measure set when the burdens of adding the measure do not outweigh the benefits based on the 6 criteria proposed at § 438.510(c)(1)(i) through (vi). we would compare similar measures, that is, those suggested for inclusion that measure performance within similar subpopulations of beneficiaries, health conditions, services, and performance areas as well as the extent to which a contemplated new measure meets the criteria listed in proposed paragraph (c)(1), to assess the benefits and burdens of including each measure in the mandatory measure set. Under our proposal, we would include a measure when all three of the standards proposed in § 438.510(c) are met. CMS would use the subregulatory process proposed in § 438.510(b) and discussed in section 1.B.6.e.3. of this proposed rule to determine which measures meet the proposed standards.
We seek comment on the standards proposed at § 438.510(c)(2) and (3) and how measures should be assessed using these standards. In particular, we seek comment on the appropriate balance of representation (of populations and performance areas) in the mandatory measure set and any additional considerations that may be missing from our proposed paragraph (c)(2). Further, we seek comment on whether there are additional considerations for the weighing of burdens and benefits of a measure under proposed § 438.510(c)(3).
We propose in § 438.510(a) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), that the quality rating system for managed care plans implemented by the State for Medicaid (and CHIP) managed care programs must include the measures in a mandatory measure set, which will be identified by CMS in the technical resource manual as proposed in § 438.530(a)(1). We note that in proposed § 438.520(b), discussed in section I.B.6.g.5. of this proposed rule, States can include other, additional measures outside the mandatory measure set. We received input through our consultations with interested parties, detailed in section I.B.6.a. of this proposed rule, on how to construct a mandatory measure set for the MAC QRS, including the number of measures, measure inclusion criteria, and performance areas and populations represented by the measures. After considering the priorities and other information gleaned through the several years of consultations described in section I.B.6.a. of this proposed rule, and applying the standards discussed in section I.B.6.e.1. of this proposed rule, we are proposing for public comment an initial set of 18 mandatory measures that represents the collective input we received during those consultations. This proposed initial set of mandatory measures can be found in Table 1. These proposed mandatory measures reflect a wide range of preventive and chronic care measures representative of Medicaid and CHIP beneficiaries.
We considered including several other measures that are not included in the proposed initial mandatory set. These other measures were not included because they did not meet one or more of the standards described in section I.B.6.e.1. of this proposed rule. These other measures and the reason we did not include them in Table 1, are described here:
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The current regulations at § 438.334(b)(2) establish that we may, after consulting with States and other interested parties and providing public notice and opportunity to comment, periodically update the Medicaid managed care QRS framework developed under current § 438.334(b)(1). We remain dedicated to the policy currently reflected in § 438.334(b)(1) and (b)(2) that requires engagement with interested parties for continuous improvement of the MAC QRS. In addition, continued engagement with States is consistent with our obligations under sections 1932(c)(1)(D) and 2103(f)(3) of the Act to consult with States in setting standards for measuring and monitoring managed care plan performance. However, we believe that requiring rulemaking to add new measures that may better meet beneficiaries' and States' needs or to remove measures whose utility has been surpassed by other measures would be overly restrictive and would undermine our ability to adapt the mandatory set to keep pace with changes in the quality field and user preferences. We also believe that a robust subregulatory process in which we interpret and apply substantive regulatory standards governing the measures to be included in the mandatory measure set can ensure that any changes reflect the extensive input from interested parties that is needed. We are therefore
With exceptions for removing measures for specific reasons proposed at § 438.510(d) and non-substantive updates to existing measures as proposed at § 438.510I(1), we are proposing in new § 438.510(b) that we will engage in a two-step subregulatory process to obtain input and recommendations from States and other interested parties prior to finalizing certain types of changes to the mandatory measure set in the future. This proposed engagement with States is similar to the public notice and comment process currently required by § 438.334(b) and consistent with our obligations under sections 1932(c)(1)(D) and 2103(f)(3) of the Act to consult with States in setting standards for measuring and monitoring managed care plan performance. Proposed § 438.510(b) would apply to separate CHIP by cross-reference through a proposed revision to § 457.1240(d).
As the first step in the process, we propose at § 438.510(b)(1) that CMS would engage with States and interested parties (such as State officials, measure experts, health plans, beneficiaries and beneficiary advocates or organizations, tribal organizations, health plan associations, health care providers, external quality review organizations and other organizations that assist States with MAC QRS ratings) to evaluate the current mandatory measure set and make recommendations to add, remove, or update existing measures. The purpose of this evaluation would be to ensure the mandatory measures continue to meet the standards proposed in § 438.510(c). We envision that this engagement could take several forms. For example, a workgroup could be convened to hold public meetings where the workgroup attendees would make recommendations to CMS to add and remove measures. Alternatively, a smaller series of meetings with interested parties could be held, or a request for information could be published to solicit recommendations from experts. In either case, we intend that recommendations would be based on the standards proposed in § 438.510(c) and discussed in section I.B.6.e.1. of this proposed rule.
At § 438.510(b)(2) we propose that the second step in the process would be for CMS to provide public notice and opportunity to comment through a call letter (or similar subregulatory process using written guidance) that includes the mandatory measures identified for addition, removal or updating through the public engagement step. Following the public notice and opportunity for public comments, we propose at § 438.510(f) that we will publish the modifications to the mandatory measure set in the technical resource manual proposed at § 438.530 (this proposal is discussed in more detail in section I.B.6.e.7. of this proposed rule).
This subregulatory process shares similarities with the QHP quality rating system, which uses a call letter process to gather feedback on measure updates. It also aligns with how the Core Sets are updated annually. As part of the Core Set annual review and selection process, a workgroup made up of Medicaid and CHIP interested parties and measurement experts convenes annually, in a public meeting, and develops a set of recommendations for changes to the Core Sets. These recommendations are posted in a draft report for public comment, and the final report that is submitted to CMS includes both the workgroup recommendations and public comments. The annual updates to the Core Sets are based on the workgroup recommendations and comments, and using input from States and Federal partners, CMS decides whether to accept them prior to the updated Core Sets being finalized. Details on this process are available at
If the proposed rule is finalized in 2024, the implementation deadline for each State's MAC QRS per proposed § 438.505(b) (which provides for such implementation to be no later than the fourth calendar year following publication of the final rule) would be December 31, 2028, and the first measurement year would be 2026. Since we are proposing to finalize our initial measure set in this rulemaking, any updates to the initial mandatory measure list made pursuant to the subregulatory process proposed at § 438.510(b) would be effective no earlier than the year after the implementation of each State's MAC QRS. We believe it would be appropriate to initiate the proposed subregulatory process for the second display year (for example, 2029 if the rule is finalized in 2024) because the mandatory measure list would be 5 years old by then, and at least biennially thereafter (in line with proposed § 438.510(b)(2)). However, we seek comment on whether we should instead initiate the subregulatory process to update the mandatory measure list for the third display year (for example, 2030 if the rule is finalized in 2024). We also seek comment on the types of engagement that would be important under this proposed subregulatory process (for example, workgroups, smaller meetings, requests for information), the types of experts that CMS should include in the engagement, and the use of a call letter or similar guidance to obtain public input.
Our proposal at § 438.510(c) states that CMS would add a measure to the mandatory measure set when all three standards proposed at § 438.510(c)(1)-(3) are met, based on available information, including input from the subregulatory process. Under our proposal, at least biennially, we would use the subregulatory process proposed in § 438.510(b) to gather input that would be used to determine if a measure meets the proposed standards to be added to the mandatory measure set. For example, CMS could request the workgroup's assessment of the list of measures suggested for addition (from the workgroup, CMS, or both), using our three proposed standards: the proposed criteria (per proposed § 438.510(c)(1)), input on how best to curate a balanced representation of measures from the suggested measures (per proposed § 438.510(c)(2)), and the benefits and burdens of adopting the measures (per proposed § 438.510(c)(3)). Using this input, CMS could identify a subset of measures from that list that best represents these standards. This subset of measures would then be considered eligible to add to the mandatory measure set and described in a call letter or similar written guidance, which would explain how standards in
In previous discussions, States and other interested parties recommended both the Follow-Up After ED Visit for Mental Illness (FUM) and the Follow-Up After Hospitalization for Mental Illness (FUH) as potential measures to include in our preliminary measure set. As a first step, we used our own research and input from our consultations to assess the measures against the measure inclusion criteria, that we are now proposing as our first standard, and found that both measures meet each of our six proposed criteria (see Table 2).
Second, we considered the two measures in light of our goals for balanced representation within a concise measure set. Given our goal to limit the initial mandatory measure set to fewer than 20 measures and the fact that both measures focus on assessing follow-up care for mental illness, we determined that including one of the two measures would best maintain balanced representation within the overall measure set and within the behavioral health performance area. We then weighed the benefits and burdens of including each measure using our assessment of the extent to which each measure met our inclusion criteria. As represented in Table 2, we found that both measures had similar benefits and burdens, but the FUH measure had more benefits as it was more commonly collected or reported at both the State and Federal level and more frequently used by States to assess plan performance. We therefore chose to include the FUH measure in the proposed mandatory set.
We are proposing at § 438.510(d)(1) that we may remove existing mandatory measures from the mandatory measure set if, after following the subregulatory process proposed at § 438.510(b), we determine that the measure no longer meets the standards for the mandatory measure set proposed at 438.510(c). We would use the same approach we described in section I.B.6.e.2. of this proposed rule and illustrated with our FUH/FUM example in section I.B.6.e.4. of this proposed rule to assess whether a measure continues to meet our measure inclusion criteria to remain in the mandatory measure set. We are also proposing at § 438.510(d)(2) through (4) to provide CMS the authority to remove mandatory measures outside of the subregulatory process proposed in § 438.510(b) in three circumstances: when the measure steward (other than CMS) retires or stops maintaining a measure (proposed at § 438.510(d)(2)), if CMS determines that the clinical guidelines associated with the specifications of the measure change such that the specifications no longer align with positive health outcomes (proposed at § 438.510(d)(3)), or if CMS determines that a measure shows low statistical reliability under the standard identified in § 422.164(e) of this chapter (proposed at § 438.510(d)(4)).
These proposed criteria for removing measures outside the subregulatory process align with the current regulations governing the MA and Part D quality rating system.
In addition to adding and removing measures, we are also proposing rules at § 438.510(e) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), governing how we would handle updates to mandatory measures in the MAC QRS that are a result of changes made by a measure steward other than CMS to an existing mandatory measure's technical specifications. These are updates that measure stewards routinely make to quality measures, and can be non-substantive (such as changes that clarify instructions to identify services or procedures) or substantive in nature (for example, major changes to how the measures are calculated). We are proposing different subregulatory processes by which these non-substantive and substantive updates to existing mandatory measures would be made. First, in proposed paragraph § 438.510(e)(1) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that we would update the technical resource manual to revise descriptions of the existing mandatory measures that undergo non-substantive measure technical specification changes. In alignment with current practices in the MA and Part D quality rating system and the Core Sets, we are not proposing to use the subregulatory process proposed in § 438.510(b) for non-substantive changes because we believe they reflect routine measure maintenance by measures stewards that do not significantly affect the measure and would not need additional review by the workgroup and CMS. We are proposing in new paragraph § 438.510(e)(1)(i)-(iv) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), to codify examples of the types of updates that are non-substantive under this proposal. This proposal is consistent with current practice and regulations for the MA and Part D quality rating system at §§ 422.164(d)(1) and 423.184(d)(1). We identify and describe the proposed non-substantive updates in detail below and seek comment on whether this list is exhaustive, whether it is an adequate list of examples of non-substantive changes, or whether we should consider adding other examples of non-substantive changes to the list. Examples of the types of changes we believe would be non-substantive for purposes of proposed § 438.510(e)(1) include, but are not limited to the following:
• If the change narrows the denominator or population covered by the measure with no other changes, the change would be non-substantive. For example, if an additional exclusion—such as excluding nursing home residents from the denominator—is added, the change would be considered non-substantive and would be incorporated through announcement in the annual technical resource manual.
• If the change does not meaningfully impact the numerator or denominator of the measure, the change would be non-substantive. For example, if additional codes are added that increase the numerator for a measure during or before the measurement period, such a change would not be considered substantive. This type of change has no impact on the current clinical practices of the plan or its providers.
• If revisions are made to the clinical codes without change in the target population or the intent of the measure and the target population, the change would be non-substantive. The clinical codes for quality measures (such as HEDIS measures) are routinely revised as the code sets are updated. Examples of clinical codes, include, but are not limited to:
+ ICD-10-CM code sets, which are updated annually,
+ Current Procedural Terminology (CPT) codes, which are published and maintained by the American Medical Association (AMA) to describe tests, surgeries, evaluations, and any other medical procedure performed by a healthcare provider on a patient, and
+ National Drug Code (NDC) which is updated bi-annually.
• If the measure specification change provides additional clarifications for reporting, without changing the intent of the measure, the change would be non-substantive. Examples include:
+ Adding additional tests that would meet the numerator requirements.
+ Clarifying documentation requirements (for example, medical record documentation).
+ Adding additional instructions to identify services or procedures that meet (or do not meet) the specifications of the measure.
+ Adding alternative data sources or expanding of modes of data collection to calculate a measure.
Second, we propose at § 438.510(e)(2) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), that we may update an existing mandatory measure that has undergone a substantive measure specification update (that is, an update not within the scope of non-substantive updates, which are illustrated in § 438.510(e)(1)(i) through (iv), only after completing the subregulatory process proposed in § 438.510(b). We believe that most substantive measure specification updates to existing measures could result in new or different measures, thereby necessitating consideration and
In new paragraph § 438.510(f) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that CMS would communicate modifications to the mandatory measure set and the timeline States would be given to implement modifications to the mandatory measure set in the annual technical resource manual. We propose to use the technical resource manual described in proposed § 438.530 to communicate the final updates. We are proposing that States would be given at least 2 calendar years from the start of the measurement year immediately following the technical resource manual in which the mandatory measure addition or substantive update was finalized to display the measurement results and ratings using the new or updated measure(s). We believe giving States at least 2 years would allow for contract and systems updates when new measures are added or substantive updates are made to the mandatory measure set. For example, if the technical resource manual finalized updates in August 2026, and the next measurement year after August started in January 2027, States would have, at a minimum, until January 2029 before they would be required to display the ratings for the mandatory measure updates in their MAC QRS. A State may elect to display the ratings for a new mandatory measure sooner. As two years from the start of the measurement year would always be in January, we seek comment on whether there is a need for States to have the flexibility to update their quality ratings by the end of the second calendar year, which, based on the example above, would give States the flexibility to update the rating between January and December of 2029.
We are proposing the same implementation timeline for substantive updates to existing mandatory measures, since we believe these should be treated in the same manner as new measures. We are proposing this timeline based on discussions with States and other interested parties about operational considerations for implementation of new and substantively updated measures and the posting of the associated ratings. We are not proposing a specific deadline for States to stop display of a measure that has been removed from the mandatory measure set because States have the option to continue to display measures removed from the mandatory set as additional measures as described in section I.B.6.g.5. of this proposed rule. We seek comment on this flexibility considering the criteria under which measures can be removed at proposed § 438.510(d). We seek comment on whether our timeframes are appropriate for updates to the mandatory measure set or whether we should consider allowing for more or less time, and why.
In conclusion, we seek comment on the proposed subregulatory process to add and remove measures, as described in sections I.B.6.e.3. of this proposed rule, specifically the types of engagement (workgroup, smaller meetings, requests for information) and the types of experts that would be included in the engagement, and the use of a call letter or similar guidance to obtain public input on the MAC QRS mandatory measure set before it is substantively updated. We note that we are proposing the subregulatory process to update the mandatory measure set take place
Fundamental to any QRS is the methodology used to calculate the quality ratings for States' managed care plans. Under current regulations at § 438.334(b)(1) CMS must, after consulting with interested parties and providing public notice and opportunity to comment, develop a methodology that States must use in the MAC QRS adopted by the State to calculate its plans' quality ratings, unless we approve an alternative methodology as part of an alternative MAC QRS in accordance with proposed § 438.525. During the extensive engagement with States and other interested parties described in section I.B.6.a. of this proposed rule, we identified two main themes to consider in the development of a MAC QRS methodology: (1) States are concerned about the burden associated with data collection and quality rating calculation, and (2) beneficiaries desire transparent, representative quality ratings. In developing the MAC QRS methodology that we are proposing here, we sought to balance these two, often competing preferences, while ensuring that quality ratings remained comparable within and among States. We also considered the Interoperability and Patient Access for Medicare Advantage Organization and Medicaid Managed Care Plans, State Medicaid Agencies, CHIP Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally-Facilitated Exchanges, and Health Care Providers,
Under current regulations at § 438.334(d), each year States would be required to collect data from each managed care plan with which they contract and issue an annual quality rating for each managed care plan based on the data collected. We are proposing to replace that policy with more specific requirements in proposed new § 438.515(a) for States to collect and validate data used by the State to calculate and issue quality ratings for
We believe that requiring States to calculate quality ratings for plans with fewer than 500 enrollees would be overly burdensome, as these plans may have limited resources for collecting and reporting data, and are more likely than plans with higher enrollment to have small denominator sizes that would make it inappropriate to issue and display quality ratings for some measures due to privacy or validity concerns. Further, through an analysis of 2019 Transformed Medicaid Statistical Information System (T-MSIS) Analytic Files (which are research-optimized files of T-MSIS data), we determined that neither the number of managed care plans nor the percentage of beneficiaries reported in the MAC QRS would be significantly reduced by excluding plans with enrollment below 500. Thus, we believe the proposed enrollment threshold maximizes inclusion of plans and enrollees, while also minimizing the burden of data collection and reporting on smaller plans. States would have the flexibility to include plans with fewer than 500 enrollees at their discretion, and we would encourage States to do so when appropriate and feasible.
At § 438.515(a)(1)(ii) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that States would also be required to collect available data from the State's Medicaid fee-for-service (FFS) program, Medicare (including Medicare Advantage plans), or both if all necessary data cannot be provided by the managed care plans for the measures and collection of these data does not impose an undue burden on the State. For example, if a State delivers behavioral health services through a managed care program and all other services through its FFS program, the State would need to collect both managed care and FFS data to calculate quality ratings for the managed care plans participating in its behavioral health managed care program for many of our proposed behavioral health mandatory measures. Similarly, if a managed care plan provides services to enrollees who are dually eligible for Medicare and Medicaid services, it would be necessary for the State to collect data about services provided by Medicare to such enrollees to calculate quality ratings for some measures included on the proposed mandatory set. While we are proposing that States must collect data from these other sources as needed to calculate mandatory measures if the data are available for collection without undue burden, we are not proposing that States would calculate or assign quality ratings to Medicaid FFS or Medicare plans.
We considered requiring States to collect data only from their contracted managed care plans and then only when a plan is able to provide all data necessary to calculate and issue a quality rating for a given performance measure, which is a common practice among measure stewards. However, we are concerned that there would be instances where there is no single plan from which a State could collect all data necessary to calculate one or more of the measures on our mandatory measure list. For example, of the 18 measures on our proposed mandatory measure set, four require data from more than one setting, including three of our proposed behavioral health mandatory measures. These four measures include Use of First-Line Psychosocial Care for Children and Adolescents on Antipsychotics (APP), Initiation and Engagement of Alcohol and Other Drug Abuse or Dependence Treatment (IET), Follow-Up After Hospitalization for Mental Illness) (FUH), and Asthma Medication Ratio (AMR). To calculate the three behavioral health measures, it is necessary to collect behavioral health or substance use service data as well as either pharmacy or physical health data. When these services are covered by separate plans or delivery systems, such as where a State has chosen to split Medicaid coverage of these services between separate managed care programs or use a combination of managed care and FFS delivery systems, these mandatory measures would be at risk of going unreported. Similar issues are raised for dually eligible individuals who receive coverage through Medicare and Medicaid. We note that Medicaid is the single largest payer of mental health services in the U.S., and behavioral health and substance use measures would be at particular risk of going unreported, as services provided in these settings are commonly provided through a separate managed care plan. We believe that our proposal for States to collect and use data from multiple sources will mitigate the risk of underreporting of mandatory measures, particularly those measures assessing behavioral health and substance use services.
We believe our proposal is aligned with ongoing efforts to expand access to health plan data at both the State and Federal level. For example, State data collection required for measures in the Child Core Set and behavioral health measures in the Adult Core Set, which will become mandatory effective for calendar year 2024, requires States to report measures using data from both managed care and FFS programs as well as Medicare data for dually eligible beneficiaries. Many of these measures overlap with the mandatory measures proposed for the MAC QRS, which means States will already be obligated to collect Medicaid managed care and FFS data and to obtain Medicare data needed to calculate certain performance measures. Thus, we believe that the benefits of proposed § 438.515(a)(1)(ii) outweigh the costs of any increased burden on States.
Furthermore, there is an ongoing effort at the Federal and State levels to increase data availability and interoperability, including State access to managed care plan data. At the time of this proposed rule, data available for collection include encounter data received from a State's own Medicaid managed care plans under § 438.242 and data from FFS providers through claims and other reporting. Given existing data availability, we believe that the collection of such data would rarely result in an undue State burden. States can also obtain Medicare Part A, B and D data free of charge through the CMS State Data Resource Center (SDRC). Although Part C data are not available publicly through the SDRC, States may use their contracts with MA Dual Eligible Special Needs Plans (D-SNPs), which are required under § 422.107, to obtain Medicare data about the dually eligible individuals enrolled in those plans. As a significant number of States already obtain Part C data in this way, we believe such data would be available without undue burden in many cases, particularly where a State has already opted to obtain some Medicare Part C data in this way.
We understand that making contractual or systems changes to allow a State to collect such data without
Once the necessary data are collected to calculate quality ratings for each mandatory measure, our proposal at § 438.515(a)(2) would require States to ensure that all collected data are validated. This aligns with similar requirements in 45 CFR 156.1120(a)(2), which requires QHP issuers to validate data for the QHP QRS, and 42 CFR 422.162(c)(2), which requires MA organizations to provide unbiased, accurate and complete quality data to CMS for the MA and Part D quality rating system. Currently, § 438.320 defines validation for purposes of subpart E of part 438 as the review of information, data, and procedures to determine the extent to which they are accurate, reliable, free from bias, and in accord with standards for data collection and analysis. We are proposing the same definition for purposes of new subpart G at § 438.500. States may use the current optional EQR activity at § 438.358(c)(6) and 457.1250(a)—for which enhanced match may be available for Medicaid EQR-related activities performed for MCOs per § 438.370(a)—to assist with the calculation and validation of data used to generate quality ratings for the MAC QRS. Use of this optional activity may help reduce burden on States.
We are proposing in § 438.515(a)(3) that States use the validated data to calculate performance rates for managed care plans. Under this proposal, States would calculate, for each mandatory measure, a measure performance rate for each managed care plan whose contract includes a service or action being assessed by the measure, as determined by the State. Under this proposal, the mandatory measures would be assigned to the plan(s) based on whether the plan's contract covers the service or action being assessed by the measure, as identified by the State. We believe this would be straightforward for measures assessing single services or actions, but, as we noted previously in this section of the proposed rule, some States choose to deliver Medicaid services through different managed care programs. In these States, data necessary to calculate a measure performance rate for a given measure may be collected from two managed care plans. However, a State may determine that only one of these services or actions for which data must be collected is being assessed by the measure. In such a case, the State must identify, among those plans from which the State collected data, the plans whose contract includes the service of action identified by the States as being assessed by the measure, and calculate and assign quality ratings accordingly.
For example, the Follow-Up After Hospitalization (FUH) measure listed in Table 2 requires data on two services: hospitalization and mental health services. In a State that offers behavioral and physical health services through separate managed care programs, the State would need hospitalization data from plans participating in the physical health program and mental health service data from the plans participating in the behavioral health program to calculate FUH performance rates. Because data are collected from more than one plan, our proposal would require States to determine which service or action is being assessed by the measure. If a State determines that the service or action being assessed by the FUH measures is the provision of timely follow-up of mental health services to an enrollee following a hospitalization for mental illness, the State would then be required to identify all plans that are contracted to provide the follow-up mental health services assessed by the FUH measure and assign each of those plans a quality rating for the FUH measure.
Lastly, our current regulation at § 438.334(d) requires States to issue
The proposal to require that States issue quality ratings for individual quality measures is supported by the user testing we conducted during our engagement with interested parties. Beneficiaries stated varying preferences for the level of information that they would like to have, with roughly half preferring more detailed information, 40 percent preferring big picture information, and 10 percent falling in the middle. Many beneficiaries stated interest in quality ratings for specific measures that related to their individual health care needs, especially those that aligned with their understanding of important health indicators identified by trusted health care professionals, such as blood A1c levels for people with diabetes, demonstrating the value of including individual measure quality ratings.
Our user testing suggests that displaying managed care plan quality ratings both at the individual measure and the domain level would be most desirable to beneficiaries. This approach would allow beneficiaries who prefer big picture information to concisely compare plans at the domain-level, while beneficiaries who desire more detailed information could drill down into the domains to understand a plan's performance on the individual quality measures from which the domain score is derived. These findings are discussed in additional detail in section I.B.6.g. of this proposed rule. However, we did not significantly test domain level quality ratings and believe that additional engagement with interested parties and beneficiary testing would be necessary before requiring States to calculate and issue domain-level ratings. Therefore,
We believe that including domain-level quality ratings in the MAC QRS, in addition to measure-level quality ratings, would align best with the informational preferences expressed by beneficiaries who participated in testing of a MAC QRS prototype. We intend to propose the care domains, methodology, and website display requirements in future rulemaking. In calculating domain-level quality ratings, we are considering requiring States to calculate and assign quality ratings for a managed care plan only in those domains that are relevant to the managed care plan. For instance, while most care domains are likely to be relevant to an MCO, a care domain that focuses on infants and children is unlikely to be relevant to a plan that provides long term services and supports to dually eligible individuals. We seek feedback on our proposal to include individual percent scores, intended approach to domain-level ratings, and potential MAC QRS care domains.
To ensure that services provided to all Medicaid beneficiaries are reflected in each managed care plan's quality ratings, we propose at § 438.515(b)(1) that States must ensure that the quality ratings issued under proposed § 438.515(a)(4) include data for all beneficiaries who receive coverage from the managed care plan for a service or action for which data are required to calculate the quality rating. This includes beneficiaries who are dually eligible for Medicare and Medicaid and receive services through the Medicaid managed care plan, subject to the availability of data about the services received by dually eligible individuals. While we recognize that including dually eligible beneficiaries in quality ratings may require additional effort to obtain and analyze Medicare utilization data, especially where dually eligible beneficiaries are not in programs that integrate Medicare and Medicaid, we believe it is important to ensure that these beneficiaries can assess the quality of care furnished by available Medicaid plans for beneficiaries who also are enrolled in Medicare. Furthermore, including dually eligible individuals in MAC QRS quality ratings would align with the Adult and Child Core Sets, as some measures require both Medicaid and Medicare data (see Core Set NPRM, 87 FR at 51317). Under proposed § 438.515(b)(1), only dually eligible individuals who receive full Medicaid benefits would be included in the MAC QRS, because individuals whose Medicaid eligibility is limited to assistance with Medicare premiums and/or cost sharing receive covered services exclusively through Medicare. We intend to provide additional guidance on which beneficiaries must be included in the quality ratings for each MAC QRS mandatory measure in the technical resource manual alongside technical specifications from the mandatory measure's measure steward. For separate CHIP, § 457.310(b)(2) does not allow for concurrent coverage with other health insurance, so our proposed amendment to § 457.1240(d) excludes dually eligible individuals from the scope of the required CHIP managed care quality rating.
In § 438.515(b)(2) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that States would be required to calculate quality ratings at the plan level by program. While some States have one managed care program through which they offer all Medicaid services, most States cover Medicaid services through multiple programs that are defined by the population served by the program and the set of benefits covered by the program. For example, a State may have one program that covers behavioral health services while a second program covers physical health services. Other States may choose to provide similar services through different managed care programs that serve different populations. In these States, different programs cover different services to meet the needs of different subpopulations of Medicaid beneficiaries, such as pregnant individuals, children in foster care, or those with disabilities, chronic conditions, or HIV/AIDS. In States with multiple managed care programs, managed care plans may choose which programs they will participate in by contracting with the State. Generally, beneficiaries would then select from the managed care plans participating in each program for which the beneficiary is determined eligible, subject to requirements on access to multiple managed care plans in § 438.52.
Under our proposals, States that offer multiple managed care programs would calculate plan level ratings for each managed care plan participating in a single managed care program using only the service data described in § 438.515(b)(1) of beneficiaries enrolled in that managed care plan under that managed care program. A managed care plan that participates in multiple managed care programs would receive a distinct rating for each of these programs. These ratings would be produced using data only from those beneficiaries enrolled in the managed care plan under the specific managed care program. That is, ratings would be calculated at the plan level but with the plan dividing up its enrolled population based on the specific managed care program(s) that the State has contracted with the plan for coverage. As eligible beneficiaries select from available managed care plans within a program, we believe that plan level quality ratings for each program in which the plan participates will best align with what beneficiaries may expect to receive from each managed care plan participating in that program. This approach is distinguishable from single plan level ratings for all of the programs in which the plan participates, which would be calculated using all data from the plan regardless of the managed care program. We believe such ratings would not provide useful information to potential enrollees because such plan level ratings would reflect the quality of services provided to all beneficiaries covered by the plan, regardless of the program through which the beneficiary receives services from the plan, and may not reflect the performance that a beneficiary could expect based on the beneficiary's enrollment options. The proposed plan level ratings for each managed care program would produce quality ratings that are most representative of the care beneficiaries can expect to experience because each rating would be calculated only from data for beneficiaries enrolled in the same managed care plan under the same program. If a measure cannot be reported for a plan due to low denominator sizes, the plan would be issued an appropriate “missing data” message for that measure as the quality rating. We seek comment on how this proposed policy would interact with our proposed minimum enrollment threshold, such as an analysis that assesses the extent to which a State's smaller plans may report missing data messages.
We considered the level at which ratings are assigned in the MA and Part D and QHP quality ratings systems as part of developing our proposal for the MAC QRS. In the MA and Part D quality rating system, quality ratings for most measures are assigned at the contract
Under our proposal at § 438.515(b)(2), managed care plans that participate in multiple managed care programs would receive separate quality ratings under each program. These separate quality ratings would be calculated from data for only those beneficiaries enrolled in the managed care plan under a given program. We believe that this approach best balances the need for representative ratings with the level of effort States must employ to calculate quality ratings for the MAC QRS, while also accommodating the current way that States structure their overall Medicaid and CHIP program and the need for comparable quality ratings both within and among States. While our proposed reporting unit would require the calculation of more quality ratings than those used by the MA and Part D or QHP quality rating systems, we believe that this additional work will also help States monitor the quality of the managed care programs that they have developed to ensure provision of high-quality, cost-efficient care to their beneficiaries. We seek comment on our proposal to use a program-level reporting unit for the MAC QRS as well as other recommendations for reporting units that would result in quality ratings that are both representative and less burdensome on States.
Finally, it is important to note that States could receive an enhanced match for assistance with quality ratings of MCOs performed by an EQRO, including the calculation and validation of MCO data, under the external quality review optional activity at § 438.358(c)(6), in accordance with § 438.370 and section 1903(a)(3)(C)(ii) of the Act.
Current regulations at § 438.334(e), which would be redesignated at § 438.520(a) of this proposed rule, require States to prominently display the quality rating issued for each MCO, PIHP, or PAHP on the website required under § 438.10(c)(3) in a manner that complies with the standards in § 438.10(d). Our policies proposed at § 438.520 would establish new requirements for the website display, which were informed by extensive consultation with Medicaid beneficiaries and their caregivers and iterative testing of a MAC QRS website prototype. The consultation and testing revealed that the presentation of quality ratings greatly influences the usability and utility of the MAC QRS as a tool to assist beneficiaries in selecting a plan. Providing information to beneficiaries in a useable way is necessary for compliance with section 1932(a)(5) of the Act regarding provision of information, including comparative information on plan quality, to beneficiaries when a State mandates enrollment in an MCO. The same standards apply under section 2103(f)(3) of the Act to CHIP. To promote the efficient and economical operation of the Medicaid State Plan and CHIP, we apply the same requirements for all managed care programs through our regulations. Our proposed requirements for Medicaid managed care programs in § 438.520 would also be applicable to separate CHIP under this proposal, through a cross-reference in the CHIP regulation at § 457.1240(d).
In our initial round of testing, participants struggled to understand how to use the MAC QRS prototype, and often dismissed or skipped over the quality ratings, noting that they did not understand the ratings or how they translated to member care. Subsequent revisions of our MAC QRS prototype focused on identifying how best to present quality ratings to prospective users in a way that supported beneficiaries' ability to understand and incorporate quality ratings and use them to inform their selection of a health plan. Based on our testing, it was clear that to truly empower beneficiaries as informed health care consumers, quality ratings are best presented as one part of a comprehensive website that efficiently guides the user through the considerations for identifying a quality health plan. We also learned that to be more useful, the website should address factors commonly considered by individuals in selecting a health plan, which include information not traditionally factored into health plan quality ratings, such as what providers are in the network and drug coverage. Using this feedback, we designed, tested, and refined the MAC QRS display components proposed in this rulemaking to align with the stated preferences of our user-testing participants.
The display components identified as most critical are included in proposed § 438.520; these components fall into three categories: (1) information to help navigate and understand the content of the MAC QRS website; (2) information to allow users to identify available managed care plans and features to tailor display information; and (3) features that allow beneficiaries to compare managed care plans on standardized information, including plan performance, cost and coverage of services and pharmaceuticals, and provider network. Based on the feedback we received during prototype testing, we believe that these components are critically important to ensure quality rating information can be readily understood by beneficiaries and used in decision-making. We are therefore proposing at § 438.520 that States display a MAC QRS website that includes: (1) clear information that is understandable and usable for navigating a MAC QRS website; (2) interactive features that allows users to tailor specific information, such as formulary, provider directory, and quality ratings based on their entered data; (3) standardized information so that users can compare managed care programs and plans, based on our identified information; (4) information that promotes beneficiary understanding of and trust in the displayed quality ratings, such as data collection timeframes and validation confirmation; and (5) access to Medicaid and CHIP enrollment and eligibility information, either directly on the website or through external resources.
Importantly, we understand from our engagement with States and interested parties that some display requirements we believe align with the goals discussed in section I.B.6.a. of this proposed rule may require more
Given the visual nature of the website display, we are providing two sample MAC QRS prototypes; a simple website (Prototype A) that represents the information we are considering to require by the proposed implementation date in § 438.505(a)(2) and another MAC QRS prototype (Prototype B) that represents an interactive website that includes both the display features from the first implementation phase and the more technology-intensive features we are considering phasing in. These prototypes can be found at
Throughout our engagement, beneficiaries consistently stated the expectation that State Medicaid website and online plan selection processes would be difficult to navigate, and many users shared that they had previously felt confused and overwhelmed during the process of selecting a managed care plan. When reviewing the initial MAC QRS prototype, some beneficiaries reported struggling to understand the purpose of the prototype and how and when the information could be useful. In light of this feedback, we tested a number of features to support users in understanding and navigating potential websites and found that beneficiaries responded positively to live assistance services (such as chat and telephone), and pop-ups and other mechanisms of displaying information to explain content as participants navigated the prototype.
We found that providing upfront clear information about what the MAC QRS is (a State-run, unbiased source of information on managed care plans and their performance) and is not (a sales funnel for a particular managed care plan) and what it can do (help compare available managed care plans and their quality and performance) and what it cannot do (determine eligibility for Medicaid and CHIP or enroll beneficiaries in a health plan) allowed participants to quickly determine the purpose of the MAC QRS and whether the information available would be a useful tool for them when selecting a managed care plan. We also found that some beneficiaries initially needed additional background on relevant programs such as Medicaid, CHIP, and Medicare to understand if they were eligible for, or enrolled in, a plan or program with ratings or information available through the MAC QRS. Once the purpose of the MAC QRS was established, beneficiaries positively responded to features that clearly conveyed how to use the information available in the MAC QRS to select a managed care plan in a simple, easy to understand manner, such as providing the steps to identifying, comparing, and selecting a managed care plan. In our testing prototype, users were wary about entering personal information to help identify and tailor the display of available managed care plans, such as zip code, age, sex, and health conditions—information that can be helpful in navigating a website designed to help individuals select a plan. However, when a clear explanation of how their information would be used, users became more comfortable providing personal information.
Based on these findings from user testing, we are proposing certain navigational requirements for the MAC QRS website display requirements in proposed § 438.520(a)(1). Specifically, we propose in § 438.520(a)(1)(i) that States must provide users with information necessary to understand and navigate the MAC QRS display, including a requirement to provide users with information on the MAC QRS purpose, relevant information on dual eligibility and enrollment through Medicare, Medicaid, and CHIP, and an overview of how the MAC QRS website can be used to select a managed care plan. We propose in § 438.520(a)(1)(ii) that States must provide information on how to access the beneficiary support system required under existing § 438.71 to answer questions related to the MAC QRS (proposed at § 438.505(a)(3) and described in section I.B.6.d. of this proposed rule). Since beneficiary support systems are not required for separate CHIP, our proposed amendment to § 457.1240(d) excludes references to this requirement. We seek comment on whether beneficiary supports similar to those proposed for Medicaid should be required for States for separate CHIP in connection with the MAC QRS information or on a broader basis through future rulemaking. Under proposed § 438.520(a)(1)(iii) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), States would be required
We believe that States can implement these features by relying on existing public information or expanding current requirements. For instance, States are required to have the beneficiary support system at § 438.71 in place and can train existing staff on the MAC QRS. Through an environmental scan of State Medicaid websites, we found that all States currently have information describing their Medicaid and CHIP programs as well as programs available to those dually eligible for Medicare and Medicaid. In both phases of the website display implementation, States may use these existing resources to comply with the requirements of proposed § 438.520(a)(1)(i) and (ii) either by hyperlinking to these resources from the MAC QRS website or incorporating existing information into the MAC QRS website display. Finally, as part of the MAC QRS design guide, we intend to provide plain language descriptions to illustrate what we would interpret the final rule to require; States may use such examples on their websites to provide an overview of how to use the MAC QRS to select a quality managed care plan.
We also found that testing participants responded positively to features that allowed them to reduce the number of plans displayed to only those that met specific criteria, such as geographic location and eligibility requirements (for example, beneficiary age), so long as their privacy concerns were addressed by providing information on how and why such data would be used. Beneficiaries felt most comfortable providing their age and geographic location to identify health plans and we believe that these data points are likely sufficient to reduce the number of plans available to beneficiaries for comparison while also minimizing burden on States. Furthermore, dually eligible participants responded positively to the ability to easily identify those plans for which they were eligible. Therefore, we are proposing at § 438.520(a)(2)(i) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), that each State's website must allow users to view available plans for which the user may be eligible based on users' age, geographic location, and dual eligibility status, as well as other demographic data identified by us in display guidance. Under the proposed rule, States would retain the flexibility to allow users to use additional information or eligibility criteria to further narrow down available managed care plans, such as searching by health condition like pregnancy or diabetes. In both phases of the website display implementation, States may meet this requirement by linking to a PDF that clearly indicates plans available to a beneficiary based on the identified factors (see Prototype A at
Participants in our user testing also prioritized confirming whether their current provider or prescriptions would be covered under a plan prior to navigating to other details about the plan. We therefore are proposing at § 438.520(a)(2)(ii) and (iii) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), to require States to display provider directory and drug coverage information for each managed care plan in phase one of the website display requirements. This information is already required to be available from managed care plans under existing § 438.10(h)(1) and (2) and § 438.10(i), which set forth the general requirements for provider directory and formulary information that plans must make available to beneficiaries. In the first phase, States could satisfy the proposed requirements by providing hyperlinks to existing plan formularies and provider directories required under § 438.10(h) and (i) (See Prototype A); this capability would be required by the general implementation date proposed under § 438.505(a)(2).
As previously mentioned, user-testing participants preferred an integrated search feature that allowed them to identify available plans that offered coverage of specific prescription drugs and providers, rather than being directed via hyperlink to each managed care plan's website, which would require them to conduct multiple searches to identify the plans that cover their prescriptions and providers. When consulted, States generally were supportive of the display requirements we are proposing in § 438.520(a)(2), but noted that a searchable formulary or directory would be difficult to design and implement by the implementation date proposed in § 438.505(a)(2). Under § 431.60(a) of the May 2020 CMS Interoperability and Patient Access final rule,
In § 438.520(a)(6)(iii) and (iv), we propose a second phase of implementation for the stratification of quality ratings, in which States would implement an interactive display that allows beneficiaries to view and filter quality ratings for specific mandatory measures identified by CMS by the factors which would already be required in phase one under proposed § 438.520(a)(2)(v) plus additional factors identified by CMS including, but not limited to, age, rural/urban status, disability, and language spoken by the enrollees who have received services (see Prototype B). This proposal would address feedback we received in testing the MAC QRS prototype websites with beneficiaries. We tested dynamic filters that allowed participants to view quality ratings representing services provided only to plan beneficiaries that aligned with participant-selected factors such as race, sex, and age. This feature increased participant positivity and trust in the quality ratings displayed, especially among those who raised concerns about the uniformity of experience among beneficiaries. Similar to our proposal to phase-in interactive plan provider directory and formulary tools, we are proposing to phase in the interactive display of quality ratings stratified by various demographic factors. In § 438.520(a)(2)(v) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we therefore are proposing a first phase of implementation for this information that would require States to display quality ratings for mandatory measures stratified by factors including dual eligibility status, race and ethnicity, and sex. To reduce burden on States, we would permit States to report, if finalized, the same measurement and stratification methodologies and classifications as those proposed in the Mandatory Medicaid and CHIP Core Set Reporting proposed rule and the Access proposed rule. Measuring and making available performance reports on a stratified basis will assist in identifying health disparities. Driving improvements in quality is a cornerstone of the CMS approach to advancing health equity and also align with the CMS Strategic Priorities. In the first phase of implementation, a State's website would need to provide access to quality ratings that reflect the quality of care furnished to all of a plan's enrollees, as well as quality ratings that reflect the quality of care furnished to these subpopulations of a plan's enrollees (see Prototype A). This requirement is consistent with current efforts among measure stewards and other Federal reporting programs, such as the Child and Adult Core Sets, to stratify data to ensure that disparities in health outcomes are identified and addressed, not hidden (See Core Set proposed rule, 87 FR 51313). We are selecting these as our initial stratification factors as we believe this information is most likely to be collected as compared to our other proposed stratification factors. Furthermore, many testing participants shared their concern that health outcomes and customer experience may vary when stratified by race, ethnicity, or sex. We also believe that those who are dually eligible to receive Medicare and full Medicaid benefits would find it particularly useful to see quality ratings that focus specifically on the experience of such dually eligible beneficiaries. We believe that such ratings would allow beneficiaries who are dually eligible for Medicare and Medicaid to best identify a high-quality health plan, given the unique access considerations among this population. States would be required to display this information by the general MAC QRS implementation date proposed under § 438.505(a)(2). We seek comment on the feasibility of the proposed factors for stratifying quality ratings by the initial implementation date, and also whether certain mandatory measures may be more feasible to stratify by these factors than others. We are proposing that this interactive tool would be available no earlier than two years after the general MAC QRS implementation date. We request comment on this proposal including the timeline for implementation, technical assistance that may be necessary for States to implement the proposed feature, and the proposed factors by which such quality ratings would be stratified.
Our prototype testing showed us participants were often frustrated and confused by the need to navigate multiple websites to obtain health plan information, such as out of pocket expenses, plan coverage of benefits, providers, and pharmaceuticals; and health plan metrics such as average time spent waiting for care, weekend and evening hours, and appointment wait times. When compiled into a standardized display along with quality ratings in our website prototype, participants responded positively and found the ability to compare plans on out-of-pocket expenses and covered benefits to be particularly useful. After identifying available plans that aligned with their needs and preferences on these two variables, some participants reflected that they would use quality ratings as an additional way to narrow down and filter their options. When presented alongside quality ratings, this information allowed beneficiaries to better compare plans. Based on this testing, we are proposing in § 438.520(a)(3) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), to require States to display, for each managed care plan, standardized information identified by CMS that allows users to compare available managed care plans and programs, including the name, website, and customer service telephone hot line of each managed care plan; premium and cost sharing information; a summary of covered benefits; certain metrics of managed care plan access and performance; and whether the managed care plan offers an integrated Medicare-Medicaid plan. Under proposed § 438.520(a)(3)(iii) and (iv), States
Under proposed § 438.520(a)(3)(v), States would also be required to provide on the QRS website certain metrics of managed care plan performance that States must make available to the public under Part 438, subparts B and D regulations, including certain data most recently reported to CMS on each managed care program under § 438.66(e) (Medicaid only) and the results of secret shopper survey proposed at § 438.68(f) in this proposed rule. Proposed paragraph (a)(3)(v) authorizes CMS to specify the metrics that are required to be displayed this way. States already report information related to grievances, appeals, availability and accessibility of covered services under § 438.66(e) and we believe that displaying some of this information would be responsive to input we received from our testing participants and improve transparency for beneficiaries without imposing significant burden on States since the information is already reported to us. States could choose to integrate these metrics into the display of MAC QRS measures on the MAC QRS website or, as illustrated in Prototypes A and B, may choose to hyperlink to an existing page with the identified information from the MAC QRS web page. These proposed requirements also support our goal for the MAC QRS to be a one-stop-shop where beneficiaries can access a wide variety of information on plan quality and performance in a user-friendly format to help inform their decision making. We seek comment on the inclusion of these metrics, and whether we should consider phasing in certain metrics first before others.
Lastly, at § 438.530(a)(3)(vi), we are proposing to require States to indicate when a managed care plan offers an integrated Medicare-Medicaid plan or a highly or fully integrated Medicare Advantage D-SNP and to provide a link to the integrated plan's rating under the MA and Part D quality rating system. The definitions of fully integrated dual eligible special needs plan and highly integrated dual eligible special needs plan are at § 422.2. We believe this is the simplest and most efficient way to help dually eligible users understand how to use the two quality ratings together. Both Prototype A and B illustrate this requirement through a hyperlink to the integrated plan's MA and Part D quality rating. We seek comment on these requirements, including on our proposal to require States to provide standardized information that users may rely on to compare managed care plans and request feedback on the feasibility of providing this information by the date initial implementation date.
Our user testing found that participants were initially skeptical of data provided in the MAC QRS, stating confusion regarding the source of the data used and mistrust in the ratings generated because they were uncertain how they were derived. Additionally, some participants stated that they did not trust information from the health plans. In an effort to improve user trust through data transparency, we tested providing clear and comprehensive information on displayed quality ratings and identified three types of information that together resulted in increased participant trust of the quality ratings. These include descriptions of the quality ratings in plain language, how recent the data displayed are, and how the data were confirmed to be accurate. Based on this user feedback, in § 438.520(a)(4)(i) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that States would provide plain language descriptions of the importance and impact of each quality measure. We found that a simple explanation of what a quality measure is assessing, as well as how the measure relates to a beneficiary's health and well-being, were most helpful to users in understanding displayed quality ratings. A simple explanation would satisfy the proposed requirement. Both Prototype A and B include example explanations for our proposed mandatory measures, and we intend to include a sample explanation of the quality ratings for each final mandatory measure in the design guide discussed in section I.B.6.g. of this proposed rule, which States may choose to use.
Users responded positively to information that showed when data were collected and whether data were validated. They appreciated knowing that an external, neutral organization calculated the measures, noting that they would not trust the measures if they were calculated solely by the managed care plan. In § 438.520(a)(4)(ii) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that States be required to indicate the measurement period during which data were produced to calculate the displayed quality ratings. In § 438.520(a)(4)(iii) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we propose that States must provide on the MAC QRS website when, how, and by whom quality ratings have been validated. This information would be provided in plain language and convey the role of parties (other than the rated plans) in validating data used to calculate the quality ratings, which will promote transparency and trustworthiness in the data. We note that States may use the External Quality Review optional activity described at § 438.358(c)(6) for EQRO assistance with quality ratings and link to the validated data included in the EQR technical reports. We seek comment on the display requirement proposed in § 438.520(a)(4) and request feedback on the feasibility of implementing these requirements by the initial implementation date proposed at§ 438.505(a)(2).
Finally, we believe that user preferences for how information should be displayed may change over time as the available data and the technology that enables website display of available data evolves. To ensure that the MAC QRS website continues to be a useful tool, we intend to periodically engage in additional consultations with MAC QRS users as part of a continuous improvement approach. We are proposing in § 438.520(c) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), that CMS periodically consult with interested parties, including MAC QRS users such as Medicaid and CHIP beneficiaries and their caregivers, to maintain and update the website display requirements for the information required in proposed § 438.520(a). These consultations may result in proposed changes through rulemaking that add to or refine existing requirements or remove existing requirements that beneficiaries no longer find useful.
Under our proposal at § 438.510(a), States would have the option to display
First, we are proposing, in § 438.520(b)(1) to require States to obtain input from prospective MAC QRS users, including beneficiaries, their caregivers, and, if the State enrolls American Indians/Alaska Natives in managed care, consult with Tribes and Tribal Organizations in accordance with the State's Tribal consultation policy. In this proposed rule, we have extensively noted the importance of the prospective user testing we engaged in and the extent to which this feedback directed our design of the MAC QRS framework and selection of the preliminary mandatory measure set. Just as beneficiary participation was, and will continue to be, critical in our design of the MAC QRS, we believe beneficiary participation is critical in the identification of any additional measures included in a State's MAC QRS. States could meet this requirement by ensuring that beneficiary members of the MCAC are present when obtaining input from the State's MCAC, or may engage in direct beneficiary interviews, focus groups, or prototype testing.
Second, we are also proposing at § 438.520(b)(2) that States must document the input received from prospective MAC QRS users on such additional measures, the modifications made to the proposed additional measures in response to the input, and rationale for not accepting input. We are also proposing this documentation to be reported as part of the MAC QRS annual report proposed under § 438.535(a)(3). For States that currently publish a QRS-like website, measures that are not in the mandatory measure set would be considered additional measures and would be subject to this process prior to display. If a State obtained user input for the additional measure prior to displaying the measure on its current website, the State may use this input to meet this requirement.
Current regulations at § 438.334(c) allow States, with CMS approval, to implement an alternative managed care quality system (alternative QRS) that uses different quality measures or applies a different methodology if the conditions set forth in § 438.334(c)(1)(i) through (iii) are met, including that the measure or methodology must be substantially comparable to the measures and methodology established by CMS under the MAC QRS framework. Based on feedback we received during our engagement with States and other interested parties, we are proposing to redesignate § 438.334(c) at § 438.525 for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), and to modify the current policy by narrowing the changes (compared to the MAC QRS framework described in proposed § 438.515) that would require our approval. We are also proposing to apply the same requirements for both Medicaid managed care programs and separate CHIP by revising § 457.1240(d) to require States to comply with § 438.525.
First, we are proposing to remove the language in current § 438.334(c)(1) that includes the use of “different performance measures” being subject to our review and approval as part of an alternative QRS. Current regulations at § 438.334(c)(1) require States to submit for our review and approval an alternative QRS request to include measures different than those included in the mandatory measure set identified by CMS. We believe requiring States to obtain our approval to include measures not required by us creates unnecessary administrative burden for both States and CMS. Under the proposed regulation, instead of requiring approval of different measures, we are proposing that States would have the flexibility to add measures that are not mandatory measures without prior approval from CMS.
We highlight here that the measure specifications established by measure stewards for mandatory measures are not considered part of the methodology described in proposed § 438.515 and are therefore not subject to § 438.525. Modifications to these specifications that are approved by the measure steward do not require a State to undergo any part of the alternative QRS process described in this section for the State to use those measure steward approved modifications to produce a rating for a mandatory measure. However, we would consider quality ratings for mandatory measures identified by CMS under § 438.510(a) that are calculated using specifications not approved by a measure steward to be a different measure. We believe that this policy provides flexibility to States while ensuring that the results on the mandatory measures remain comparable among States.
Second, we are proposing to further define the criteria and process for determining if an alternative QRS system is substantially comparable to the MAC QRS methodology described in proposed § 438.515. The current regulations at § 438.334(c)(4) provide that we will issue guidance on the criteria and process for determining if an alternative QRS meets the substantial comparability standard in current § 438.334(c)(1)(ii), redesignated at § 438.525(a)(2). We are proposing to eliminate § 438.334(c)(4) and redesignate as proposed § 438.525(c)(2)(i) through (iii) and specify in proposed § 438.525(c)(2)(iv) that States are responsible for submitting documents and evidence that demonstrates compliance with the substantial comparability standards. We believe that eliminating § 438.334(c)(4) is appropriate as this rulemaking provides an opportunity for States and other interested parties to submit comments on how CMS should evaluate alternative quality rating systems for substantial comparability.
In the future, we intend to issue instructions on the procedures and the dates by which States must submit an alternative QRS request to meet the implementation date specified in proposed § 438.505(a)(2). For requests or modifications made after implementation of the MAC QRS, we are considering accepting rolling requests instead of specifying certain dates or times of year when we will accept alternative QRS requests or modifications. We believe this may be necessary given that States may have different contract cycles with managed care plans. We solicit comment on these different approaches.
Current § 438.334(c)(2) describes the information that States would submit to CMS as part of their request to implement an alternative QRS. We are proposing to redesignate § 438.334(c)(2), with revisions, at § 438.525(c)(2)(iv) to allow States to provide additional supporting documents and evidence that they believe demonstrates that a proposed alternative QRS would yield information regarding managed care plan performance that is substantially comparable to that yielded by the MAC QRS methodology described in § 438.515. Examples of such additional supporting documents could include a summary of the results of a quantitative or qualitative analysis of why the proposed alternative methodology is substantially comparable or calculations of mandatory measures with the alternative methodology and with the methodology required under § 438.515.
We seek comment on these proposals, in particular, the described process and documentation for assessing whether a
i. Annual Technical Resource Manual (§§ 438.334, 438.530, and 457.1240(d))
We propose at § 438.530(a) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), that CMS will develop and update annually a Medicaid managed care quality rating system technical resource manual no later than August 1, 2025, and update it annually thereafter. Providing clear and detailed information for reporting on MAC QRS measures not only supports States in implementing their MAC QRS but is also essential for consistent reporting and comparable quality ratings across States and managed care plans. This manual would include information needed by States and managed care plans to calculate and issue quality ratings for all mandatory measures that States would be required to report under this proposed rule. This includes the mandatory measure set, the measure steward technical specifications for those measures, and information on applying our proposed methodology requirements to the calculation of quality ratings for mandatory measures. Under our proposal, we would publish an initial technical resource manual following the final rule, and would update the manual annually thereafter to maintain its relevance. We considered releasing the technical resource manual less frequently than annually, but we do not believe this manual could be properly maintained unless it is updated annually due to the inclusion of updates to the technical specifications for the mandatory measures.
Proposed § 438.530(a) identifies the components of the technical resource manual to be issued by CMS. As described in § 438.530(a)(1), we propose to use the technical resource manual to identify the mandatory measures as well as any measures newly added or removed from the previous year's mandatory measure set. We intend for the first technical resource manual to include details on the initial MAC QRS mandatory measure set that will be finalized after consideration of the public comments received in response to this proposed rule.
These content requirements for the technical resource manual proposed at new § 438.530(a)(1) through (3) include the following:
• The mandatory measure set so States know what they are required to report.
• The specific MAC QRS measures newly added to or removed from the prior year's mandatory set as well as a summary of the engagement and public comments received during the engagement process in § 438.510(b) used for the most recent modifications to the mandatory measure set. To provide a complete picture of any changes being made to the MAC QRS measures, we propose this summary to include a discussion of the feedback and recommendations received, the final modifications and timeline for implementation, and the rationale for recommendations or feedback not accepted.
• The subset of mandatory measures that must be stratified by race, ethnicity, sex, age, rural/urban status, disability, language, or such other factors as may be specified by CMS in the annual technical resource manual as required under § 438.520(a)(2)(v) and (a)(6)(iii). We discuss the rationale for inclusion of stratifiers in section I.B.6.g.2. of this proposed rule.
• How to use the methodology described in § 438.515 to calculate quality ratings for managed care plans. We seek comment on which topics States and health plans would like technical assistance or additional guidance to ensure successful implementation of the rating system.
• Technical specifications for mandatory measures produced by measures stewards as part of the proposed annual technical resource manual. We believe this information would assist States and health plans in the calculation of quality ratings for mandatory measures and aligns with the practices of the Adult and Child Core Set and the MA and Part D and QHP quality rating systems.
Lastly, at § 438.530(b) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d), we are proposing the general rule that CMS take into account stratification guidance issued by the measure steward and other CMS reporting programs when identifying which measures, and by which factors, States must stratify mandatory measures. Under this proposal, we plan to implement a phased-in approach for specifying the mandatory measures for which data must be stratified and the factors by which such data must be stratified. We intend to align with the stratification schedule which is proposed in § 437.10(d) of the Mandatory Medicaid and CHIP Core Set Reporting Proposed Rule (see 87 FR 51327). We believe this alignment with the Core Set stratification would minimize State and health plan burden to report stratified measures. For any MAC QRS measures that are not Core Set measures, we would consider, and align where appropriate, with the stratification policies for the associated measure steward or other CMS reporting programs. Additional information regarding MAC QRS stratification requirements are proposed in section I.B.6.g.2. of this proposed rule.
Based on feedback we received through listening sessions with interested parties, we are considering releasing an updated technical resource manual at least five months prior to the measurement period for which the technical resource manual will apply. This is in alignment with the proposed date for the first technical resource manual of August 1, 2025 for a 2026 measurement year, and would ensure that States have enough time to implement any necessary changes before the measurement period and, if necessary, submit and receive approval for an alternative QRS request. In our listening sessions, interested parties noted that this timeline would align with those used by other measure stewards (for example, NCQA for HEDIS measures) and would ensure that States and managed care plans are able to identify and make necessary contractual, systems, and data collection changes to facilitate additional data collection required for the upcoming measurement period. We seek comment on whether this timing is appropriate for States to implement any changes included in the reporting and technical guidance for the initial measurement year as well as subsequent measurement years.
j. Reporting (§§ 438.334, 438.535, and 457.1240(d))
We are proposing requirements at § 438.535 for States to submit to CMS, upon request, information on their MAC QRS to support our oversight of Medicaid and CHIP and compliance with MAC QRS requirements, to ensure beneficiaries can meaningfully compare ratings between plans, and to help us monitor trends in additional measures and use of permissible modifications to measure specifications used among States, which could inform future additions to the mandatory measures and modifications of our methodology. We are proposing any request for reporting by States would be no more frequently than annually. We are proposing the report would include the following components:
• A list of all measures included in the State's MAC QRS, including a list of the mandatory measures reported and any additional measures a State has chosen to display in their MAC QRS to inform updates to the measures list;
• An attestation that displayed quality ratings for all mandatory measures were calculated and issued in compliance with § 438.515, and a description of the methodology used to calculate any additional measures when it deviates from the methodology proposed in § 438.515;
• If a State chooses to display additional quality measures, a description of and the required documentation for the process required under § 438.520(b);
• The date on which the State publishes or updates their quality ratings for the State's managed care plans;
• The link to the State's MAC QRS website to enable CMS to ensure the MAC QRS ratings are current; and
• The use of any technical specification adjustments to MAC QRS mandatory measures, which are outside the measure steward's allowable adjustment for the mandatory measure, but that the measure steward has approved for use by the State. As discussed in section I.B.6.f. of this proposed rule, we do not consider measure steward technical specifications to be part of the MAC QRS rating methodology, but they are part of the measures. Therefore, we do not require States to submit such adjustments to us for approval as an alternative QRS and believe State reporting is more appropriate to better understand if such adjustments impact plan-to-plan comparability or comparability within and among States.
• A summary of each alternative QRS approved by CMS, including the effective dates (the time period during which the alternative QRS was, has been, or will be applied by the State) for each approved alternative QRS.
We propose these reporting requirements at new § 438.535(a)(1) through (7) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d). We propose in § 438.535(a) the report will be “in a form and manner determined by CMS” because we intend to establish an online portal that States could access to easily submit this information to us. At § 438.535(b) for Medicaid, and for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d) we propose that States would be given a minimum of 90 days' notice to provide such a report. We seek comment on whether States prefer one annual reporting date or a date that is relative to their MAC QRS updates.
We are proposing several technical changes to conform our regulations with other parts of our proposed rule, which include:
• Redesignating the regulations under current § 438.334(a) to 42 CFR part 438, subpart G, § 438.505;
• In current § 438.358(c)(6), changing the reference for this EQR optional activity from § 438.334 to part 438, subpart G to align with the proposed redesignating of § 438.334;
• In current § 438.334(a)(1), redesignated to § 438.505(a)(1)(i), changing the “Medicaid managed care quality rating system developed by CMS in accordance with paragraph (b) of this section” to “QRS framework” to align with the proposed definition of QRS framework in new § 438.500;
• In current § 438.334(a)(2), redesignated to § 438.505(a)(2)(ii), changing “in accordance with paragraph (c) of this section” to “in accordance with § 438.525 of this subpart” to align with the proposed alternative QRS requirements in new § 438.525;
• Modifying current § 438.334(a)(3), redesignated to § 438.505(a)(2), to use the term “the final rule” instead of “a final notice” to refer to the proposed rules herein, if finalized;
• Modifying current § 438.334(c)(1), redesignated to § 438.525(a), by replacing “different methodology” with “alternative methodology” to better align with the proposed terminology used in the new proposed § 438.525);
• In current § 438.334(b)(1), redesignated to § 438.505(c), replacing “related CMS quality rating approaches” with “similar CMS quality measurement and rating initiatives” to better describe how we are aligning the QRS framework;
• Redesignating current § 438.334(c)(3)(i) to § 438.525(c)(2)(i) and modifying by removing “alternative quality rating system framework, including the quality measures” to align with our proposal under new § 438.525;
Unless otherwise noted, these technical changes are equally proposed for separate CHIP by cross-reference through a proposed amendment at § 457.1240(d).
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements. Comments, if received, will be responded to within the subsequent final rule.
To derive average costs, we used data from the U.S. Bureau of Labor Statistics' May 2021 National Occupational Employment and Wage Estimates for all salary estimates (
To estimate the burden for the requirements in part 438, we utilized State submitted data by States for enrollment in managed care plans for CY 2020. The enrollment data reflected 58,521,930 enrollees in MCOs, 37,692,501 enrollees in PIHPs or PAHPs, and 6,089,423 enrollees in PCCMs, for a total of 67,836,622 Medicaid managed care enrollees. This includes duplicative counts when enrollees are enrolled in multiple managed care plans concurrently. These data also showed 43 States that contract with 467 MCOs, 11 States that contract with 162 PIHPs or PAHPs, 19 States that contract with 21 non-emergency transportation PAHPs, and 13 States with 26 PCCM or PCCM entities. The estimates below reflect deduplicated State counts as data permitted.
To estimate the burden for these requirements in part 457, we utilized State submitted data for enrollment in managed care plans for CY 2017. The enrollment data reflected 4,580,786 Medicaid expansion CHIP and 2,593,827 separate CHIP managed care enrollees. These data also showed that 32 States use managed care entities for CHIP enrollment contracting with 199 MCOs, PIHPs, and PAHPs, as well as 17 PCCMs.
The following proposed changes to § 438.3 will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1203 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.3(i) and 457.1203(f) would require that MCOs, PIHPs, and PAHPs report provider incentive payments based on standard metrics for provider performance. The proposed amendments to § 438.8(e)(2) would define the provider incentive payments that could be included in the MLR calculation; however, the administrative burden for these changes is attributable to the managed care contracting process, so we are attributing these costs to the contracting requirements in § 438.3(i). Approximately half (or 315 Medicaid contracts and 100 CHIP contracts) of all MCO, PIHP, and PAHP contracts would require modification to reflect these changes. For the contract modifications, we estimate it would take 2 hours at $77.28/hr for a business operations specialist and 1 hour at $110.82/hr for a general operations manager. In aggregate for Medicaid for § 438.3(i), we estimate a one-time State burden of 945 hours (315 contracts × 3 hr) at a cost of $83,595 [315 contracts × ((2 hr × $77.28/hr) + (1 hr × $110.82/hr))]. As this would be a one-time requirement, we annualize our time and cost estimates to 315 hours and $9,288. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
In aggregate for CHIP for § 457.1203(f) we estimate a one-time State burden of 300 hours (100 contracts × 3 hr) at a cost of $26,538 [100 contracts × ((2 hr × $77.28/hr) + (1 hr × $110.82/hr))]. As this would be a one-time requirement, we annualize our time and cost estimates to 66 hours and $8,819. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
To report provider incentive payment based on standard metrics, MCOs, PIHP, and PAHPs would need to select standard metrics, develop appropriate payment arrangements, and then modify the affected providers' contracts. We estimate it would take 120 hours consisting of: 80 hours × $77.28/hr for a business operations specialist and 40 hours × $110.82/hr for a general and operations manager. In aggregate for Medicaid for § 438.3(i), we estimate a one-time private sector burden of 37,800 hours (315 contracts × 120 hr) at a cost of $3,343,788 [315 contracts × ((80 hr × $77.28/hr) + (40 hr × $110.82/hr))]. As this would be a one-time requirement, we annualize our time and cost
In aggregate for CHIP for § 457.1203(f) we estimate a one-time private sector burden of 12,000 hours (100 contracts × 120 hr) at a cost of $1,061,520 [100 contracts × ((80 hr × $77.28/hr) + (40 hr × $110.82/hr))].
To do the annual reconciliations needed to make the incentive payments and include the expenditures in their annual report required by 438.8(k), we estimate MCOs, PIHPs, and PAHPs would take 1 hour at $77.28/hr for a business operations specialist. In aggregate for Medicaid we estimate an annual private sector burden of 315 hours (315 contracts × 1 hr) at a cost of $24,343 (315 contracts × 1 hr × $77.28/hr).
In aggregate for CHIP, we estimate an annual private sector burden of 100 hours (100 contracts × 1 hr) and $7,728 (100 contracts × 1 hr × $77.28/hr).
The following proposed changes will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request.
The proposed amendments to § 438.6(c)(2) would require all SDP expenditures under paragraphs (c)(1)(i) and (ii) and (c)(1)(iii)(C) through (E) (that is, the SDPs that require prior written approval under this proposed rule) must be submitted and have written approval by CMS prior to implementation.
Initially, we estimate that 38 States would submit 50 new proposals for minimum/maximum fee schedules, value-based payment, or uniform fee increases. We estimate that it would take 2 hours at $120.48/hr for an actuary, 6 hours at $77.28/hr for a business operations specialist, and 2 hours at $110.82/hr for a general and operations manager for development and submission. We estimate an annual State burden of 500 hours (50 proposals × 10 hr) at a cost of $46,314 [50 proposals × ((2 hr × $120.48/hr) + (6 hr × $77.28/hr) + (2 hr × $110.82/hr))].
Thereafter, we estimate that 38 States would submit 150 renewal or amendment proposals per year. We estimate also it would take 1 hour at $77.28/hr for a business operations specialist, 1 hour at $120.48/hr for an actuary, and 1 hour at $110.82/hr for a general and operations manager for any proposal updates or renewals. In aggregate, we estimate an annual State burden of 450 hours (150 proposals × 3 hr) and $46,287 [150 renewal/amendment proposals × ((1 hr × $77.28/hr) + (1 hr × $110.82/hr) + (1 hr × 120.48/hr))].
The proposed amendments to
Section 438.6(c)(2)(iv) would require that SDPs under paragraphs (c)(1)(i) and (ii) and (c)(1)(iii)(C) through (E) must prepare and submit a written evaluation plan to CMS. The evaluation plan must include specific components under this proposal and is intended to measure the effectiveness of those State directed payments in advancing at least one of the goals and objectives in the quality strategy on an annual basis and whether specific performance targets are met. We estimate that 38 States would submit 50 written evaluation plans for new proposals. We also estimate it would take 5 hours at $109.36/hour for a computer programmer, 2.5 hours at $110.82/hr for a general and operations manager, and 2.5 hours at $77.28/hr for a business operations specialist for each new evaluation plan. In aggregate, we estimate an annual State burden of 500 hours (50 evaluation plans × 10 hr) and at a cost of $50,853 [50 evaluation plans × ((5 hr × 109.36/hr) + (2.5 hr × $110.82) + (2.5 hr × $77.28/hr))].
Thereafter, we estimate that 38 States would prepare and submit 150 written evaluation plans for amendment and renewal proposals. We also estimate it would take 2 hours at $109.36/hr for a computer programmer, 2 hours at $110.82/hr for a general and operations manager and 2 hours at $77.28/hr for a business operations specialist for each evaluation plan amendment and renewal. In aggregate we estimate an annual State burden of 900 hours (150 evaluation plans × 6 hr) at a cost of $89,238 [150 evaluation plans × ((2 hr × 109.36/hr) + (2 hr × $110.82) + (2 hr × $77.28/hr))].
Section 438.6(c)(2)(v) would require for all SDPs under paragraphs (c)(1)(i) and (ii) and (c)(1)(iii)(C) through (E) that have an actual Medicaid managed care spending percentage greater than 1.5 must complete and submit an evaluation report using the approved evaluation plan to demonstrate whether the SDP results in achievement of the State goals and objectives in alignment with the State's evaluation plan.
We estimate 38 States will submit 47 evaluation reports. We also estimate it would take 3 hours at $109.36/hr for a computer programmer, 1 hour at $110.82/hour for a general and operations manager, and 2 hours at $77.28/hr for a business operations specialist for each report. In aggregate we estimate an annual State burden of 282 hours (47 reports × 6 hr) at a cost of $27,893 [47 reports × ((3 hr × $109.36/hr) + (1hr × $110.82/hr) + (2 hr × $77.28/hr)].
The proposal at § 438.6(c)(7) would require States to submit a final SDP cost percentage as a separate actuarial report concurrently with the rate certification only if a State wishes to demonstrate that the final SDP cost percentage is below 1.5 percent. We anticipate that 10 States would need: 5 hours at $120.48/hr for an actuary, 5 hours at $109.36/hr for a computer programmer, and 7 hours at $77.28/hr for a business operations specialist. In aggregate, we estimate an annual State burden of 170 hours (17 hr × 10 States) at a cost of $16,902 (10 States × [(5 hr × $120.48/hr) + (5 hr × $109.36/hr) + (7 hr × $77.28/hr)]).
The following proposed changes will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request.
The proposed amendments to § 438.7 set out revisions to the submission and
We estimate that 44 States would develop 225 certifications at 250 hours for each certification. Of the 250 hours, we estimate that it would take 110 hours at $120.48/hr for an actuary, 15 hours at $110.82/hr for a general and operations manager, 53 hours at $109.36/hr for a computer programmer, 52 hours at $77.28/hr for a business operations specialist, and 20 hours at $37.96/hr for an office and administrative support worker. In aggregate we estimate an annual State burden of 56,250 hours (250 hr × 225 certifications) at a cost of $5,735,012 [225 certifications × ((110 hr × $120.48/hr) + (15 hr × $110.82/hr) + (53 hr × $109.36/hr) + (52 hr × $77.28/hr) + (20 hr × $37.96/hr))].
The following proposed changes will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1203 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
This rule's proposed amendments to §§ 438.8 and 457.1203 would require that MCOs, PIHPs, and PAHPs report to the State annually their total expenditures on all claims and non-claims related activities, premium revenue, the calculated MLR, and, if applicable, any remittance owed.
We estimate the total number of MLR reports that MCOs, PIHPs, and PAHPs were required to submit to States amount to 629 Medicaid contracts and 199 CHIP contracts. All MCOs, PIHPs, and PAHPs need to report the information specified under §§ 438.8 and 457.1203 regardless of their credibility status.
The proposed amendments to § 438.8(k) would require that MCOs, PIHPs, and PAHPs include expenditures for State directed payments on a separate line in their annual report to the State. We anticipate that the one-time system change would take 4 hr at $77.28/hr for a business operations specialist and 2 hr at $109.36/hr for a computer programmer. In aggregate for Medicaid for § 438.8(k), we estimate a one-time private sector burden of 3,774 hours (629 contracts × 6 hr) at a cost of $332,011 [629 contracts × ((4 hr × $77.28/hr) + (2 hr × $109.36/hr))]. As this would be a one-time requirement, we annualize our time and cost estimates to 1,258 hours and $110,670. The annualization divides our estimate by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
The proposed amendments to §§ 438.8(k)(1)(vii) and 457.1203(f) would require that MCOs, PIHPs, and PAHPs develop their annual MLR reports compliant with the proposed expense allocation methodology.
The proposed amendments to §§ 438.74 and 457.1203(e) would require States to comply with data aggregation requirements for their annual reports to CMS. We estimate that only 5 States would need to resubmit MLR reports to comply with the proposed data aggregation changes. We anticipate that it would take 5 hours × $77.28/hr for a business operations specialist. In aggregate, for Medicaid for § 438.74, we estimate a one-time State burden of 25 hours (5 States × 5 hr) at a cost of $1,932 (5 States × 5 hr × $77.28/hr). As this would be a one-time requirement, we annualize our time and cost estimates to 8 hours and $644. In aggregate for CHIP for § 457.1203(e) we estimate a one-time State burden of 25 hours (5 States × 5 hr) at a cost of $1,932 (5 States × 5 hr × $77.28/hr). As this would be a one-time requirement, we annualize our time and cost estimates for CHIP to 8 hours and $644. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
The proposed amendments to § 438.74 would require States to submit a summary report of the State directed payment data submitted by their managed care plans under § 438.8(k). The proposed changes to § 438.74 would apply to 43 States. To accommodate the new data from plans resulting from proposed changes to § 438.74, we anticipate it would take 4 hours at $77.28/hr for a business operations specialist to implement the proposed SDP reporting changes in their MLR summary reports. In aggregate, we estimate an annual State burden of 172 hours (43 States × 4 hr) at a cost of $13,292 (43 States × 4 hr × $77.28/hr).
The following proposed changes to § 438.10 will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1207 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.10(c)(3) and 457.1207 would require States to operate a website that provides the information required in § 438.10(f). We propose to require that States include required information on one page, use clear labeling, and verify correct functioning and accurate content at least quarterly. We anticipate it would take 20 hours at $109.36/hr once for a computer programmer to place all required information on one page and ensure the use of clear and easy to understand labels on documents and links.
In aggregate for Medicaid for § 438.10(c)(3), we estimate a one-time State burden of 900 hours (45 States × 20 hr) at a cost of $98,424 (900 hr × $109.36/hr). As this would be a one-time requirement, we annualize our time and cost estimates to 300 hours and $32,808. In aggregate for CHIP for § 457.1207, we estimate a one-time State burden of 640 hours (32 States × 20 hr) at a cost of $69,990 (640 hr × $109.36/
We also anticipate that it would take 40 hr at $109.36/hr for a computer programmer to periodically add and verify the function and content on the site at least quarterly (10 hours/quarter). In aggregate for Medicaid for we estimate an annual State burden of 1,800 hours (45 States × 40 hr) at a cost of $196,848 (1,800 hr × $109.36/hr). Due to the additional proposal to post summary enrollee experience survey results by separate CHIP managed care plan on the State's website, we estimate an additional 1 hour at $109.36/hr for a computer programmer to post these comparative data annually for a total of 41 hours. For CHIP, we estimate an annual State burden of 1,312 hours (32 States × 41 hr) at a cost of $143,480 (1,312 hr × $109.36/hr).
The following proposed changes at § 438.16 will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1201 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposals at §§ 438.16 and 457.1201 would require States that provide ILOSs, with the exception of short term IMD stays, to comply with additional information collection requirements. 44 States utilize MCOs, PIHPs and PAHPs in Medicaid managed care programs. We do not have current data readily available on the number of States that utilize ILOSs and the types of ILOSs in Medicaid managed care. We believe it is a reasonable estimate to consider that half of the States with MCOs, PIHPs and PAHPs (22 States) may choose to provide non-IMD ILOSs. Similarly, for CHIP, we estimate that half of the States with MCOs, PIHPs, and PAHPS (16 States) provide ILOSs and would be subject to the additional information collection requirements.
The proposal at § 438.16(c)(4)(i) would require States to submit a projected ILOS cost percentage to CMS as part of the rate certification. The burden for this proposal is accounted for in ICR #2 (above) for § 438.7 Rate Certifications.
The proposal at § 438.16(c)(5)(ii) would require States to submit a final ILOS cost percentage and summary of actual MCO, PIHP and PAHP ILOS costs as a separate actuarial report concurrently with the rate certification. We anticipate that 22 States would need: 5 hours at $120.48/hr for an actuary, 5 hours at $109.36/hr for a computer programmer, and 7 hours at $77.28/hr for a business operations specialist. In aggregate, we estimate an annual State burden of 374 hours (17 hr × 22 States) at a cost of $37,184 (22 States × [(5 hr × $120.48/hr) + (5 hr × $109.36/hr) + (7 hr × $77.28/hr)]).
Proposals at §§ 438.16(d)(1) and 457.1201(e) would require States that elect to use ILOS to include additional documentation requirements in their managed care plan contracts. We anticipate that 22 States for Medicaid and 16 States for CHIP would need 1 hour at $77.28/hr for a business operations specialist to amend 327 Medicaid MCO, PIHP, and PAHP contracts and 100 CHIP contracts annually. In aggregate for Medicaid for § 438.16(d)(1), we estimate an annual State burden of 327 hours (327 contracts × 1 hr) at a cost of $25,271 (327 hr × $77.28/hr). In aggregate for CHIP for § 457.1201(e) we estimate an annual State burden of 100 hours (100 contracts × 1 hr) at a cost of $7,728 (100 hr × $77.28/hr).
Proposals at §§ 438.16(d)(2) and 457.1201(e) would require some States to provide to CMS additional documentation to describe the process and supporting data the State used to determine each ILOS to be a medically appropriate and cost-effective substitute. This additional documentation would be required for States with a projected ILOS cost percentage greater than 1.5 percent. We anticipate that approximately 5 States may be required to submit this additional documentation. We estimate it would take 2 hours at $77.28/hr for a business operations specialist to provide this documentation. In aggregate for Medicaid for § 438.16(d)(2), we estimate an annual State burden of 10 hours (5 States × 2 hr) at a cost of $773 (10 hr × $77.28/hr). In aggregate for CHIP for § 457.1201(e) we estimate the same annual State burden of 10 hours (5 States × 2 hr) at a cost of $773 (10 hr × $77.28/hr).
Proposals at §§ 438.16(e)(1) and 457.1201(e) would require States with a final ILOS cost percentage greater than 1.5 percent to submit an evaluation for ILOSs to CMS. We anticipate that approximately 5 States may be required to develop and submit an evaluation. We estimate it would take 25 hours at $77.28/hr for a business operations specialist. In aggregate for Medicaid for § 438.16(e)(1), we estimate an annual State burden of 125 hours (5 States × 25 hr) at a cost of $9,660 (125 hr × $77.28/hr). In aggregate for CHIP for § 457.1201(e), we estimate the same annual State burden of 125 hours (5 States × 25 hr) at a cost of $9,660 (125 hr × $77.28/hr).
An ILOS may be terminated by either a State, a managed care plan, or by CMS. Proposals as §§ 438.16(e)(2)(iii) and 457.1201(e) would require States to develop an ILOS transition of care policy. We believe all States with non-IMD ILOSs should proactively prepare a transition of care policy in case an ILOS is terminated. We estimate both a one-time burden and an annual burden for these proposals. We believe there is a higher one-time burden as all States that currently provide non-IMD ILOSs would need to comply with this proposed requirement by the applicability date, and an annual burden is estimated for States on an on-going basis. We estimate for a one-time burden, it would take: 2 hours at $109.36/hr for a computer programmer and 2 hours at $77.28/hr for a business and operations specialist for initial development of a transition of care policy. In aggregate for Medicaid for § 438.16(e)(2)(iii), we estimate a one-time State burden 88 hours (22 States × 4 hr) at a cost of $8,212 (22 States × [(2 hr × $109.36/hr) + (2 hr × $77.28/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 30 hours and $2,799. In aggregate for CHIP for § 457.1201(e), we estimate a one-time State burden 64 hours (16 States × 4 hr) at a cost of $5,973 (16 States × [(2 hr × $109.36/hr) + (2 hr × $77.28/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 21 hours and $1,991. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
For updates to reflect specific ILOSs, we also estimate that this proposed ILOS transition of care policy would have an annual burden of 1 hour at $77.28/hr for a business operations specialist per State. In aggregate for
For MCOs, PIHPs, or PAHPs that would need to implement a transition policy when an ILOS is terminated, we estimate that on an annual basis, 20 percent of managed care plans (65 plans for Medicaid and 40 plans for CHIP) may need to implement this policy. We estimate an annual managed care plan burden of 2 hours at $77.28/hr for a business operations specialist to implement the policy. In aggregate for Medicaid for § 438.16(e)(2)(iii)(B) we estimate an annual burden of 130 hours (65 plans × 2 hr) at a cost of $10,046 (130 hr × $77.28/hr). In aggregate for CHIP for § 457.1201(e), we estimate an annual burden of 80 hours (40 plans × 2 hr) at a cost of $6,182 (80 hr × $77.28/hr).
The following proposed changes will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request.
The proposed amendments to § 438.66(c) would require States to conduct, or contract for, an enrollee experience survey annually. We believe most, if not all, States will use a contractor for this task and base our burden estimates on that assumption. In the first year, for procurement, contract implementation and management, and analysis of results, we estimate 85 hours at $77.28/hr for a business operations specialist and 25 hours at $110.82/hr for general operations manager. In aggregate for § 438.66(c
In subsequent years, for contract management and analysis of experience survey results, we estimate 50 hours at $77.28/hr for a business operations specialist and 15 hours at $110.82/hr for general operations manager. In aggregate, we estimate an annual State burden of 3,185 hr (49 States × 65 hr) at a cost of $270,789 (49 States × [(50 hr × $77.28/hr) + (15 hr × $110.20/hr)]).
Amendments to § 438.66(e)(1) and (2) would require that States submit an annual program assessment report to CMS covering the topics listed in § 438.66(e)(2). The data collected for § 438.66(b) and the utilization of the data in § 438.66(c), including reporting as proposed in § 438.16, would be used to complete the report. We anticipate it would take 80 hours at $77.28/hr for a business operations specialist to compile and submit this report to CMS. In aggregate, we estimate an annual State burden of 3,920 hours (49 States × 80 hr) at a cost of $302,938 (3,920 hr × $77.28/hr).
The following proposed changes to § 438.66 will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1218 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
Sections 438.68(e) and 457.1218 would require States with MCO, PIHP, and PAHPs to develop appointment wait time standards for four provider types. We anticipate it would take: 20 hours at $77.28/hr for a business operations specialist for development and 10 hours at $77.28/hr a business operations specialist for ongoing enforcement of all network adequacy standards. In aggregate for Medicaid for § 438.68(e), we estimate a one-time State burden of 880 hours (44 States × 20 hr) at a cost of $68,006 (880 hr × $77.28/hr) and an annual State burden of 440 hours (44 States × 10 hr) at a cost of $34,003 (440 hr × $77.28/hr).
In aggregate for CHIP for § 457.1218, we estimate a one-time State burden of 640 hours (32 States × 20 hr) at a cost of $49,459 (640 hr × $77.28/hr) and an annual State burden of 320 hours (32 States × 10 hr) at a cost of $24,730 (320 hr × $77.28/hr). As this would be a one-time requirement, we annualize our time and cost estimates to 320 hours and $24,729. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
Amendments to §§ 438.68(f) and 457.1218 would require States with MCO, PIHPs, or PAHPs to contract with an independent vendor to perform secret shopper surveys of plan compliance with appointment wait times and accuracy of provider directories and send directory inaccuracies to the State within three days of discovery. In the first year, for procurement, contract implementation, and management, we anticipate it would take: 85 hours at $77.28/hr for a business operations specialist and 25 hours at $110.82/hr for general operations manager. In aggregate for Medicaid for § 438.68(f), we estimate a one-time State burden of 4,840 hours (44 States × 110 hr) at a cost of $410,929 (44 States × [(85 hr × $77.28/hr) + (25 hr × $110.82/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 1,614 hours and $136,976. In aggregate for CHIP for § 457.1218, we estimate a one-time State burden of 3,520 hours (32 States × 110 hr) at a cost of $298,858 (32 States × [(85 hr × $77.28/hr) + (25 hr × $110.82/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 1441 hours and $129,228. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
In subsequent years, for contract management and analysis of results, we anticipate it would take 50 hours at $77.28/hr for a business operations specialist and 15 hours at $110.82/hr for general operations manager. In aggregate for Medicaid for § 438.68(c), we estimate an annual State burden of 2,860 hours (44 States × 65 hr) at a cost of $243,157 (44 States × [(50 hr × $77.28/hr) + (15 hr × $110.82)]).
In aggregate for CHIP for § 457.1218 we estimate an annual State burden of 2,080 hours (32 States × 65 hr) at a cost of $176,842 (32 States × [(50 hr × $77.28/hr) + (15 hr × $110.82/hr)]).
The following proposed changes to § 438.207 will be submitted to OMB for
The proposed amendments to §§ 438.207(b) and 457.1230(b) would require MCOs, PIHPs, and PAHPs to submit documentation to the State of their compliance with § 438.207(a). As we propose in this rule to add a reimbursement analysis at § 438.207(b)(3) (and at § 457.1230(b) for separate CHIP), we estimate a one-time plan burden of: 50 hours at $77.28/hr for a business operations specialist, 20 hours at $110.82/hr for a general operations manager, and 80 hours at $109.36/hr for a computer programmer. In aggregate for Medicaid for § 438.207(b), we estimate a one-time private sector burden of 94,350 hours (629 MCO, PIHPs, and PAHPs × 150 hr) at a cost of $9,327,567 (629 MCOs, PIHPs, and PAHPs × [(50 hr × $77.28/hr) + (20 hr × $110.20/hr) + (80 hr × $109.36/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 31,450 hours and $3,460,800. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
In aggregate for CHIP for § 457.1230(b), we estimate a one-time private sector burden of 29,850 hours (199 MCO, PIHPs, and PAHPs × 150 hr) at a cost of $2,948,543 (199 MCOs, PIHPs, and PAHPs × [(50 hr × $77.28/hr) + (20 hr × $110.20/hr) + (80 hr × $109.36/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 9,950 hours and $982,848. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
For ongoing analyses and submission of information that would be required by amendments to § 438.207(b), we estimate it would take: 20 hours at $77.28/hr for a business operations specialist, 5 hours at $110.82/hr for a general operations manager, and 20 hours at $109.36/hr for a computer programmer. In aggregate for Medicaid, we estimate a one-time private sector burden of 28,305 hours (629 MCO, PIHPs, and PAHPs × 45 hr) at a cost of $2,696,460 (629 MCO, PIHPs, and PAHPs × [(20 hr × $77.28/hr) + (5 hr × $110.20/hr) + (20 hr × $109.36/hr)]).
In aggregate for CHIP, we estimate a one-time private sector burden of 8,955 hours (199 MCO, PIHPs, and PAHPs × 45 hr) at a cost of $852,476 (199 MCO, PIHPs, and PAHPs × [(20 hr × $77.28/hr) + (5 hr × $110.20/hr) + (20 hr × $109.36/hr)]).
Amendments to §§ 438.207(d) and 457.1230(b) would require States to submit an assurance of compliance to CMS that their MCOs, PIHPs, and PAHPs meet the State's requirements for availability of services. The submission to CMS must include documentation of an analysis by the State that supports the assurance of the adequacy of the network for each contracted MCO, PIHP or PAHP and the accessibility of covered services. Including the proposals in this rule at § 438.68(f) and § 438.208(b)(3), we anticipate it would take 40 hours at $77.28/hr for a business operations specialist. Although States may need to submit a revision to this report at other times during a year (specified at § 438.207(c)), we believe these submissions will be infrequent and require minimal updating to the template; therefore, the burden estimated here in inclusive of occasional revisions. In aggregate for Medicaid, we estimate an annual State burden of 1,760 hours (44 States × 40 hr) at a cost of $136,013 (1,760 hr × $77.28/hr).
Due to the additional proposal to include enrollee experience survey results in the State's separate CHIP analysis of network adequacy, we anticipate an additional 4 hours at $77.28/hr for a business operations specialist to analyze these data for a total of 44 hours annually. In aggregate for CHIP, we estimate an annual State burden of 1,408 hours (32 States x 44 hr) at a cost of $108,810 (1,408 hr × $77.28/hr).
The following proposed changes to § 438.364 will be submitted to OMB under control number 0938-0786 (CMS-R-305), and the proposed changes to § 457.1250 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
Amendments to § 438.360(a)(1) would remove the requirement that plan accreditation must be from a private accrediting organization recognized by CMS as applying standards at least as stringent as Medicare under the procedures in § 422.158. Eliminating this requirement would simplify the plan accreditation process. We assume that States would apply the non-duplication provision to 10 percent of MCOs, PIHPs, and PAHPs, we anticipate that this provision would offset the burden associated with § 438.358(b)(1)(i) through (iii) for 65 MCOs, PIHPs, and PAHPs (since these activities will no longer be necessary for these 65 plans). Consistent with the estimates used in § 438.358(b)(1)(i) through (iii), we estimate an aggregated offset of annual State burden of minus 26,606 hours [(−65 MCOs, PIHPs × 409.33 hr)] and minus $2,056,146 (−26,606.45 hr × $77.28/hr).
The proposed amendments to § 438.364(a)(2)(iii) for Medicaid, and through an existing cross-reference at § 457.1250(a) for separate CHIP, would (1) require that the EQR technical reports include “any outcomes data and results from quantitative assessments” for the applicable EQR activities in addition to whether or not the data has been validated, and (2) add the mandatory network adequacy validation activity to the types of EQR activities to which the requirement to include data in the EQR technical report applies. For Medicaid § 438.364, we assume 44 States and 654 MCOs, PIHPs and PAHPs will be subject to the EQR provisions. For CHIP, we assume 32 States and 199 MCOs, PIHPs and PAHPs will be subject to the proposed EQR provisions.
We estimate it would take 1 hour at $77.28/hr for a business operations specialist to describe the data and results from quantitative assessments and 30 minutes at $37.96/hr for an office clerk to collect and organize data. In aggregate for Medicaid we estimate an annual State burden of 981 hours (654 MCOs, PIHPs, and PAHPs yearly reports × 1.5 hr) at a cost of $62,954 (654 reports × [(1 hr × $77.28/hr) + (0.5 hr × $37.96/hr)]). In aggregate for CHIP for § 457.1250(a), we estimate an annual State burden of 299 hours (199 MCOs, PIHPs, and PAHPs yearly reports × 1.5 hr) at a cost of $19,156 (199 reports × [(1 hr × $77.28/hr) + (0.5 hr × $37.96/hr)]).
Amendments to § 438.364(c)(1) for Medicaid, and through an existing cross-reference at § 457.1250(a) for separate CHIP, shifts the date in which States must finalize their annual EQR technical report. Previously, EQR annual reports had to be posted by April 30th, but under this new provision, EQR technical reports must be posted on the website required under §§ 438.10(c)(3)
Amendments to § 438.364(c)(2)(iii) for Medicaid, and through an existing cross-reference at § 457.1250(a) for separate CHIP, would require States to maintain an archive of at least the previous 5 years of EQR technical reports on their websites. Currently, almost half of States maintain an archive of at least 2 years' worth of EQR reports. Initially, we assume 75 percent of reports completed within the previous 5 years need to be archived on State websites. We estimate it would take 5 minutes (0.0833 hr) at $77.28/hr for a business operations specialist to collect and post a single EQR technical report to a State website. In aggregate for Medicaid for § 438.364(c)(2)(iii), we estimate a one-time burden of 204 hours (654 MCOs, PIHPs, and PAHPs yearly reports × 0.75 × 5 years × 0.0833 hr) at a cost of $15,765 (204 hr × $77.28/hr). As this will be a one-time requirement, we annualize our time and cost estimates to 68 hours and $5,255. In aggregate for CHIP for § 457.1250(a), we estimate a one-time burden of 62 hours [(199 MCOs, PIHPs, and PAHPs yearly reports × 0.75 × 5 years × 0.0833 hr) at a cost of $4,791 (62 hr × $77.28/hr). As this would be a one-time requirement, we annualize our time and cost estimates to 21 hours and $1,597. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
The following proposed changes will be submitted to OMB for review under control number 0938-0786 (CMS-R-305). The following proposed changes to § 457.1250 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.310(c)(2), 438.350, and 457.1250(a) would remove PCCMs from the managed care entities subject to EQR. We estimate the burden on States of completing EQR mandatory and optional activities which include:
Mandatory EQR activities include the validation of performance measures and a compliance review. We assume States validate 3 performance measures each year and conduct a compliance review once every 3 years. We expect it would take 53 hours at $77.28/hr for a business operations specialist to complete each performance measure validation and 361 hours at $77.28/hr for a business operations specialist to conduct a compliance review. Alleviating this burden would result in an annual State Medicaid savings of minus 2,793 hours (10 PCCM entities × [(53 hr/validation × 3 performance measure validations) + (361 hr/3 years compliance review)]) and minus $215,843 (− 2,793 hr × $77.28/hr). For CHIP for § 457.1250(a), we estimate an annual State savings of minus 4,749 hours (17 PCCM entities × [(53 hr/validation × 3 performance measure validations) + (361 hr/3 years compliance review)]) and minus $367,003 (−4,749 hr × $77.28/hr).
Optional EQR activities include: (1) validation of client level data (such as claims and encounters); (2) administration or validation of consumer or provider surveys; (3) calculation of performance measures; (4) conduct of PIPs; (5) conduct of focused studies; and (6) assist with the quality rating of MCOs, PIHPs, and PAHPs consistent with §§ 438.334 and 457.1240(d). Based on our review of recent EQR technical report submissions we estimate and assume that each year 10 percent of PCCM entities would be subject to each of the optional EQR-related activities. Regarding the administration or validation of consumer or provider surveys, we assume that half would administer surveys while half (29) would validate surveys. We also estimate that a mix of professionals would work on each optional EQR-related activity: 20 percent by a general and operations manager at $110.82/hr; 25 percent by a computer programmer at $92.92/hr; and 55 percent by a business operations specialist at $77.28/hr. Alleviating this burden would result in an annual State Medicaid savings of minus 999 hours (−350+−75 hr + −25 hr + −159 hr + −195 hr + −195 hr) and minus $87,810 [(−999 hr × 0.20 × $110.82/hr) + (−999 hr × 0.25 × $92.92/hr) + (−999 hr × 0.55 × $77.28/hr)]. For CHIP, we estimate annual State savings of minus 649 hours (−75 hr + −25 hr + −159 hr + −195 hr + −195 hr) and minus $57,045.80 [(−649 hr × 0.20 × $110.82/hr) + (−649 hr × 0.25 × $92.92/hr) + (−649 hr × 0.55 × $77.28/hr)].
Per § 438.364(c)(2)(ii), each State agency would provide copies of technical reports, upon request, to interested parties such as participating health care providers, enrollees and potential enrollees of the MCO, PIHP, or PAHP, beneficiary advocacy groups, and members of the general public. This change would eliminate the burden on States to provide PCCM EQR reports. We estimate an annual State burden of 5 minutes (on average) or 0.0833 hours at $37.96/hr for an office clerk to disclose the reports (per request), and that a State would receive five requests per PCCM entity. Alleviating this burden would result in an annual Medicaid State savings of minus 4 hours (10 PCCM entities × 5 requests × 0.0833 hr) and minus $152 (−4 hr × $37.96/hr). For CHIP for § 457.1250(a), we estimate an annual State savings of minus 0.833 hours (50 minutes) (2 PCCM entities × 5 requests × 0.833 hr) and minus $32 (−0.833 hr × $37.96/hr).
For the mandatory and optional EQR activities, in aggregate, we estimate an annual State savings of minus 3,796 hours (−2,793 hr + −999 hr + −4 hr) and minus $303,805 ($215,843 + $87,810 + $152).
Additionally, the burden associated with § 438.358(b)(2) also includes the time for a PCCM entity (described in § 438.310(c)(2)) to prepare the information necessary for the State to conduct the mandatory EQR-related activities. Given the estimate of 200 hr for an MCO, PIHP, or PAHP, and that there are only 2 mandatory EQR-related activities for PCCM entities (described in § 438.310(c)(2)), we estimate it would take 100 hr to prepare the documentation for these 2 activities, half (50 hr) at $77.28/hr by a business operations specialist and half (50 hr) at
Amendments to §§ 438.364(c)(7) and 457.1250(a) add a new optional EQR activity to assist in evaluations for In Lieu of Services, quality strategies and State Directed Payments that pertain to outcomes, quality, or access to health care services. Based on our review of recent EQR technical report submissions we estimate and assume that each year 10 percent of MCOs, PIHPs and PAHPs will be subject to each of the optional EQR-related activities, though we note that the exact States and number vary from year to year. We also estimate that a mix of professionals will work on each optional EQR-related activity: 20 percent by a general and operations manager at $110.82/hr; 25 percent by a computer programmer at $109.36/hr; and 55 percent by a business operations specialist at $77.28/hr. To assist in evaluations, we estimate an annual State burden of 80 hours per MCO, PIHP and PAHP. In aggregate for Medicaid, the annual State burden to assist in evaluations is 4,640 hours (58 MCOs, PIHPs and PAHPs × 80 hr) at a cost of $426,917 [(4,640 hr × 0.20 × $110.82/hr) + (4,640 hr × 0.25 × $103.36/hr) + (4,640 hr × 0.55 × $77.28/hr)]. In aggregate for CHIP for § 457.1250(a), the annual State burden to assist in evaluations is 1,600 hours (20 MCOs, PIHPs and PAHPs × 80 hr) at a cost of $147,213 [(1,600 hr × 0.20 × $110.82/hr) + (1,600 hr × 0.25 × $109.36/hr) + (1,600 hr × 0.55 × $77.28/hr)].
The following proposed changes will be submitted to OMB for review under control number 0938-1281 (CMS-10553). The following proposed changes to § 457.1240 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.515(a)(1) and 457.1240(d) would revise the existing QRS requirements by mandating that the State collect specified data from each managed care plan with which it contracts that has 500 or more enrollees on July 1 of the measurement year. Based on the data collected, the State would calculate and issue an annual quality rating to each managed care plan. The State would also collect data from Medicare and the State's fee-for-service providers, if all data necessary to issue an annual quality rating cannot be provided by the managed care plans. Annual quality ratings will serve as a tool for States, plans and beneficiaries. The annual quality ratings will hold States and plans accountable for the care provided to Medicaid and CHIP beneficiaries, provide a tool for States to drive improvements in plan performance and the quality of care provided by their programs, and empower beneficiaries with useful information about the plans available to them. States would be required to collect data using the framework of a mandatory QRS Measure Set. We used the proposed mandatory measure set, found in Table 1, as the basis for the measure collection burden estimate. The proposed mandatory measure set consists of 18 measures, including CAHPS survey measures, and reflects a wide range of preventive and chronic care measures representative of Medicaid and CHIP beneficiaries. For Medicaid managed care, we assume 629 MCOs, PIHPs and PAHPs and 44 States to be subject to the proposed mandatory QRS measure set collection and reporting provision. For CHIP managed care, we assume 199 MCOs, PIHPs and PAHPs and 32 States to be subject to the proposed mandatory QRS measure set collection and reporting provision. We assume that plans with CHIP populations will report the subset of QRS measures which apply to beneficiaries under 19 years of age and to pregnant and postpartum adults, where applicable.
For Medicaid, we expect reporting the QRS non-survey measures would take: 680 hours at $109.36/hr for a computer programmer to program and synthesize the data; 212 hours at $77.28/hr for a business operations specialist to manage the data collection process; 232 hours at $37.96/hr for an office clerk to input the data; 300 hours at $79.56/hr for a registered nurse to review medical records for data collection; and 300 hours at $46.46/hr for medical records and health information analyst to compile and process medical records. For Medicaid, for one managed care entity we estimate an annual private sector burden of 1,724 hours (680 hr + 212 hr + 232 hr + 300 hr + 300 hr) at cost of $137,361 ([680 hr × $109.36/hr] + [252 hr × $77.28/hr] + [328 hr x $37.96/hr] + [300 hr × $79.56/hr] + [300 hr × $46.46/hr]).
For Medicaid, we also estimate that conducting the QRS survey measures comprised of the CAHPS survey would take: 20 hours at $77.28/hr for a business operations specialist to manage the data collection process; 40 hours at $37.96/hr for an office clerk to input the data; and 32 hours at $95.62/hr for a statistician to conduct data sampling. For one Medicaid managed care entity we estimate an annual private sector burden of 92 hours (20 hr + 40 hr + 32 hr) at cost of $6,124 ([20 hr × $77.28/hr] + [40 hr × $37.96/hr] + [32 hr × $95.62]).
For one Medicaid managed care entity, for mandatory QRS non-survey and survey measures we estimate an annual private sector burden of 1,816 hours (1,724 hr +92 hr) at a cost of $143,485 ($137,361 + $6,124). In aggregate, for Medicaid, we estimate an annual private sector burden of 1,142,264 hours (629 Medicaid MCOs, PIHPs and PAHPs × 1,816 hours) and $90,252,065 (629 Medicaid MCOs, PIHPs and PAHPs × $143,485).
For CHIP for § 457.1240(d), we expect reporting non-survey QRS measures would take: 400 hours at $109.36/hr for a computer programmer to program and synthesize the data; 148 hours at $77.28/hr for a business operations specialist to manage the data collection process; 152 hours at $37.96/hr for an office clerk to input the data; 60 hours at $79.56/hr for a registered nurse to review medical records for data collection; and 60 hours at $46.46/hr for medical records specialist to compile and process medical records. For one CHIP managed care entity we estimate an annual private sector burden of 820 hours (400 hr + 148 hr + 152 hr + 60 hr +60 hr) at cost of $68,513 ([400 hr × $109.36/hr] + [148 hr × $77.28/hr] + [152 hr × $37.96/hr] + [60 hr × $79.56/hr] + [60 hr × $46.46/hr])
For CHIP for § 457.1240(d), we also estimate that conducting the survey measures (comprised of the CAHPS survey and secret shopper) would take: 20 hours at $77.28/hr for a business operations specialist to manage the data collection process; 56 hours at $37.96/hr for an office clerk to input the data; and 32 hours at $95.62/hr for a statistician to conduct data sampling. For one CHIP managed care entity we estimate an annual private sector burden of 108 hours (20 hr + 56 hr + 32 hr) at cost of $6,731 ([20 hr × $77.28/hr] + [56 hr × $37.96/hr] + [32 hr × $95.62]).
For one CHIP managed care entity, for mandatory QRS non-survey and survey measures, we estimate an annual private sector burden of 928 hours (820 hr +108 hr) at a cost of $75,244 ($68,513 + $6,731). In aggregate, for CHIP for § 457.1240(d), we estimate an annual private sector burden of 184,672 hours (199 CHIP MCOs, PIHPs and PAHPs × 928 hours) and $14,973,556 (199 CHIP MCOs, PIHPs and PAHPs × $75,244).
The CAHPS survey measures also include a new burden on Medicaid beneficiaries. Beneficiaries complete the survey via telephone or mail. Response rates vary slightly by survey population. The adult CAHPS survey aims for 411 respondents out of a 1,350-person sampling and the Child CAHPS survey aims for 411 respondents out of a 1,650-person sampling. For Medicaid, the survey would be conducted twice, once for children and once for adults. For CHIP, the survey would be conducted once for children and once for pregnant or postpartum adults, as applicable. We estimate it would take 20 minutes (0.33 hr) at $28.01/hr for a Medicaid or CHIP beneficiary to complete the CAHPS Health Plan Survey. For Medicaid, in aggregate, we estimate a new beneficiary burden of 172,346 hours (629 MCOs, PIHPs and PAHPs × 0.33 hr per survey response × 822 beneficiary responses) at a cost of $4,827,411 (172,346 hr × $28.01/hr). For CHIP for § 457.1240(d), in aggregate, we estimate a new beneficiary burden of 27,263 hours (199 MCOs, PIHPs, and PAHPs × 0.33 hr per survey response × 411 beneficiary responses) at a cost of $763,637 (27,263 hr × $28.01/hr).
Additionally, amendments to § 438.515(a)(1)(i), reporting QRS measures would require States to update existing managed care contracts. We estimate it would take 1 hour at $77.28/hr for a business operations specialist and 30 minutes at $110.82/hr a general operations manager to amend vendor contracts to reflect the new reporting requirements. In aggregate for Medicaid, we estimate a one-time State burden of 944 hours (629 MCOs, PIHPs, and PAHPs × 1.5 hours) at a cost of $83,462 (629 contracts × [(1 hr × $77.28/hr) + (0.5 hr × $110.82/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 315 hours and $27,821. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate for CHIP for § 457.1240(d), we estimate a one-time State burden of 299 hours (199 MCOs, PIHPs, and PAHPs × 1.5 hours) at a cost of $26,405 (199 contracts × [(1 hr × $77.28/hr) + (0.5 hr × $110.82/hr)]). As this would be a one-time requirement, we annualize our time and cost estimates to 99 hours and $8,820. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
Amendments to § 438.515(a)(1)(ii) require States to collect data from Medicare and the State's fee-for-service providers, if all data necessary to issue an annual quality rating cannot be provided by the managed care plans and the data are available for collection by the State without undue burden. We expect a that subset of States would need to collect Medicare data or State Medicaid fee-for-service data to report the mandatory quality measures. We assume that plans have access to Medicare data for their members and have included this burden in the cost of data collection described above. However, we assume Medicaid fee-for-service data would need to be provided and that this requirement would impact 5 States. For a State to collect the fee-for-service data needed for QRS reporting, we expect it would take: 120 hours at $109.36/hr for a computer programmer to program and synthesize the data and 20 hours at $77.28/hr for a business operations specialist to manage the data collection process. In aggregate for Medicaid, we estimate an annual State burden of 700 hours (5 States × [120 hr + 20 hr]) at a cost of $73,344 ([120 hr × $109.36/hr] + [20 hr × $77.28/hr]).
Amendments to §§ 438.515(a)(2) and 457.1240(d) require the QRS measure data to be validated. We estimate it would take 16 hours at $77.28/hr for a business operations specialist to review, analyze and validate measure data. In aggregate for Medicaid, we estimate an annual private sector burden of 10,064 hours (629 MCOs, PIHPs, PAHPs and PCCMs × 16 hr) at a cost of $777,746 (10,064 hr × $77.28/hr). In aggregate for CHIP for § 457.1240(d), we estimate an annual private sector burden of 3,184 hours (199 MCOs, PIHPs and PAHPs × 16 hr) at a cost of $246,060 (3,184 hr × $77.28/hr).
The following proposed changes will be submitted to OMB for review under control number 0938-1281 (CMS-10553). The following proposed changes to § 457.1240 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.520(a) and 457.1240(d) would require the State to prominently post an up-to-date display on its website that provides information on available MCOs, PIHPs and PAHPs. The display must: allow users to view tailored information, compare managed care plans, provide information on quality ratings and directs users to resources on how to enroll in a Medicaid or CHIP plan. Additionally, the display must offer consumer live assistance services. After the display is established, the State would need to maintain the display by populating the display with data collected from the mandatory QRS measure set established as proposed in this proposed rule. The proposed rule outlines a phase-in approach to the QRS website display requirements; however, the burden estimate reflects the full implementation of the website. We recognize this may results is an overestimate during the initial phase of the website display but believe the estimate is representative of the longer-term burden associated with the QRS website display requirements.
To develop the initial display, we estimate it would take: 600 hours at $109.36/hr for a computer programmer to create and test code; 600 hours at $78.18/hr for a web developer to create the user interface; 80 hours at $77.28/hr for a business operations specialist to manage the display technical development process; and 450 hours at $98.50/hr for a database administer to establish the data structure and organization. We estimate that 44 States for Medicaid and 32 States for CHIP will develop QRS website displays. For one State, we estimate a burden of 1,730 hours (600 hr + 600 hr + 80 hr + 450 hr) at a cost of $163,031 ([600 hr × $109.36/hr] + [600 hr × $78.18/hr] + [80 hr × $77.28/hr] + [450 hr × $98.50/hr]). In aggregate for Medicaid, we estimate a one-time State burden of 76,120 hours (44 States × 1,730 hr) at a cost of $7,173,364 (44 States × $163,031). In aggregate for CHIP for § 457.1240(d), we estimate a one-time State burden of 55,360 hours (32 States × 1,730 hr) and $5,216,992 (32 States × $163,031). As this would be a one-time requirement, we annualize our time and cost estimates for CHIP to 18,453 hours and $48,330,202. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimates since we do not anticipate any additional burden after the 3-year approval period expires.
To maintain the QRS display annually, we estimate it would take: 384 hours at $109.36/hr for a computer programmer to modify and test code; 256 hours at $78.18/hr to update and maintain the user interface; 120 hours at $77.28/hr for a business operations specialist to manage the daily operations of the display; and 384 hours at $98.50/hr for a database administer to organize data. We estimate that 44
The amendments to §§ 438.520(a)(2)(iv) and 457.1240(d) would require the display to include quality ratings for mandatory measures which may be stratified by factors determined by CMS. We estimate it would take 24 hours at $109.36/hr for a computer programmer to develop code to stratify plan data. In aggregate for Medicaid (§ 438.520(a)(2)(iv)), we estimate an annual private sector burden of 15,096 hours (629 MCOs, PIHPs and PAHPs × 24 hr) at a cost of $1,650,899 (15,096 hr × $109.36/hr). In aggregate for CHIP for § 457.1240(d), we estimate an annual private sector burden of 4,776 hours (199 MCOs, PIHPs and PAHPs × 24 hr) at a cost of $522,303 (4,776 hr × $109.36/hr).
The amendments to § 438.520(a)(3)(v) would require the QRS website display to include certain managed care plan performance metrics, as specified by CMS including the results of the secret shopper survey specified in § 438.68(f). The secret shopper survey is currently accounted for by OMB under control number 0938-TBD (CMS-10856). Plans would complete the secret shopper independent of the QRS requirements. To meet QRS requirements, States would enter data collected from the secret shopper survey and display the results of the survey on the QRS. Since the burden for the secret shopper survey is accounted for under a separate control number, for the purposes of MAC QRS, we account for the incremental burden associated with meeting the QRS requirements. We estimate it would take 16 hours at $37.96/hr for an office clerk to enter the results from the secret shopper survey into the QRS. In aggregate for Medicaid § 438.520(a)(3)(v), we estimate an annual private sector burden of 10,064 hours (629 MCOs, PIHPs and PAHPs × 16 hr) at a cost of $382,029 (10,064 hr × $37.96/hr). In aggregate for CHIP for § 457.1240(d), we estimate an annual private sector burden of 3,184 hours (199 MCOs, PIHPs and PAHPs × 16 hr) at a cost of $120,865 (3,184 hr × $37.96/hr).
The following proposed changes will be submitted to OMB for review under control number 0938-1281 (CMS-10553). The following proposed changes to § 457.1240 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.535(a) and 457.1240(b) would mandate that on an annual basis, the State submit a Medicaid managed care quality rating system report in a form and manner determined by CMS. We estimate that 44 States for Medicaid and 32 States for CHIP will submit annual MAC QRS reports. We estimate it would take 24 hours at $77.28/hr for a business operations specialist to compile the required documentation to complete this report and attestation that the State is in compliance with QRS standards. In aggregate for Medicaid for § 438.535(a), we estimate an annual State burden of 1,056 hours (44 States × 24 hr) at a cost of $81,608 (1,056 hr × $77.28/hr). In aggregate for CHIP for § 457.1240(b), we estimate an annual State burden of 768 hours (32 States × 24 hr) at a cost of $59,351 (768 hr × $77.28/hr).
The addition of 438 subpart G for Medicaid, and through a proposed amendment at § 457.1240(d) for separate CHIP, would revise the quality rating system requirements and associated burden previously promulgated under § 438.334. Given the QRS requirements have substantively changed, our currently approved burden estimates for making changes to an approved alternative Medicaid managed care QRS are no longer applicable.
Therefore, alleviating this burden would result in an annual Medicaid State reduction of minus 116.7 hours [(10 States × 35 hr)/3 years] and minus $8,361 (10 States × [(5 hr × $37.96/hr) + (30 × $77.28/hr)]/3 years). Similarly, we estimate an annual CHIP State savings of minus 116.7 hours [(10 States × 35 hr)/3 years] and minus $8,361 [(10 States × ((5 hr × $37.96/hr) + (30 × $77.28/hr))/3 years)].
To implement an alternative Medicaid managed care QRS, we estimate it would take: 5 hours at $37.96/hr for an office and administrative support worker, 25 hours at $77.28/hr for a business operations specialist to complete the public comment process, and 5 additional hours at $77.28/hr for a business operations specialist to seek and receive approval from CMS for the change. We assume that a subset of States will opt for an alternative QRS and that the subset will revise their QRS once every three years.
The following proposed changes to § 438.608 will be submitted to OMB for review under control number 0938-TBD (CMS-10856). At this time the OMB control number has not been determined, but it will be assigned by OMB upon their clearance of our proposed collection of information request. The control number's expiration date will be issued by OMB upon their approval of our final rule's collection of information request. The following proposed changes to § 457.1285 will be submitted to OMB for review under control number 0938-1282 (CMS-10554).
The proposed amendments to §§ 438.608 and 457.1285 would require States to update all MCO, PIHP, and PAHP contracts to require managed care plans to report overpayments to the State within 10 business days of identifying or recovering an overpayment. We estimate that the proposed changes to the timing of overpayment reporting (from timeframes that varied by State to 10 business days for all States) would apply to all MCO, PIHP, and PAHP contracts, including contracts for NEMT, that is, a total of 654 contracts for Medicaid, and 199 contracts for CHIP. We estimate it would take: 2 hours at $77.28/hr for a business operations specialist and 1 hour at $110.82/hr for a general and operations manager to modify State contracts with plans. In aggregate for Medicaid for
In aggregate for CHIP for § 457.1285, we estimate a one-time State burden of 597 hours (199 contracts × 3 hr) at a cost of $52,811 [199 contracts × ((2 hr × $77.28/hr) + (1 hr × $110.82/hr))]. As this would be a one-time requirement, we annualize our time and cost estimates to 199 hours and $17,604. The annualization divides our estimates by three (3) years to reflect OMB's likely approval period. We are annualizing the one-time burden estimate since we do not anticipate any additional burden after the 3-year approval period expires.
We also estimate that it would take MCOs, PIHPs, and PAHPs 1 hour at
We have submitted a copy of this proposed rule to OMB for its review of the rule's information collection requirements. The requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms for the proposed collections discussed above, please visit the CMS website at
We invite public comments on these potential information collection requirements. If you wish to comment, please submit your comments electronically as specified in the
Because of the large number of public comments we normally receive on
This proposed rule would advance CMS' efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and CHIP managed care enrollees. The proposed rule would specifically address standards for timely access to care and States' monitoring and enforcement efforts, reduce burden for State directed payments and certain quality reporting requirements, add new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization and identify the scope and nature of ILOS, specify medical loss ratio (MLR) requirements, and establish a quality rating system (QRS) for Medicaid and CHIP managed care plans.
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as an action that is likely to result in a rule: (1) having an annual effect on the economy of $200 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities; (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules. Based on our estimates, OMB's Office of Information and Regulatory Affairs has determined this rulemaking is “significant” under Section 3(f)(1) as measured by the $200 million threshold, and hence also a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act). Accordingly, we have prepared a Regulatory Impact Analysis that to the best of our ability presents the costs and benefits of the rulemaking. Therefore, OMB has reviewed these proposed regulations, and the Departments have provided the following assessment of their impact.
We have examined the proposed provisions in this rule and determined that most of the proposed revisions to part 438 and part 457 outlined in this proposed rule are expected to minimally or moderately increase administrative burden and associated costs as we note in the COI (see section II. of this proposed rule). Aside from our analysis on burden in the COI, we believe that certain provisions in this proposed rule should specifically be analyzed in this regulatory impact analysis as potentially having a significant economic impact. Those proposed provisions include State directed payments, MLR reporting standards, and ILOS due to the impact these proposed provisions could have on the associated and corresponding managed care payments.
Neither the May 6, 2016 final rule (81 FR 27830) nor the November 13, 2020 final rule (85 FR 72754) included a regulatory impact analysis that discussed the financial and economic effects of SDPs. At the time the 2016 final rule was published and adopted regulations explicitly governing State directed payments, we believed that States would use the SDPs in three broad ways to: (1) transition previous pass-through payments into formal arrangements as SDPs; (2) add or expand provider payment requirements to promote access to care; and (3) implement quality or value payment models that include Medicaid managed care plans. However, since § 438.6(c) was issued in the 2016 final rule, States have requested approval for an increasing number of SDPs. The scope, size, and complexity of the SDPs being submitted by States for approval has also grown steadily. In calendar year 2017, CMS received 36 preprints for our review and approval from 15 States; in calendar year 2021, CMS received 223 preprints from 39 States. For calendar year 2022, CMS received 309 preprints from States. As of March 2023, CMS has reviewed more than 1,100 SDP proposals and approved more than 1,000 proposals since the 2016 final rule was issued. To accommodate these requests from States, CMS applied discretion in interpreting and applying § 438.6(c) in reviewing and approving SDPs. The 2016 final rule required criteria to determine if provider payment rates are “reasonable, appropriate, and attainable” and that SDPs must relate to utilization, quality, or other goals described in § 438.6(c). CMS has interpreted these sections of the regulation broadly, and therefore, the amount of SDP payments has grown significantly over time.
SDPs also represent a substantial amount of State and Federal spending. The Medicaid and CHIP Payment and Access Commission (MACPAC) reported that CMS approved SDPs in 37
We have tracked SDP spending trends as well. Using the total spending captured for each SDP through the end of fiscal year 2022, we calculate that SDP payments in 2022 were at least $52.2 billion. there may be some SDPs for which CMS does not have projected or actual spending data. In addition, our data reporting and collection is not standardized, and in some cases may be incomplete, so spending data for some SDP approvals may be less accurate. CMS began collecting total dollar estimates for SDPs incorporated through adjustments to base rates as well as those incorporated through separate payment terms with the revised preprint form published in January 2021; States were required to use the revised preprint form for rating periods beginning on or after July 1, 2021. We estimate that SDP spending comprises approximately 11.3 percent of total managed care payments in 2022 ($461.6 billion) and 6.6 percent of total Medicaid benefit expenditures ($794.5 billion). SDP spending varies widely across States. Thirty-nine (39) States reported the use of one or more SDPs in 2022. In these States, the percentage of Medicaid managed care spending paid through SDPs ranged from 1 percent to 58 percent, with a median of 8 percent; as a share of total Medicaid spending, SDPs ranged from 0 percent to 33 percent, with a median of 3 percent.
From 2016 through 2022, SDPs were a significant factor in Medicaid expenditure growth. Total benefit spending increased at an average annual rate of 6.3 percent per year from 2016 through 2022; excluding SDPs, benefit spending grew at an average rate of 5.1 percent. Managed care payments grew 9.2 percent on average over 2016 to 2022, but excluding SDPs, the average growth rate was 7.0 percent. While some SDP spending may have been included in managed care payments prior to 2016 (either as a pass-through payment or some other form of payment), by 2022 we expect that much of this is new spending.
In 2022, we estimate that about 75 percent of SDP spending went to hospitals for inpatient and outpatient services, and another 5 percent went to academic medical centers. The remaining 20 percent of SDP spending went to nursing facilities, primary care physicians, specialty physicians, HCBS and personal care service providers, behavioral health service providers, and dentists.
The data available do not allow us to determine how much of this baseline SDP spending was incorporated into managed care expenditures prior to the 2016 final rule, or reflected historical transfers from prior payment arrangements. For example, States transitioned pass-through payments to SDPs or transferred spending from fee-for-service payments (for example, supplemental payments) to SDPs. Some States indicate that the SDP has had no net impact on rate development while other States have reported all estimated spending for the services and provider class affected by the SDP. Based on our experience working with States, we believe much of the earlier SDP spending was largely existing Medicaid spending that was transitioned to managed care SDPs. However, in more recent years, we believe that most SDP spending reflects new expenditures. For context, States reported $6.7 billion in pass-through payments after the 2016 final rule.
The proposals in this rule are intended to ensure the following policy goals: (1) Medicaid managed care enrollees receive access to high-quality care under SDPs; (2) SDPs are appropriately linked to Medicaid quality goals and objectives for the providers participating in the SDPs; and (3) CMS has the appropriate fiscal and program integrity guardrails in place to strengthen the accountability and feasibility of SDPs.
The proposal expected to have the most significant economic impact is setting a payment ceiling at 100 percent of the ACR for SDPs for inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at academic medical centers. As discussed in section I.B.2.f. of this proposed rule, we have used the ACR as a benchmark for total payment levels for all SDP reviews since 2018 and have not knowingly approved an SDP that includes payment rates that are projected to exceed the ACR. Based on the available data, we estimate that $11.6 billion of SDPs in 2022 reflect payments at or near the ACR. It is difficult to determine the amounts of these payments due to data quality and inconsistent reporting of these details. For example, if payment data are aggregated across multiple providers or provider types, it can be difficult to determine if providers are being paid at different levels. Additionally, many SDPs report payment rates relative to Medicare instead of ACR; for some SDPs, the payment rates relative to Medicare suggest effective payment rates would be near the ACR. These would include SDPs with effective payment rates of 150 percent or more of the Medicare rate (with several over 200 percent and as high as 450 percent).
Under current policy, we project that SDP spending would increase from $52 billion in 2022 (or 11.3 percent of managed care spending) to about $91 billion by 2028 (or 15 percent of managed care spending).
Estimating the impact of the proposed SDP provisions is challenging for several reasons. First, as noted previously, the projected and actual spending data that we collect from States is not standardized, and in some cases aggregated across providers. It is also often difficult to determine how payment rates compare, especially when States use different benchmarks for payment (for example, comparing SDPs using Medicare payment rates to those using ACR payment rates). In addition, there is frequently limited information on ACR payment rates. It is difficult to determine how the ACR may be calculated and how the calculation may vary across different States and providers. Furthermore, it may be difficult to determine how many more providers are not paid under SDPs and how much they could be paid if SDPs were expanded to them.
Second, it is difficult to determine how much providers are paid in managed care programs without SDPs. These data appear to be less frequently reported, and we have virtually no information about provider payments when the State does not use an SDP. This information is important when estimating the impact of changes in SDPs, because the initial payment rate matters as much as the final rate. In some cases, the initial payment rates for existing SDPs are significantly low (for example, there are several SDPs where the reported initial payment rates are 10 to 20 percent of ACR or commercial rates, 25 to 30 percent of Medicare rates, or 10 to 35 percent of Medicaid State plan rates). In other cases, the initial payment rates are relatively higher. Thus, it may be difficult to determine how large new SDPs would be.
Third, there is significant variation in the use of SDPs across States. States have significant discretion in developing SDPs (including which providers receive SDPs and the amounts of the payments), and it is challenging to predict how States would respond to changes in policy. Some States may add more SDPs or expand spending in existing SDPs. Moreover, as many SDPs are funded through sources other than State general revenues (such as intergovernmental transfers or provider taxes), decisions about SDPs may be dependent on the availability of these funding sources.
For these reasons, we believe it is prudent to provide a range of estimated impacts for this section of the proposed rule. The following estimates reflect a reasonable expectation of the impacts of this proposed rule on Medicaid expenditures, but do not include all possible outcomes.
We estimate that the low end of the range for the proposed changes would have zero impact on Medicaid expenditures. That is, we assume that the new policies in the rule would have no bearing on States' future decisions on SDPs. Future growth in Medicaid spending on SDPs would be the same as currently projected. This estimate also assumes that there would be no reduction in expenditures from limiting effective payment rates to ACR rates.
We believe this is a reasonable estimate of the low end of this range. SDPs are already growing rapidly and several States already have SDPs with effective payment rates at or near the ACR. In addition, SDP spending is projected to continue to grow as a share of Medicaid managed care spending over the next several years, which suggests that other States may add SDPs or increase the payment rates within the SDPs. Thus, one possible outcome is that States would use SDPs the same way under current policy and under the proposed rule.
The estimate of the upper end of the range is based on the expectation that the provisions of the proposed rule would prompt States to increase SDP spending. We believe that by setting the payment limit at the ACR rates for certain services, States may increase the size and scope of future SDPs to approach this limit. In particular, there are many SDPs that currently have effective reimbursement rates at or around 100 percent of Medicare reimbursement rates, and others with rates below 100 percent of ACR, and that States may potentially increase payments associated with these SDPs.
For the high scenario, we assume that Medicaid SDP spending would increase at a faster rate than projected under current law. Under current law, Medicaid SDP spending is projected to reach 15 percent of managed care spending by 2027; we assume in the high scenario that SDP spending would reach about 17.5 percent of managed care spending in 2027. Under this scenario, SDP spending would increase by approximately 20 percent by 2027 (or about $16 billion). From 2024 through 2026, SDP spending would increase somewhat faster than assumed under current law to reach those levels. This increase would include additional spending from current SDPs increasing payment rates to the ACR, and may also include new or expanded SDPs. We would also expect that this would occur mostly among SDPs for hospitals and academic medical centers, as those are currently the providers that receive the majority of SDPs. We have not estimated a breakdown of impacts by provider type or by State in this analysis. The estimated impacts are provided in Table 7.
In Table 8, we provide estimates of the impacts on the Federal government and on States.
We project that the Federal government would pay an additional $11.1 billion in 2028, with the States paying an additional $6.2 billion in the high scenario. We would note that for the States, they would have discretion of whether or not to increase SDP spending (through existing or new SDPs), and that the source of the non-Federal share may vary. Many States already use sources other than State general revenues (such as IGTs and provider taxes, as noted previously), and therefore the direct impact to State expenditures may be less than projected.
As noted previously, there is a wide range of possible outcomes of this proposed rule on SDP expenditures. The actual changes in spending may be difficult to determine, as there is uncertainty in the future amount of spending through SDPs in the baseline. The specific impacts could also vary over time, by State, and by provider type. We believe actual impacts can reasonably be expected to fall within the range shown here.
There are additional proposals in this rule that may also slightly increase SDP spending. This includes allowing States to:
(1) Direct expenditures for non-network providers;
(2) Set the amount and frequency for VBP SDPs;
(3) Recoup unspent funds for VBP SDPs; and
(4) Exempting minimum fee schedules at the Medicare rate from prior approval.
We do not have quantitative data to analyze the impact of these provisions. However, based on a qualitative analysis of our work with States, we believe these regulatory changes would have much more moderate effects on the economic impact in comparison to the ceiling on payment levels described above. Allowing States to direct expenditures for non-network providers will likely increase the number of State contract provisions; however, we anticipate that most States will want to require minimum fee schedules tied to State plan rates, which will likely result in very small changes from existing rate development practices. Regarding the proposal to remove the existing regulatory requirements for setting the amount and frequency for VBP SDPs and recouping unspent funds for VBP SDPs, we anticipate this will change the types of SDPs States seek, encouraging them to pursue VBP models, that would replace existing VBPs, though a few States may pursue new models. The proposed regulatory requirement to exempt minimum fee schedules tied to Medicare rates will likely cause some increase in spending as more States may take up this option, but again, we do not anticipate this to have as significant impact on rate development.
There are a few proposals in this rule that are likely to exert some minor downward pressure on the rate of growth in SDP spending, such as the enhanced evaluation requirements, requirements related to financing of the non-Federal share, and eliminating States' ability to use reconciliation processes. We expect that these provisions would not have any significant effect on Medicaid expenditures.
Aside from spending, we believe many of the proposals in section I.B.2. of this proposed rule would have significant qualitative impacts on access, quality, and transparency. One example is our proposal to permit the use of SDPs for non-network providers (section I.B.2.d. of this proposed rule). One of the most frequently used non-network provider types is family planning. Permitting States to use SDPs for family planning providers could greatly improve access and ease access for enrollees consistent with the statutory intent of section 1902(a)(23)(B) of the Act. Our proposal to permit States to set the frequency and amount of SDP payments (section I.B.2.h. of this proposed rule) should remove unnecessary barriers for States implementing VBP SDPs. This should have direct impacts on quality of care as States will be more inclined to use VBP SDPs. It will allow the payments to be more closely linked to the services provided in a timely fashion, and it will allow States to establish strong parameters and operational details that define when and how providers will receive payment to support robust provider participation. Lastly, our proposal (section I.B.2.b. of this proposed rule) to require specific information in managed care plan contracts would improve accountability to ensure that the additional funding included in the rate certification is linked to a specific service or benefit provided to a specific enrollee covered under the contract.
We propose to amend §§ 438.3(i), 438.8(e)(2), 457.1201, and 457.1203 to specify that only those provider incentives and bonuses that are tied to clearly defined, objectively measurable, and well-documented clinical or quality improvement standards that apply to providers may be included in incurred claims for MLR reporting. In States that require managed care plans to pay remittances back to the State for not meeting a minimum MLR, and where remittance calculations are based on the MLR standards in § 438.8, the remittance amounts may be affected. If managed care plans currently include
We propose to amend §§ 438.8(e)(3) and 457.1203(c) to specify that only expenditures directly related to activities that improve health care quality may be included in QIA expenses for MLR reporting. In States that require managed care plans to pay remittances back to the State for not meeting a minimum MLR, and where the remittance calculations are based on the MLR standards in § 438.8, the remittance amounts may be affected. This proposed change would result in transfers from managed care plans that currently include indirect expenses in QIA to States in the form of higher remittances or lower capitation rates. Although we do not know how many managed care plans include indirect expenses in QIA, using information from a previous CCIIO RIA analysis,
We propose to amend §§ 438.608(a)(2) and (d)(3), and 457.1285 to require States' contracts with managed care plans to include a provision requiring managed care plans to report any overpayment (whether identified or recovered) to the State. In States that require managed care plans to pay remittances back to the State for not meeting a minimum MLR, and where the remittance calculations are based on the MLR standards in § 438.8, the remittance amounts may be affected. Given that States do not provide this level of payment reporting to CMS, we are unable to quantify the benefits and costs of this proposed change; however, this proposed change may result in transfers from managed care plans to States in the form of higher remittances or lower capitation rates.
We propose to amend 438.8(k) to require managed care plans to report SDPs to States as a line item in their MLR reports. In States that require managed care plans to pay remittances back to the State for not meeting a minimum MLR, and the remittance calculation arrangements are based on § 438.8, the remittance amounts may be affected. Given that CMS does not have data on actual revenue and expenditure amounts for SDPs that would allow for modeling the effect of the line item reporting on remittances, we are unable to quantify the benefits and costs of this proposed change. We expect that this proposed change may result in transfers from States to managed care plans in the form of lower remittances or higher capitation rates.
In the May 6, 2016 final rule (81 FR 27830), the regulatory impact analysis addressed the financial and economic effects of allowing FFP for capitation payments made for enrollees that received inpatient psychiatric services during short-term stays in an institution for mental disease (IMD) as an ILOS; however, it did not address other potential ILOS (see 81 FR 27840 and 27841 for further details). When we analyzed the May 6, 2016 final rule for the regulatory impact analysis, we concluded that the financial and economic effects of all other ILOSs would be offset by a decrease in expenditures for the State plan-covered services and settings for which ILOSs are a medically appropriate and cost effective substitute. The use of ILOSs is a longstanding policy in managed care given the flexibility that managed care plans have historically had in furnishing care in alternate settings and services in a risk-based delivery system, if cost effective, on an optional basis and to the extent that the managed care plan and the enrollee agree that such setting or service would provide medically appropriate care. States and managed care plans historically have utilized ILOSs that are immediate substitutes for covered services and settings under the State plan, such as a Sobering Center as a substitute for an emergency department visit. More recently, a few States and managed care plans have begun utilizing ILOSs as longer term substitutes for covered services and settings under the State plan. On January 7, 2021, CMS published a State Health Official (SHO) letter (SHO# 21-001)
We believe that expanding the definition of what is allowable as ILOSs in Medicaid managed care would likely lead to an increase in Medicaid expenditures. Many of these services intended to address HRSNs may not have been previously eligible for coverage under Medicaid as an ILOS. While guidance requires these to be cost effective, the proposed rule does not require cost effectiveness to be “budget neutral.” Moreover, for ILOSs that are intended to be in lieu of some future service, the cost effectiveness may need to be measured over years.
Data on ILOS is extremely limited, and CMS does not currently collect any data (outside of ILOS spending for IMDs as part of the managed care rate contract). Moreover, there is limited information on the additional ILOSs that States may use. Therefore, we are providing a range of potential impacts for this section as well.
At the low end of the range, we project that there would be no impact on Medicaid expenditures. In these cases, we would assume (1) the use of new ILOSs are relatively lower; and (2) additional ILOS spending is offset by savings from other Medicaid services.
At the high end of the range, we project that there would be some increase in Medicaid spending. We make the following assumptions for the high scenario: (1) half of States would use new ILOSs; (2) States would increase use of ILOSs to 2 percent of total Medicaid managed care spending; and (3) additional ILOSs would offset 50 percent of new spending. Table 9 shows the impacts in the high scenario.
We also believe it is important for CMS to begin to capture data on ILOS expenditures as a portion of total capitation payments that are eligible for FFP to ensure appropriate fiscal oversight, as well as detail on the managed care plans' ILOS costs. Therefore, we proposed reporting related to the final ILOS cost percentage and actual MCO, PIHP and PAHP ILOS costs in §§ 438.16(c) and 457.1201(c). This will also aid us in future regulatory impact analyses.
If regulations impose administrative costs on private entities, such as the time needed to read and interpret this proposed rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that will review the rule, we assume that the total number of unique commenters on the 2016 final rule will be the number of reviewers of this proposed rule. We received 879 unique comments on the 2016 final rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. It is possible that not all commenters reviewed the 2016 rule in detail, and it is also possible that some reviewers chose not to comment on the proposed rule. For these reasons, we thought that the number of past commenters would be a fair estimate of the number of reviewers of this rule. We welcome any comments on the approach in estimating the number of entities which will review this proposed rule.
We also recognize that different types of entities are in many cases affected by mutually exclusive sections of this proposed rule, and therefore, for the purposes of our estimate, we assume that each reviewer reads approximately 50 percent of the rule. We seek comments on this assumption.
Using the wage information from the BLS for medical and health service managers (Code 11-9111), we estimate that the cost of reviewing this rule is $115.22 per hour, including overhead and fringe benefits
As discussed in section I.B.2.f. of this proposed rule on provider payment limits, we are considering alternatives to the ACR as a total payment rate limit for inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at an academic medical center for each SDP. The alternatives we are considering include the Medicare rate, some level between Medicare and the ACR, or a Medicare equivalent of the ACR. We are also considering an alternative that would establish a total payment rate limit for any SDPs described in paragraphs (c)(1)(i) and (ii) that are for any of these four services, at the ACR, while limiting the total payment rate for any SDPs described in paragraph § 438.6(c)(1)(iii)(C) through (E), at the Medicare rate. We are also considering and seek public comment on establishing a total payment rate limit for all services for all SDP arrangements described in § 438.6(c)(1)(i) and (ii), and 438.6(c)(1)(iii)(C) through (E) at the Medicare rate. For each of these alternatives, we acknowledge that some States currently have SDPs that have total payment rates up to the ACR. Therefore, these alternative proposals could be more restrictive, and States could need to reduce funding from current levels, which could have a negative impact on access to care and health equity initiatives.
For all MLR-related proposed changes, except those relating to SDP reporting, the only alternative considered was no change. We considered alternatives to requiring actual SDP amounts as part of MLR reports, including creating a new separate reporting process for SDPs or modifying existing reporting processes to include SDPs. We determined that creating a new separate reporting process specific to SDPs would impose significant burden on States as it would require State staff to learn a new process and complete an additional set of documents for SDP reporting. We considered modifying other State managed care reporting processes, for example, MCPAR, to include SDPs but, unlike MLR reporting, those processes were not specific to reporting financial data. We propose integrating SDP reporting in the MLR as the current MLR process requires reporting of financial data from managed care plans, and in turn, States provide a summary of these reports to CMS in the form of the annual MLR summary report. The integration of managed care plan and State SDP reporting using current MLR processes will encourage States to add the monitoring and oversight of SDPs as a part of a State's established MLR reporting process.
One alternative we considered was leaving the 2016 final rule as it is today; however, since the rule was finalized in 2016, we continue to hear of increased State and plan utilization and innovation in the use of ILOSs, and we do not believe the current regulation ensures appropriate enrollee and fiscal protections. As a result, we propose many additional safeguards in this rule. The ILOS proposals seek to ensure appropriate safeguards while also specifying that States and managed care plans can consider both short term and
As required by OMB Circular A-4 (available at
This provides our best estimates of the transfer payments outlined in the “Section C. Detailed Economic Analysis” above. We detail our estimates of the low and high end of the ranges in this section, and the primary estimate is the average of the low and high scenario impacts. This reflects a wide range of possible outcomes, but given the uncertainty
These impacts are discounted at seven percent and three percent, respectively, as reflected in Table 10.
Effects on MCOs, PIHPs or PAHPs (referred to as “managed care plans”) will not have a significant economic impact. As outlined in section II.B. of this proposed rule, we utilized data submitted by States for enrollment in Medicaid managed care plans for CY 2020. The enrollment data reflected 58,521,930 enrollees in MCOs, 37,692,501 enrollees in PIHPs or PAHPs, and 6,089,423 enrollees in PCCMs, for a total of 67,836,622 Medicaid managed care enrollees.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that some managed care plans may be small entities as that term is used in the RFA. We believe that only a few managed care plans may qualify as small entities. Specifically, we believe that approximately 14-25 managed care plans may be small entities. We believe that the remaining managed care plans have average annual receipts from Medicaid and CHIP contracts and other business interests in excess of $41.5 million; therefore, we do not believe that this proposed rule will have a significant economic impact on a substantial number of small businesses.
For purposes of the RFA, approximately 0.04 percent of Medicaid managed care plans may be considered small businesses according to the Small Business Administration's size standards with total revenues of $8 million to $41.5 million in any 1 year. Individuals and States are not included in the definition of a small entity. The cost impact on Medicaid managed care plans on a per entity basis is approximately $54,500. This proposed rule will not have a significant impact measured change in revenue of 3 to 5 percent on a substantial number of small businesses or other small entities.
The proposed rule would specifically address standards for (1) timely access to care and States' monitoring and enforcement efforts; (2) reduce burden for State directed payments (SDPs) and certain quality reporting requirements; (3) add new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization and identify the scope and nature of ILOS; (4) specify medical loss ratio (MLR) requirements; and (5) establish a quality rating system (QRS) for Medicaid and CHIP managed care plans. As outlined, these efforts do not impact small entities.
As its measure of significant economic impact on a substantial number of small entities, HHS uses a change in revenue of more than 3 to 5 percent. We do not believe that this threshold will be reached by the requirements in this proposed rule. Therefore, the Secretary has certified that this proposed rule will not have a significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 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. We do not anticipate that the provisions in this proposed rule will have a substantial economic impact on most hospitals, including small rural hospitals. Provisions include some proposed new standards for State governments and managed care plans but no direct requirements on providers, including hospitals. The impact on individual hospitals will vary according to each hospital's current and future contractual relationships with Medicaid managed care plans, but any additional burden on small rural hospitals should be negligible. We invite comment on our proposed analysis of the impact on small rural hospitals regarding the provisions of this proposed rule. We have determined that we are not preparing analysis for either the RFA or section 1102(b) of the Act because we have determined, and the Secretary certifies, that this proposed rule will not have a significant economic impact on a substantial number of small entities or a significant impact on the operations of a substantial number of small rural hospitals in comparison to total revenues of these entities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2023, that is approximately $177 million. This proposed rule does not contain any Federal mandate costs resulting from (A) imposing enforceable duties on State, local, or tribal governments, or on the private sector, or (B) increasing the stringency of conditions in, or decreasing the funding of, State, local, or tribal governments under entitlement programs. We have determined that this proposed rule does not impose any mandates on State, local, or tribal governments, or the private sector that will result in an annual expenditure of $177 million or more.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We believe this proposed regulation gives States appropriate flexibility regarding managed care standards (for example, setting network adequacy standards, setting credentialing standards, EQR activities), while also aligning Medicaid and CHIP managed care standards with those for plans in the Marketplace and MA to better streamline the beneficiary experience and to reduce administrative and operational burdens on States and health plans across publicly-funded programs and the commercial market. We have determined that this proposed rule would not significantly affect States' rights, roles, and responsibilities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2023, that threshold is approximately $177 million. This proposed rule would not impose a mandate that will result in the expenditure by State, local, and Tribal Governments, in the aggregate, or by the private sector, of more than $177 million in any one year.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This proposed rule will not have a substantial direct effect on State or local governments, preempt States, or otherwise have a Federalism implication.
Administrative practice and procedure, Grant programs-health, Medicaid, Reporting and recordkeeping requirements.
Citizenship and naturalization, Civil rights, Grant programs-health, Individuals with disabilities, Medicaid, Reporting and recordkeeping requirements, Sex discrimination.
Administrative practice and procedure, Grant programs-health,
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as set forth below:
42 U.S.C. 1302.
Four distinct types of disputes may arise under Medicaid.
(d) Disputes that pertain to disapproval of written prior approval by CMS of State directed payments under 42 CFR 438.6(c)(2)(i) are also heard by the Board in accordance with procedures set forth in 45 CFR part 16. 45 CFR part 16, appendix A, lists all the types of disputes that the Board hears.
42 U.S.C. 1302.
The addition and revision read as follows:
(9) Coordination with mental and substance use disorder health systems and providers.
The additions and revisions read as follows:
(c) * * *
(1) * * *
(ii) The final capitation rates must be based only upon services covered under the State plan, ILOS, and additional services deemed by the State to be necessary to comply with the requirements of subpart K of this part (applying parity standards from the Mental Health Parity and Addiction Equity Act), and represent a payment amount that is adequate to allow the MCO, PIHP or PAHP to efficiently deliver covered services to Medicaid-eligible individuals in a manner compliant with contractual requirements.
(e) * * *
(2) An MCO, PIHP or PAHP may cover, for enrollees, an ILOS as follows:
(i) The State determines that the ILOS is a medically appropriate and cost effective substitute for the covered service or setting under the State plan;
(ii) The enrollee is not required by the MCO, PIHP, or PAHP to use the ILOS, and the MCO, PIHP or PAHP must comply with the following requirements:
(A) An enrollee who is offered or utilizes an ILOS offered as a substitute for a covered service or setting under the State plan retains all rights and protections afforded under part 438, and if an enrollee chooses not to receive an ILOS, they retain their right to receive the service or setting covered under the State plan on the same terms as would apply if an ILOS was not an option; and
(B) An ILOS may not be used to reduce, discourage, or jeopardize an enrollee's access to services and settings covered under the State plan, and an MCO, PIHP or PAHP may not deny access to a service or setting covered under the State plan, on the basis that the enrollee has been offered an ILOS as an optional substitute for a service or setting covered under the State plan, is currently receiving an ILOS as a substitute for a service or setting covered under the State plan, or has utilized an ILOS in the past;
(iii) The approved ILOS is authorized and identified in the MCO, PIHP or PAHP contract, and will be offered to enrollees at the option of the MCO, PIHP or PAHP;
(iv) The utilization and actual cost of the ILOS is taken into account in developing the component of the capitation rates that represents the covered State plan services and settings, unless a statute or regulation explicitly requires otherwise; and
(v) With the exception of a short term stay as specified in § 438.6(e) in an Institution for Mental Diseases (IMD), as defined in § 435.1010 of this chapter, for inpatient mental health or substance use disorder treatment, an ILOS must also comply with the requirements in § 438.16.
(i) * * *
(3) The State, through its contracts with an MCO, PIHP, and PAHP must require that incentive payment contracts between the MCO, PIHP, and PAHP and network providers:
(i) Have a defined performance period that can be tied to the applicable MLR reporting periods.
(ii) Be signed and dated by all appropriate parties before the commencement of the applicable performance period.
(iii) Include well-defined quality improvement or performance metrics that the provider must meet to receive the incentive payment.
(iv) Specify a dollar amount that can be clearly linked to successful completion of the metrics defined in the incentive payment contract, including a date of payment.
(4) The State through its contracts with an MCO, PIHP, and PAHP must:
(i) Define the documentation that must be maintained by the MCO, PIHP, and PAHP to support the provider incentive payments.
(ii) Prohibit the use of attestations as supporting documentation for data that factor into the MLR calculation.
(iii) Require the MCO, PIHP, and PAHP to make incentive payment contracts, and any documentation in paragraph (e)(4)(i), available to the State upon request and at any routine frequency established in the State's contract with the MCO, PIHP, and PAHP.
(v)
The revisions and additions read as follows:
(a)
(i) The average payment rate paid by all MCOs, PIHPs, or PAHPs to all providers included in the specified provider class for each service identified in the State directed payment;
(ii) The effect of the State directed payment on the average rate paid to providers included in the specified provider class for the same service for which the State is seeking prior approval under paragraph (c)(2)(i) of this section;
(iii) The effect of any and all other State directed payments on the average rate paid to providers included in the specified provider class for the same service for which the State is seeking prior approval under paragraph (c)(2)(i) of this section; and
(iv) The effect of any and all allowable pass-through payments, as defined in paragraph (a) of this section, paid to any and all providers included in the provider class specified in the State directed payment for which the State is seeking prior approval under paragraph (c)(2)(i) of this section on the average payment rate to providers in the specified provider class.
(c)
(1) * * *
(iii) The State may require the MCO, PIHP, or PAHP to:
(A) Adopt a minimum fee schedule for providers that provide a particular service under the contract using State plan approved rates.
(B) Adopt a minimum fee schedule for providers that provide a particular service under the contract using a total published Medicare payment rate that was in effect no more than 3 years prior to the start of the rating period and the minimum fee schedule to be used by the MCO, PIHP, or PAHP is equivalent to 100 percent of the specified total published Medicare payment rate.
(C) Adopt a minimum fee schedule for providers that provide a particular service under the contract using rates other than the State plan approved rates or one or more total published Medicare payment rates described in paragraph (c)(1)(iii)(B) of this section.
(D) Provide a uniform dollar or percentage increase for providers that provide a particular service under the contract.
(E) Adopt a maximum fee schedule for providers that provide a particular service under the contract, so long as the MCO, PIHP, or PAHP retains the ability to reasonably manage risk and has discretion in accomplishing the goals of the contract.
(2)
(ii) Each State directed payment must meet the following standards. Specifically, each State directed payment must:
(A) Be based on the utilization and delivery of services;
(B) Direct expenditures equally, and using the same terms of performance, for a class of providers providing the service under the contract;
(C) Expect to advance at least one of the goals and objectives in the quality strategy in § 438.340;
(D) Have an evaluation plan that measures the degree to which the State directed payment advances at least one of the goals and objectives in the quality strategy in § 438.340 and includes all of the elements outlined in paragraph (c)(2)(iv) of this section;
(E) Not condition provider participation in State directed payments on the provider entering into or adhering to intergovernmental transfer agreements;
(F) Result in achievement of the stated goals and objectives in alignment with the State's evaluation plan;
(G) Comply with all Federal legal requirements for the financing of the non-Federal share, including but not limited to, 42 CFR 433, subpart B;
(H) Ensure that each provider receiving payment under a State directed payment attests that it does not participate in any hold harmless arrangement with respect to any health care-related tax as specified in § 433.68(f)(3) of this subchapter in which the State or other unit of government imposing the tax provides for any direct or indirect payment, offset, or waiver such that the provision of the payment, offset, or waiver directly or indirectly guarantees to hold the provider harmless for all or any portion of the tax amount, and ensure that such attestations are available upon CMS request;
(I) Ensure that the total payment rate for each service and provider class included in the State directed payment must be reasonable, appropriate and attainable and, upon request from CMS, the State must provide documentation demonstrating the total payment rate for each service and provider class; and
(J) Be developed in accordance with § 438.4, and the standards specified in §§ 438.5, 438.7, and 438.8.
(iii) The total payment rate projected for each State directed payment for which written prior approval is required under paragraph (c)(2)(i) of this section for inpatient hospital services, outpatient hospital services, nursing facility services, or qualified practitioner services at an academic medical center must not exceed the average commercial rate. To demonstrate compliance with this paragraph, States must submit:
(A) The average commercial rate demonstration, for which States must use payment data that:
(
(
(
(
(5) Excludes payments to FQHCs, RHCs, and from any non-commercial payers, such as Medicare; and
(
(B) A total payment rate comparison, for which States must provide a comparison of the total payment rate for these services included in the State directed payment to the average commercial rate that:
(
(
(
(
(
(C) The ACR demonstration described in paragraph (c)(2)(iii)(A) of this section must be included with the initial documentation submitted for written prior approval of the State directed payment under paragraph (c)(2)(i) of this section, and then subsequently updated at least once every 3 years thereafter as long as the State continues to include the State directed payment that requires prior approval under paragraph (c)(2)(i) of this section in any MCO, PIHP, or PAHP contract. The total payment rate comparison described in paragraph (c)(2)(iii)(B) of this section must be included with the documentation submitted for written prior approval under paragraph (c)(2)(i) of this section and updated with each amendment and subsequent renewal.
(iv) For State directed payments for which written prior approval under paragraph (c)(2)(i) of this section is required, the State must include a written evaluation plan with its submission for written prior approval under paragraph (c)(2)(i) of this section and an updated written evaluation plan with each amendment and subsequent renewal. The evaluation plan must include the following elements:
(A) Identification of at least two metrics that will be used to measure the effectiveness of the State directed payment in advancing at least one of the goals and objectives in the quality strategy on an annual basis, which must:
(
(
(B) Include baseline statistics on all metrics that will be used in the evaluation of the State directed payment for which the State is seeking written prior approval under paragraph (c)(2)(i) of this section;
(C) Include performance targets for all metrics to be used in the evaluation of the State directed payment for which the State is seeking written prior approval under paragraph (c)(2)(i) of this section that demonstrate either maintenance or improvement over the baseline statistics and not a decline relative to baseline. The target for at least one performance measure, as defined in § 438.6(a), must demonstrate improvement over baseline; and
(D) Include a commitment by the State to submit an evaluation report in accordance with § 438.6(c)(2)(v) if the final State directed payment cost percentage exceeds 1.5 percent.
(v) For any State directed payment for which written prior approval is required under paragraph (c)(2)(i) of this section that has a final State directed payment cost percentage greater than 1.5 percent, the State must complete and submit an evaluation report using the evaluation plan outlined during the prior approval
(A) This evaluation report must:
(
(
(
(B) States must submit the initial evaluation report as described in paragraph (c)(2)(v)(A) of this section to CMS no later than 2 years after the conclusion of the 3-year evaluation period. Subsequent evaluation reports must be submitted to CMS every 3 years.
(vi) Any State directed payments described in paragraph (c)(1)(i) or (ii) of this section must:
(A) Make participation in the value-based purchasing, delivery system reform, or performance improvement initiative available using the same terms of performance to a class of providers providing services under the contract related to the reform or improvement initiative;
(B) If the State directed payment for which written prior approval is required under paragraph (c)(2)(i) of this section conditions payment upon performance, the payment to providers under the State directed payment:
(
(
(
(
(
(C) If the State directed payment is a population-based or condition-based payment, the State directed payment must:
(
(
(
(
(vii) Any State directed payment described in paragraph (c)(1)(iii) of this section must:
(A) Condition payment from the MCO, PIHP, or PAHP to the provider on the utilization and delivery of services under the contract for the rating period for which the State is seeking written prior approval only; and
(B) Not condition payment from the MCO, PIHP, or PAHP to the provider on utilization and delivery of services outside of the rating period for which the State is seeking written prior approval and then require that payments be reconciled to utilization during the rating period.
(viii) A State must submit all required documentation for all State directed payments for which written prior approval is required under (c)(2)(i) of this section no later than:
(A) Ninety days before the end of the rating period for any State directed payments that begins at least 90 days before the end of the rating period.
(B) Before the end of the rating period for any State directed payment that begins less than 90 days before the end of the rating period.
(C) For any State directed payments that are approved for multiple rating periods as provided in paragraph (c)(3) of this section, the same time frames described in paragraphs (c)(2)(viii)(A) and (B) of this section apply to the first rating period for which the State is seeking written prior approval under paragraph (c)(2)(i) of this section.
(ix) States seeking to amend State directed payments after CMS has issued written prior approval under paragraph (c)(2)(i) of this section must obtain written prior approval of the amendment(s). States must submit all required documentation for written prior approval of such amendment(s):
(A) Prior to the end of the rating period to which the State directed payment applies to amend the State directed payment; and
(B) For any State directed payments that are approved for multiple rating periods as provided in paragraph (c)(3) of this section, within 120 days of the start of the rating period for amendments to the State directed payment for either the second or third rating period. States cannot amend State directed payments that are approved on a multi-year basis as defined in paragraph (c)(3) of this section for rating periods that have concluded.
(3)
(A) The State has explicitly identified and described the State directed payment in the contract as a multi-year State directed payment, including a description of the State directed payment by year and if the State directed payment varies by year.
(B) The State has developed and described its plan for implementing a multi-year State directed payment, including the State's plan for multi-year evaluation, and the impact of a multi-year State directed payment on the State's goals and objectives in the State's quality strategy in § 438.340.
(C) The State has affirmed that it will not make any changes to the State directed payment methodology, or magnitude of the payment, described in the contract for all years of the multi-year State directed payment without CMS written prior approval. If the State determines that changes to the State
(ii) Written prior approval of a State directed payment described in paragraph (c)(1)(iii)(C) through (E) of this section is for one rating period.
(iii) State directed payments are not automatically renewed.
(4)
(i) Provider identifiers.
(ii) Enrollee identifiers.
(iii) MCO, PIHP or PAHP identifiers.
(iv) Procedure and diagnosis codes.
(v) Allowed, billed, and paid amounts. Paid amounts include the amount that represents the MCO's, PIHP's or PAHP's negotiated payment amount, the amount of the State directed payment, the amount for any pass-through payments under paragraph (d) of this section, and any other amounts included in the total amount paid to the provider.
(5)
(i) The State directed payment start date and, if applicable, the end date within the applicable rating period;
(ii) A description of the provider class eligible for the State directed payment and all eligibility requirements;
(iii) A description of the State directed payment, which must include at a minimum:
(A) For State directed payments described in paragraphs (c)(1)(iii)(A), (B), and (C) of this section:
(
(
(
(
(
(B) For State directed payments described in paragraphs (c)(1)(iii)(D) of this section, the contract must include the following:
(
(
(
(
(
(C) For State directed payments described in paragraph (c)(1)(iii)(E) of this section, the contract must include the following:
(
(
(
(
(D) For State directed payments described in paragraphs (c)(1)(i) and (ii) of this section that condition payment based upon performance:
(
(
(
(
(
(
(E) For State directed payments described in paragraphs (c)(1)(i) and (ii) of this section using a population-based or condition-based payment as defined in paragraph (a) of this section:
(
(
(
(
(
(iv) Any encounter reporting and separate reporting requirements necessary for auditing the State directed payment in addition to the reporting requirements in paragraph (c)(4) of this section; and
(v) If the State will be using a separate payment term as defined in paragraph (a) of this section to implement the State directed payment for which written prior approval is required under paragraph (c)(2)(i) of this section.
(vi) All State directed payments must be specifically described and documented in the MCO's, PIHP's, and PAHP's contracts no later than 120 days after the start date of the State directed payment for which the State has obtained written prior approval or 120 days after the date CMS issued written prior approval of the State directed payment under (c)(2) of this section, whichever is later.
(6)
(i) Be reviewed and approved as part of the review of the State directed payment for which written prior approval is required under paragraph (c)(2)(i) of this section;
(ii) Not be used to implement a State directed payment described in paragraphs (c)(1)(iii)(A) and (B) of this section;
(iii) Be specific to each Medicaid managed care program and specific to the individual State directed payment for which the State has obtained written prior approval under paragraph (c)(2) of this section;
(iv) Not exceed the total amount documented in the written prior approval for each State directed payment for which the State has obtained written prior approval under paragraph (c)(2)(i) of this section and for each Medicaid managed care program; and
(v) Be documented in the State's contracts with the MCOs, PIHPs, or PAHPs no later than 120 days after the start date of the State directed payment for which the State has obtained written prior approval under paragraph (c)(2)(i) of this section or 120 days after the date CMS issued written prior approval of the State directed payment under (c)(2)(i) of this section, whichever is later.
(A) The separate payment term cannot be amended except to account for a payment methodology that is first approved by CMS as an amendment to the State directed payment for which the State has obtained written prior approval under paragraph (c)(2)(i) of this section.
(B) The documentation in the MCO's, PIHP's, or PAHP's contract must include:
(
(
(
(
(7)
(i)
(ii)
(iii)
(A) The actual total amount that is paid as a separate payment term described in paragraph (c)(6) of this section and portion of the actual total capitation payments that is attributable to the State directed payment for which the State has obtained written prior approval under paragraph (c)(2)(i) of this section, for each managed care program.
(B) The actual total capitation payments, defined at § 438.2, for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the actual total amount of all State directed payments that are paid as separate payment terms as described in paragraph(c)(6).
(iv)
(8)
(i) Paragraphs (a), (c)(1)(iii), (c)(2)(i), (c)(2)(ii)(A) through (C), (c)(2)(ii)(E), (c)(2)(ii)(G), (c)(2)(ii)(I) and (J), (c)(2)(vi)(A), (c)(3), (c)(6)(i) through (iv) of this section beginning on [EFFECTIVE DATE OF THE FINAL RULE].
(ii) Paragraphs (c)(2)(iii), (c)(2)(vi)(B), and (c)(2)(vi)(C)(
(iii) Paragraphs (c)(2)(ii)(H), (c)(2)(vi)(C)(
(iv) Paragraphs (c)(2)(ii)(D) and (F), (c)(2)(iv), (c)(2)(v) and (c)(7) of this section no later than the first rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 3 years after [insert the effective date of the final rule].
(v) Paragraphs (c)(5)(vi) and (c)(6)(v) of this section no later than the first rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 4 years after [insert the effective date of the final rule].
(vi) Paragraph (c)(4) of this section no later than the first rating period following the release of reporting instructions by CMS.
(e)
The revisions and additions read as follows:
(b) * * *
(6)
(c) * * *
(4) The State must submit a revised rate certification for any changes in the capitation rate per rate cell, as required under paragraph (a) of this section for any special contract provisions related to payment described in § 438.6 and ILOS in § 438.3(e)(2) not already described in the rate certification, regardless of the size of the change in the capitation rate per rate cell.
(5) Retroactive adjustments to the capitation rates, as outlined in paragraph (c)(2), resulting from a State directed payment described in § 438.6(c) must be a result of adding or amending any State directed payment consistent with the requirements in § 438.6(c), or a material error in the data, assumptions or methodologies used to develop the initial capitation rate adjustment such that modifications are necessary to correct the error.
(6) The rate certification or retroactive adjustment to capitation rates resulting from any State directed payments for which the State has obtained written prior approval under § 438.6(c)(2)(i) must be submitted no later than 120 days after the start date of the State directed payment for which the State has obtained written prior approval under § 438.6(c)(2)(i) of this section or 120 days after the date CMS issued written prior approval of the State directed payment under § 438.6(c)(2)(i) of this section, whichever is later.
(f)
(1) The State may pay each MCO, PIHP or PAHP a different amount under the separate payment term that is different than the amount paid to another MCO, PIHP or PAHP, so long as the aggregate total dollars paid to all MCOs, PIHPs and PAHPs does not exceed the total dollars of the separate payment term for each respective Medicaid managed care program included in the Medicaid managed care contract.
(2) As part of the State's rate certification documentation for a separate payment term, the State, through its actuary, must provide an estimate of the impact of the separate payment term on a rate cell basis, as paid per the State directed payment approved by CMS under § 438.6(c)(2)(i).
(3) No later than 12 months following the end of the rating period, the State must submit documentation to CMS that demonstrates the impact of the separate payment term by rate cell for which the State has obtained written prior approval under § 438.6(c)(2)(i) consistent with the distribution methodology described in the State directed payment for which the State obtained written prior approval under § 438.6(c)(2)(i) in the manner and form required by CMS.
(4) Once CMS has issued written prior approval under § 438.6(c)(2)(i), the State must submit a rate certification or a rate certification amendment incorporating the separate payment term no later than 120 days after the start date of the State directed payment for which the State has obtained written prior approval under § 438.6(c)(2)(i) or 120 days after the date CMS issued written prior approval of the State directed payment under § 438.6(c)(2)(i), whichever is later.
(g)
(2) Paragraphs (c)(4), (c)(5), (f)(1), (f)(2) and (f)(3) of this section applies beginning on [insert the effective date of the final rule].
(3) Paragraphs (c)(6) and (f)(4) of this section apply no later than the first rating period for contracts with MCOs, PIHPs and PAHPs beginning on or after 4 years after [insert the effective date of the final rule].
The revisions and additions read as follows:
(e) * * *
(2) * * *
(iii) * * *
(A) The amount of incentive and bonus payments made, or expected to be made, to network providers that are tied to clearly-defined, objectively measurable, and well-documented clinical or quality improvement standards that apply to providers.
(C) The amount of payments made under all contract arrangements that direct the MCO's, PIHP's, or PAHP's expenditures as specified in § 438.6(c)(1)(i) through (iii).
(3) * * *
(i) An MCO, PIHP, or PAHP activity that meets the requirements of 45 CFR 158.150(a) and (b) and is not excluded under 45 CFR 158.150(c).
(f) * * *
(2) * * *
(vii) Payments to the MCO, PIHP, or PAHP for expenditures approved under § 438.6(c)(1)(i) through (iii).
(h) * * *
(4) CMS will publish base credibility factors for MCOs, PIHPs, and PAHPs that are developed according to the following methodology:
(k) * * *
(1) * * *
(vii) Methodology(ies) for allocation of expenditures, which must include a detailed description of the methods used to allocate expenses, including incurred claims, quality improvement expenses, Federal and State taxes and licensing or regulatory fees, and other non-claims costs, as described in 45 CFR 158.170(b).
(xiv) The amount of payments made to providers under all contract arrangements that direct the MCO's, PIHP's, or PAHP's expenditures as described in § 438.6(c)(1)(i) through (iii).
(xv) Payments to the MCO, PIHP, or PAHP from the State for expenditures approved under § 438.6(c)(1)(i) through (iii).
(xvi) Paragraphs (k)(1)(xiv) and (xv) of this section apply to the rating period for contracts with MCOs. PIHPs, and PAHPs beginning on or after 60 days following [EFFECTIVE DATE OF THE FINAL RULE].
(m)
The revisions and additions read as follows:
(c) * * *
(3) The State must operate a website that provides the content, either directly or by linking to individual MCO, PIHP, PAHP, or PCCM entity web pages, specified at § 438.602(g) and elsewhere in this part. States must:
(i) Include all content, either directly or by linking to individual MCO, PIHP, PAHP, or PCCM entity websites, on one web page;
(ii) Include clear and easy to understand labels on documents and links;
(iii) Verify no less than quarterly, the accurate function of the website and the timeliness of the information presented; and
(iv) Explain that assistance in accessing the required information on the website is available at no cost and include information on the availability of oral interpretation in all languages and written translation available in each prevalent non-English language, how to request auxiliary aids and services, and a toll-free and TTY/TDY telephone number.
(d) * * *
(2) Make oral interpretation available in all languages and written translation available in each prevalent non-English language. Written materials that are critical to obtaining services for potential enrollees and experience surveys for enrollees must include taglines in the prevalent non-English languages in the State, explaining the availability of written translations or oral interpretation to understand the information provided, information on how to request auxiliary aids and services, and the toll-free telephone number of the entity providing choice counseling services as required by § 438.71(a). Taglines for written materials critical to obtaining services must be printed in a conspicuously-visible font size.
(g) * * *
(2) * * *
(ix) Enrollee rights and responsibilities, including the elements specified in § 438.100 and, if applicable, § 438.3(e)(2)(ii).
(h) * * *
(1) Each MCO, PIHP, PAHP, and when appropriate, the PCCM entity, must make available in paper form upon request and searchable electronic form, the following information about its network providers:
(ix) Whether the provider offers covered services via telehealth.
(2) * * *
(iv) Mental health and substance use disorder providers; and
(3) * * *
(iii) MCOs, PIHPs, or PAHPs must use the information received from the State pursuant to § 438.68(f)(1)(iii) to update provider directories no later than the timeframes specified in (h)(3)(i) and (ii).
(j)
(a)
(b)
(c)
(ii) The projected ILOS cost percentage, the final ILOS cost percentage, and the summary report of actual MCO, PIHP, and PAHP ILOS costs must be calculated on an annual basis and recalculated annually.
(iii) The projected ILOS cost percentage, the final ILOS cost percentage, and the summary report of actual MCO, PIHP, and PAHP ILOS costs must be certified by an actuary and developed in a reasonable and appropriate manner consistent with generally accepted actuarial principles and practices.
(2)
(i) The portion of the total capitation payments that is attributable to all ILOSs, excluding a short term stay in an
(ii) The projected total capitation payments for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the projected total State directed payments in effect under § 438.6(c) that are paid as a separate payment term as described in § 438.6(c)(6).
(3)
(i) The portion of the total capitation payments that is attributable to all ILOSs, excluding a short term stay in an IMD as specified in § 438.6(e), for each managed care program.
(ii) The actual total capitation payments, defined at § 438.2, for each managed care program, including all State directed payments in effect under § 438.6(c) and pass-through payments in effect under § 438.6(d), and the actual total State directed payments in effect under § 438.6(c) that are paid as a separate payment term as described in § 438.6(c)(6).
(4)
(5)
(i) The State must annually submit the projected ILOS cost percentage to CMS for review as part of the rate certification required in § 438.7(a).
(ii) The State must submit the final ILOS cost percentage and the summary report of actual MCO, PIHP, and PAHP ILOS costs annually to CMS for review as a separate report concurrent with the rate certification submission required in § 438.7(a) for the rating period beginning 2 years after the completion of each 12-month rating period that includes an ILOS.
(d)
(i) The name and definition of each ILOS;
(ii) The covered service or setting under the State plan for which each ILOS is a medically appropriate and cost-effective substitute;
(iii) The clinically defined target populations for which each ILOS is determined to be medically appropriate and cost effective;
(iv) The process by which a licensed network or MCO, PIHP, or PAHP staff provider, determines and documents in the enrollee's records that each identified ILOS is medically appropriate for the specific enrollee;
(v) The enrollee rights and protections, as defined in § 438.3(e)(2)(ii); and
(vi) A requirement that the MCO, PIHP, or PAHP will utilize specific codes established by the State that identify each ILOS in encounter data, as required under § 438.242.
(2)
(i) A description of the process and supporting evidence the State used to determine that each ILOS is a medically appropriate service or setting for the clinically defined target population(s), consistent with paragraph (d)(1)(iii) of this section.
(ii) A description of the process and supporting data the State used to determine that each ILOS is a cost-effective substitute for the clinically defined target population(s), consistent with paragraph (d)(1)(iii) of this section.
(3)
(e)
(i) Be completed separately for each managed care program that includes an ILOS.
(ii) Be completed using the 5 most recent years of accurate and validated data for the ILOS. The State must utilize these data to at least evaluate cost, utilization, access, grievances and appeals, and quality of care for each ILOS.
(iii) Evaluate at least:
(A) The impact each ILOS had on utilization of State plan approved services or settings, including any associated cost savings;
(B) Trends in MCO, PIHP, or PAHP and enrollee use of each ILOS;
(C) Whether encounter data supports the State's determination that each ILOS is a medically appropriate and cost-effective substitute for the identified covered service and setting under the State plan or a cost-effective measure to reduce or prevent the future need to utilize the covered service and setting under the State plan;
(D) The impact of each ILOS on quality of care;
(E) The final ILOS cost percentage for each year consistent with the report in paragraph (c)(5)(ii) of this section with a declaration of compliance with the allowable threshold in paragraph (c)(1)(i) of this section;
(F) Appeals, grievances, and State fair hearings data, reported separately, related to each ILOS, including volume, reason, resolution status, and trends; and
(G) The impact each ILOS had on health equity efforts undertaken by the State to mitigate health disparities.
(iv) The State must submit the retrospective evaluation to CMS no later than 2 years after the completion of the first 5 rating periods that included ILOS.
(v) CMS reserves the right to require the State to submit additional retrospective evaluations to CMS.
(2)
(i)
(A) The State determines that an ILOS is no longer a medically appropriate or cost effective substitute for the covered service or setting under the State plan identified in the contract as required in paragraph (d)(1)(ii) of this section; or
(B) The State identifies noncompliance with requirements in this section.
(ii)
(iii)
(A) A process to notify enrollees of the termination of an ILOS that they are currently receiving as expeditiously as the enrollee's health condition requires.
(B) A transition of care policy, not to exceed 12 months, to arrange for State plan services and settings to be provided timely and with minimal disruption to care to any enrollee who is currently receiving the ILOS that will be terminated. The State must make the transition of care policy publicly available.
(C) An assurance the State will submit the modification of the MCO, PIHP, or PAHP contract to remove the ILOS and submission of the modified contracts to CMS as required in § 438.3(a), and a reasonable timeline for submitting the contract amendment.
(D) An assurance the State and its actuary will submit an adjustment to the actuarially sound capitation rate, as needed, to remove utilization and cost of the ILOS from capitation rates as required in §§ 438.4, 438.7(a) and 438.7(c)(2), and a reasonable timeline for submitting the revised rate certification.
(f)
(b) * * *
(4) Enrollee materials, enrollee experience, and customer services, including the activities of the beneficiary support system.
(c) * * *
(5) Results from an annual enrollee experience survey conducted by the State and any provider satisfaction survey conducted by the State or MCO, PIHP, or PAHP.
(e) * * *
(2) * * *
(vi) Availability and accessibility of covered services, including any ILOS, within the MCO, PIHP, or PAHP contracts, including network adequacy standards.
(vii) Evaluation of MCO, PIHP, or PAHP performance on quality measures and results of an enrollee experience survey, including as applicable, consumer report card, provider surveys, or other reasonable measures of performance.
(3) * * *
(i) Posted on the website required under § 438.10(c)(3) within 30 calendar days of submitting it to CMS.
(f) With respect to applicability, States will not be held out of compliance with the requirements of paragraphs (b) through (c) of this section prior to the first rating period for contracts with MCOs, PIHPs, or PAHPs beginning on or after 3 years after [insert the effective date of the final rule], so long as they comply with the corresponding standard(s) codified in § 438.66 contained in the 42 CFR, parts 430 to 481, edition most recently published prior to the final rule.
The revisions and additions read as follows:
(b) * * *
(1)
(iii) Mental health and substance use disorder, adult and pediatric.
(d) * * *
(1) To the extent the State permits an exception to any of the provider-specific network standards developed under this section, the standard by which the exception will be evaluated and approved must:
(i) Be specified in the MCO, PIHP or PAHP contract.
(ii) Be based, at a minimum, on the number of providers in that specialty practicing in the MCO, PIHP, or PAHP service area.
(iii) Include consideration of the payment rates offered by the MCO, PIHP, or PAHP to the provider type for which an exception is being requested.
(2) States that grant an exception in accordance with paragraph (d)(1) of this section to an MCO, PIHP or PAHP must monitor enrollee access to that provider type on an ongoing basis and include the findings to CMS in the managed care program assessment report required under § 438.66(e).
(e)
(1)
(i) If covered in the MCO's, PIHP's, or PAHP's contract, outpatient mental health and substance use disorder, adult and pediatric, within State-established time frames but no longer than 10 business days from the date of request.
(ii) If covered in the MCO's, PIHP's, or PAHP's contract, primary care, adult and pediatric, within State-established time frames but no longer than 15 business days from the date of request.
(iii) If covered in the MCO's, PIHP's, or PAHP's contract, obstetrics and gynecological within State-established time frames but no longer than 15 business days from the date of request.
(iv) State-selected, other than those listed in paragraphs (e)(1)(i) through (iii) of this section, chosen in an evidence-based manner within State-established time frames.
(2)
(3)
(f)
(1)
(A) Primary care providers, if they are included in the MCO's, PIHP's, or PAHP's provider directory;
(B) Obstetric and gynecological providers, if they are included in the MCO's, PIHP's, or PAHP's provider directory;
(C) Outpatient mental health and substance use disorder providers, if they are included in the MCO's, PIHP's, or PAHP's provider directory; and
(D) The provider type chosen by the State in (e)(1)(iv).
(ii) A secret shopper survey must assess the accuracy of the information in each MCO's, PIHP's, and PAHP's most current electronic provider directories for at least:
(A) The active network status with the MCO, PIHP, or PAHP;
(B) The street address(es) as required at § 438.10(h)(1)(ii);
(C) The telephone number(s) as required at § 438.10(h)(1)(iii); and
(D) Whether the provider is accepting new enrollees as required at § 438.10(h)(1)(vi).
(iii) States must receive information, sufficient to facilitate correction by the MCO, PIHP, or PAHP, on errors in directory data identified in secret shopper surveys from the entity conducting the secret shopper survey no later than 3 business days from the day the error is identified by the entity conducting the secret shopper survey.
(iv) States must send information required in paragraph (f)(1)(iii) of this section to the applicable MCO, PIHP, or PAHP no later than 3 business days from receipt.
(2)
(i) After consulting with States and other interested parties and providing public notice and opportunity to comment, CMS may select additional types of appointments to be added to a secret shopper survey.
(ii) Appointments offered via telehealth can only be counted toward compliance with the appointment wait time standards in paragraph (e)(1) of this section if the provider being surveyed also offers in-person appointments to the MCO's, PIHP's, or PAHP's enrollees and must be identified separately from in-person appointments in survey results.
(3)
(i) An entity will be considered independent of the State if it is not part of the State Medicaid agency.
(ii) An entity will be considered independent of an MCO, PIHP, or PAHP subject to the secret shopper surveys if the entity is not an MCO, PIHP, or PAHP, is not owned or controlled by any of the MCOs, PIHPs, or PAHPs subject to the surveys, and does not own or control any of the MCOs, PIHPs, or PAHPs subject to the surveys.
(4)
(i) Use a random sample;
(ii) Include all areas of the State covered by the MCO's, PIHP's, or PAHP's contract; and
(iii) For secret shopper surveys required in paragraph (f)(2) of this section for appointment wait time standards, be completed for a statistically valid sample of providers.
(5)
(i) Reported to CMS using the content, form, and submission times as specified at § 438.207(d); and
(ii) Posted on the State's website required at § 438.10(c)(3) within 30 calendar days of submission to CMS.
(g)
(h)
(a)
(2) The summary description must be provided for each MCO, PIHP, or PAHP under contract with the State and must include, at a minimum, the amount of the numerator, the amount of the denominator, the MLR percentage achieved, the number of member months, and any remittances owed by each MCO, PIHP, or PAHP for that MLR reporting year.
(3) The summary description must also include line items for:
(i) The amount of payments made under all contract arrangements that direct the MCO's, PIHP's, or PAHP's expenditures as specified in § 438.6(c)(1)(i) through (iii); and
(ii) Payments to the MCO, PIHP, or PAHP for expenditures approved under § 438.6(c)(1)(i) through (iii).
(4) Paragraph (a)(3) of this section applies to the rating period for contracts with MCOs, PIHPs, and PAHPs beginning on or after 60 days following [insert the effective date of the final rule].
(c) * * *
(1) * * *
(i) Meet and require its network providers to meet State standards for timely access to care and services taking into account the urgency of the need for services as well as appointment wait times specified in § 438.68(e).
(d)
The revisions and additions read as follows:
(b) * * *
(3) Except as specified in paragraphs (b)(3)(iii) and (iv) of this section and if covered by the MCO's, PIHP's, or PAHP's contract, provides a payment analysis using paid claims data from the immediately prior rating period that demonstrates each MCO's, PIHP's, or PAHP's level of payment as specified in paragraphs (b)(3)(i) and (ii) of this section.
(i) The payment analysis must provide the total amount paid for evaluation and management current procedural terminology codes in the paid claims data from the prior rating period for primary care, OB/GYN, mental health, and substance use disorder services, as well as the percentage that results from dividing the total published Medicare payment rate for the same services.
(A) A separate total and percentage must be reported for primary care, obstetrics and gynecology, mental health, and substance use disorder services; and
(B) If the percentage differs between adult and pediatric services, the percentages must be reported separately.
(ii) For homemaker services, home health aide services, and personal care services, the payment analysis must provide the total amount paid and the percentage that results from dividing the total amount paid by the amount the State's Medicaid FFS program would have paid for the same services.
(A) A separate total and percentage must be reported for homemaker services, home health aide services, and personal care services; and
(B) If the percentage differs between adult and pediatric services, the percentages must be reported separately.
(iii) Payments by MCOs, PIHPS, and PAHPs for the services specified in § 438.207(b)(3)(i) but for which the MCO, PIHP, or PAHP is not the primary payer are excluded from the analysis required in this paragraph.
(iv) Services furnished by a Federally-qualified health center as defined in section 1905(l)(2) and services furnished by a rural health clinic as defined in section 1905(l)(1) are excluded from the analysis required in this paragraph.
(d)
(1) The submission to CMS must include documentation of an analysis that supports the assurance of the adequacy of the network for each contracted MCO, PIHP or PAHP related to its provider network.
(2) The analysis in paragraph (d)(1) of this section must include the payment analysis submitted by each MCO, PIHP, or PAHP, as required in paragraph (b)(3) of this section, and contain:
(i) The data provided by each MCO, PIHP, and PAHP in paragraph (b)(3) of this section; and
(ii) A State level payment percentage for each service type specified in paragraphs (b)(3)(i) and (ii) of this section produced by using the number of member months for the applicable rating period to weight each MCO's, PIHP's, or PAHP's reported percentages, as required in paragraph (b)(3) of this section.
(3) States must submit the assurance of compliance required in paragraph (d) of this section as specified in paragraphs (i) through (iii) of this section and post the report on the State's website required in § 438.10(c)(3) within 30 calendar days of submission to CMS.
(i) At the time it submits a completed readiness review, as specified at § 438.66(d)(1)(iii).
(ii) On an annual basis and no later than 180 calendar days after each rating period.
(iii) At any time there has been a significant change as specified in paragraph (c)(3) of this section and with the submission of the associated contract, as required at § 438.3(a).
(e)
(f)
(i) Submit to CMS for approval a remedy plan as specified in paragraph (f)(ii) of this section no later than 90 calendar days following the date that the State becomes aware of an MCO's, PIHP's, or PAHP's access issue;
(ii) Develop a remedy plan that addresses the identified access issue within 12 months and that identifies specific steps with timelines for implementation and completion, and responsible parties. State's and managed care plans' actions may include a variety of approaches, including, but not limited to: increasing payment rates to providers, improving outreach and problem resolution to providers, reducing barriers to provider credentialing and contracting, providing for improved or expanded use of telehealth, and improving the timeliness and accuracy of processes such as claim payment and prior authorization;
(iii) Ensure that improvements in access are measurable and sustainable; and
(iv) Submit quarterly progress updates to CMS on implementation of the remedy plan.
(2) If the remedy plan required in paragraph(f)(1) of this section does not result in addressing the MCO's, PIHP's, or PAHP's access issue by improving access within 12 months, CMS may require the State to continue the remedy plan for another 12 months and may require revision to the remedy plan required in paragraph (f)(1) of this section.
(g)
The revision and addition read as follows:
(b) * * *
(1) Each State must establish a uniform credentialing and recredentialing policy that addresses acute, primary, mental health, substance use disorders, and LTSS providers, as appropriate, and requires each MCO, PIHP and PAHP to follow those policies.
(d) * * *
(2) States must ensure through its contracts that MCOs, PIHPs, and PAHPs terminate any providers of services or persons terminated (as described in section 1902(kk)(8) of the Social Security Act) from participation under this title, title XVIII, or title XXI from participating as a provider in any network.
(b) * * *
(5) Requirements for annual external quality reviews of each contracting MCO, PIHP, PAHP including—
(c) * * *
(2) The provisions of § 438.330(b)(2) and (3), (c), and (e), and § 438.340 apply to States contracting with PCCM entities whose contracts with the State provide for shared savings, incentive payments or other financial reward for the PCCM entity for improved quality outcomes.
(d)
(1) States must comply with § 438.330(d)(4) no later than the rating period for contracts beginning after [insert the effective date of the final rule].
(2) States must comply with updates to § 438.340 no later than 1 year from [insert the effective date of the final rule].
(3) States must comply with updates to §§ 438.358 and 438.364(c)(2)(iii) no later than December 31, 2025.
(4) States must comply with § 438.364(a)(2)(iii) no later 1 year from the issuance of the associated protocol.
(d) * * *
(4) The State may permit an MCO, PIHP, or PAHP exclusively serving dual eligibles to substitute an MA organization chronic care improvement program conducted under § 422.152(c) of this chapter for one or more of the performance improvement projects otherwise required under this section.
(b) * * *
(4) Arrangements for annual, external independent reviews, in accordance with § 438.350, of the quality outcomes and timeliness of, and access to, the services covered under each MCO, PIHP, and PAHP contract.
(c) * * *
(1) Make the strategy available for public comment before submitting the strategy to CMS for review in accordance with paragraph (c)(3) of this section, including:
(2) * * *
(ii) The State must make the results of the review, including the evaluation conducted pursuant to paragraph (c)(2)(i) of this section, available on the website required under § 438.10(c)(3).
(3) Prior to adopting as final, submit to CMS the following:
(i) A copy of the initial strategy for CMS comment and feedback.
(ii) A copy of the strategy—
(A) Every 3 years following the review in paragraph (c)(2) of this section;
(B) Whenever significant changes, as defined in the State's quality strategy per paragraph (b)(10) of this section, are made to the document;
(C) Whenever significant changes occur within the State's Medicaid program.
Each State that contracts with MCOs, PIHPs, or PAHPs must ensure that—
(a) Except as provided in § 438.362, a qualified EQRO performs an annual EQR for each such contracting MCO, PIHP, or PAHP.
(c) * * *
(2) * * *
(iii) Conduct, on the State's behalf, ongoing Medicaid managed care program operations related to oversight of the quality of MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) services that it will review as an EQRO, except for the related activities specified in § 438.358;
The revisions read as follows:
(a) * * *
(1) The State, its agent that is not an MCO, PIHP, or PAHP or an EQRO may perform the mandatory and optional EQR-related activities in this section.
(3) For the EQR-related activities described in § 438.350(b)(1) and (c) of
(b) * * *
(1) For each MCO, PIHP, or PAHP the following EQR-related activities must be performed in the 12 months preceding the finalization of the annual report:
(i) Validation of performance improvement projects required in accordance with § 438.330(b)(1) that were underway during the EQR review period per paragraph (a)(3) of this section.
(ii) Validation of MCO, PIHP, or PAHP performance measures required in accordance with § 438.330(b)(2) or MCO, PIHP, or PAHP performance measures calculated by the State during the EQR review period described in paragraph (a)(3) of this section.
(iv) Validation of MCO, PIHP, or PAHP network adequacy during the EQR review period per paragraph (a)(3) of this section to comply with requirements set forth in § 438.68 and, if the State enrolls Indians in the MCO, PIHP, or PAHP, § 438.14(b)(1).
(2) [Reserved]
(c)
(6) Assist with the quality rating of MCOs, PIHPs, and PAHPs consistent with 42 CFR part 438, subpart G.
(7) Assist with evaluations required under §§ 438.16(e)(1), 438.340(c)(2)(i), and 438.6(c)(2)(iv) and (v) pertaining to outcomes, quality, or access to health care services
(a) * * *
(1) The MCO, PIHP, or PAHP is in compliance with the applicable Medicare Advantage standards established by CMS, as determined by CMS or its contractor for Medicare, or has obtained accreditation from a private accrediting organization recognized by CMS;
(b) * * *
(2)
(a) * * *
(1) A description of the manner in which the data from all activities conducted in accordance with § 438.358 were aggregated and analyzed, and conclusions were drawn as to the quality, timeliness, and access to the care furnished by the MCO, PIHP, or PAHP.
(2) * * *
(iii) The data and a description of data obtained, including validated performance measurement, any outcomes data and results from quantitative assessments, for each activity conducted in accordance with § 438.358(b)(1)(i), (ii) and (iv) of this subpart; and
(3) An assessment of each MCO's, PIHP's, or PAHP's-strengths and weaknesses for the quality, timeliness, and access to health care services furnished to Medicaid beneficiaries.
(4) Recommendations for improving the quality of health care services furnished by each MCO, PIHP, or PAHP, including how the State can target goals and objectives in the quality strategy, under § 438.340, to better support improvement in the quality, timeliness, and access to health care services furnished to Medicaid beneficiaries.
(5) Methodologically appropriate, comparative information about all MCOs, PIHPs, or PAHPs, consistent with guidance included in the EQR protocols issued in accordance with § 438.352(e).
(6) An assessment of the degree to which each MCO, PIHP, or PAHP has addressed effectively the recommendations for quality improvement made by the EQRO during the previous year's EQR.
(c) * * *
(1) The State must contract with a qualified EQRO to produce and submit to the State an annual EQR technical report in accordance with paragraph (a) of this section. The State must finalize the annual technical report by December 31st of each year.
(2) The State must—
(i) Post the most recent copy of the annual EQR technical report on the website required-under § 438.10(c)(3) by December 31st of each year and notify CMS, in a form and manner determined by CMS, within 14 calendar days of the Web posting.
(ii) Provide printed or electronic copies of the information specified in paragraph (a) of this section, upon request, to interested parties such as participating health care providers, enrollees and potential enrollees of the MCO, PIHP, or PAHP beneficiary advocacy groups, and members of the general public.
(iii) Maintain at least the previous 5 years of EQR technical reports on the on the website required under § 438.10(c)(3).
(a) Definitions. As used in this subpart, the following terms have the indicated meanings:
(a)
(1)(i) Adopt the QRS framework developed by CMS; or
(ii) Adopt an alternative managed care quality rating system in accordance with § 438.525 of this subpart.
(2) Implement such managed care quality rating system by the end of the fourth calendar year following [the effective date of the final rule published in the
(3) Use the State's beneficiary support system implemented under § 438.71 to provide the services identified at § 438.71(b)(1)(i) and (ii) to beneficiaries, enrollees, or both seeking assistance using the managed care quality rating system implemented by the State under this subpart.
(b)
(c)
(a)
(b)
(1) Engaging with States and other interested parties (such as State officials, measure experts, health plans, beneficiary advocates, tribal organizations, health plan associations, and external quality review organizations) to evaluate the current mandatory measure set and make recommendations to add, remove or update existing measures based on the criteria and standards in paragraph (c) of this section; and
(2) Providing public notice and opportunity to comment through a call letter (or similar subregulatory process using written guidance) on any planned modifications to the mandatory measure set following the engagement described in paragraph (b)(1) of this section.
(c)
(1) The measure meets at least 5 of the following criteria:
(i) Is meaningful and useful for beneficiaries or their caregivers when choosing a managed care plan;
(ii) Aligns with other CMS programs described in § 438.505(c);
(iii) Measures health plan performance in at least one of the following areas: customer experience, access to services, health outcomes, quality of care, health plan administration, and health equity;
(iv) Presents an opportunity for managed care plans to influence their performance on the measure;
(v) Is based on data that are available without undue burden on States and plans such that it is feasible to report by many States and managed care plans;
(vi) Demonstrates scientific acceptability, meaning that the measure, as specified, produces consistent and credible results;
(2) The proposed measure contributes to balanced representation of beneficiary subpopulations, age groups, health conditions, services, and performance areas within a concise mandatory measure set, and
(3) The burdens associated with including the measure does not outweigh the benefits to the overall quality rating system framework of including the new measure based on the criteria listed in paragraph (c)(1).
(d)
(1) After following the process described in paragraph (b) of this section, CMS determines that the measure no longer meets the standards described in paragraph (c) of this section;
(2) The measure steward (other than CMS) retires or stops maintaining a measure;
(3) CMS determines that the clinical guidelines associated with the specifications of the measure change such that the specifications no longer align with positive health outcomes; or
(4) CMS determines that the measure shows low statistical reliability under the standard identified in §§ 422.164(e) and 423.184(e) of this chapter.
(e)
(1)
(i) Narrow the denominator or population covered by the measure.
(ii) Do not meaningfully impact the numerator or denominator of the measure.
(iii) Update the clinical codes with no change in the target population or the intent of the measure.
(iv) Provide additional clarifications such as:
(A) Adding additional tests that would meet the numerator requirements;
(B) Clarifying documentation requirements;
(C) Adding additional instructions to identify services or procedures; or
(D) Adding alternative data sources or expanding of modes of data collection to calculate a measure.
(2)
(f)
(a) For each measurement year, the State—
(1) Must collect the data necessary to calculate quality ratings for each quality measure described in § 438.510(a) of this subpart from:
(i) The State's contracted managed care plans that have 500 or more enrollees from the State's Medicaid program on July 1 of the measurement year; and
(ii) Sources of Medicare data (including Medicare Advantage plans, Medicare providers, and CMS), the State's Medicaid fee-for-service providers, or both if all data necessary to calculate a measure cannot be provided by the managed care plans described in paragraph (a)(1) of this section and such data are available for collection by the State without undue burden.
(2) Must ensure that all data collected under paragraph (a)(1) of this section are validated.
(3) Must use the validated data described in paragraph (a)(2) of this section and the methodology described in paragraph (b) of this section to calculate for each quality measure described in § 438.510(a) of this subpart, a measure performance rate for each managed care plan whose contract includes a service or action assessed by the measure, as determined by the State.
(4) Must issue quality ratings to each managed care plan for each measure calculated for the plan under paragraph (a)(3) of this section.
(b) Subject to § 438.525, the State must ensure that the quality ratings issued under paragraph (a)(4) of this section:
(1) Include data for all enrollees who receive coverage through the managed care plan for a service or action for which data are necessary to calculate the quality rating for the managed care plan, including data for enrollees who are dually eligible for both Medicare and Medicaid, subject to the availability of data under paragraph (a)(1)(ii) of this section.
(2) Are issued to each managed care plan at the plan level, by managed care program, so that a plan participating in multiple managed care programs is issued distinct ratings for each program in which it participates resulting in quality ratings that are representative of services provided only to those beneficiaries enrolled in the plan through the rated program.
(c) After engaging with States, beneficiaries, and other interested parties, CMS will propose to implement domain-level quality ratings, including care domains for which States would be required to calculate and assign domain-level quality ratings for managed care plans, a methodology to calculate such ratings, and website display requirements for displaying such ratings on the MAC QRS website display described in § 438.520.
(a) In a manner that complies with the accessibility standards outlined in § 438.10(d) of this part and in a form and manner specified by CMS, the State must prominently display on the website required under § 438.10(c)(3):
(1) Information necessary for users to understand and navigate the contents of the QRS website display, including:
(i) A statement of the purpose of the Medicaid managed care quality rating system, relevant information on Medicaid, CHIP and Medicare and an overview of how to use the information available in the display to select a quality managed care plan;
(ii) Information on how to access the beneficiary support system described in § 438.71 to answer questions about using the State's managed care quality rating system to select a managed care plan; and
(iii) If users must input user-specific information to access or use the QRS, an explanation of why the information is requested, how it will be used, and whether it is optional or required.
(2) Information that allows beneficiaries to identify managed care plans available to them that align with their coverage needs and preferences including:
(i) All available managed care programs and plans for which a user may be eligible based on the user's age, geographic location, and dually eligible status, if applicable, as well as other demographic data identified by CMS;
(ii) A description of the drug coverage for each managed care plan, including the formulary information specified in § 438.10(i) and other similar information as specified by CMS;
(iii) Provider directory information for each managed care plan including all information required by § 438.10(h)(1) and (2) and such other provider information as specified by CMS;
(iv) Quality ratings described at § 438.515(a)(4) that are calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS in the technical resource manual, and
(v) The quality ratings described in § 438.520(a)(2)(iv) calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS, stratified by dual eligibility status, race and ethnicity, and sex.
(3) Standardized information identified by CMS that allows users to compare available managed care plans and programs, including:
(i) The name of each managed care plan;
(ii) An internet hyperlink to each managed care plan's website and each available managed care plan's toll-free customer service telephone number;
(iii) Premium and cost-sharing information including differences in premium and cost-sharing among available managed care plans within a single program;
(iv) A summary of benefits including differences in benefits among available managed care plans within a single program;
(v) Certain metrics, as specified by CMS, of managed care plan performance that States must make available to the public under subparts B and D of this part, including data most recently reported to CMS on each managed care program pursuant to § 438.66(e) of this part and the results of the secret shopper survey specified in § 438.68(f) of this part;
(vi) If a managed care plan offers an integrated Medicare-Medicaid plan or a highly or fully integrated Medicare Advantage D-SNP (as those terms are defined in § 422.2 of this chapter), an indication that an integrated plan is
(4) Information on quality ratings displayed in accordance with paragraph (a)(2)(iv) of this section in a manner that promotes beneficiary understanding of and trust in the ratings, including:
(i) A plain language description of the importance and impact of each quality measure assigned a quality rating;
(ii) The measurement period during which the data used to calculate the quality rating was produced; and
(iii) Information on quality ratings data validation, including a plain language description of when, how and by whom the data were validated.
(5) Information or hyperlinks directing users to resources on how and where to apply for Medicaid and enroll in a Medicaid or CHIP plan.
(6) By a date specified by CMS, which shall be no earlier than 2 years after the implementation date for the quality rating system specified in § 438.505:
(i) A search tool that enables users to identify available managed care plans that provide coverage for a drug identified by the user;
(ii) A search tool that enables users to identify available managed care plans that include a provider identified by the user in the plan's network of providers; and
(iii) The quality ratings described in § 438.520(a)(iv) calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS, including the display of such measures stratified by dual eligibility status, race and ethnicity, sex, age, rural/urban status, disability, language of the enrollee, or other factors specified by CMS in the annual technical resource manual.
(iv) An interactive tool that enables users to view the quality ratings described at § 438.520(a)(iv), stratified by the factors described in paragraph (a)(6)(iii) of this section.
(b) If the State chooses to display quality ratings for additional measures not included in the mandatory measures set described in § 438.510(a), the State must:
(1) Obtain input on the additional measures, prior to their use, from prospective users, including beneficiaries, caregivers, and, if the State enrolls American Indians/Alaska Natives in managed care, consult with Tribes and Tribal Organizations in accordance with the State's Tribal consultation policy; and
(2) Document the input received from prospective users required under paragraph (b)(1) of this section, including modifications made to the additional measure(s) in response to the input and rationale for input not accepted.
(c) CMS will periodically consult with States and interested parties including Medicaid managed care quality rating system users to evaluate the website display requirements described in this section for continued alignment with beneficiary preferences and values.
(a) A State may implement an alternative Medicaid managed care quality rating system that applies an alternative methodology from that described in § 438.510(a)(3) provided that—
(1) The alternative quality rating system includes the mandatory measures identified by CMS under § 438.510(a)(1);
(2) The ratings generated by the alternative quality rating system yield information regarding managed care plan performance which, to the extent feasible, is substantially comparable to that yielded by the methodology described in § 438.515, taking into account such factors as differences in covered populations, benefits, and stage of delivery system transformation, to enable meaningful comparison of performance across States.
(3) The State receives CMS approval prior to implementing an alternative quality rating system or modifications to an approved alternative Medicaid managed care quality rating system.
(b) Prior to submitting a request for, or modification of, an alternative Medicaid managed care quality rating system to CMS, the State must—
(1) Obtain input from the State's Medical Care Advisory Committee established under § 431.12 of this chapter; and
(2) Provide an opportunity for public comment of at least 30 days on the proposed alternative Medicaid managed care quality rating system or modification.
(c) To receive CMS approval for an alternative quality rating system, a State must:
(1) Submit a request for, or modification of, an alternative Medicaid managed care quality rating system to CMS in a form and manner and by a date determined by CMS; and
(2) Include the following in the State's request for or modification of an alternative quality rating system:
(i) The alternative methodology to be used in generating plan ratings;
(ii) Documentation of the public comment process specified in paragraph (b)(1) and (2) this section, including discussion of the issues raised by the Medical Care Advisory Committee and any policy revisions or modifications made in response to the comments and rationale for comments not accepted;
(iii) Other information or documentation specified by CMS to demonstrate compliance with paragraph (a) of this section; and
(iv) Other supporting documents and evidence that the State believes demonstrates compliance with the requirements of (a)(2) of this section.
(a) No later than August 1, 2025, CMS will publish a Medicaid managed care quality rating system technical resource manual, and update it annually thereafter. The technical resource manual must include all of the following:
(1) Identification of all Medicaid managed care quality rating system measures, including:
(i) A list of the mandatory measures; and
(ii) Any measures newly added or removed from the prior year's mandatory measure set.
(iii) The subset of mandatory measures that must be displayed and stratified by factors such as race and ethnicity, sex, age, rural/urban status, disability, language, or such other factors as may be specified by the CMS in accordance with §§ 438.520(a)(2)(iv) and 438.520(a)(6)(iii).
(2) Guidance on the application of the methodology used to calculate and issue quality ratings as described in § 438.515.
(3) Measure steward technical specifications for mandatory measures.
(4) A summary of interested party engagement and public comments received during the public notice and comment process described in § 438.510(b) using the process identified in § 438.510(c) for the most recent modifications to the mandatory measure set including:
(i) Discussion of the feedback and recommendations received on potential modifications to mandatory measures;
(ii) The final modifications and the timeline by which such modifications must be implemented; and
(iii) The rationale for not accepting or implementing specific recommendations or feedback submitted during the consultation process.
(b) In developing and issuing the manual content described in paragraphs (a)(1) and (2) of this section, CMS will take into account whether stratification is currently required by the measure steward or other CMS programs and by
(a) Upon CMS' request, but no more frequently than annually, the State must submit a Medicaid managed care quality rating system report in a form and manner determined by CMS. Such report must include:
(1) A list of all mandatory measures displayed as required under § 438.520(a)(1)(i) and any additional measures the State chooses to include in the Medicaid managed care quality rating system as permitted under § 438.510(a).
(2) An attestation that all displayed quality ratings for mandatory measures were calculated and issued in compliance with § 438.515, and a description of the methodology used to calculate ratings for any additional measures, if such methodology deviates from the methodology in § 438.515.
(3) The documentation required under § 438.520(b)(2), if including additional measures in the State's Medicaid managed care quality rating system in accordance with § 438.520(c)(3).
(4) The date on which the State publishes or updates the quality ratings for the State's managed care plans.
(5) A link to the State's website for their Medicaid managed care quality rating system.
(6) The application of any technical specification adjustments used to calculate and issue quality ratings described in § 438.515(a)(3) and (4), at the plan- or State-level, that are outside a measure steward's allowable adjustments for a mandatory measure but that the measure steward has approved for use by the State.
(7) A summary of each alternative QRS approved by CMS, including the effective dates for each approved alternative QRS.
(b) States will be given no less than 90 days to submit such a report to CMS on their Medicaid managed care quality rating system.
(g) * * *
(5) Enrollee handbooks, provider directories, and formularies required at § 438.10(g), (h), and (i).
(6) The information on rate ranges required at § 438.4(c)(2)(iv), if applicable.
(7) The reports required at § 438.66(e) and § 438.207(d).
(8) The network adequacy standards required at § 438.68(b)(1) through (2) and (e).
(9) The results of secret shopper surveys required at § 438.68(f).
(10) State directed payment evaluation reports required in § 438.6(c)(2)(v)(C).
(11) Information on all required Application Programming Interfaces including as specified in § 431.60(d) and (f).
(12) Quality related information as required in §§ 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i).
(13) Documentation of compliance with requirements in Subpart K—Parity in Mental Health and Substance Use Disorder Benefits.
(j)
(a) * * *
(2) Provision for reporting within 10 business days all overpayments identified or recovered, specifying the overpayments due to potential fraud, to the State.
(d) * * *
(3) Each MCO, PIHP, or PAHP must report annually to the State on all overpayments identified or recovered.
(e)
42 U.S.C. 1302.
(d)
(c)
(e
(n) * * *
(2) Contracts with PCCMs must comply with the requirements of paragraph (o) of this section; § 457.1207; § 457.1240(b) (cross-referencing § 438.330(b)(2), (b)(3), (c), and (e) of this chapter); § 457.1240(e) (cross-referencing § 438.340 of this chapter).
(e) The State must comply with the requirements related to medical loss ratios in accordance with the terms of
(f) The State must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the requirements in § 438.8 of this chapter, except that contract arrangements described in § 438.6(c) do not apply.
The State must provide, or ensure its contracted MCO, PAHP, PIHP, PCCM, and PCCM entities provide, all enrollment notices, informational materials, and instructional materials related to enrollees and potential enrollees in accordance with the terms of § 438.10 of this chapter, except that the terms of § 438.10(c)(2), (g)(2)(xi)(E), and (g)(2)(xii) of this chapter do not apply and that references to enrollee rights and protections under part 438 should be read to refer to the rights and protections under subparts K and L of this part. The State must annually post comparative summary results of enrollee experience surveys by managed care plan on the State's website as described at § 438.10(c)(3) of this chapter.
(b)
(d)
(f)
(a) Each State that contracts with MCOs, PIHPs, or PAHPs must follow all applicable external quality review requirements as set forth in §§ 438.350 (except for references to § 438.362), 438.352, 438.354, 438.356, 438.358 (except for references to § 438.6), 438.360 (only with respect to nonduplication of EQR activities with private accreditation) and 438.364 of this chapter.
The State must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438 of this chapter, except that the terms of §§ 438.66(e), 438.362(c), 438.602(g)(6) and (10), 438.604(a)(2), 438.608(d)(4) and references to LTSS of this chapter do not apply and that references to subpart K under part 438 should be read to refer to parity requirements at § 457.496.
United States Sentencing Commission.
Notice of submission to Congress of amendments to the sentencing guidelines effective November 1, 2023, and request for comment.
The United States Sentencing Commission hereby gives notice that the Commission has promulgated amendments to the sentencing guidelines, policy statements, commentary, and statutory index; and the Commission requests comment regarding whether Parts A and B of Amendment 8, relating to “status points” and certain offenders with zero criminal history points, should be included in the
There are two methods for submitting public comment.
Jennifer Dukes, Senior Public Affairs Specialist, (202) 502-4597.
The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for federal courts pursuant to 28 U.S.C. 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. 994(o) and submits guideline amendments to the Congress not later than the first day of May each year pursuant to 28 U.S.C. 994(p). Absent action of the Congress to the contrary, submitted amendments become effective by operation of law on the date specified by the Commission (generally November 1 of the year in which the amendments are submitted to Congress).
Pursuant to its authority under 28 U.S.C. 994(p), the Commission has promulgated amendments to the sentencing guidelines, policy statements, commentary, and statutory index. Notice of the proposed amendment was published in the
The text of the amendments to the sentencing guidelines, policy statements, commentary, and statutory index, and the reason for each amendment, is set forth below. Additional information pertaining to the amendments described in this notice may be accessed through the Commission's website at
This notice sets forth a request for comment regarding whether Parts A and B of Amendment 8, relating to the impact of “status points” at § 4A1.1 ((Criminal History Category) and offenders with zero criminal history points at new § 4C1.1 (Adjustment for Certain Zero-Point Offenders), should be included in subsection (d) of § 1B1.10 (Reduction in Term of Imprisonment as a Result of Amended Guideline Range (Policy Statement)) as an amendment that may be applied retroactively to previously sentenced defendants.
The Background Commentary to § 1B1.10 lists the purpose of the amendment, the magnitude of the change in the guideline range made by the amendment, and the difficulty of applying the amendment retroactively to determine an amended guideline range under § 1B1.10(b) as among the factors the Commission considers in selecting the amendments included in § 1B1.10(d). To the extent practicable, public comment should address each of these factors.
by inserting at the beginning the following new heading: “(a)
by striking “Bureau of Prisons under” and inserting “Bureau of Prisons or the defendant pursuant to”;
and by inserting at the end the following:
“(b)
(1)
(A) The defendant is suffering from a terminal illness (
(B) The defendant is—
(i) suffering from a serious physical or medical condition,
(ii) suffering from a serious functional or cognitive impairment, or
(iii) experiencing deteriorating physical or mental health because of the aging process,
that substantially diminishes the ability of the defendant to provide self-care within the environment of a correctional facility and from which he or she is not expected to recover.
(C) The defendant is suffering from a medical condition that requires long-term or specialized medical care that is not being provided and without which the defendant is at risk of serious deterioration in health or death.
(D) The defendant presents the following circumstances—
(i) the defendant is housed at a correctional facility affected or at
(ii) due to personal health risk factors and custodial status, the defendant is at increased risk of suffering severe medical complications or death as a result of exposure to the ongoing outbreak of infectious disease or the ongoing public health emergency described in clause (i); and
(iii) such risk cannot be adequately mitigated in a timely manner.
(2)
(3)
(A) The death or incapacitation of the caregiver of the defendant's minor child or the defendant's child who is 18 years of age or older and incapable of self-care because of a mental or physical disability or a medical condition.
(B) The incapacitation of the defendant's spouse or registered partner when the defendant would be the only available caregiver for the spouse or registered partner.
(C) The incapacitation of the defendant's parent when the defendant would be the only available caregiver for the parent.
(D) The defendant establishes that circumstances similar to those listed in paragraphs (3)(A) through (3)(C) exist involving any other immediate family member or an individual whose relationship with the defendant is similar in kind to that of an immediate family member, when the defendant would be the only available caregiver for such family member or individual. For purposes of this provision, `immediate family member' refers to any of the individuals listed in paragraphs (3)(A) through (3)(C) as well as a grandchild, grandparent, or sibling of the defendant.
(4)
(A) sexual abuse involving a `sexual act,' as defined in 18 U.S.C. 2246(2) (including the conduct described in 18 U.S.C. 2246(2)(D) regardless of the age of the victim); or
(B) physical abuse resulting in `serious bodily injury,' as defined in the Commentary to § 1B1.1 (Application Instructions);
that was committed by, or at the direction of, a correctional officer, an employee or contractor of the Bureau of Prisons, or any other individual who had custody or control over the defendant.
For purposes of this provision, the misconduct must be established by a conviction in a criminal case, a finding or admission of liability in a civil case, or a finding in an administrative proceeding, unless such proceedings are unduly delayed or the defendant is in imminent danger.
(5)
(6)
(c)
(d)
(e)
The Commentary to § 1B1.13 captioned “Application Notes” is amended—
by striking Notes 1 through 5 as follows:
“1.
(A)
(i) The defendant is suffering from a terminal illness (
(ii) The defendant is—
(I) suffering from a serious physical or medical condition,
(II) suffering from a serious functional or cognitive impairment, or
(III) experiencing deteriorating physical or mental health because of the aging process,
that substantially diminishes the ability of the defendant to provide self-care within the environment of a correctional facility and from which he or she is not expected to recover.
(B)
(C)
(i) The death or incapacitation of the caregiver of the defendant's minor child or minor children.
(ii) The incapacitation of the defendant's spouse or registered partner when the defendant would be the only available caregiver for the spouse or registered partner.
(D)
2.
3.
4.
This policy statement shall not be construed to confer upon the defendant any right not otherwise recognized in law.
5.
and by inserting the following new Notes 1 and 2:
“1.
2.
The Commentary to § 1B1.13 captioned “Background” is amended by striking “the Commission is authorized” and inserting “the Commission is required”.
Section 3582(c)(1)(A) authorizes a court to reduce a defendant's term of imprisonment if “extraordinary and compelling reasons” warrant a reduction and “such a reduction is consistent with applicable policy statements issued by the Sentencing Commission.” Congress directed the Commission to “describe what should be considered extraordinary and compelling reasons for sentence reduction, including the criteria to be applied and a list of specific examples.” Sentencing Reform Act of 1984 (“SRA”), Public Law 98-473, 98 Stat. 1987, 2023 (codified at 28 U.S.C. 994(t)). Congress also directed the Commission to promulgate general policy statements regarding the appropriate use of section 3582(c). 28 U.S.C. 994(a)(2)(C).
For more than 30 years, reductions pursuant to section 3582(c)(1)(A) could be granted only upon the motion of the BOP. BOP filed such motions extremely rarely—the number of defendants receiving relief averaged two dozen per year—and for the most part limited its motions to cases involving inmates who were expected to die within a year or were profoundly and irremediably incapacitated. U.S. Dep't of Just., Off. of the Inspector Gen., The Federal Bureau of Prisons' Compassionate Release Program, I-2013-006 1 & n.9 (2013).
Sentence reductions under section 3582(c)(1)(A) thus came to be known as “compassionate release,” though that phrase appears nowhere in the SRA and sentence reductions that do not result in immediate release are authorized by the law. BOP's sparing use of its authority persisted despite guidance from the Commission in 2007 that “extraordinary and compelling reasons” can be based on (a) the medical condition of the defendant, (b) the age of the defendant, (c) the defendant's family circumstances, and (d) reasons other than, or in combination with, those three specified ones. USSG App. C, amend. 698 (effective Nov. 1, 2007).
In 2018, the First Step Act put an end to BOP's gatekeeping function and allowed individuals to file motions for sentence reductions under the statute. Because the Commission lost its quorum in early 2019 and did not regain it until 2022, it was unable to amend § 1B1.13 during the more than four-year period since defendants were first permitted to file such motions. During those years, courts have found extraordinary and compelling reasons warranting sentence reductions based on all of the factors the Commission identified in 2007,
Among other things, the amendment extends the applicability of the policy statement to defendant-filed motions; expands the list of specified extraordinary and compelling reasons that can warrant sentence reductions; retains the existing “other reasons” catchall; provides specific guidance with regard to the permissible consideration of changes in the law; and responds to case law that developed after the enactment of the First Step Act.
The amendment is informed by Commission data, including its analysis of the factors identified by courts in granting sentence reduction motions in the years since the First Step Act was signed into law. It is also informed by extensive public comment, including from the Department of Justice, the Federal Public and Community Defenders, the Commission's advisory groups, law professors, currently and formerly incarcerated individuals, and other stakeholders in the federal criminal justice system.
The amendment revises § 1B1.13(a) to reflect that a defendant is now
The amendment also makes two structural changes to § 1B1.13. First, it moves the description of the permissible bases for a reduction from the Commentary to the policy statement itself.
Second, the amendment moves Application Notes 2 and 3 into the body of the policy statement as new subsections (e) and (d). Application Note 3 previously provided that, pursuant to 28 U.S.C. 994(t), rehabilitation of a defendant is not, by itself, an extraordinary and compelling reason for purposes of § 1B1.13. New subsection (d) adopts this same language but adds, consistent with the plain language of section 994(t) and courts' interpretations of it, that rehabilitation of the defendant while incarcerated may be considered
The amendment expands the list of specified extraordinary and compelling reasons and retains the “other reasons” basis for a sentence reduction to better account for and reflect the plain language of section 3582(c)(1)(A), its legislative history, and decisions by courts made in the absence of a binding policy statement.
The list of specified “extraordinary and compelling reasons” is expanded by: (a) adding two new subcategories to the “Medical Circumstances of the Defendant” ground for relief; (b) making three modifications to the “Family Circumstances” ground; (c) adding a new ground called “Victim of Abuse”; and (d) adding a new ground called “Unusually Long Sentence,” which permits a judge to consider a non-retroactive change in sentencing law as an extraordinary and compelling reason in specified circumstances.
The first of the two new subcategories under “Medical Circumstances of the Defendant” applies when a defendant is “suffering from a medical condition that requires long-term or specialized medical care that is not being provided” and who, without that care, “is at risk of serious deterioration in health or death.” The second applies when a defendant, due to personal health risk factors and custodial status, is at increased risk of suffering severe medical complications or death as a result of exposure to an ongoing outbreak of infectious disease or public health emergency. The amendment incorporates several factors courts considered during the COVID-19 pandemic related to the defendant's individual health circumstances, the level of risk at the defendant's facility, and the ability to adequately mitigate the defendant's individualized risk. The public health emergency prong requires that the emergency be declared by the appropriate governmental authority. These new subcategories reflect the medical circumstances not expressly identified in § 1B1.13 that were most often cited by courts in granting sentence reduction motions during the pandemic.
The second modification to the list of specified extraordinary and compelling reasons revises the “Family Circumstances” ground in three ways. First, it expands the existing provision relating to the death or incapacitation of the caregiver of a defendant's minor child to include a child who is 18 years of age or older and incapable of self-care because of a mental or physical disability or a medical condition. This expansion reflects the Commission's determination that providing care for a non-minor child with severe caretaking needs presents a circumstance similar to providing care for a minor child, as some courts have recognized.
The third modification to the list of specified extraordinary and compelling reasons adds a ground for relief at new subsection (b)(4) (“Victim of Abuse”), which applies if a defendant has suffered sexual or physical abuse that was committed by or at the direction of a correctional officer, an employee or contractor of the BOP, or any other individual having custody or control over the defendant. This provision responds to the Department of Justice's (“DOJ”) suggestion that a sentence reduction may be appropriate where an individual in BOP custody has been determined to have been the victim of sexual assault perpetrated by BOP personnel. Principal Assoc. Deputy Att'y Gen. Working Grp. of DOJ Components, Dep't of Just., Report and
Apart from the specified extraordinary and compelling reasons, the amendment retains the “Other Reasons” catchall ground currently found in Application Note 1(D). It also makes clear that extraordinary and compelling reasons exist if the defendant presents any other circumstance or combination of circumstances that, considered by themselves or together with any of the reasons specified in paragraphs (1) through (4), are similar in gravity to those described in paragraphs (1) through (4). The Commission considered but specifically rejected a requirement that “other reasons” be similar in nature and consequence to the specified reasons. Rather, they need be similar only in gravity, a requirement that inheres in the statutory requirement that they present extraordinary and compelling reasons for a sentence reduction.
The Commission recognized that during the period between the enactment of the First Step Act in 2018 and this amendment, district courts around the country based sentence reductions on dozens of reasons and combinations of reasons. Based on a careful review of those cases, the Commission continues to believe what is stated in Application Note 4 to the current policy statement,
The fifth modification to the list of specified extraordinary and compelling reasons appears in new subsection (b)(6) (“Unusually Long Sentence”) and permits non-retroactive changes in law (other than non-retroactive amendments to the Guidelines Manual) to be considered extraordinary and compelling reasons warranting a sentence reduction, but only in narrowly circumscribed circumstances. Specifically, where (a) the defendant is serving an unusually long sentence; (b) the defendant has served at least ten years of the sentence; and (c) an intervening change in the law has produced a gross disparity between the sentence being served and the sentence likely to be imposed at the time the motion is filed, the change in law can qualify as an extraordinary and compelling reason after the court has fully considered the defendant's individualized circumstances.
One of the expressed purposes of section 3582(c)(1)(A) when it was enacted in 1984 was to provide a narrow avenue for judicial relief from unusually long sentences. S. Rep. No. 98-225 (1983). Having abolished parole in the interest of certainty in sentencing, Congress recognized the need for such judicial authority. In effect, it replaced opaque Parole Commission review of every federal sentence with a transparent, judicial authority to consider reducing only a narrow subset of sentences—those presenting “extraordinary and compelling” reasons for a reduction.
Subsections (b)(6) and (c) operate together to respond to a circuit split concerning when, if ever, non-retroactive changes in law may be considered as extraordinary and compelling reasons within the meaning of section 3582(c)(1)(A).
The Commission considered whether the foregoing split among the circuit courts of appeals was properly addressed by the Commission, which typically resolves such disagreements when they relate to its guidelines or policy statements,
The amendment agrees with the circuits that authorize a district court to consider non-retroactive changes in the law as extraordinary and compelling circumstances warranting a sentence reduction but adopts a tailored approach that narrowly limits that principle in multiple ways. First, it permits the consideration of such changes only in cases involving “unusually long sentences,” which the legislative history to the SRA expressly identified as a context in which sentence reduction authority is needed.
Subsection (b)(6) excludes from consideration as extraordinary and compelling reasons warranting a reduction in sentence changes to the Guidelines Manual that the Commission has not made retroactive. Public comment requested that the Commission clarify the interaction between § 1B1.13 and § 1B1.10, and the Commission determined that excluding non-retroactive changes to the guidelines from consideration as extraordinary and compelling reasons was consistent with § 1B1.10 and the Supreme Court's decision in
To more fully address the proper role of changes in law in this context, the amendment also adds a new subsection (c) to the policy statement. Whereas subsection (b)(6) narrowly limits the circumstances in which a non-retroactive change in the law can constitute an extraordinary and compelling reason that itself can warrant a reduction in sentence, subsection (c) of the amended policy statement governs the use of changes in the law in cases where a defendant “otherwise establishes that extraordinary and compelling reasons warrant a sentence reduction.” In those circumstances,
Finally, the requirements in subsection (b)(6) that the defendant be serving an unusually long sentence and have served at least ten years of such sentence are not applicable to cases not covered by that subsection. Those requirements apply only when a defendant seeks to have a non-retroactive change in law itself be considered an extraordinary and compelling reason warranting a reduction in sentence.
The amendment also adds two new application notes to the Commentary to § 1B1.13. New Application Note 1 provides that a reduction under this policy statement is not appropriate when temporary release under 18 U.S.C. 3622 (a furlough granted by the Bureau of Prisons) “adequately addresses” the defendant's circumstances. This new application note responds to public comment, including comment from the Criminal Law Committee for the Judicial Conference of the United States, urging the Commission to clarify that this policy statement is not intended to address temporary medical or family circumstances that a BOP-granted furlough adequately addresses.
New Application Note 2 “encourages the court to make its best effort to ensure that any victim of the offense is reasonably, accurately, and timely notified, and provided, to the extent practicable, with an opportunity to be reasonably heard, unless any such victim previously requested not to be notified.” Although § 3582(c)(1)(A) does not require a court to conduct a public court proceeding before resolving a motion, and in many cases the passage of time can make victim identification and notification difficult, the Commission encourages the court to make its best effort to notify any victims and, to the extent public court proceedings are held, afford them an opportunity to be heard, unless the victim previously requested not to be notified.
Finally, as conforming changes, the amendment deletes Application Notes 4 and 5 and makes a minor technical change to the Background Commentary. Application Note 4 reflected that only the Bureau of Prisons could file a motion under 18 U.S.C. 3582(c)(1)(A) before the First Step Act and, as such, “encourage[d] the Director of the Bureau of Prisons to file such a motion.” Application Note 5 provided that “[a]ny reduction made pursuant to a motion by the Director of the Bureau of Prisons for the reasons set forth in subdivisions (1) and (2) is consistent with this policy statement.” These two application notes were deleted because a motion by the Director of the Bureau of Prisons is no longer required after the enactment of the First Step Act. The Background Commentary is also amended to reflect that the Commission is “required,” as opposed to “authorized,” to “describe what should be considered extraordinary and compelling reasons for sentence reduction.”
Section 2A5.2 is amended in the heading by striking “Vehicle” and inserting “Vehicle; Unsafe Operation of Unmanned Aircraft”.
The Commentary to § 2A5.2 captioned “Statutory Provisions” is amended by striking “18 U.S.C. § 1992(a)(1)” and inserting “18 U.S.C. § 39B, 1992(a)(1)”.
The Commentary to § 2B1.1 captioned “Statutory Provisions” is amended by striking “7 U.S.C. § 6, 6b, 6c, 6h, 6o, 13, 23; 15 U.S.C. § 50, 77e, 77q, 77x, 78j, 78ff, 80b-6, 1644, 6821; 18 U.S.C. § 38, 225, 285-289, 471-473, 500, 510, 553(a)(1), 641, 656, 657, 659, 662, 664, 1001-1008, 1010-1014, 1016-1022, 1025, 1026, 1028, 1029, 1030(a)(4)-(5), 1031, 1037, 1040, 1341-1344, 1348, 1350, 1361, 1363, 1369, 1702, 1703 (if vandalism or malicious mischief, including destruction of mail, is involved), 1708, 1831, 1832, 1992(a)(1), (a)(5), 2113(b), 2282A, 2282B, 2291, 2312-2317, 2332b(a)(1), 2701; 19 U.S.C. § 2401f; 29 U.S.C. § 501(c); 42 U.S.C. § 1011; 49 U.S.C. 14915, 30170, 46317(a), 60123(b)”, and inserting “5 U.S.C. §§ 8345a, 8466a; 7 U.S.C. § 6, 6b, 6c, 6h, 6o, 13, 23; 15 U.S.C. §§ 50, 77e, 77q, 77x, 78j, 78ff, 80b-6, 1644, 6821; 18 U.S.C. § 38, 220, 225, 285-289, 471-473, 500, 510, 553(a)(1), 641, 656, 657, 659, 662, 664, 1001-1008, 1010-1014,
The Commentary to § 2B4.1 captioned “Statutory Provisions” is amended by striking “18 U.S.C. § 215” and inserting “18 U.S.C. § 215, 220”.
Section 2G1.1(b)(1)(B) is amended by striking “the offense involved fraud or coercion” and inserting “(i) the offense involved fraud or coercion; or (ii) the offense of conviction is 18 U.S.C. §§ 2421A(b)(2)”.
The Commentary to § 2G1.1 captioned “Statutory Provisions” is amended by striking “2422(a) (only if the offense involved a victim other than a minor)” and inserting “2421A (only if the offense involved a victim other than a minor), 2422(a) (only if the offense involved a victim other than a minor). For additional statutory provision(s),
Section 2G1.3(b) is amended—
in paragraph (3) by striking “increase by 2 levels” and inserting “increase by 2 levels.
and in paragraph (4) by striking “If (A) the offense involved the commission of a sex act or sexual contact; or (B) subsection (a)(3) or (a)(4) applies and the offense involved a commercial sex act, increase by 2 levels.”, and inserting the following:
“(Apply the greater):
(A) If (i) the offense involved the commission of a sex act or sexual contact; or (ii) subsection (a)(3) or (a)(4) applies and the offense involved a commercial sex act, increase by 2 levels.
(B) If (i) subsection (a)(4) applies; and (ii) the offense of conviction is 18 U.S.C. §§ 2421A(b)(2), increase by 4 levels.”.
The Commentary to § 2G1.3 captioned “Statutory Provisions” is amended by striking “2422 (only if the offense involved a minor), 2423, 2425” and inserting “2421A (only if the offense involved a minor), 2422 (only if the offense involved a minor), 2423, 2425. For additional statutory provision(s),
The Commentary to § 2H3.1 captioned “Statutory Provisions” is amended by striking “47 U.S.C. § 605” and inserting “44 U.S.C. § 3572; 47 U.S.C. § 605”.
The Commentary to § 2N1.1 captioned “Statutory Provisions” is amended by striking “18 U.S.C. § 1365(a), (e)” and inserting “18 U.S.C. § 1365(a), (e); 21 U.S.C. 333(b)(7). For additional statutory provision(s),
The Commentary to § 2N2.1 captioned “Statutory Provisions” is amended by striking “333(a)(1), (a)(2), (b)” and inserting “333(a)(1), (a)(2), (b)(1)-(6), (b)(8)”.
The Commentary to § 2S1.3 captioned “Statutory Provisions” is amended by striking “5332” and inserting “5332, 5335, 5336”.
The Commentary to § 2X5.2 captioned “Statutory Provisions” is amended by striking “18 U.S.C. § 1365(f), 1801; 34 U.S.C. § 12593; 49 U.S.C. § 31310.” and inserting “10 U.S.C. § 2733a(g)(2); 18 U.S.C. § 39B, 1365(f), 1801, 2259(d)(4); 34 U.S.C. § 12593; 49 U.S.C. § 31310. For additional statutory provision(s),
Appendix A (Statutory Index) is amended—
by inserting before the line referenced to 7 U.S.C. 6 the following new line references:
by inserting before the line referenced to 12 U.S.C. § 631 the following new line reference:
by inserting before the line referenced to 18 U.S.C. § 43 the following new line references:
by inserting before the line referenced to 18 U.S.C. § 224 the following new line reference:
by inserting before the line referenced to 18 U.S.C. § 2260(a) the following new line reference:
by inserting before the line referenced to 18 U.S.C. § 2320 the following new line reference:
by inserting before the line referenced to 18 U.S.C. § 2422 the following new line reference:
by inserting before the line referenced to 21 U.S.C. § 101 the following new line reference:
by inserting before the line referenced to 21 U.S.C. § 458 the following new line reference:
by inserting before the line referenced to 31 U.S.C. § 5363 the following new line references:
and by inserting before the line referenced to 45 U.S.C. § 359(a) the following new line reference:
First, the amendment amends Appendix A (Statutory Index) to reference a new offense for counterfeit drugs at 21 U.S.C. 333(b)(8) (Penalties [for violations of the Federal Food, Drug, and Cosmetic Act (FDCA)]) to § 2N2.1 (Violations of Statutes and Regulations Dealing With Any Food, Drug, Biological Product, Device, Cosmetic, Agricultural Product, or Consumer Product) in response to the FDA Reauthorization Act of 2017, Public Law 115-52 (Aug. 18, 2017). The Act added subsection 333(b)(8), which provides that the statutory maximum term of imprisonment is ten years for a violation of 21 U.S.C. 331(i)(3) (Prohibited acts [under the FDCA]). Subsection 331(i)(3) prohibits causing a drug to be counterfeited, or making, selling, dispensing, or holding for sale or dispensing, a counterfeit drug. The Commission determined that § 2N2.1 is the most appropriate guideline to which to reference this offense because § 2N2.1 covers similar penalty provisions at section 333.
Second, the amendment amends §§ 2G1.1 (Promoting a Commercial Sex Act or Prohibiting Sexual Conduct with an Individual Other than a Minor) and 2G1.3 (Promoting a Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor) in response to the Allow States and Victims to Fight Online Sex Trafficking Act of 2017, Public Law 115-164 (Apr. 11, 2017). The Act added a new offense at 18 U.S.C. 2421A(a) (Promotion or facilitation of prostitution and reckless disregard of sex trafficking) which prohibits owning, managing, or operating an interactive computer service with the intent to promote or
Third, the amendment amends Appendix A to reference new offenses in the FAA Reauthorization Act of 2018, Public Law 115-254 (Oct. 5, 2018). The new offense at 18 U.S.C. 39B (Unsafe operation of unmanned aircraft) is referenced to § 2A5.2 (Interference with Flight Crew Member or Flight Attendant; Interference with Dispatch, Navigation, Operation, or Maintenance of Mass Transportation Vehicle) and § 2X5.2 (Class A Misdemeanors (Not Covered by Another Specific Offense Guideline)). Section 39B prohibits the knowing or reckless unsafe operation of drones that interfere with the safe operation of an aircraft carrying one or more persons or operated in close proximity to an airport runway. Section 39B has a statutory maximum term of imprisonment of one year. The statutory maximum term of imprisonment for reckless violations that cause serious bodily injury or death is ten years, and for knowing violations that cause serious bodily injury or death is any term of years or life. The Commission determined that § 2A5.2 is the most appropriate guideline to which to reference felony violations of section 39B because it covers conduct interfering with the operation of aircraft. Additionally, providing a reference to § 2X5.2 is consistent with Commission practice relating to new misdemeanor offenses.
The FAA Reauthorization Act also added a new offense at 18 U.S.C. 40A (Operation of unauthorized unmanned aircraft over wildfires) which is referenced in Appendix A to § 2A2.4 (Obstructing or Impeding Officers). Section 40A prohibits operating a drone in a manner that interferes with wildfire suppression or with law enforcement or emergency response efforts related to wildfire suppression. Section 40A has a statutory maximum term of imprisonment of two years. The Commission determined that § 2A2.4 is the most appropriate guideline to which to reference this offense because it covers conduct involving interfering with and obstructing or impeding officers.
Fourth, the amendment amends Appendix A to reference a new offense at 18 U.S.C. 220 (Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories) to §§ 2B1.1 (Theft, Property Destruction, and Fraud) and 2B4.1 (Bribery in Procurement of Bank Loan and Other Commercial Bribery) in response to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“the SUPPORT for Patients and Communities Act”), Public Law 115-271 (Oct. 24, 2018). Section 220 prohibits soliciting, receiving, paying, or offering any remuneration, including kickbacks, bribes, or rebates, for referring patients to a facility covered by a health care benefit program. Section 220 has a statutory maximum term of imprisonment of ten years. The Commission determined that §§ 2B1.1 and 2B4.1 are the most appropriate guidelines to which to reference this offense because both guidelines cover conduct involving kickbacks and bribery.
Fifth, the amendment amends Appendix A to reference a new offense at 18 U.S.C. 2259(d) (Mandatory restitution [for child pornography victims]) to § 2X5.2 in response to the Amy, Vicky, and Andy Child Pornography Victim Assistance Act, Public Law 115-299 (Dec. 7, 2018). Subsection 2259(d) prohibits attorneys from charging fees in excess of 15 percent when representing a child pornography victim who receives “defined monetary assistance” from the Child Pornography Victims Reserve and provides for a statutory maximum term of imprisonment of one year. Providing a reference to § 2X5.2 is consistent with Commission practice relating to new misdemeanor offenses.
Sixth, the amendment amends Appendix A to reference a new offense at 44 U.S.C. 3572 (Confidential information protection) to § 2H3.1 (Interception of Communications; Eavesdropping; Disclosure of Certain Private or Protected Information) in response to the Confidential Information Protection and Statistical Efficiency Act, part of the Foundations for Evidence-Based Policymaking Act of 2018, Public Law 115-435 (Jan. 14, 2019).
Section 3572 prohibits the unauthorized disclosure of information collected by an agency under a pledge of confidentiality for exclusively statistical purposes or using the information for other than statistical purposes. Section 3572 has a statutory maximum term of imprisonment of five years. The Commission determined that § 2H3.1 is the most appropriate guideline to which to reference this offense because it covers conduct involving the unauthorized disclosure of information.
Seventh, the amendment amends Appendix A to reference a new offense at 10 U.S.C. 2733a (Armed Forces; Medical malpractice claims by members of the uniformed services) to § 2X5.2 in response to the National Defense Authorization Act for Fiscal Year 2020, Public Law 116-92 (Dec. 20, 2019). Section 2733a prohibits attorneys from charging fees in excess of 20 percent when representing a member of the uniformed services who receives a payment under section 2733a for medical malpractice caused by a health care provider of the Department of Defense. Section 2733a has a statutory maximum term of imprisonment of one year. Providing a reference to § 2X5.2 is consistent with Commission practice relating to new misdemeanor offenses.
Eighth, the amendment amends Appendix A to reference two new offenses at 5 U.S.C. 8345a (Government Organization and Employees; Embezzlement or conversion of
Ninth, the amendment amends Appendix A to reference a new offense at 20 U.S.C. 1097(e) (Education; Student Assistance Programs; Criminal penalties) to § 2B1.1 in response to the Stop Student Debt Relief Scams Act of 2019, Public Law 116-251 (Dec. 22, 2020). Subsection 1097(e) prohibits the unauthorized use of an access device relating to student assistance programs issued to another or obtained by fraud to access the information technology systems of the Department of Education for commercial advantage or private financial gain. Subsection 1097(e) has a statutory maximum term of imprisonment of five years. The Commission determined that § 2B1.1 is the most appropriate guideline to which to reference this offense because § 2B1.1 covers other section 1097 offenses prohibiting embezzlement, fraud and false statements involved in student assistance programs.
Tenth, the amendment amends Appendix A to reference a new offense at 18 U.S.C. 2319C (Illicit digital transmission services) to § 2B5.3 (Criminal Infringement of Copyright or Trademark) in response to the Protecting Lawful Streaming Act, part of the 2021 Consolidated Appropriations Act, Public Law 116-260 (Dec. 27, 2020). Section 2319C prohibits publicly offering or providing digital transmission services designed to provide the unauthorized transmission of copyrighted works, including pre-release works being prepared for commercial public performance, and provides for a statutory maximum term of imprisonment of three years. The statutory maximum term of imprisonment is five years if the offense involved one or more pre-release works, and for a second or subsequent violation of section 2319C, the statutory maximum term of imprisonment is ten years. The Commission determined that § 2B5.3 is the most appropriate guideline to which to reference this offense because it covers conduct involving criminal copyright infringement including pre-release works.
Eleventh, the amendment amends Appendix A to reference multiple new offenses at 31 U.S.C. 5335 (Money and Finance; Concealment of source of assets in monetary transactions) and 5336 (Beneficial ownership information reporting requirements) to § 2S1.3 (Structuring Transactions to Evade Reporting Requirement; Failure to Report Cash or Monetary Transactions; Failure to File Currency and Monetary Instruments Report) in response to the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law 116-283 (Jan. 1, 2021).
Subsection 5335(b) prohibits concealing, falsifying, or misrepresenting a material fact from a financial institution about the ownership or control of certain assets over $1,000,000 if the person or entity controlling the assets is a certain foreign figure or associate. Subsection 5335(c) prohibits concealing, falsifying, or misrepresenting a material fact, to or from a financial institution, about the source of funds in monetary transactions involving “primary money laundering concerns” and that violate the prohibitions prescribed in section 5318A(b)(5). Both subsections 5335(b) and 5335(c) have a statutory maximum term of imprisonment of ten years.
Subsection 5336(h)(1) prohibits willfully providing false or fraudulent beneficial ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) in accordance with the reporting requirements in subsection 5336(b). Subsection 5336(h)(1) has a statutory maximum term of imprisonment of two years. Subsection 5336(c)(4) prohibits employees and officers of any requesting agency from violating the protocols established by the Secretary of the Treasury or the unauthorized disclosure or use of the beneficial ownership information submitted to FinCEN. Subsection 5336(h)(2) prohibits any person from knowingly disclosing or using beneficial ownership information obtained through a report submitted to, or through a disclosure made by, FinCEN, without authorization. Both subsections 5336(c)(4) and 5336(h)(2) have a statutory maximum term of imprisonment of five years. The statutory maximum term of imprisonment for a violation of subsection 5336(c)(4) or 5336(h)(2) is ten years if the offense was committed while violating another law of the United States or as part of a pattern of certain unlawful activities.
The Commission determined that § 2S1.3 is the most appropriate guideline to which to reference these new offenses because it covers similar conduct involving structuring financial transactions and requiring the filing of a Currency Transaction Report regarding payment, receipt, or transfer of United States coins or currency.
in the heading by striking “Acts” and inserting “Acts; Criminal Sexual Abuse of an Individual in Federal Custody”.
in subsection (a) by striking “14” and inserting “18”;
and by inserting at the end the following new subsection (c):
“(c) Cross Reference
(1) If the offense involved criminal sexual abuse or attempt to commit criminal sexual abuse (as defined in 18 U.S.C. § 2241 or § 2242), apply § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse). If the victim had not attained the age of 12 years, § 2A3.1 shall apply, regardless of the `consent' of the victim.”.
The Commentary to § 2A3.3 captioned “Statutory Provision” is amended by striking “§ 2243(b)” and inserting “§§ 2243(b), 2243(c)”.
The Commentary to § 2H1.1 captioned “Statutory Provisions” is amended by striking “246, 247, 248, 249” and inserting “246-250”.
Appendix A (Statutory Index) is amended—
by inserting before the line referenced to 18 U.S.C. 281 the following new line reference:
and by inserting before the line referenced to 18 U.S.C. 2244 the following new line reference:
First, the amendment amends Appendix A (Statutory Appendix) to reference the new offense created at 18 U.S.C. 250 (Penalties for civil rights offenses involving sexual misconduct) to § 2H1.1 (Offenses Involving Individual Rights). New section 250 criminalizes engaging in or causing another to engage in sexual misconduct while committing any civil rights offense under chapter 13 (Civil Rights) of title 18, U.S. Code, or 42 U.S.C. 3631 (Fair Housing [violations]). Section 250 delineates different degrees of prohibited sexual misconduct, including aggravated sexual abuse as defined in 18 U.S.C. 2241 (Aggravated sexual abuse), sexual abuse as defined in 18 U.S.C. 2242 (Sexual abuse), a sexual act not amounting to aggravated sexual abuse or sexual abuse, and sexual contact, as defined in 18 U.S.C. 2244 (Abusive sexual contact). The statutory maximum term of imprisonment for a violation of section 250 ranges from two years to any term of years or life, depending on the sexual conduct involved in the offense.
The Commission determined that § 2H1.1 is the most appropriate guideline to which to reference this new offense. Other similar offenses are referenced to this guideline. In addition, the Commission concluded that the alternative base offense levels provided in § 2H1.1 effectively address both the broad array of conduct criminalized under this new statute and the varying statutory maximum terms of imprisonment applicable to such conduct.
Second, the amendment amends Appendix A to reference new subsection (c) at 18 U.S.C. 2243 (Sexual abuse of a minor, a ward, or an individual in Federal custody) to § 2A3.3 and makes a conforming change to § 2A3.3's title. The new subsection at 18 U.S.C. 2243 prohibits law enforcement officers from knowingly engaging in a sexual act with an individual under arrest or supervision, in detention, or in federal custody. The Commission determined § 2A3.3 is the most appropriate guideline to which to reference the new offense because it covers a similar offense at 18 U.S.C. 2243(b) prohibiting anyone in a federal prison, institution, or facility from knowingly engaging in a sexual act with a ward, defined as an inmate or other person in official detention and under the custodial, supervisory, or disciplinary authority of the person engaging in the act. Subsection 2243(b) also has the same 15-year statutory maximum term of imprisonment, and a reference to this guideline will result in similar penalties for both subsections of section 2243.
Finally, the amendment increases the base offense level at § 2A3.3 for offenses involving the sexual abuse of a ward or an individual in federal custody from 14 to 18. The Commission determined that the increased base offense level will more appropriately reflect the 15-year statutory maximum penalty for offenses referenced to this guideline and punish the serious sexual conduct involved in these offenses. In promulgating the amendment, the Commission was informed by both the rate and extent of above-range sentences in these cases. While the average guideline minimum in fiscal years 2018 through 2022 was 17 months (median 12 months), the average sentence imposed was more than double, at 35 months (median 15 months).
The Commission also concluded that an increased guideline range for § 2A3.3 offenses would be more proportional to the guideline range at § 2A3.2 (Criminal Sexual Abuse of a Minor Under the Age of Sixteen Years (Statutory Rape) or Attempt to Commit Such Acts) for the sexual abuse of minors over the age of 12 and under the age of 16 years, conduct prohibited by 18 U.S.C. 2243(a) with the same 15-year statutory maximum term of imprisonment as subsections 2243(b) and 2243(c). Section 2A3.2 has a base offense level 18 and a 4-level enhancement if the victim is in the care, custody, or supervisory control of the defendant.
Consistent with this approach, the amendment also amends § 2A3.3 to include the same cross reference currently provided for in § 2A3.2 in order to ensure proportional guideline ranges for all section 2243 offenses when the offense involved aggravating sexual conduct. The new cross reference sends cases to § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse) if the offense involved criminal sexual abuse or attempt to commit criminal sexual abuse (as defined in 18 U.S.C. 2241 or § 2242), and further directs that § 2A3.1 shall apply if the victim had not attained the age of 12 years, regardless of the “consent” of the victim.
in paragraph (1) by striking the following:
“43, if the defendant is convicted under 21 U.S.C. 841(b)(1)(A), (b)(1)(B), or (b)(1)(C), or 21 U.S.C. 960(b)(1), (b)(2), or (b)(3), and the offense of conviction establishes that death or serious bodily injury resulted from the use of the substance and that the defendant committed the offense after one or more prior convictions for a similar offense; or”,
and inserting the following:
“43, if—
(A) the defendant is convicted under 21 U.S.C. 841(b)(1)(A) or (b)(1)(B), or 21 U.S.C. 960(b)(1) or (b)(2), and the offense of conviction establishes that death or serious bodily injury resulted from the use of the substance and that the defendant committed the offense after one or more prior convictions for a serious drug felony or serious violent felony; or
(B) the defendant is convicted under 21 U.S.C. 841(b)(1)(C) or 21 U.S.C. 960(b)(3) and the offense of conviction establishes that death or serious bodily injury resulted from the use of the substance and that the defendant committed the offense after one or more prior convictions for a felony drug offense; or”;
and in paragraph (3) by striking “similar offense” and inserting “felony drug offense”.
Section 2D1.1(b)(18) is amended by striking “subdivisions” and inserting “paragraphs”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended—
by striking Note 2 as follows:
“2.
by redesignating Note 1 as Note 2;
by inserting before Note 2 (as so redesignated) the following new Note 1:
“1.
For purposes of the guidelines, a `plant' is an organism having leaves and a readily observable root formation (
For purposes of subsection (a), `serious drug felony,' `serious violent felony,' and `felony drug offense' have the meaning given those terms in 21 U.S.C. 802.”;
and in Note 21 by striking “a minimum offense level of level 17” and inserting “that the applicable guideline range shall not be less than 24 to 30 months of imprisonment”.
Section 2D1.11(b)(6) is amended by striking “subdivisions” and inserting “paragraphs”.
The Commentary to § 2D1.11 captioned “Application Notes” is amended in Note 7 by striking “a minimum offense level of level 17” and inserting “an applicable guideline range of not less than 24 to 30 months of imprisonment”.
Section 4A1.3(b)(3)(B) is amended—
in the heading by striking “
by striking “whose criminal history category is Category I after receipt of” and inserting “who receives”;
by striking “criterion” and inserting “criminal history requirement”;
and by striking “if, before receipt of the downward departure, the defendant had more than one criminal history point under § 4A1.1 (Criminal History Category)” and inserting “if the defendant did not otherwise meet such requirement before receipt of the downward departure”.
Section 5C1.2(a) is amended—
by inserting after “§ 963,” the following: “or 46 U.S.C. 70503 or § 70506,”;
by striking “set forth below” and inserting “as follows”;
and by striking paragraph (1) as follows:
“(1) the defendant does not have more than 1 criminal history point, as determined under the sentencing guidelines before application of subsection (b) of § 4A1.3 (Departures Based on Inadequacy of Criminal History Category);”,
and inserting the following new paragraph (1):
“(1) the defendant does not have—
(A) more than 4 criminal history points, excluding any criminal history points resulting from a 1-point offense, as determined under the sentencing guidelines;
(B) a prior 3-point offense, as determined under the sentencing guidelines; and
(C) a prior 2-point violent offense, as determined under the sentencing guidelines;”.
Section 5C1.2(b) is amended by striking “the offense level applicable from Chapters Two (Offense Conduct) and Three (Adjustments) shall not be less than 17” and inserting “the applicable guideline range shall not be less than 24 to 30 months of imprisonment”.
The Commentary to § 5C1.2 captioned “Application Notes” is amended—
by striking Notes 1, 2, and 3 as follows:
“1. `More than 1 criminal history point, as determined under the sentencing guidelines,' as used in subsection (a)(1), means more than one criminal history point as determined under § 4A1.1 (Criminal History Category) before application of subsection (b) of § 4A1.3 (Departures Based on Inadequacy of Criminal History Category).
2. `Dangerous weapon' and `firearm,' as used in subsection (a)(2), and `serious bodily injury,' as used in subsection (a)(3), are defined in the Commentary to § 1B1.1 (Application Instructions).
3. `Offense,' as used in subsection (a)(2)-(4), and `offense or offenses that were part of the same course of conduct or of a common scheme or plan,' as used in subsection (a)(5), mean the offense of conviction and all relevant conduct.”;
by inserting the following new Note 1:
“1.
(A) The term `violent offense' means a `crime of violence,' as defined in 18 U.S.C. 16, that is punishable by imprisonment.
(B) `Dangerous weapon' and `firearm,' as used in subsection (a)(2), and `serious bodily injury,' as used in subsection (a)(3), are defined in the Commentary to § 1B1.1 (Application Instructions).
(C) `Offense,' as used in subsection (a)(2)-(4), and `offense or offenses that were part of the same course of conduct or of a common scheme or plan,' as used in subsection (a)(5), mean the offense of conviction and all relevant conduct.”;
by redesignating Note 4 as Note 2;
in Note 2 (as so redesignated) by inserting at the beginning the following new heading: “
by striking Notes 5, 6, and 7 as follows:
“5. `Organizer, leader, manager, or supervisor of others in the offense, as determined under the sentencing guidelines,' as used in subsection (a)(4), means a defendant who receives an adjustment for an aggravating role under § 3B1.1 (Aggravating Role).
6. `Engaged in a continuing criminal enterprise,' as used in subsection (a)(4), is defined in 21 U.S.C. 848(c). As a practical matter, it should not be necessary to apply this prong of subsection (a)(4) because (i) this section does not apply to a conviction under 21 U.S.C. 848, and (ii) any defendant who `engaged in a continuing criminal enterprise' but is convicted of an offense to which this section applies will be an `organizer, leader, manager, or supervisor of others in the offense.'
7. Information disclosed by the defendant with respect to subsection (a)(5) may be considered in determining the applicable guideline range, except where the use of such information is restricted under the provisions of § 1B1.8 (Use of Certain Information). That is, subsection (a)(5) does not provide an independent basis for restricting the use of information disclosed by the defendant.”;
by inserting the following new Notes 3 and 4:
“3.
(A)
(B)
4.
by redesignating Notes 8 and 9 as Notes 5 and 6, respectively;
in Note 5 (as so redesignated) by inserting at the beginning the following new heading: “
and in Note 6 (as so redesignated) by inserting at the beginning the following new heading: “
The Commentary to § 5C1.2 captioned “Background” is amended by inserting after “Violent Crime Control and Law Enforcement Act of 1994” the following: “and subsequently amended”.
First, the amendment makes three changes to § 5C1.2 and its corresponding commentary to reflect the statutory changes to section 3553(f) made by the First Step Act. The First Step Act expanded the safety valve provision at section 3553(f) by extending its applicability to defendants convicted of maritime offenses (46 U.S.C. 70503 and 70506) and broadening the criminal history eligibility criteria to include defendants who do not have: (1) “more than 4 criminal history points, excluding any criminal history points resulting from a 1-point offense, as determined under the sentencing guidelines”; (2) a “prior 3-point offense, as determined under the sentencing guidelines”; and (3) a “prior 2-point violent offense, as determined under the sentencing guidelines.” The amendment revises § 5C1.2(a) to include maritime offenses and the expanded statutory criminal history criteria. Next, it revises Application Note 1 to incorporate the statutory definition for the term “violent offense.” Finally, it revises Application Note 7 to reflect the new statutory limitation that information disclosed by a defendant pursuant to 18 U.S.C. 3553(f) “may not be used to enhance the defendant's sentence unless the information relates to a violent offense.”
Second, the amendment revises § 5C1.2(b) to account for the expanded class of defendants who qualify for safety valve relief. Section 5C1.2(b) implemented Congress's directive requiring that the guideline minimum be at least 24 months for defendants whose statutorily required minimum sentence was at least five years by providing a minimum offense level of 17 for such offenders.
Third, the amendment makes conforming changes to § 4A1.3 (Departures Based on Inadequacy of Criminal History Category (Policy Statement)), which references the number of criminal history points permitted under § 5C1.2(a)(1).
Fourth, the amendment makes only non-substantive changes to § 2D1.1(b)(18) and § 2D1.11(b)(6), the 2-level reductions that are tethered to the eligibility criteria of paragraphs (1)-(5) of § 5C1.2(a). The 2-level reductions in § 2D1.1 and § 2D1.11 apply to any defendant who meets the revised criteria of § 5C1.2.
Finally, the amendment revises subsections (a)(1) and (a)(3) of § 2D1.1 to replace the term “similar offense” with the appropriate terms set forth in the relevant statutory provisions, as amended by the First Step Act.
The penalty provisions at 21 U.S.C. 841(b) and 960(b) provide enhanced mandatory minimum penalties for defendants (1) whose instant offense resulted in death or serious bodily injury or (2) who have prior convictions for certain specified offenses. Penalties are further increased if death or serious bodily injury occurred as a result of the instant offense
The enhanced statutory penalty structure is accounted for through heightened alternative base offense levels (BOL) at § 2D1.1(a)(1)-(a)(4). Prior to the amendment, § 2D1.1(a)(1) provided for a BOL of 43 “if the defendant is convicted under [any of six enumerated subsections], and the offense of conviction establishes that death or serious bodily injury resulted from the use of the substance and that the defendant committed the offense after one or more prior convictions
The First Step Act amended four of the six penalty provisions referenced in § 2D1.1(a)(1) and, for those amended provisions, the term “similar offense” is over-inclusive, because it includes drug offenses that do not meet the definition of “serious drug felony,” and under-inclusive, because it fails to account for a prior “serious violent felony.” The amendment divides § 2D1.1(a)(1) into two subparagraphs, (A) and (B). Subparagraph (A), which references the four statutory provisions amended by the First Step Act, replaces the term “similar offense” with “serious drug felony or serious violent felony.” Subparagraph (B), which references the two provisions that were not amended, replaces the term “similar offense” with “felony drug offense.” The amendment also amends § 2D1.1(a)(3), by replacing the term “similar offense” with “felony drug offense,” for consistency with the terminology used in § 2D1.1(a)(1).
by inserting after “defendant” the following: “(A)”;
and by inserting after “4 levels” the following: “; or (B) represented or marketed as a legitimately manufactured drug another mixture or substance containing fentanyl (N-phenyl-N-[1-(2-phenylethyl)-4-piperidinyl] propanamide) or a fentanyl analogue, and acted with willful blindness or conscious avoidance of knowledge that such mixture or substance was not the legitimately manufactured drug, increase by 2 levels. The term `drug,' as used in subsection (b)(13)(B), has the meaning given that term in 21 U.S.C. 321(g)(1)”.
Since § 2D1.1(b)(13)'s initial promulgation in 2018, the distribution of fentanyl and fentanyl analogues has dramatically increased. The Drug Enforcement Administration reported a substantial increase in the seizure of fake prescription pills, seizing over 50.6 million in calendar year 2022, with 70 percent containing fentanyl. Of those seized pills containing fentanyl, six out of ten contained a potentially lethal dose of the substance, according to lab testing. Additionally, the Centers for Disease Control and Prevention (CDC) estimates there were 107,622 drug overdose deaths in the United States in 2021, an increase of nearly 15 percent from the 93,655 deaths estimated in 2020. The CDC attributes 80,816 of the drug overdose deaths in 2021 to synthetic opioids, primarily fentanyl.
Commission data also indicates an increase in fentanyl and fentanyl analogue offenses, with fentanyl supplanting other drug types, such as crack cocaine and heroin, to become the third most prevalent primary drug (12.6%) among federal drug offenses in fiscal year 2022. In fiscal year 2017, 166 offenders were held accountable for fentanyl or fentanyl analogues. By fiscal year 2022, the number of offenders increased to 2,511 offenders.
The new alternative 2-level enhancement reflects the increased culpability of an individual who acted with willful blindness or conscious avoidance of knowledge that the substance the individual represented or marketed as a legitimately manufactured drug contained fentanyl or a fentanyl analogue. The Commission determined that the “willful blindness” and “conscious avoidance” doctrines are “well established in criminal law,” as recognized by the Supreme Court.
Section 2K2.1(a)(6)(B) is amended by inserting after “18 U.S.C. 922(d)” the following: “, § 932, or § 933”.
Section 2K2.1(b) is amended—
in paragraph (4) by striking “If any firearm (A) was stolen, increase by 2 levels; or (B) had an altered or obliterated serial number, increase by 4 levels” and inserting “If (A) any firearm was stolen, increase by 2 levels; or (B)(i) any firearm had an altered or obliterated serial number; or (ii) the defendant knew that any firearm involved in the offense was not otherwise marked with a serial number (other than a firearm manufactured prior to the effective date of the Gun Control Act of 1968) or was willfully blind to or consciously avoided knowledge of such fact, increase by 4 levels”;
in paragraph (5) by striking “If the defendant engaged in the trafficking of firearms, increase by 4 levels.” and inserting the following:
“(Apply the Greatest) If the defendant—
(A) was convicted under 18 U.S.C. 933(a)(2) or (a)(3), increase by 2 levels;
(B) (i) transported, transferred, sold, or otherwise disposed of, or purchased or received with intent to transport, transfer, sell, or otherwise dispose of, a firearm or any ammunition knowing or having reason to believe that such conduct would result in the receipt of the firearm or ammunition by an individual who (I) was a prohibited person; or (II) intended to use or dispose of the firearm or ammunition unlawfully; (ii) attempted or conspired to commit the conduct described in clause (i); or (iii) received a firearm or any ammunition as a result of inducing the conduct described in clause (i), increase by 2 levels; or
(C) (i) transported, transferred, sold, or otherwise disposed of, or purchased or received with intent to transport, transfer, sell, or otherwise dispose of, two or more firearms knowing or having reason to believe that such conduct would result in the receipt of the firearms by an individual who (I) had a prior conviction for a crime of violence, controlled substance offense, or misdemeanor crime of domestic violence; (II) was under a criminal justice sentence at the time of the offense; or (III) intended to use or dispose of the firearms unlawfully; (ii) attempted or conspired to commit the conduct described in clause (i); or (iii) received two or more firearms as a result of inducing the conduct described in clause (i), increase by 5 levels.
and by inserting at the end the following new paragraphs (8) and (9):
“(8) If the defendant—
(A) receives an enhancement under subsection (b)(5); and
(B) committed the offense in connection with the defendant's participation in a group, club, organization, or association of five or more persons, knowing or acting with willful blindness or conscious avoidance of knowledge that the group, club, organization, or association had as one of its primary purposes the commission of criminal offenses;
increase by 2 levels.
(9) If the defendant—
(A) receives an enhancement under subsection (b)(5);
(B) does not have more than 1 criminal history point, as determined under § 4A1.1 (Criminal History Category) and § 4A1.2 (Definitions and Instructions for Computing Criminal History), read together, before application of subsection (b) of § 4A1.3 (Departures Based on Inadequacy of Criminal History Category); and
(C) (i) was motivated by an intimate or familial relationship or by threats or fear to commit the offense and was otherwise unlikely to commit such an offense; or (ii) was unusually vulnerable to being persuaded or induced to commit the offense due to a physical or mental condition;
decrease by 2 levels.”.
The Commentary to § 2K2.1 captioned “Statutory Provisions” is amended by inserting after “(k)-(o),” the following: “932, 933,”.
The Commentary to § 2K2.1 captioned “Application Notes” is amended—
in Note 3 by striking “subsections (a)(4)(B) and (a)(6)” and inserting “subsections (a)(4)(B), (a)(6), and (b)(5)”;
in Note 8(A)—
in the first paragraph by striking “However, if the offense involved a firearm with an altered or obliterated serial number, apply subsection (b)(4)(B)” and inserting “However, if the offense involved a firearm with an altered or obliterated serial number, or
and by striking the second paragraph as follows:
“Similarly, if the offense to which § 2K2.1 applies is 18 U.S.C. §§ 922(k) or 26 U.S.C. §§ 5861(g) or (h) (offenses involving an altered or obliterated serial number) and the base offense level is determined under subsection (a)(7), do not apply the enhancement in subsection (b)(4)(B). This is because the base offense level takes into account that the firearm had an altered or obliterated serial number. However, if the offense involved a stolen firearm or stolen ammunition, apply subsection (b)(4)(A).”,
and inserting the following paragraph:
“Similarly, if the offense to which § 2K2.1 applies is 18 U.S.C. §§ 922(k) or 26 U.S.C. §§ 5861(g) or (h) (offenses involving an altered or obliterated serial number) and the base offense level is determined under subsection (a)(7), do not apply the enhancement in subsection (b)(4)(B)(i). This is because the base offense level takes into account that the firearm had an altered or obliterated serial number. However, if the offense involved a stolen firearm or stolen ammunition, or if the defendant knew that any firearm involved in the offense was not otherwise marked with a serial number (other than a firearm manufactured prior to the effective date of the Gun Control Act of 1968) or was willfully blind to or consciously avoided knowledge of such fact, apply subsection (b)(4)(A) or (B)(ii).”;
in Note 8(B) by striking the following:
“
and inserting the following:
“
in Note 10 by striking “subsection (a)(1) and (a)(2)” and inserting “subsections (a)(1) and (a)(2)”;
in Note 13—
by striking paragraph (A) as follows:
“(A)
(i) transported, transferred, or otherwise disposed of two or more firearms to another individual, or received two or more firearms with the intent to transport, transfer, or otherwise dispose of firearms to another individual; and
(ii) knew or had reason to believe that such conduct would result in the transport, transfer, or disposal of a firearm to an individual—
(I) whose possession or receipt of the firearm would be unlawful; or
(II) who intended to use or dispose of the firearm unlawfully.”;
by redesignating paragraphs (B), (C), and (D) as paragraphs (A), (B), and (C), respectively;
in paragraph (A) (as so redesignated) by striking the following paragraphs:
“ `Individual whose possession or receipt of the firearm would be unlawful' means an individual who (i) has a prior conviction for a crime of violence, a controlled substance offense, or a misdemeanor crime of domestic violence; or (ii) at the time of the offense was under a criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status. `Crime of violence' and `controlled substance offense' have the meaning given those terms in § 4B1.2 (Definitions of Terms Used in Section 4B1.1). `Misdemeanor crime of domestic violence' has the meaning given that term in 18 U.S.C. §§ 921(a)(33)(A).
The term `defendant', consistent with § 1B1.3 (Relevant Conduct), limits the accountability of the defendant to the defendant's own conduct and conduct that the defendant aided or abetted, counseled, commanded, induced, procured, or willfully caused.”,
and inserting the following paragraphs:
“ `Crime of violence' and `controlled substance offense' have the meaning given those terms in § 4B1.2 (Definitions of Terms Used in Section 4B1.1).
`Misdemeanor crime of domestic violence' has the meaning given that term in 18 U.S.C. §§ 921(a)(33)(A).
The term `criminal justice sentence' includes probation, parole, supervised release, imprisonment, work release, or escape status.
The term `defendant,' consistent with § 1B1.3 (Relevant Conduct), limits the accountability of the defendant to the defendant's own conduct and conduct that the defendant aided or abetted, counseled, commanded, induced, procured, or willfully caused.”;
and in paragraph (B) (as so redesignated) by striking “If the defendant trafficked substantially more than 25 firearms” and inserting “If the defendant transported, transferred, sold, or otherwise disposed of, or purchased or received with intent to transport, transfer, sell, or otherwise dispose of, substantially more than 25 firearms”;
and by striking Note 15 as follows:
“15.
Appendix A (Statutory Index) is amended by inserting before the line referenced to 18 U.S.C. 956 the following new line references:
shall review and amend its guidelines and policy statements to ensure that persons convicted of an offense under section 932 or 933 of title 18, United States Code, and other offenses applicable to the straw purchases and trafficking of firearms are subject to increased penalties in comparison to those currently provided by the guidelines and policy statements for such straw purchasing and trafficking of firearms offenses. In its review, the Commission shall consider, in particular, an appropriate amendment to reflect the intent of Congress that straw purchasers without significant criminal histories receive sentences that are sufficient to deter participation in such
Public Law 117-159, 12004(a)(5), 136 Stat. 1313, 1328 (2022).
The amendment makes two changes to account for the new offenses at 18 U.S.C. 932 and 933 established by the Act. First, the amendment amends Appendix A (Statutory Index) to reference the new offenses to § 2K2.1. Section 12004(a)(1) of the Act makes it unlawful to engage in straw purchasing of firearms (18 U.S.C. 932) or trafficking in firearms (18 U.S.C. 933). Sections 932 and 933 both carry statutory maximum sentences of 15 years of imprisonment. 18 U.S.C. 932(c)(1), 933(b). The statutory maximum in section 932 increases to 25 years where the defendant has reasonable cause to believe the firearm would be used to commit a felony or certain other offenses. 18 U.S.C. 932(c)(2). As both offenses address conduct that is analogous to other firearms offenses, the Commission determined that the most appropriate guideline is § 2K2.1.
Second, the amendment revises § 2K2.1 to set the base offense level for defendants convicted of these crimes at level 14, or level 20 if the offense involved either a semiautomatic firearm that is capable of accepting a large capacity magazine or a firearm described in 26 U.S.C. 5845(a). The Commission set these base offense levels to the same levels applicable to defendants convicted under a third statute used to prosecute straw purchasers and traffickers with the same 15-year statutory maximum, 18 U.S.C. 922(d), to ensure proportionality.
The amendment next revises § 2K2.1 to respond to section 12004(a)(5) of the Act, which directs the Commission to provide increased penalties for defendants convicted under 18 U.S.C. 932, 18 U.S.C. 933, or “other offenses applicable to the straw purchases and trafficking of firearms.” Specifically, the amendment revises the existing “trafficking” specific offense characteristic at § 2K2.1(b)(5).
Prior to the amendment, subsection (b)(5) provided an enhancement of four levels “[i]f the defendant engaged in the trafficking of firearms.” Application Note 13(A) provided that this enhancement applied if the defendant transported, transferred, or otherwise disposed of two or more firearms to another individual, or received two or more firearms with the intent to transport, transfer, or otherwise dispose of firearms to another individual, whose possession or receipt would be unlawful or who intended to use or dispose of the firearm unlawfully. Application Note 13(B) defined a person whose possession or receipt would be unlawful as an individual who (i) had a prior conviction for a crime of violence, a controlled substance offense, or a misdemeanor crime of domestic violence; or (ii) at the time of the offense was under a criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.
The amendment revises subsection (b)(5) in three ways to comply with Congress's directive to include an increase for all defendants convicted under 18 U.S.C. 932, 18 U.S.C. 933, or other offenses involving straw purchasing or trafficking of firearms.
First, the amendment creates a new subsection, § 2K2.1(b)(5)(A), which provides a 2-level enhancement for defendants convicted of illegally receiving a firearm under 18 U.S.C. 933(a)(2) (the trafficking receipt provision) or § 933(a)(3) (attempting/conspiring to violate section 933). This ensures that receipt-only defendants convicted under section 933 receive the requisite increase.
Second, the amendment creates a new subsection, § 2K2.1(b)(5)(B), which provides a 2-level enhancement for any defendant engaged in straw purchasing or trafficking. This provision incorporates the elements of the straw purchasing and firearms trafficking statutes, including 18 U.S.C. 922(d), § 932, and § 933(a)(1), to provide an increase for defendants who attempted, conspired, or engaged in conduct involving the illicit transfer of a firearm or ammunition but who would not have received the trafficking enhancement prior to the amendment because of the limiting criteria in the existing Application Note 13. Those criteria included trafficking two or more firearms and that the recipient have criminal convictions for specified crimes.
Third, the amendment revises the criteria previously set forth in Application Notes 13(A) and (B) and incorporates the criteria into subsection (b)(5)(C). New subsection (b)(5)(C) provides an increase for defendants who attempted, conspired, or engaged in conduct involving the illicit transfer of two or more firearms to a person who (i) had a prior conviction of a crime of violence, controlled substance offense, or misdemeanor crime of domestic violence; (ii) was under a criminal justice sentence at the time of the offense; or (iii) intended to use or dispose of the firearms unlawfully. The new subsection (b)(5)(C) increases the enhancement from four levels to five levels to ensure straw purchasers and firearms traffickers meeting these criteria receive increased penalties as required by the directive.
The Commission determined that the expanded specific offense characteristic at subsection (b)(5) fully implements the directive by ensuring that defendants who illegally transfer a firearm receive an increased penalty under the guidelines. Specifically, the enhancement is tailored to apply to the most culpable defendants who engage in (a) straw purchasing, including those defendants who induce straw purchasing, and (b) firearms trafficking, including those defendants whose conduct was “upstream” in the gun trafficking pipeline. Consistent with the legislative history of the Act, public comment, and witness testimony, the Commission determined that such an increase is appropriate to reflect Congress's view that such conduct contributes to the illegal flow of firearms and that such defendants are currently under-punished as compared to felons in possession of the trafficked weapons. At the same time, by incorporating the elements of the core straw purchasing and firearms trafficking statutes, including the new offenses (sections 932 and 933), the new enhancement narrowly targets such defendants without also impacting other firearms defendants who were not intended to receive an increase.
The amendment also makes two conforming changes. First, to conform with statutory changes in 18 U.S.C. 921(a)(33), the amended subsection (b)(5)(C) includes a proviso that the enhancement does not apply by reason of the transferee's prior misdemeanor crime of domestic violence where the transferee's rights were restored. Second, the amendment amends the upward departure provision in Application Note 13(B) to conform the language with the revised subsection (b)(5).
The amendment next amends § 2K2.1 to respond to section 12004(a)(5) of the Act, which directs the Commission to increase penalties for defendants convicted under 18 U.S.C. 932 or § 933 who are affiliated with organized crime. The amendment implements this portion of the directive by creating a new specific offense characteristic providing for a 2-level enhancement under § 2K2.1(b)(8). Section 2K2.1(b)(8) applies to those defendants who receive an increase at subsection (b)(5) and who committed the offense in connection with the defendant's participation in an organization of five or more persons, knowing, or acting with willful blindness or conscious avoidance of knowledge, that the organization has as one of its primary purposes the commission of criminal offenses.
To ensure that a defendant would not receive the enhancement based solely on evidence unrelated to the criminal act or mere inclusion in gang databases, the enhancement requires that the defendant committed the offense “in connection with” the defendant's “participation” in a criminal organization, and that the defendant knew or consciously avoided knowledge of the criminal nature of the organization's activities. As with other amendments this year, the Commission determined that the doctrines of “willful blindness” and “conscious avoidance” are “well established in criminal law.”
Finally, the Commission determined that a 2-level increase for defendants receiving this enhancement is appropriate because specific offense characteristics accounting for other aggravating factors, such as the number of firearms and the use or possession of any firearm or ammunition in connection with another felony offense, may also apply to gang-affiliated defendants in addition to the new enhancement at subsection (b)(8). Accordingly, the Commission determined that an incremental 2-level enhancement appropriately and adequately differentiates straw purchasing and firearms trafficking defendants affiliated with organized crime from those who are unaffiliated.
The amendment amends § 2K2.1 to respond to section 12004(a)(5) of the Act, which directs the Commission to consider an amendment accounting for straw purchasers with mitigating circumstances. The amendment implements this portion of the directive by creating a new specific offense characteristic at § 2K2.1(b)(9) providing a 2-level reduction available to defendants who receive an increase at subsection (b)(5) and satisfy other eligibility criteria. The amendment also deletes Application Note 15, which provided for a downward departure for certain straw purchasers, because subsection (b)(9) provides a reduction with broader criteria.
Consistent with congressional intent that the reduction apply to straw purchasers without significant criminal histories, a defendant must have no more than 1 criminal history point to qualify for the specific offense characteristic. Also consistent with congressional intent that the Commission account for mitigating circumstances, the adjustment applies to a defendant motivated by an intimate or familial relationship or by threats or fear who was otherwise unlikely to commit such an offense, or to a defendant who was unusually vulnerable due to physical or mental conditions. The Commission determined that such qualifiers appropriately ensure that the reduction is not so broad as to include highly culpable defendants, while also ensuring it is not so narrow as to exclude the less culpable defendants.
Similarly, the Commission determined that a 2-level reduction is appropriate to ensure that the magnitude of the reduction matches the magnitude of the increase provided in subsections (b)(5)(A) and (B) so that qualifying defendants do not receive increased penalties as a result of the amendment taken as a whole.
Finally, the amendment amends § 2K2.1 to account for privately made firearms not marked with a serial number, commonly referred to as “ghost guns.” The amendment provides a 4-level enhancement if the defendant knew that the offense involved a firearm not marked with a serial number, or the defendant was willfully blind or consciously avoided knowing this fact.
In adding the enhancement, the Commission concluded that there is no meaningful distinction between a firearm with an obliterated serial number, which has long-triggered a 4-level enhancement under § 2K2.1(b)(4), and a firearm that is not marked with a serial number. The Commission also concluded that firearms not marked with a serial number share the traits that led the Commission to implement a 4-level enhancement for firearms with altered or obliterated serial numbers: “difficulty in tracing firearms with altered or obliterated serial numbers, and the increased market for these types of weapons.” USSG App. C, amend. 691 (effective Nov. 1, 2006). Specifically, the Commission shared concerns raised by the Department of Justice regarding the proliferation of ghost guns, the increased frequency with which ghost guns are used in connection with criminal activity, and the difficulty in tracing these firearms. Therefore, the Commission concluded that the same 4-level enhancement applied in offenses involving an altered or obliterated serial number is also appropriate for firearms not marked with a serial number.
The Commission determined that the enhancement should apply only to those defendants who knew or consciously avoided knowing that the firearm was not marked with a serial number. The amendment also specifically excepts firearms manufactured before the effective date of the Gun Control Act of 1968, which imposed the requirement that federal firearms licensees serialize newly manufactured or imported firearms.
The amendment also makes conforming changes to Application Note 8.
The Commentary to § 3E1.1 captioned “Application Notes” is amended in Note 6 by striking “The government
The amendment defines “preparing for trial” as “substantive preparations taken to present the government's case against the defendant to a jury (or judge, in the case of a bench trial) at trial.” The amendment further provides examples of actions that ordinarily indicate preparing for trial (such as preparing witnesses for trial, in limine motions, proposed voir dire questions and jury instructions, and witnesses and exhibit lists). The amendment further provides that preparations for pretrial proceedings (such as litigation related to a charging document, discovery motions, and suppression motions) ordinarily are not considered preparing for trial, and that post-conviction matters (such as sentencing objections, appeal waivers, and related issues) are not considered preparing for trial.
As Justices Sotomayor and Gorsuch observed in 2021, the conflict as to whether a suppression hearing is a valid basis for denying a § 3E1.1(b) reduction is both longstanding and has a potentially significant impact on defendants.
Similarly, the First, Third, Seventh, and Eighth Circuits have held that the government may withhold a § 3E1.1(b) motion based on sentencing challenges, while the Second and Fifth Circuits have held that it may not.
These conflicts have resulted in variation in § 3E1.1(b) motion practice across—and even within—judicial districts. In some jurisdictions, defendants receive the additional reduction as a matter of course, even if they assert pre-trial or post-conviction challenges. In others, the § 3E1.1(b) motion has been withheld based on motions to suppress, sentencing challenges, or other grounds. Because the sentencing impact of losing one additional level under § 3E1.1(b) can be significant, the practice in the latter districts has had a chilling effect, deterring defendants from pursuing certain evidentiary and sentencing challenges.
The Commission promulgated this amendment to decrease variation between jurisdictions in applying § 3E1.1(b). The amendment also aims to minimize any deterrent effect on defendants' ability to exercise their constitutional rights.
In promulgating this amendment, the Commission recognizes that these circuit conflicts involve guideline and commentary provisions that Congress directly amended, and that Congress also directed the Commission not to “alter or repeal” the congressional amendments.
The Commentary to § 2P1.1 captioned “Application Notes” is amended in Note 5 by striking “§ 4A1.1(d)” and inserting “§ 4A1.1(e)”.
Section 4A1.1 is amended—
by striking subsection (d) as follows:
“(d) Add 2 points if the defendant committed the instant offense while under any criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.”;
by redesignating subsection (e) as subsection (d);
and by inserting at the end the following new subsection (e):
“(e) Add 1 point if the defendant (1) receives 7 or more points under subsections (a) through (d), and (2) committed the instant offense while under any criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.”.
The Commentary to § 4A1.1 captioned “Application Notes” is amended—
by striking Note 4 as follows:
“4.
by redesignating Note 5 as Note 4;
in Note 4 (as so redesignated) by striking “§ 4A1.1(e)” each place such term appears and inserting “§ 4A1.1(d)”;
and by inserting at the end the following new note 5:
“5.
The Commentary to § 4A1.1 captioned “Background” is amended in the last paragraph by striking “Section 4A1.1(d) adds two points if the defendant was under a criminal justice sentence during any part of the instant offense” and inserting “Section 4A1.1(e) adds one point if the defendant receives 7 or more points under § 4A1.1(a) through (d) and was under a criminal justice sentence during any part of the instant offense”.
Section 4A1.2 is amended—
in subsection (a)(2) by striking “§ 4A1.1(e)” and inserting “§ 4A1.1(d)”;
in subsection (m) by striking “§ 4A1.1(d)” and inserting “§ 4A1.1(e)”;
in subsection (n) by striking “§ 4A1.1(d)” and inserting “§ 4A1.1(e)”;
and in subsection (p) by striking “§ 4A1.1(e)” and inserting “§ 4A1.1(d)”.
Chapter Four is amended by inserting at the end the following new Part C:
“PART C—ADJUSTMENT FOR CERTAIN ZERO-POINT OFFENDERS
§ 4C1.1.
(a)
(1) the defendant did not receive any criminal history points from Chapter Four, Part A;
(2) the defendant did not receive an adjustment under § 3A1.4 (Terrorism);
(3) the defendant did not use violence or credible threats of violence in connection with the offense;
(4) the offense did not result in death or serious bodily injury;
(5) the instant offense of conviction is not a sex offense;
(6) the defendant did not personally cause substantial financial hardship;
(7) the defendant did not possess, receive, purchase, transport, transfer, sell, or otherwise dispose of a firearm or other dangerous weapon (or induce another participant to do so) in connection with the offense;
(8) the instant offense of conviction is not covered by § 2H1.1 (Offenses Involving Individual Rights);
(9) the defendant did not receive an adjustment under § 3A1.1 (Hate Crime Motivation or Vulnerable Victim) or § 3A1.5 (Serious Human Rights Offense); and
(10) the defendant did not receive an adjustment under § 3B1.1 (Aggravating Role) and was not engaged in a continuing criminal enterprise, as defined in 21 U.S.C. 848;
decrease the offense level determined under Chapters Two and Three by 2 levels.
(b)
(1) `Dangerous weapon,' `firearm,' `offense,' and `serious bodily injury' have the meaning given those terms in the Commentary to § 1B1.1 (Application Instructions).
(2) `Sex offense' means (A) an offense, perpetrated against a minor, under (i) chapter 109A of title 18, United States Code; (ii) chapter 110 of title 18, not including a recordkeeping offense; (iii) chapter 117 of title 18, not including transmitting information about a minor or filing a factual statement about an alien individual; or (iv) 18 U.S.C. 1591; or (B) an attempt or a conspiracy to commit any offense described in subparagraphs (A)(i) through (iv) of this definition.
(3) In determining whether the defendant's acts or omissions resulted in `substantial financial hardship' to a victim, the court shall consider, among other things, the non-exhaustive list of factors provided in Application Note 4(F) of the Commentary to § 2B1.1 (Theft, Property Destruction, and Fraud).
1.
2.
The Commentary to § 5C1.1 captioned “Application Notes” is amended—
by inserting at the beginning of Note 1 the following new heading: “
by inserting at the beginning of Note 2 the following new heading: “
by inserting at the beginning of Note 3 the following new heading: “
by striking Note 4 as follows:
“If the defendant is a nonviolent first offender and the applicable guideline range is in Zone A or B of the Sentencing Table, the court should consider imposing a sentence other than a sentence of imprisonment, in accordance with subsection (b) or (c)(3).
by redesignating Notes 5 through 10 as Notes 4 through 9, respectively;
by inserting at the beginning of Note 4 (as so redesignated) the following new
by inserting at the beginning of Note 5 (as so redesignated) the following new heading: “
by inserting at the beginning of Note 6 (as so redesignated) the following new heading: “
by inserting at the beginning of Note 7 (as so redesignated) the following new heading: “
by inserting at the beginning of Note 8 (as so redesignated) the following new heading: “
by inserting at the beginning of Note 9 (as so redesignated) the following new heading: “
and by inserting at the end the following new Note 10:
“10.
(A)
(B)
Chapter One, Part A is amended in Subpart 1(4)(d) (Probation and Split Sentences)—
by adding an asterisk after “community confinement or home detention.”;
by adding a second asterisk after “through departures.*”;
and by striking the following Note:
“*Note: Although the Commission had not addressed `single acts of aberrant behavior' at the time the Introduction to the Guidelines Manual originally was written, it subsequently addressed the issue in Amendment 603, effective November 1, 2000. (
and inserting the following Notes:
“*Note: The Commission expanded Zones B and C of the Sentencing Table in 2010 to provide a greater range of sentencing options to courts with respect to certain offenders. (
**Note: Although the Commission had not addressed `single acts of aberrant behavior' at the time the Introduction to the Guidelines Manual originally was written, it subsequently addressed the issue in Amendment 603, effective November 1, 2000. (
Section 4A1.3(b)(2)(A) is amended by striking “A departure” and inserting “Unless otherwise specified, a departure”.
The Commentary to § 4A1.3 captioned “Application Notes” is amended in Note 3 by striking “due to the fact that the lower limit of the guideline range for Criminal History Category I is set for a first offender with the lowest risk of recidivism” and inserting “unless otherwise specified”.
The Commentary to § 4A1.3 captioned “Application Notes”, as amended by Part B, Subpart 3 of this amendment, is further amended in Note 3 by striking the following:
“
and inserting the following:
“
(A)
(i) The defendant had two minor misdemeanor convictions close to ten years prior to the instant offense and no other evidence of prior criminal behavior in the intervening period.
(ii) The defendant received criminal history points from a sentence for possession of marihuana for personal use, without an intent to sell or distribute it to another person.
(B)
Part A of the amendment addresses “status points” for offenders, namely the additional criminal history points given to offenders for the fact of having committed the instant offense while under a criminal justice sentence,
Under the previous “status points” provision, two criminal history points were added under § 4A1.1(d) if the defendant committed the instant offense “while under any criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.” The amendment limits the overall criminal history impact of “status points” in two ways. First, as revised, the “status points” provision under redesignated subsection (e) applies only to offenders with more serious criminal histories under the guidelines by requiring that an offender have seven or more criminal history points under subsections (a) through (d) in addition to having been under a criminal justice sentence at the time of the instant offense. Offenders with six or fewer criminal history points under subsections (a) through (d) will no longer receive “status points.” Second, the amendment also reduces from two points to one point the “status points” assessed for offenders to whom the revised provision applies. Part A of the amendment also makes conforming changes to the Commentary to § 4A1.1, § 2P1.1 (Escape, Instigating or Assisting Escape), and § 4A1.2 (Definitions and Instructions for Computing Criminal History).
As part of its study of criminal history, the Commission found that “status points” are relatively common in cases with at least one criminal history point, having been applied in 37.5 percent of cases with criminal history points over the last five fiscal years. Of the offenders who received “status points,” 61.5 percent had a higher Criminal History Category as a result of the addition of the “status points.” The Commission also recently published a series of research reports regarding the recidivism rates of federal offenders.
The Commission's action to limit the impact of “status points” builds upon its tradition of data-driven evolution of the guidelines. As described in the Introduction to Chapter Four, the original Commission envisioned status points as “consistent with the extant empirical research assessing correlates of recidivism and patterns of career criminal behavior” and therefore envisioned “status points” as being reflective of, among other sentencing goals, the increased likelihood of future recidivism.
Accordingly, the Commission determined that it was appropriate to address several concerns regarding the scope and impact of status points. In taking these steps, the Commission observed that the operation of the
At the same time, by retaining “status points” for those offenders in higher criminal history categories, the Commission continues to recognize that “status points,” like the other criminal history provisions in Chapter Four, reflect and serve multiple purposes of sentencing, including the offender's perceived lack of respect for the law, as reflected both in the offender's overall criminal history and the fact that the offender has reoffended while under a criminal justice sentence ordered by a court.
The Commission concluded that accounting for status on a more limited basis continues to serve the broader purposes of sentencing while also addressing other concerns raised regarding the impact of status points.
Part B of the amendment includes three subparts making changes pertaining to offenders who did not receive any criminal history points from Chapter Four, Part A. Subpart 1 provides for an adjustment for certain offenders with zero criminal history points. Subpart 2 revises § 5C1.1 (Imposition of a Term of Imprisonment) to implement the congressional directive at 28 U.S.C. 994(j). Finally, Subpart 3 makes other conforming changes.
Subpart 1 of Part B of the amendment creates a new Chapter Four guideline at § 4C1.1 (Adjustment for Certain Zero-Point Offenders). New § 4C1.1 provides a decrease of two levels from the offense level determined under Chapters Two and Three for offenders who did not receive any criminal history points under Chapter Four, Part A and whose instant offense did not involve specified aggravating factors. In establishing new § 4C1.1, the Commission was informed by its studies of recidivism among federal offenders, as well as other extensive data analyses of offenders with no criminal history points, and public comment. The Sentencing Table in Chapter Five, Part A is divided into six criminal history categories, from I (lowest) to VI (highest). Criminal History Category I includes offenders with zero criminal history points and those with one criminal history point. Recidivism data analyzed by the Commission shows, however, that offenders with zero criminal history points have considerably lower recidivism rates than other offenders, including offenders with one criminal history point.
In promulgating this change, the Commission also considered the rates of departures and variances in cases involving offenders with no criminal history points. The Commission has
The amendment applies to offenders with no criminal history points, including (1) offenders with no prior convictions; (2) offenders who have prior convictions that are not counted because those convictions were not within the time limits set forth in subsection (d) and (e) of § 4A1.2 (Definitions and Instructions for Computing Criminal History); and (3) offenders who have prior convictions that are not used in computing the criminal history category for reasons other than their “staleness” (
While determining that a reduction is appropriate for some offenders with zero criminal history points, the Commission also identified circumstances in which zero-point offenders are appropriately excluded from eligibility in light of the seriousness of the instant offense of conviction or the existence of aggravating factors in the instant offense (
Subpart 2 of Part B of the amendment revises the Commentary to § 5C1.1 (Imposition of a Term of Imprisonment) that addresses “nonviolent first offenders.” New Application Note 10(A) provides that if the defendant received an adjustment under new § 4C1.1 and the defendant's applicable guideline range is in Zone A or B of the Sentencing Table, a sentence other than a sentence of imprisonment, in accordance with subsection (b) or (c)(3), is generally appropriate. New Application Note 10(B) adds a corresponding departure provision providing that a departure, including a departure to a sentence other than a sentence of imprisonment, may be appropriate if the offender received an adjustment under new § 4C1.1 and the applicable guideline range overstates the gravity of the offense because the offense of conviction is not a crime of violence or an otherwise serious offense.
The changes to the Commentary to § 5C1.1 respond to Congress's directive to the Commission at 28 U.S.C. 994(j), directing the Commission to ensure that the guidelines reflect the general appropriateness of imposing a sentence other than imprisonment in cases in which the defendant is a first offender who has not been convicted of a crime of violence or an otherwise serious offense. The Commission determined that the revised commentary serves Congress's intent in promulgating section 994(j) while providing appropriate limitations and guidance through reliance on the criteria set forth in new § 4C1.1 and the specific statutory language set forth in section 994(j).
Subpart 3 of Part B of the amendment makes a corresponding change to subsection (b)(2)(A) of § 4A1.3 (Departures Based on Inadequacy of Criminal History Category (Policy Statement)) to provide that a departure below the lower limit of the applicable guideline range for Criminal History Category I is prohibited, “unless otherwise specified.” The amendment also revises an explanatory note in Chapter One, Part A, Subpart 1(4)(d) (Probation and Split Sentences) to detail amendments to the
Part C of the amendment revises the Commentary to § 4A1.3 (Departures Based on Inadequacy of Criminal History Category (Policy Statement)) to include sentences resulting from possession of marihuana offenses as an example of when a downward departure from the defendant's criminal history may be warranted. Specifically, Part C provides that a downward departure may be warranted if the defendant received criminal history points from a sentence for possession of marihuana for personal use, without an intent to sell or distribute it to another person. Most commenters, including the Department of Justice, supported this change.
The Commission also relied upon its recently published report on the impact of simple possession of marihuana offenses on sentencing.
Section 4B1.2(a) is amended—
by inserting at the beginning the following new heading “
and in paragraph (1) by striking “another,” and inserting “another;”.
Section 4B1.2(b) is amended by striking the following:
“The term `controlled substance offense' means an offense under federal or state law, punishable by imprisonment for a term exceeding one year, that prohibits the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense.”,
and inserting the following:
“
(1) prohibits the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense; or
(2) is an offense described in 46 U.S.C. 70503(a) or § 70506(b).”.
Section 4B1.2(c) is amended by inserting at the beginning the following new heading “
Section 4B1.2 is amended by inserting at the end the following two new subsections (d) and (e):
“(d)
(e)
(1)
(2)
(3)
(4)
The Commentary to § 4B1.2 captioned “Application Notes” is amended in Note 1—
in the heading by striking “
by striking the first three paragraphs as follows:
“ `Crime of violence' and `controlled substance offense' include the offenses of aiding and abetting, conspiring, and attempting to commit such offenses.
`Forcible sex offense' includes where consent to the conduct is not given or is not legally valid, such as where consent to the conduct is involuntary, incompetent, or coerced. The offenses of sexual abuse of a minor and statutory rape are included only if the sexual abuse of a minor or statutory rape was (A) an offense described in 18 U.S.C. 2241(c) or (B) an offense under state law that would have been an offense under section 2241(c) if the offense had occurred within the special maritime and territorial jurisdiction of the United States.
`Extortion' is obtaining something of value from another by the wrongful use of (A) force, (B) fear of physical injury, or (C) threat of physical injury.”;
and by striking the last paragraph as follows:
“ `Prior felony conviction' means a prior adult federal or state conviction for an offense punishable by death or imprisonment for a term exceeding one year, regardless of whether such offense is specifically designated as a felony and regardless of the actual sentence imposed. A conviction for an offense committed at age eighteen or older is an adult conviction. A conviction for an offense committed prior to age eighteen is an adult conviction if it is classified as an adult conviction under the laws of the jurisdiction in which the defendant was convicted (
The amendment makes several changes to address a circuit conflict regarding the authoritative weight afforded to certain commentary to § 4B1.2. The commentary to § 4B1.2 prior to the amendment provided that the definitions of “crime of violence” and “controlled substance offense” include the offenses of aiding and abetting, conspiring, and attempting to commit such offenses. Although most circuits had previously held that this commentary was authoritative under
The amendment addresses this circuit conflict by moving, without change, the commentary including certain inchoate and accessory offenses in the definitions of “crime of violence” and “controlled substance offense” to the text of the guideline. While not the subject of the circuit conflict, the amendment also moves the definitions of enumerated offenses (
The amendment next addresses a concern that Hobbs Act robbery offenses no longer qualify as “crimes of violence” under § 4B1.2. In 2016, the Commission amended § 4B1.2 to, among other things, delete the “residual clause” and revise the “enumerated clause” by moving enumerated offenses that were previously listed in the commentary to the guideline itself. Although the guideline generally relies on existing case law for purposes of defining most enumerated offenses, the amendment added to the Commentary to § 4B1.2 definitions for two of the enumerated offenses: “forcible sex offense” and “extortion.” Consistent with the Commission's goal of focusing the career offender and related enhancements on the most dangerous offenders, the amendment narrowed the generic definition of extortion by limiting it to offenses having an element of force or an element of fear or threat “of physical injury,” as opposed to non-violent threats such as injury to reputation. As such, extortion is defined as “obtaining something of value from another by the wrongful use of (A) force, (B) fear of physical injury, or (C) threat of physical injury.”
After the 2016 amendment, every Court of Appeals addressing the issue under the guidelines has held that Hobbs Act robbery is not a “crime of violence” under § 4B1.2, reasoning that neither generic robbery nor the guidelines definition of extortion encompass threats against property while the Hobbs Act defines “robbery” as, among other things, “the unlawful taking or obtaining of personal property . . . by means of actual or threatened force, or violence, or fear of injury, immediate or future, to his person or
The amendment amends § 4B1.2 to add to the new subsection (e) a definition of “robbery” that mirrors the “robbery” definition at 18 U.S.C. 1951(b)(1) and makes a conforming change to § 2L1.2 (Illegal Reentry), which also includes robbery as an enumerated offense. The Commission views the recent decisions holding that Hobbs Act robbery is not a crime of violence under the guidelines as an unintended consequence of the 2016 amendment to the career offender guideline meant to remove threats to reputation. In addition, the Commission conducted an analysis of recent cases and found that the Hobbs Act robberies overwhelmingly involved violence.
The amendment clarifies that “actual or threatened force” for purposes of the new “robbery” definition is “force sufficient to overcome a victim's resistance.” The Commission concludes that such definition, relying on the Supreme Court's decision in
Finally, the amendment revises the definition of “controlled substance offense” in § 4B1.2(b) to include “an offense described in 46 U.S.C. 70503(a) or § 70506(b).” The directive at 28 U.S.C. 994(h) instructs the Commission to assure that “the guidelines specify a term of imprisonment at or near the maximum term authorized” for offenders who are 18 years or older and have been convicted of a felony that is, and have previously been convicted of two or more felonies that are, among other things, “an offense described in . . . chapter 705 of title 46.”
The Commentary to § 5F1.7 captioned “Background” is amended—
by striking “six months” and inserting “6 months”;
by striking “as the Bureau deems appropriate. 18 U.S.C. 4046.' ” and inserting “as the Bureau deems appropriate.' 18 U.S.C. 4046.”;
and by striking the final paragraph as follows:
“The Bureau of Prisons has issued an operations memorandum (174-90 (5390), November 20, 1990) that outlines eligibility criteria and procedures for the implementation of this program (which the Bureau of Prisons has titled `intensive confinement program'). Under these procedures, the Bureau will not place a defendant in an intensive confinement program unless the sentencing court has approved, either at the time of sentencing or upon consultation after the Bureau has determined that the defendant is otherwise eligible. In return for the successful completion of the `intensive confinement' portion of the program, the defendant is eligible to serve the remainder of his term of imprisonment in a graduated release program comprised of community
and inserting the following:
“In 1990, the Bureau of Prisons issued an operations memorandum (174-90 (5390), November 20, 1990) that outlined eligibility criteria and procedures for the implementation of a shock incarceration program (which the Bureau of Prisons titled the `intensive confinement program'). In 2008, however, the Bureau of Prisons terminated the program and removed the rules governing its operation.
First, the amendment revises subsection (d) of § 3D1.2 (Grouping of Closely Related Counts) to provide that multiple counts involving more than one victim sentenced under § 2G1.3 (Promoting a Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor) are explicitly excluded from grouping under § 3D1.2(d). Subsection 3D1.2(d) provides that certain guidelines are excluded from the operation of the grouping rules in Chapter Three, Part D (Multiple Counts). Among the guidelines specifically excluded under § 3D1.2(d) is § 2G1.1 (Promoting a Commercial Sex Act or Prohibited Sexual Conduct with an Individual Other than a Minor). When § 2G1.3 was promulgated in 2004, some offenses that were originally referenced to § 2G1.1 were moved to the new § 2G1.3, but § 2G1.3 was not added to the list of excluded guidelines at § 3D1.2(d).
Second, the amendment updates the Commentary to § 5F1.7 (Shock Incarceration Program (Policy Statement)) to reflect that the Bureau of Prisons (BOP) no longer operates a shock incarceration program. The Commentary to § 5F1.7 describes the authority of the BOP to operate a shock incarceration program and the procedures that the BOP established in 1990 regarding operation of such a program. However, the BOP terminated its shock incarceration program and removed the rules governing its operation in 2008. The amendment updates the Commentary to § 5F1.7 to reflect that shock incarceration is no longer a potential sentencing option, foreclosing any potential confusion on its current availability.
The Commentary to § 1B1.3 captioned “Background” is amended by striking “the guidelines in those Chapters” and inserting “the guidelines in those chapters”.
The Commentary to § 1B1.4 captioned “Background” is amended by striking “in imposing sentence within that range” and inserting “in imposing a sentence within that range”.
The Commentary to § 1B1.10 captioned “Background” is amended by striking “Title 18” and inserting “title 18”.
The Commentary to § 1B1.11 captioned “Background” is amended by striking “133 S. Ct. 2072, 2078” and inserting “569 U.S. 530, 533”.
The Commentary to § 2A4.2 captioned “Statutory Provisions” is amended by striking “§§ 876,” and inserting “§§ 876(a),”.
The Commentary to § 2A6.1 captioned “Statutory Provisions” is amended by striking “876,” and inserting “876(c),”.
The Commentary to § 2B3.2 captioned “Statutory Provisions” is amended by striking “§§ 875(b), 876,” and inserting “§§ 875(b), (d), 876(b), (d),”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended—
in Note 8(A) by striking “the statute (21 U.S.C. 841(b)(1)), as the primary basis” and inserting “the statute (21 U.S.C. 841(b)(1)) as the primary basis”, and by striking “fentanyl, LSD and marihuana” and inserting “fentanyl, LSD, and marihuana”;
in Note 8(D)—
under the heading relating to Schedule I or II Opiates, by striking the following:
and inserting the following:
under the heading relating to Cocaine and Other Schedule I and II Stimulants (and their immediate precursors), by striking the following:
and inserting the following:
under the heading relating to Synthetic Cathinones (except Schedule III, IV, and V Substances), by striking “a synthetic cathinone” and inserting “a Synthetic Cathinone”;
under the heading relating to LSD, PCP, and Other Schedule I and II Hallucinogens (and their immediate precursors), by striking the following:
and inserting the following:
under the heading relating to Schedule I Marihuana, by striking the following:
and inserting the following:
under the heading relating to Synthetic Cannabinoids (except Schedule III, IV, and V Substances), by striking “a synthetic cannabinoid” and inserting “a Synthetic Cannabinoid”, and by striking ” `Synthetic cannabinoid,' for purposes of this guideline” and inserting ” `Synthetic Cannabinoid,' for purposes of this guideline”;
under the heading relating to Schedule I or II Depressants (except gamma-hydroxybutyric acid), by striking “except gamma-hydroxybutyric acid” both places such term appears and inserting “except Gamma-hydroxybutyric Acid”;
under the heading relating to Gamma-hydroxybutyric Acid, by striking “of gamma-hydroxybutyric acid” and inserting “of Gamma-hydroxybutyric Acid”;
under the heading relating to Schedule III Substances (except ketamine), by striking “except ketamine” in the heading and inserting “except Ketamine”;
under the heading relating to Ketamine, by striking “of ketamine” and inserting “of Ketamine”;
under the heading relating to Schedule IV (except flunitrazepam), by striking “except flunitrazepam” in the heading and inserting “except Flunitrazepam”;
under the heading relating to List I Chemicals (relating to the manufacture of amphetamine or methamphetamine), by striking “of amphetamine or methamphetamine” in the heading and inserting “of Amphetamine or Methamphetamine”;
under the heading relating to Date Rape Drugs (except flunitrazepam, GHB, or ketamine), by striking “except flunitrazepam, GHB, or ketamine” in the heading and inserting “except Flunitrazepam, GHB, or Ketamine”, by striking “of 1,4-butanediol” and inserting “of 1,4-Butanediol”, and by striking “of gamma butyrolactone” and inserting “of Gamma Butyrolactone”;
in Note 9 in the Typical Weight Per Unit (Dose, Pill, or Capsule) Table, under the heading relating to Hallucinogens, by striking the following:
and inserting the following:
and in Note 21, by striking “Section § 5C1.2(b)” and inserting “Section 5C1.2(b)”.
The Commentary to § 2D1.1 captioned “Background” is amended by striking “Public Law 103-237” and inserting “Public Law 104-237”, and by inserting after “to change the title of the Drug Equivalency Tables to the `Drug Conversion Tables.' ” the following: “
The Commentary to § 2D2.3 captioned “Background” is amended by striking “Section 6482” and inserting “section 6482”.
Section 2G2.1(b)(6)(A) is amended by striking “engage sexually explicit conduct” and inserting “engage in sexually explicit conduct”.
The Commentary to § 2H3.1 captioned “Application Notes” is amended in Note 5(B) by striking “(
The Commentary to § 2K2.4 captioned “Statutory Provisions” is amended by striking “§§ 844(h)” and inserting “§§ 844(h), (o)”.
The Commentary to § 2M1.1 captioned “Background” is amended by striking “this Part” and inserting “this part”.
The Commentary to § 2M4.1 captioned “Statutory Provisions” is amended by striking “50 U.S.C. App. § 462” and inserting “50 U.S.C. § 3811”.
The Commentary to § 2M5.1 captioned “Statutory Provisions” is amended by striking “50 U.S.C. App. §§ 2401-2420” and inserting “50 U.S.C. § 4601-4623. For additional statutory provision(s),
The Commentary to § 2M5.1 captioned “Application Notes” is amended—
in Note 3 by striking “50 U.S.C. App. § 2410” and inserting “50 U.S.C. § 4610”;
and in Note 4 by striking “50 U.S.C. App. 2405” and inserting “50 U.S.C. § 4605”.
The Commentary to § 2M5.3 captioned “Application Notes” is amended in Note 1, in the paragraph that begins ” `Specially designated global terrorist' has”, by striking “§ 594.513” and inserting “§ 594.310”.
The Commentary to § 2M6.1 captioned “Application Notes” is amended in Note 1—
by striking the following paragraph:
“ `Restricted person' has the meaning given that term in 18 U.S.C. § 175b(d)(2).”,
and by striking the following paragraph:
“ ‘Vector' has the meaning given that term in 18 U.S.C. § 178(4).”.
The Commentary to § 2T1.1 captioned “Application Notes” is amended—
in Note 6, in the paragraph that begins “ `Gross income' has”, by striking “§ 1.61” and inserting “§ 1.61-1”;
and in Note 7 by striking “Subchapter C corporation” and inserting “subchapter C corporation”.
The Commentary to § 2T1.1 captioned “Background” is amended by striking “the treasury” and inserting “the Treasury”.
Chapter Two, Part T, Subpart 2 is amended in the introductory commentary by striking “Parts I-IV of Subchapter J of Chapter 51 of Subtitle E of Title 26” and inserting “parts I-IV of subchapter J of chapter 51 of subtitle E of title 26, United States Code”.
Chapter Two, Part T, Subpart 3 is amended in the introductory commentary by striking “Subpart” both places such term appears and inserting “subpart”.
Chapter Three, Part A is amended in the introductory commentary by striking “Part” and inserting “part”.
The Commentary to § 3A1.1 captioned “Background” is amended by striking “Section 280003” and inserting “section 280003”.
The Commentary to § 3A1.2 captioned “Application Notes” is amended in Note 3 by striking “the victim was a government officer or employee, or a member of the immediate family thereof” and inserting “the victim was a government officer or employee, a former government officer or employee, or a member of the immediate family thereof”.
Chapter Three, Part B is amended in the introductory commentary by striking “Part” and inserting “part”.
The Commentary to § 3C1.1 captioned “Application Notes” is amended in Note 4(I) by striking “Title 18” and inserting “title 18”.
Chapter Three, Part D is amended in the introductory commentary by striking “Part” each place such term appears and inserting “part”.
The Commentary to § 3D1.1 captioned “Application Notes” is amended in Note 2 by striking “Part” both places such term appears and inserting “part”.
The Commentary to § 3D1.1 captioned “Background” is amended by striking “Chapter 3” and inserting “Chapter Three”, and by striking “Chapter 4” and inserting “Chapter Four”.
The Commentary to § 3D1.2 captioned “Background” is amended by striking “Part” both places such term appears and inserting “part”.
The Commentary to § 3D1.3 captioned “Background” is amended by striking “Part” and inserting “part”.
The Commentary to § 3D1.4 captioned “Background” is amended by striking “Part” and inserting “part”.
The Commentary to § 4A1.3 captioned “Application Notes” is amended in Note 2(C)(v) by striking “this Chapter” and inserting “this chapter”.
The Commentary to § 4B1.1 captioned “Background” is amended by striking “Title 28” and inserting “title 28”.
The Commentary to § 5C1.1 captioned “Application Notes” is amended in Note 1 by striking “this Chapter” and inserting “this chapter”.
The Commentary to § 5E1.1 captioned “Application Notes” is amended in Note 1 by striking “Chapter” both places such term appears and inserting “chapter”; by striking “Title 18” both places such term appears and inserting “title 18”; and by striking “Subchapter C” and inserting “subchapter C”.
The Commentary to § 5E1.1 captioned “Background” is amended by striking “Title 18” and inserting “title 18”.
The Commentary to § 5E1.3 captioned “Background” is amended by striking “Title 18” and inserting “title 18”, and by striking “The Victims” and inserting “the Victims”.
The Commentary to § 5E1.4 captioned “Background” is amended by striking “Titles” and inserting “titles”.
The Commentary to § 5G1.3 captioned “Background” is amended by striking “132 S. Ct. 1463, 1468” and inserting “566 U.S. 231, 236”, and by striking “132 S. Ct. at 1468” and inserting “566 U.S. at 236”.
Chapter Five, Part H is amended in the introductory commentary by striking “Part” each place such term appears and inserting “part”.
Chapter Six, Part A is amended in the introductory commentary by striking “Part” and inserting “part”.
Chapter Seven, Part A, Subpart 3(b) (Choice between Theories) is amended by striking “Title 21” and inserting “title 21”.
The Commentary to § 8A1.2 captioned “Application Notes” is amended in Note 3(G) by striking ” `Prior criminal adjudication' means” and inserting ” `Criminal Adjudication' means”.
The Commentary to § 8B1.1 captioned “Background” is amended by striking “Title 18” and inserting “title 18”.
The Commentary to § 8B2.1 captioned “Application Notes” is amended in Note 1, in the paragraph that begins ” `Governing authority' means”, by striking “means the (A) the Board” and inserting “means (A) the Board”.
The Commentary to § 8C2.5 captioned “Application Notes” is amended in Note 1 by striking ” `prior criminal adjudication' ” and inserting ” `criminal adjudication' ”.
The Commentary to § 8C3.2 captioned “Application Note” is amended in Note 1 by striking “the period provided for payment shall in no event exceed five years” and inserting “the period provided for payment shall be the shortest time in which full payment can reasonably be made”.
Section 8C3.3(a) is amended by striking “its ability” and inserting “the ability of the organization”.
The Commentary to § 8E1.1 captioned “Background” is amended by striking “Title 18” and inserting “title 18”.
Appendix A (Statutory Index) is amended—
by striking the following line reference:
“18 U.S.C. § 876 2A4.2, 2A6.1, 2B3.2, 2B3.3”;
by inserting before the line referenced to 18 U.S.C. 877 the following new line references:
in the line referenced to 25 U.S.C. 450d by striking “§ 450d” and inserting “§ 5306”;
by striking the following line references:
by inserting before the line referenced to 46 U.S.C. App. § 1707a(f)(2) the following new line references:
by striking the following line references:
and by inserting before the line referenced to 52 U.S.C. 10307(c) the following new line references:
First, the amendment makes clerical changes to correct typographical errors in the following guidelines and commentary: § 1B1.1 (Application Instructions); § 1B1.3 (Relevant Conduct (Factors that Determine the Guideline Range)); § 1B1.4 (Information to be Used in Imposing Sentence (Selecting a Point Within the Guideline Range or Departing from the Guidelines)); § 1B1.10 (Reduction in Term of Imprisonment as a Result of Amended Guideline Range (Policy Statement)); § 2D2.3 (Operating or Directing the Operation of a Common Carrier Under the Influence of Alcohol or Drugs); § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production); § 2H3.1 (Interception of Communications; Eavesdropping; Disclosure of Certain Private or Protected Information); § 2M1.1 (Treason); § 2T1.1 (Tax Evasion; Willful Failure to File Return, Supply Information, or Pay Tax; Fraudulent or False Returns, Statements, or Other Documents); the Introductory Commentary to Chapter Two, Part T, Subpart 2 (Alcohol and Tobacco Taxes); the Introductory Commentary to Chapter Two, Part T, Subpart 3 (Customs Taxes); the Introductory Commentary to Chapter Three, Part A (Victim-Related Adjustments); § 3A1.1 (Hate Crime Motivation or Vulnerable Victim); the Introductory Commentary to Chapter Three, Part B (Role in the Offense); § 3C1.1 (Obstructing or Impeding the Administration of Justice); the Introductory Commentary to Chapter Three, Part D (Multiple Counts); § 3D1.1 (Procedure for Determining Offense Level on Multiple Counts); § 3D1.2 (Groups of Closely Related Counts); § 3D1.3 (Offense Level Applicable to Each Group of Closely Related Counts); § 3D1.4 (Determining the Combined Offense Level); § 4A1.3 (Departures Based on Inadequacy of Criminal History Category (Policy Statement)); § 4B1.1 (Career Offender); § 5C1.1 (Imposition of a Term of Imprisonment); § 5E1.1 (Restitution); § 5E1.3 (Special Assessments); § 5E1.4 (Forfeiture); the Introductory Commentary to Chapter Five, Part H (Specific Offender Characteristics); the Introductory Commentary to Chapter Six, Part A (Sentencing Procedures); Chapter Seven, Part A (Introduction to Chapter Seven); § 8B1.1 (Restitution—Organizations); § 8B2.1 (Effective Compliance and Ethics Program); § 8C3.3 (Reduction of Fine Based on Inability to Pay); and § 8E1.1 (Special Assessments—Organizations).
Second, the amendment makes clerical changes to the Commentary to §§ 1B1.11 (Use of Guidelines Manual in Effect on Date of Sentencing (Policy Statement)) and 5G1.3 (Imposition of a Sentence on a Defendant Subject to an Undischarged Term of Imprisonment or Anticipated State Term of Imprisonment), to update citations of Supreme Court cases. In addition, the amendment makes technical changes to (1) the Commentary to § 2K2.4 (Use of Firearm, Armor-Piercing Ammunition, or Explosive During or in Relation to Certain Crimes), to add a missing reference to 18 U.S.C. 844(o); (2) the Commentary to § 2M6.1 (Unlawful Activity Involving Nuclear Material, Weapons, or Facilities, Biological Agents, Toxins, or Delivery Systems, Chemical Weapons, or Other Weapons Of Mass Destruction; Attempt or Conspiracy), to delete the definitions of two terms that are not currently used in the guideline; (3) the Commentary to §§ 2M5.3 (Providing Material Support or Resources to Designated Foreign Terrorist Organizations or Specially Designated Global Terrorists, or For a Terrorist Purpose) and 2T1.1 (Tax Evasion; Willful Failure to File Return, Supply Information, or Pay Tax; Fraudulent or False Returns, Statements, or Other Documents), to correct references to the Code of Federal Regulations; and (4) the Commentary to § 3A1.2 (Official Victim), to add missing content in Application Note 3.
Third, the amendment makes technical changes to the Commentary to §§ 2A4.2 (Demanding or Receiving Ransom Money), 2A6.1 (Threatening or
Fourth, the amendment makes certain stylistic and technical changes to the Commentary to § 2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking). It revises the Drug Conversion Tables at Application Note 8(D) and the Typical Weight Per Unit Table at Application Note 9 to reorganize the controlled substances contained therein in alphabetical order to make the tables more user-friendly. The amendment also makes minor changes to the controlled substance references to promote consistency in the use of capitalization, commas, parentheticals, and slash symbols throughout the Drug Conversion Tables. In addition, the amendment makes clerical changes throughout the Commentary to correct certain typographical errors. It also amends the Background Commentary to add a specific reference to Amendment 808, which replaced the term “marihuana equivalency” with the new term “converted drug weight” and changed the title of the “Drug Equivalency Tables” to “Drug Conversion Tables.”
Fifth, the amendment makes clerical changes to reflect the editorial reclassification of certain sections of the United States Code. Effective December 1, 2015, the Office of Law Revision Counsel eliminated the Appendix to title 50 of the United States Code and transferred the non-obsolete provisions to new chapters 49 to 57 of title 50 and to other titles of the United States Code. To reflect the new section numbers of the reclassified provisions, the amendment makes changes to § 2M4.1 (Failure to Register and Evasion of Military Service), § 2M5.1 (Evasion of Export Controls; Financial Transactions with Countries Supporting International Terrorism), and Appendix A. Similarly, effective September 1, 2016, the Office of Law Revision Counsel also transferred certain provisions from chapter 14 of title 25 of the United States Code to four new chapters in title 25 to improve the organization of the title. To reflect these changes, the amendment makes further changes to Appendix A.
Sixth, the amendment makes technical changes to the commentary of several guidelines in Chapter Eight (Sentencing of Organizations). It replaces the term “prior criminal adjudication,” as found and defined in Application Note 3(G) of § 8A1.2 (Application Instructions—Organizations), with “criminal adjudication” to better reflect how that term is used throughout Chapter Eight. The amendment also makes conforming changes to the Commentary to § 8C2.5 (Culpability Score) to account for the new term. In addition, the amendment revises Application Note 1 of § 8C3.2 (Payment of the Fine—Organizations) to reflect the current language of subsection (d) of 18 U.S.C. 3572 (Imposition of a sentence of fine and related matters), providing that if the court permits other than immediate payment of a fine or other monetary payment, the period provided for payment shall be the shortest time in which full payment can reasonably be made.
Finally, the amendment makes clerical changes to provide updated references to certain sections of the United States Code that were redesignated by legislation. The Frank LoBiondo Coast Guard Authorization Act of 2018, Pub. L. 115-282 (2018) (hereinafter “the Act”), among other things, established a new chapter 700 (Ports and Waterway Safety) in subtitle VII (Security and Drug Enforcement) of title 46 (Shipping) of the United States Code. Section 401 of the Act repealed the Ports and Waterways Safety Act of 1972, previously codified in 33 U.S.C. 1221-1232b, and restated its provisions with some revisions in the new chapter 700 of title 46, specifically at 46 U.S.C. 70001-70036. Appendix A includes references to Chapter Two guidelines for both former 33 U.S.C. 1227(b) and 1232(b). The amendment revises Appendix A to delete the references to 33 U.S.C. 1227(b) and 1232(b) and replace them with updated references to 46 U.S.C. 70035(b) and 70036(b). The Act did not make substantive revisions to either of these provisions.
On April 27, 2023, the Commission submitted to the Congress amendments to the sentencing guidelines, policy statements, official commentary, and Statutory Index, which become effective on November 1, 2023, unless Congress acts to the contrary. Such amendments and the reason for each amendment are included in this notice.
Section 3582(c)(2) of title 18, United States Code, provides that “in the case of a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C. 994(o), upon motion of the defendant or the Director of the Bureau of Prisons, or on its own motion, the court may reduce the term of imprisonment, after considering the factors set forth in section 3553(a) to the extent that they are applicable, if such a reduction is consistent with applicable policy statements issued by the Sentencing Commission.” Pursuant to 28 U.S.C. 994(u), “[i]f the Commission reduces the term of imprisonment recommended in the guidelines applicable to a particular offense or category of offenses, it shall specify in what circumstances and by what amount the sentences of prisoners serving terms of imprisonment for the offense may be reduced.” The Commission lists in subsection (d) of § 1B1.10 (Reduction in Term of Imprisonment as a Result of Amended Guideline Range (Policy Statement)) the specific guideline amendments that the court may apply retroactively under 18 U.S.C. 3582(c)(2).
Amendment 8, pertaining to criminal history, has the effect of lowering guideline ranges. The Commission intends to consider whether, pursuant to 18 U.S.C. 3582(c)(2) and 28 U.S.C. 994(u), Parts A and B of this amendment, relating to the impact of “status points” at § 4A1.1 (Criminal History Category) and offenders with zero criminal history points at new § 4C1.1 (Adjustment for Certain Zero-Point Offenders), should be included in § 1B1.10(d) as an amendment that may be applied retroactively to previously sentenced defendants. In considering whether to do so, the Commission will consider, among other things, a retroactivity impact analysis and public comment. Accordingly, the Commission seeks public comment on whether it should make Parts A and B of Amendment 8 available for retroactive application. To help inform public comment, the retroactivity impact analysis will be made available to the public as soon as practicable.
The Background Commentary to § 1B1.10 lists the purpose of the amendment, the magnitude of the change in the guideline range made by the amendment, and the difficulty of applying the amendment retroactively to determine an amended guideline range under § 1B1.10(b) as among the factors the Commission considers in selecting the amendments included in § 1B1.10(d). To the extent practicable, public comment should address each of these factors.
The Commission seeks comment on whether it should list Parts A and B of Amendment 8, addressing the impact of “status points” at § 4A1.1 and offenders
If the Commission does list one or both such parts of the amendment in § 1B1.10(d) as an amendment that may be applied retroactively to previously sentenced defendants, should the Commission provide further guidance or limitations regarding the circumstances in which, and the amount by which, sentences may be reduced?
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to address the unreasonable risk of injury to human health presented by methylene chloride under its conditions of use as documented in EPA's June 2020 Risk Evaluation for Methylene Chloride and November 2022 revised risk determination for methylene chloride prepared under the Toxic Substances Control Act (TSCA). TSCA requires that EPA address by rule any unreasonable risk of injury to health or the environment identified in a TSCA risk evaluation and apply requirements to the extent necessary so that the chemical no longer presents unreasonable risk. Methylene chloride, also known as dichloromethane, is acutely lethal, a neurotoxicant, a likely human carcinogen, and presents cancer and non-cancer risks following chronic exposures as well as acute risks. Central nervous system depressant effects can result in loss of consciousness and respiratory depression, resulting in irreversible coma, hypoxia, and eventual death, including 85 documented fatalities from 1980 to 2018, a majority of which were occupational fatalities (see Unit II.A.). Nevertheless, methylene chloride is still a widely used solvent in a variety of consumer and commercial applications including adhesives and sealants, automotive products, and paint and coating removers. To address the identified unreasonable risk, EPA is proposing to: prohibit the manufacture, processing, and distribution in commerce of methylene chloride for consumer use; prohibit most industrial and commercial uses of methylene chloride; require a workplace chemical protection program (WCPP), which would include a requirement to meet inhalation exposure concentration limits and exposure monitoring for certain continued conditions of use of methylene chloride; require recordkeeping and downstream notification requirements for several conditions of use of methylene chloride; and provide certain time-limited exemptions from requirements for uses of methylene chloride that would otherwise significantly disrupt national security and critical infrastructure.
Comments must be received on or before July 3, 2023. Under the Paperwork Reduction Act, comments on the information collection provisions are best assured of consideration if the Office of Management and Budget (OMB) receives a copy of your comments on or before June 2, 2023.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2020-0465, through the Federal eRulemaking Portal at
You may be potentially affected by the proposed action if you manufacture (defined under TSCA to include import), process, distribute in commerce, use, or dispose of methylene chloride or products containing methylene chloride. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities include:
This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA. Persons who import any chemical substance governed by a final TSCA section 6(a) rule are subject to the TSCA section 13 (15 U.S.C. 2612) import certification requirements and the corresponding regulations at 19 Code of Federal Regulations (CFR) 12.118 through 12.127; see also 19 CFR 127.28. Those persons must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B. In addition, any persons who export or intend to export a chemical substance that is the subject of this proposed rule are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)), and must comply with the export notification requirements in 40 CFR part 707, subpart D.
If you have any questions regarding the applicability of this proposed action to a particular entity, consult the technical information contact listed under
Under TSCA section 6(a) (15 U.S.C. 2605(a)), if the U.S. Environmental Protection Agency, hereinafter EPA or “the Agency,” determines through a TSCA section 6(b) risk evaluation that a chemical substance presents an unreasonable risk of injury to health or the environment, EPA must by rule apply one or more requirements listed in section 6(a) to the extent necessary so that the chemical substance or mixture no longer presents such risk.
Pursuant to TSCA section 6(b), EPA determined that methylene chloride presents an unreasonable risk of injury to health, without consideration of costs or other non-risk factors, including an unreasonable risk to potentially exposed or susceptible subpopulations identified as relevant to the 2020 Risk Evaluation for Methylene Chloride by EPA, under the conditions of use (Refs. 1, 2). A detailed description of the conditions of use that drive EPA's determination that methylene chloride presents an unreasonable risk is included in Unit III.B.2. Accordingly, to address the unreasonable risk, EPA is proposing, under TSCA section 6(a) to:
(i) Prohibit the manufacture, processing, and distribution of methylene chloride for all consumer use, as outlined in Unit IV.A.3.;
(ii) Prohibit most industrial and commercial use of methylene chloride, as outlined in Unit IV.A.2.;
(iii) Require a WCPP, including inhalation exposure concentration limits and related workplace exposure monitoring and exposure controls, for ten conditions of use of methylene chloride (including manufacture; processing as a reactant; laboratory use; industrial or commercial use in aerospace and military paint and coating removal from safety-critical, corrosion-sensitive components by Federal agencies and their contractors; industrial or commercial use as a bonding agent for acrylic and polycarbonate in mission-critical military and space vehicle applications, including in the production of specialty batteries for such by Federal agencies and their contractors; and disposal), as outlined in Unit IV.A.1.;
(iv) Require recordkeeping and downstream notification requirements for manufacturing, processing, and distribution in commerce of methylene chloride, as outlined in Unit IV.A.4.;
(v) Provide a 10-year time-limited exemption under TSCA section 6(g) for civilian aviation from the prohibition addressing the use of methylene chloride for paint and coating removal to avoid significant disruptions to critical infrastructure, as outlined in Unit IV.A.5., with conditions for this exemption to include compliance with the WCPP described in Unit IV.A.1.; and
(vi) Provide a 10-year time-limited exemption under TSCA section 6(g) for emergency use of methylene chloride in furtherance of National Aeronautics and Space Administration's mission for specific conditions which are critical or essential and for which no technically and economically feasible safer alternative is available, as outlined in Unit IV.A.5., with conditions for this exemption to include compliance with the WCPP described in Unit IV.A.1.
EPA notes that all TSCA conditions of use of methylene chloride (other than the use of methylene chloride in consumer paint and coating removers, which was subject to separate action under TSCA section 6 (84 FR 11420, March 27, 2019)) are subject to this proposal. Condition of use is defined in TSCA to mean the circumstances under which a chemical substance is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of. EPA is requesting public comment on all aspects of this proposal.
Under TSCA section 6(a), “[i]f the Administrator determines in accordance with subsection (b)(4)(A) that the manufacture, processing, distribution in commerce, use or disposal of a chemical substance or mixture, or that any combination of such activities, presents an unreasonable risk of injury to health or the environment, the Administrator shall by rule. . . apply one or more of the [section 6(a)] requirements to such substance or mixture to the extent necessary so that the chemical substance no longer presents such risk.” Methylene chloride was the subject of a risk evaluation under TSCA section 6(b)(4)(A) that was issued in June 2020 (2020 Risk Evaluation for Methylene Chloride) (Ref. 1). In addition, EPA issued a revised unreasonable risk determination for methylene chloride in November 2022 (Ref. 2) determining that methylene chloride, as a whole chemical substance, presents an unreasonable risk of injury to health under the conditions of use. As a result, EPA is proposing to take action to the extent necessary so that methylene chloride no longer presents such risk. The unreasonable risk is described in Unit III.B.1. and the conditions of use that drive the unreasonable risk for methylene chloride are described in Unit III.B.2.
EPA emphasizes that some of the adverse effects from methylene chloride exposure can be immediately experienced and only for a short duration; others, however, can result in sudden death. Other effects may result in long-term impacts and should likewise be considered significant. Methylene chloride's hazards are well established. Fatalities from acute methylene chloride exposures have
EPA is not proposing a complete ban on methylene chloride. The agency recognizes that continued use of methylene chloride in one of the TSCA conditions of use may complement the agency's efforts to address climate-damaging hydrofluorocarbons (HFCs) under the American Innovation and Manufacturing Act of 2020 (AIM Act), thereby supporting human health and environmental protection under these programs, and that, for these HFC-related, reactant processing uses, workplace controls to address unreasonable risk can be implemented. Therefore, while addressing the unreasonable risk, this rule proposes to allow methylene chloride's continued use in tandem with additional worker protections for the production of HFC-32, one of the regulated substances that are subject to a phasedown under the AIM Act. While HFC-32 is one of the regulated substances subject to the phasedown in production and consumption by 85% over the next 15 years, HFC-32 is likely to be used to facilitate the transition from certain other HFCs and HFC blends with higher global warming potentials in certain applications. EPA expects that, by allowing for the continued use of methylene chloride in the production of HFC-32, this approach would complement EPA's work under the AIM Act. For many of the conditions of use for which EPA is proposing workplace controls under a WCPP, data was submitted during the risk evaluation and Small Business Advocacy Review (SBAR process that indicates some facilities may already be in compliance with the proposed methylene chloride Existing Chemical Exposure Limit (ECEL). Additionally, the requirements in this proposal would prohibit uses that account for approximately one third of the total annual production volume of methylene chloride generated (TSCA and non-TSCA uses), leaving a sufficient supply in circulation to provide a source for these critical or essential uses for which EPA is proposing to allow continued use (Unit IV.A.), either under a WCPP or through a TSCA section 6(g) exemption (Ref. 3).
EPA has prepared an Economic Analysis of the potential incremental impacts associated with this rulemaking that can be found in the rulemaking docket (Ref. 3). As described in more detail in the Economic Analysis (Ref. 3) and in Units VI.D. and X.D., EPA's analysis of the incremental, non-closure-related costs of this proposed rule is estimated to be $13.2 million annualized over 20 years at a 3% discount rate and $14.5 million annualized over 20 years at a 7% discount rate. These costs take compliance with implementation of a WCPP for certain conditions of use into consideration, which would include an ECEL of 2 ppm (8 mg/m
EPA estimates that as many as 5,000 furniture refinishers still use methylene chloride, a majority of which are small businesses. While the amount of methylene chloride paint removers used per firm for furniture refinishing can vary greatly, industry stakeholder information indicates one 55-gallon drum every two months (Ref. 4). This would result in an estimated 2.3 million gallons of formulated paint remover used annually. The amount of methylene chloride included in this estimate would depend on the percent in formulation used by the furniture refinishing firms. The impact of a prohibition of methylene chloride for furniture refinishing could result in the closure of an unknown number of the 5,000 potentially affected furniture refinishing firms using methylene chloride in the baseline.
Based on the estimated revenues per firm presented in Table 3-1 of the Economic Analysis and the 5,000 estimated number of furniture refinishing firms using methylene chloride (see Table 6-12 in the Economic Analysis), the total revenue for furniture refinishing firms using methylene chloride is approximately $1.8 billion. According to IRS (2013) data, profit in this sector is about 3.8% of sales. Therefore, closure of affected furniture refinishing firms using methylene chloride following this
EPA identified many alternative products for paint and coating removers, though many may require longer periods of time, replacement of equipment, or rework of processes in order to work for furniture refinishing uses. These may not be appropriate alternatives as they could damage the wood substrate. Mechanical or thermal methods (
The actions proposed in this rule are expected to achieve health benefits for the American public, some of which can be monetized and others that, while tangible and significant, cannot be monetized. Although some benefits cannot be quantified, they are not necessarily less important than the quantified benefits. The monetized benefits of this rule are approximately $17.7 million to $18.5 million annualized over 20 years at a 3% discount rate and $13.4 million to $13.9 million annualized over 20 years at a 7% discount rate. The monetized benefits only include potential reductions in risk of liver cancer, lung cancer, and potential deaths avoided from acute methylene chloride exposure. Non-monetized benefits include potential reductions in central nervous system depressant effects; these effects include loss of consciousness and respiratory depression that may result in irreversible coma and hypoxia. Risks from acute exposures to methylene chloride can lead to workplace accidents and are precursors to the more severe central nervous system effects (up to and including death). Other non-monetized benefits include reductions in liver disease (including vacuolization, necrosis, hemosiderosis and hepatocellular degeneration), immune system compromise, and irritation and burns (Ref. 3).
Methylene chloride is acutely lethal, a neurotoxicant, and a likely human carcinogen. This proposed rule is specifically intended to address the unreasonable risk of injury to health that EPA has identified in the 2020 Risk Evaluation for Methylene Chloride and unreasonable risk determination, as described in Unit III.B.2. Methylene chloride is a colorless liquid and a volatile chemical with a sweet odor resembling chloroform. It is produced in and imported into the United States. Methylene chloride is manufactured, processed, distributed in commerce, used, and disposed of as part of many industrial, commercial, and consumer conditions of use. As outlined in Unit III.B.1., methylene chloride is a widely used solvent in a variety of consumer and commercial applications including adhesives and sealants, automotive products, and paint and coating removers. Some evidence suggests that in recent years, use of methylene chloride has been declining in certain sectors (Ref. 3), particularly for consumer products, as the hazards of methylene chloride are well known, and certain uses are highly regulated. As further described in Unit II.B. and in the regulatory appendix (Ref. 7), these regulations include EPA's 2019 rule addressing unreasonable risk to consumers from methylene chloride use in consumer paint and coating removal by prohibiting manufacturing, processing, and distribution in commerce of methylene chloride for consumer use in paint and coating removal (84 FR 11420, March 27, 2019) (FRL-9989-29).
The total aggregate production volume of methylene chloride ranged from 100 million to 500 million pounds between 2016 and 2019 according to Chemical Data Reporting (CDR) (Ref. 8). One notable high-volume use accounting for approximately one-fifth of all methylene chloride annual production volume is processing as a reactant, which includes the manufacture of hydrofluorocarbons (HFCs) (Ref. 1). This condition of use is described in Unit III.B.2., with a description of proposed requirements to address unreasonable risk in Unit III.B.3, and V.1. An estimated 35% of the annual production volume of methylene chloride is for pharmaceutical uses, which are not subject to TSCA and would not be regulated by this rule (15 U.S.C. 2602(2)(B)(vi); 21 U.S.C. 321(g)(1)).
Because of its adverse health effects, methylene chloride is subject to numerous State, Federal, and international regulations restricting and regulating its use. A summary of EPA regulations pertaining to methylene chloride, as well other Federal, State, and international regulations, is in the docket (Refs. 1, 7).
TSCA requires EPA to evaluate whether a chemical substance presents an unreasonable risk of injury to health or the environment, without consideration of costs or other non-risk factors, including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by the Administrator, under the conditions of use. Conditions of use are the circumstances, as determined by the Administrator, under which a chemical is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of. If EPA determines through risk evaluation that a chemical substance presents an unreasonable risk, TSCA section 6 requires EPA to issue regulations applying one or more control requirements to the extent necessary so that the chemical substance no longer presents such risk. Although EPA must consider, and in some cases factor-in, to the extent practicable, non-risk factors as part of TSCA section 6(a) rulemaking (see TSCA section 6(c)(2)), EPA must nonetheless still ensure that the selected regulatory requirements apply “to the extent necessary so that the chemical substance or mixture no longer presents [unreasonable] risk.” 15 U.S.C. 2605(a). This risk-based requirement is distinguishable from approaches mandated by other laws, including the Occupational Safety and Health Act (OSH Act), which includes both significant risk and feasibility (technical and economic) assessments in its rulemaking.
Congress intended for EPA to consider occupational risks from chemicals it evaluates under TSCA, among other potential exposures, as relevant and appropriate. As noted previously, section 6(b) of TSCA requires EPA to evaluate risks to potentially exposed or susceptible subpopulations identified as relevant by the Administrator. TSCA section 3(12)
The OSH Act similarly requires OSHA to evaluate risk specific to workers prior to promulgating new or revised standards and requires OSHA standards to substantially reduce significant risk to the extent feasible, even if workers are exposed over a full working lifetime.
Thus, the standards for chemical hazards that OSHA promulgates under the OSH Act share a broadly similar purpose with the standards that EPA promulgates under TSCA section 6(a). The control measures OSHA and EPA require to satisfy the objectives of their respective statutes may also, in many circumstances, overlap or coincide. However, as this section outlines, there are important differences between EPA's and OSHA's regulatory approaches and jurisdiction, and EPA considers these differences when deciding whether and how to account for OSHA requirements (such as those described in Unit II.B.2.) when evaluating and addressing potential unreasonable risk to workers so that compliance requirements are clearly explained to the regulated community.
OSHA's mission is to ensure that employees work in safe and healthful conditions. The OSH Act establishes requirements that each employer comply with the General Duty Clause of the Act (29 U.S.C. 654(a)), as well as with occupational safety and health standards issued under the Act.
The General Duty Clause of the OSH Act requires employers to keep their workplaces free from recognized hazards that are causing or are likely to cause death or serious physical harm to employees. The General Duty Clause is cast in general terms, and does not establish specific requirements like exposure limits, personal protective equipment (PPE)), or other specific protective measures that EPA could potentially consider when developing its risk evaluations or risk management requirements. OSHA, under limited circumstances, has cited the General Duty Clause for regulating exposure to chemicals. To prove a violation of the General Duty Clause, OSHA must prove employer or industry recognition of the hazard, that the hazard was causing or likely to cause death or serious physical harm, and a feasible method to eliminate or materially reduce the hazard was available. In rare situations, OSHA has cited employers for violation of the General Duty Clause where exposures were below a chemical-specific permissible exposure limit (PEL). In such situations, OSHA must demonstrate that the employer had actual knowledge that the PEL was inadequate to protect its employees from death or serious physical harm. Because of the heavy evidentiary burden on OSHA to establish violations of the General Duty Clause, it is not frequently used to cite employers for employee exposure to chemical hazards.
OSHA standards are issued pursuant to the OSH Act and are found in title 29 of the CFR. There are separate standards for general industry, construction, maritime and agriculture sectors, general standards applicable to a number of sectors (
OSHA sets legally enforceable limits on the airborne concentrations of hazardous chemicals, referred to as PELs, established for employers to protect their workers against the health effects of exposure to hazardous substances (29 CFR parts 1910, Subpart Z; 1915, Subpart Z; 1926, Subparts D and Z). Under section 6(a) of the OSH Act, OSHA was permitted an initial 2-year window after the passage of the Act to adopt “any national consensus standard and any established Federal standard.” 29 U.S.C. 655(a). OSHA used this authority in 1971 to establish PELs that were adopted from Federal health standards originally set by the Department of Labor through the Walsh-Healy Act, in which approximately 400 occupational exposure limits were selected based on the American Conference of Governmental Industrial Hygienists (ACGIH) 1968 list of Threshold Limit Values (TLVs). In addition, about 25 exposure limits recommended by the American Standards Association (now called the American National Standards Institute) (ANSI) were adopted as PELs.
Following the 2-year window provided under section 6(a) of the OSH Act for adoption of national consensus and existing Federal standards, OSHA has issued health standards following the requirements in section 6(b) of the Act. OSHA has established approximately 30 PELs under section 6(b)(5) as part of comprehensive substance-specific standards that include additional requirements for protective measures such as use of PPE, establishment of regulated areas, exposure assessment, hygiene facilities, medical surveillance, and training. These ancillary provisions in substance-specific OSHA standards further mitigate residual risk that could be present due to exposure at the PEL.
Though many OSHA PELs have not been updated since they were established in 1971, the methylene chloride PEL was last updated as part of the OSHA methylene chloride standard in 1997. In many instances, scientific evidence has accumulated suggesting that the current limits of many PELs are not sufficiently protective. On October 10, 2014, OSHA published a
In sum, the great majority of OSHA's chemical standards are outdated or do not sufficiently reduce significant risk to workers. They would, in either case, be unlikely to address unreasonable risk to workers within the meaning of TSCA, since TSCA section 6(b) unreasonable risk determinations may account for unreasonable risk to more sensitive endpoints and working populations than OSHA's risk evaluations typically contemplate, and EPA is obligated to apply TSCA section 6(a) risk management requirements to the extent necessary so that the unreasonable risk is no longer presented.
Because the requirements and application of TSCA and OSHA regulatory analyses differ, and because
When characterizing the risk during risk evaluation under TSCA, EPA believes it is appropriate to evaluate the levels of risk present in scenarios where no mitigation measures are assumed to be in place for the purpose of determining unreasonable risk (see Unit II.C.2.a.). (It should be noted that there are some cases where scenarios may reflect certain mitigation measures, such as in instances where exposure estimates are based on monitoring data at facilities that have existing engineering controls in place.) In addition, EPA believes it is appropriate to also evaluate the levels of risk present in scenarios considering applicable OSHA requirements (
When making unreasonable risk determinations as part of TSCA risk evaluations, EPA cannot assume as a general matter that all workers are always equipped with and appropriately using sufficient PPE, although it does not question the public comments received on the 2020 Risk Evaluation for Methylene Chloride regarding the occupational safety practices often followed by industry respondents. When characterizing the risk to human health from occupational exposures during risk evaluation under TSCA, EPA believes it is appropriate to evaluate the levels of risk present in baseline scenarios where PPE is not assumed to be used by workers. This approach of not assuming PPE use by workers considers the risk to potentially exposed or susceptible subpopulations (workers and occupational non-users) who may not be covered by OSHA standards, such as self-employed individuals and public sector workers who are not covered by a State Plan. Mitigation scenarios included in the EPA risk evaluation (
Therefore, EPA makes its determinations of unreasonable risk based on scenarios that do not assume compliance with OSHA standards, including any applicable exposure limits or requirements for use of respiratory protection or other PPE. Making unreasonable risk determinations based on such scenarios should not be viewed as an indication that EPA believes there are no occupational safety protections in place at any location, or that there is widespread noncompliance with applicable OSHA standards. Rather, it reflects EPA's recognition that unreasonable risk may exist for subpopulations of workers that may be highly exposed because they are not covered by OSHA standards, such as self-employed individuals and public sector workers who are not covered by an OSHA State Plan, or because their employer is out of compliance with OSHA standards, or because EPA finds unreasonable risk for purposes of TSCA notwithstanding existing OSHA requirements.
In addition to the scenarios described previously, EPA risk evaluations may characterize the levels of risk present in scenarios considering applicable OSHA requirements (
When undertaking risk management actions, EPA: (1) Develops occupational risk mitigation measures to address any unreasonable risk identified by EPA, striving for consistency with applicable OSHA requirements and industry best practices, including appropriate application of the National Institute for Occupational Safety and Health (NIOSH) hierarchy of controls (Ref. 9) (hereafter referred to as “hierarchy of controls”), when those measures would address an unreasonable risk; and (2) Ensures that EPA requirements apply to all potentially exposed workers in accordance with TSCA requirements. Consistent with TSCA section 9(d), EPA consults and coordinates TSCA activities with OSHA and other relevant Federal agencies for the purpose of achieving the maximum applicability of TSCA while avoiding the imposition of duplicative requirements.
Informed by the mitigation scenarios and information gathered during the risk evaluation and risk management process, the Agency might propose rules that require risk management practices that may be already common practice in many or most facilities. Adopting clear, comprehensive regulatory standards will foster compliance across all facilities (ensuring a level playing field) and assure protections for all affected workers, especially in cases where current OSHA standards may not apply to them or not be sufficient to address the unreasonable risk.
EPA incorporated the considerations described earlier in this Unit into the 2020 Risk Evaluation for Methylene Chloride, the November 2022 revised unreasonable risk determination for methylene chloride, and this rulemaking. Specifically, in the TSCA 2020 Risk Evaluation for Methylene Chloride, EPA presented risk estimates based on workers' exposures with and without respiratory protection. EPA determined that even when respirators are used by workers, most of the conditions of use evaluated presented an unreasonable risk. Additional considerations of OSHA standards in the revised unreasonable risk determination are discussed further in the
In accordance with the approach described earlier in Unit II.C.3., EPA intends for this regulation to be as consistent as possible with the current OSHA standard for methylene chloride, with additional requirements as necessary to address the unreasonable risk. Notable differences between the WCPP and the OSHA standard are the exposure limits and the action levels. The WCPP would include an Existing Chemical Exposure Limit (ECEL) of 2 ppm as an 8-hour TWA to address unreasonable risk for chronic cancer and non-cancer inhalation endpoints, and acute non-cancer endpoints, as well as an EPA Short Term Exposure Limit (EPA STEL) of 16 ppm as a 15-minute TWA to address any peak exposures which may result in additional unreasonable risk from acute inhalation. A regulated entity must comply with both the 8-hour TWA ECEL and the 15-minute TWA EPA STEL to completely address the unreasonable risk. EPA recognizes that for methylene chloride, the ECEL and EPA STEL would be significantly lower than the OSHA PEL (25 ppm as an 8-hour TWA) and STEL (125 ppm). In addition to the distinctions in statutory requirements described in this Unit, EPA has identified factors contributing to the differences in these levels, outlined here (Ref. 14).
EPA considers the methylene chloride ECEL to represent the best available science under TSCA section 26(h), since it was derived from information in the 2020 Risk Evaluation for Methylene Chloride, which is the result of a rigorous systematic review process that investigated the entirety of the reasonably available current literature in order to identify all relevant adverse health effects. Additionally, by using the information from the 2020 Risk Evaluation for Methylene Chloride, the ECEL incorporates advanced modeling and peer-reviewed methodologies, including accounting for exposures to potentially exposed or susceptible subpopulations, as required by TSCA.
The ECEL is an 8-hour occupational inhalation exposure limit based on the point of departure of the endpoint that drives the unreasonable risk determination (chronic non-cancer liver effects, in the case of methylene chloride), and takes into consideration the uncertainties identified in the 2020 Risk Evaluation for Methylene Chloride (Ref. 11). The ECEL represents the concentration at or below which an adult human, including a member of a potentially exposed or susceptible subpopulation, would be unlikely to suffer adverse effects if exposed for a working lifetime. EPA has determined as a matter of risk management policy that ensuring exposures remain at or below the ECEL will eliminate- any unreasonable risk of injury to health. In addition to the ECEL, as part of this rulemaking, EPA is setting an ECEL-action level, a value half of the ECEL, that would trigger additional monitoring action to ensure that workers are not exposed to concentrations above the ECEL.
The OSHA PEL is an 8-hour time-weighted average (TWA) based on an employee's average airborne exposure in any 8-hour work shift of a 40-hour work week that shall not be exceeded (Ref. 12). OSHA is required to promulgate a standard that reduces significant risk to the extent that it is technologically and economically feasible to do so (81 FR 16285).
For methylene chloride, the ECEL is based on the most sensitive point of departure (POD) across acute, chronic non-cancer, and cancer endpoints. As demonstrated in the ECEL memo, chronic liver toxicity is the basis of the methylene chloride ECEL (Ref. 11). Both inhalation and oral studies identified liver effects as sensitive non-cancer effects linked with exposure to methylene chloride in animals. Overall, based on limited human evidence and strong evidence in multiple animal species from highly rated studies based on systematic review, the weight of the scientific evidence supported EPA's finding that non-cancer liver effects follow methylene chloride exposure.
EPA used liver lesions in rats as indicated by cellular vacuolization in Nitschke
The EPA STEL is based on decreased visual performance identified in an acute inhalation study on human subjects. Putz
The OSHA PEL for methylene chloride was adopted in 1971 and updated in 1997 (62 FR 1494, January 10, 1997). The OSHA PEL is set at 25 ppm, based on cancer from the same National Toxicology Program (1986) study cited for cancer effects in the 2020 Methylene Chloride Risk Evaluation (Ref. 14) (though EPA found this was not the most sensitive POD, and thus set an ECEL of 2 ppm, based on non-cancer liver effects from Nitschke
The OSHA PEL utilized a PBPK model to derive lifetime excess risk estimates for cancer. The PEL was set at 25 ppm based on estimated lifetime risk of 2.4 to 3.6 cases per 1000 or 2.4-3.66x10
As for non-cancer liver effects that are the basis of the ECEL, OSHA determined that “chronic exposure to [methylene chloride] caused toxic effects in rat and mouse liver and cancer in mouse liver. These studies appear to have been well conducted and the differences in toxicity observed across studies were likely due to differences in dose or route of exposure . . . [L]imited evidence supports the hypothesis that [methylene chloride] causes human hepatotoxicity, based on the data in the Ott study. The remaining studies and case reports do not provide clear evidence of a causative role of [methylene chloride] in hepatotoxicity. The Agency [OSHA] has set the exposure limits based on cancer and [central nervous system] effects and has not reached final conclusions on this issue” (62 FR 1514-1515, January 10, 1997). As discussed in Units II.D., III.B.A., and VII.D., the ECEL represents the best available science at time of publication of the 2020 Risk Evaluation for Methylene Chloride.
In July 2017, EPA published the scope of the methylene chloride risk evaluation (82 FR 31592, July 7, 2017) (FRL-9963-57), and, after receiving public comments, published the problem formulation in June 2018 (83 FR 26998, June 11, 2018) (FRL-9978-40). In October 2019, EPA published a draft risk evaluation (84 FR 57866, October 29, 2019) (FRL-9999-69), and, after public comment and peer review by the Science Advisory Committee on Chemicals (SACC), EPA issued the 2020 Risk Evaluation for Methylene Chloride in June 2020 in accordance with TSCA section 6(b) (85 FR 37942, June 24, 2020) (FRL-10011-16). EPA subsequently issued a draft revised TSCA risk determination for methylene chloride (87 FR 39824, July 5, 2022) (9946-01-OCSPP), and, after public notice and receipt of comments, published a Revised Risk Determination for Methylene Chloride in November 2022 (Ref. 2). The 2020 Risk Evaluation for Methylene Chloride and supplemental materials are in docket EPA-HQ-OPPT-2019-0437, and the November 2022 revised unreasonable risk determination and additional materials supporting the risk evaluation process are in docket EPA-HQ-OPPT-2016-0742, on
In the 2020 Risk Evaluation for Methylene Chloride, EPA evaluated risks associated with 53 conditions of use within the following categories: manufacture (including import), processing, distribution in commerce, industrial and commercial use, consumer use, and disposal (Ref. 1). Descriptions of these conditions of use are in Unit III.B.2. The 2020 Risk Evaluation for Methylene Chloride identified significant adverse health effects associated with short- and long-term exposure to methylene chloride, including central nervous system effects up to and including death from acute inhalation exposures, non-cancer liver effects from chronic inhalation, and cancer from chronic inhalation exposures to methylene chloride, as well as acute central nervous system effects and chronic non-cancer liver effects from dermal exposure. A further discussion of the hazards of methylene chloride is in Unit III.B.1.
EPA has been revisiting specific aspects of its first ten TSCA existing chemical risk evaluations, including the methylene chloride risk evaluation, to ensure that the risk evaluations upon which risk management decisions are made better align with TSCA's objective of protecting health and the environment. For methylene chloride, EPA revised the original unreasonable risk determination based on the 2020 Risk Evaluation for Methylene Chloride and issued a final revised unreasonable risk determination in November 2022 (Ref. 2). EPA revised the risk determination for the 2020 Risk Evaluation for Methylene Chloride pursuant to TSCA section 6(b) and consistent with Executive Order 13990, (“Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis”) and other Administration priorities (Refs. 17, 18, 19). The revisions consisted of making the risk determination based on the whole-chemical substance instead of by individual conditions of use (which resulted in the revised risk determination superseding the prior “no unreasonable risk” determinations (Ref. 2) the withdrawal of the associated TSCA section 6(i)(1) “no unreasonable risk” order; and clarifying that the risk determination does not reflect an assumption that all workers are always provided and appropriately wear PPE (Ref. 2).
In determining whether methylene chloride presents unreasonable risk under the conditions of use, EPA considered relevant risk-related factors, including, but not limited to: the effects of the chemical substance on health (including cancer and non-cancer risks) and human exposure to the substance under the conditions of use (including duration, magnitude and frequency of exposure); the effects of the chemical substance on the environment and environmental exposure under the conditions of use; the population exposed (including any potentially exposed or susceptible subpopulations); the severity of hazard (including the nature of the hazard, the irreversibility of the hazard); and uncertainties.
EPA determined that methylene chloride presents an unreasonable risk of injury to health. The unreasonable risk determination is driven by risks to workers and occupational non-users (workers who do not directly handle methylene chloride but perform work in an area where methylene chloride is present) from occupational exposures (
While the 2020 Risk Evaluation for Methylene Chloride estimated different risks for occupational non-users and workers, the benchmark (and thus the ECEL and EPA STEL value) is the same for both populations. That is, while workers and occupational non-users may have different exposure patterns, the level of exposure such that risks are no longer unreasonable is the same for both workers and occupational non-users. Thus, for the purposes of risk management, the distinction between worker and occupational non-user is no longer relevant, and both are encompassed by the definition of a potentially exposed person, as outlined in Unit IV.A.1.a. EPA additionally emphasizes that the inclusion of occupational non-users itself does not exceed the scope of those individuals that are already covered by the OSHA PEL, as the methylene chloride OSHA standard applies to all employees within a regulated area, regardless of whether they directly handle methylene chloride.
The 2020 TSCA Risk Evaluation for Methylene Chloride excluded the assessment of certain exposure pathways that were or could be regulated under another EPA-administered statute (see section 1.4.2 of the 2020 Risk Evaluation for Methylene Chloride (Refs. 1, 2)). This resulted in the surface water, drinking water, and ambient air pathways for methylene chloride exposure not being assessed for human health risk to the general population. In June 2021, EPA made a policy announcement on the path forward for TSCA chemical risk evaluations, indicating that EPA would, among other things, examine whether the exclusion of certain exposure pathways from the risk evaluations would lead to a failure to identify and protect fenceline communities (Refs. 10, 20).
In order to assess the potential for risk to the general population in proximity to a facility releasing methylene chloride, EPA developed the TSCA Screening Level Approach for Assessing Ambient Air and Water Exposures to Fenceline Communities Version 1.0, which was presented to the SACC in March 2022, with a report issued by the SACC on May 18, 2022 (Ref. 21). This analysis is discussed in Unit VI.A.
Under TSCA section 6(a), if the Administrator determines, in accordance with TSCA section 6(b)(4)(A), that the manufacture (including import), processing, distribution in commerce, use, or disposal of a chemical substance or mixture, or any combination of such activities, presents an unreasonable risk of injury to health or the environment, EPA must by rule apply one or more of the following requirements to the extent necessary so that the chemical substance or mixture no longer presents such risk.
• Prohibit or otherwise restrict the manufacturing (including import), processing, or distribution in commerce of the substance or mixture, or limit the amount of such substance or mixture which may be manufactured, processed, or distributed in commerce (section 6(a)(1)).
• Prohibit or otherwise restrict the manufacturing, processing, or distribution in commerce of the substance or mixture for a particular use or above a specific concentration for a particular use (section 6(a)(2)).
• Limit the amount of the substance or mixture which may be manufactured, processed, or distributed in commerce for a particular use or above a specific concentration for a particular use specified (section 6(a)(2)).
• Require clear and adequate minimum warning and instructions with respect to the substance or mixture's use, distribution in commerce, or disposal, or any combination of those activities, to be marked on or accompanying the substance or mixture (section 6(a)(3)).
• Require manufacturers and processors of the substance or mixture to make and retain certain records or conduct certain monitoring or testing (section 6(a)(4)).
• Prohibit or otherwise regulate any manner or method of commercial use of the substance or mixture (section 6(a)(5)).
• Prohibit or otherwise regulate any manner or method of disposal of the substance or mixture, or any article containing such substance or mixture, by its manufacturer or processor or by any person who uses or disposes of it for commercial purposes (section 6(a)(6)).
• Direct manufacturers or processors of the substance or mixture to give notice of the unreasonable risk determination to distributors, certain other persons, and the public, and to replace or repurchase the substance or mixture (section 6(a)(7)).
As described in Unit III.B., EPA assessed how the TSCA section 6(a) requirements could be applied to address the unreasonable risk found to be present in the 2020 Risk Evaluation for Methylene Chloride and the final revised unreasonable risk determination, so that methylene chloride no longer presents such unreasonable risk. EPA's proposed regulatory action and a primary alternative regulatory action are fully discussed in Unit IV. EPA is requesting public comment on the proposed regulatory action and primary alternative regulatory action.
Under the authority of TSCA section 6(g), EPA may consider granting a time-limited exemption for a specific condition of use for which EPA finds that: (1) The specific condition of use is a critical or essential use for which no technically and economically feasible safer alternative is available, taking into consideration hazard and exposure; (2) Compliance with the requirement would significantly disrupt the national economy, national security, or critical infrastructure; or (3) The specific condition of use, as compared to reasonably available alternatives, provides a substantial benefit to health, the environment, or public safety. Further, the Administrator may by rule, extend, modify, or eliminate an exemption if the Administrator determines, on the basis of reasonably available information and after adequate public justification, the exemption warrants extension or modification or is no longer necessary. Based on reasonably available information, EPA has considered the issue and is proposing that a TSCA section 6(g) exemption is warranted for certain
TSCA section 6(c)(2)(A) requires EPA, in proposing and promulgating section 6(a) rules, to consider and include a statement of effects addressing certain factors, including the costs and benefits and the cost effectiveness of the proposed regulatory action and of the one or more primary alternative regulatory actions considered by the Administrator. Also, under TSCA section 6(c)(2), EPA must consider the effects of the chemical substance or mixture on health or the environment and the magnitude of the exposure, which can include impacts to health or the environment in fenceline communities. TSCA section 6(c)(2) considerations are discussed in Unit VI.
TSCA section 6(c)(2)(C) requires that, in deciding whether to prohibit or restrict in a manner that substantially prevents a specific condition of use and in setting an appropriate transition period for such action, EPA consider, to the extent practicable, whether technically and economically feasible alternatives that benefit health or the environment will be reasonably available as a substitute when the proposed prohibition or restriction takes effect. Unit III.B.4. includes more information regarding EPA's consideration of alternatives, and Unit V. provides more information on EPA's considerations more broadly under TSCA section 6(c)(2).
As described in this Unit, EPA carried out required consultations as described later in this unit and also considered impacts on children's environmental health as part of its approach to developing this TSCA section 6 regulatory action.
EPA conducted consultations and outreach as part of development of this proposed regulatory action. The Agency held a federalism consultation from October 22, 2020, until January 23, 2021, as part of this rulemaking process and pursuant to Executive Order 13132. This included a background presentation on September 9, 2020, and a consultation meeting on October 22, 2020. During the consultation, EPA met with State and local officials early in the process of developing the proposed action in order to receive meaningful and timely input into its development (Ref. 22). During the consultation, participants and EPA discussed preemption, EPA's authority under TSCA section 6 to regulate identified unreasonable risk, what activities would be potentially regulated in the proposed rule, and the relationship between TSCA and existing statutes—particularly the Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) (Ref. 22).
Methylene chloride is not manufactured (including imported), processed, distributed in commerce, or regulated by Tribal governments. However, EPA consulted with Tribal officials during the development of this proposed action (Ref. 23). The Agency held a Tribal consultation from October 7, 2020, to January 8, 2021, with meetings on November 12 and 13, 2020. Tribal officials were given the opportunity to meaningfully interact with EPA risk managers concerning the current status of risk management. During the consultation, EPA discussed risk management under TSCA section 6(a), findings from the 2020 Risk Evaluation for Methylene Chloride, types of information that would be helpful to inform risk management, principles for transparency during the risk management process, and types of information EPA is seeking from Tribes (Ref. 23). EPA received no written comments as part of this consultation.
In addition to the formal consultations, EPA also conducted outreach to advocates for communities that might be subject to disproportionate exposure to methylene chloride, including underrepresented communities such as minority populations, low-income populations, and Indigenous peoples. EPA's Environmental Justice (EJ) consultation occurred from November 4, 2020, through January 18, 2021. On November 16 and 19, 2020, EPA held public meetings as part of this consultation. These meetings were held pursuant to and in compliance with Executive Orders 12898 and 14008. EPA received three written comments following the EJ meetings, in addition to oral comments provided during the consultations (Refs. 24, 25, 26). In general, commenters supported strong regulation of methylene chloride to protect lower-income communities and workers. Commenters supported strong outreach to affected communities, encouraged EPA to follow the hierarchy of controls in regulating methylene chloride, favored prohibitions, and noted the uncertainties associated with use of PPE (
As required by section 609(b) of the Regulatory Flexibility Act (RFA), EPA convened a SBAR Panel to obtain advice and recommendations from Small Entity Representatives (SERs) that potentially would be subject to the rule's requirements. EPA met with SERs before and during Panel proceedings, on November 4, 2020, and January 28, 2021. Panel recommendations are in Unit X.C. and in the Initial Regulatory Flexibility Analysis (Ref. 27); the Panel report is in the docket (Ref. 6).
Units X.C., X.E., X.F., and X.J. provide more information regarding the consultations.
In addition to the formal consultations described in Unit X., EPA attended a Small Business Administration (SBA) Office of Advocacy Environmental Roundtable on September 11, 2020 and held a public webinar on September 16, 2020. At both events EPA staff provided an overview of the TSCA risk management process and the findings in the 2020 Risk Evaluation for Methylene Chloride (Ref. 28). Attendees of these meetings were given an opportunity to voice their concerns regarding the risk evaluation and risk management.
Furthermore, EPA has engaged in discussions with representatives from different industries, non-governmental organizations, technical experts, and users of methylene chloride. A list of external meetings held during the development of this proposed rule is in the docket (Ref. 29); meeting materials and summaries are also in the docket. The purpose of these discussions was to hear from users, academics, manufacturers, and members of the public health community about practices related to commercial and consumer uses of methylene chloride; public health impacts of methylene chloride; the importance of methylene chloride in the various uses subject to this proposed rule; frequently used substitute chemicals or alternative methods; engineering control measures and PPE currently in use or feasibly adoptable; and other risk-reduction approaches that may have already been adopted or considered for industrial, commercial or consumer uses.
The Agency's 2021 Policy on Children's Health (Ref. 30) requires EPA to protect children from environmental exposures by consistently and explicitly considering early life exposures (from conception, infancy, and early childhood and through adolescence until 21 years of age) and lifelong health in all human health decisions through identifying and integrating children's health data and information when conducting risk assessments. TSCA section 6(b)(4)(A) also requires EPA to
The 2020 Risk Evaluation for Methylene Chloride evaluated exposures of infants, toddlers, older children (11 to 15 years and 16 to 20 years), and males and females of reproductive age; while EPA identified exposures to these populations (as bystanders, consumers, or workers) as driving the unreasonable risk for methylene chloride, EPA did not find that the adverse health impacts for these groups was disproportionate in comparison to other populations. While there is some evidence of an association between methylene chloride and developmental neurological effects, the literature contains methodological limitations in human studies and concentration limitations in animal studies, and thus reproductive/development effects were not carried forward to dose-response (Ref. 1).
More specifically, the 2020 Risk Evaluation for Methylene Chloride released in June 2020 considered impacts on both children and adults from occupational and consumer use from inhalation and dermal exposures, as applicable. For occupational use, the risk evaluation considered males (>16 years of age) and females of reproductive age (>16 years of age to less than 50 years of age) for both dermal and inhalation exposures. For consumer use, EPA evaluated dermal exposures for children ages 11 to 15 and 16 to 20 years of age, and the evaluation of bystander exposure from inhalation exposures included infants, toddlers and older children. While risks to children are not disproportionate, effects observed in studies include central nervous system impairment from acute inhalation exposure and liver toxicity from chronic inhalation exposure. The risks described in this section would be addressed by the proposed regulatory action described in Unit IV.
This Unit describes the TSCA conditions of use that drive the unreasonable risk for methylene chloride. Condition of use descriptions were obtained from EPA sources such as CDR use codes, the 2020 Risk Evaluation for Methylene Chloride and related documents, as well as the Organisation for Economic Co-operation and Development harmonized use codes, and stakeholder engagements. EPA acknowledges that some of the terms here may be defined under other statutes; however, the descriptions in this unit are intended to provide clarity to the regulated entities who will implement the provisions of this rulemaking under TSCA section 6(a).
This condition of use refers to manufacturing, or producing, a chemical substance within the United States (including manufacturing for export). Manufacture includes the extraction of a component chemical substance from a previously existing chemical substance or complex combination of chemical substances.
This condition of use refers to the act of causing a chemical substance or mixture to arrive within the customs territory of the United States.
This condition of use refers to processing methylene chloride in chemical reactions for the manufacturing of another chemical substance or product,
This condition of use refers to when methylene chloride is added to a product (or product mixture) prior to further distribution of the product.
This condition of use refers to the preparation of methylene chloride for distribution in commerce in a different form, state, or quantity. This includes transferring the chemical from a bulk container into smaller containers.
This condition of use refers to the process of treating generated waste streams(
This condition of use refers to the process of heating methylene chloride to its volatilization point and using its vapor to remove dirt, oils, greases, and other surface contaminants (such as drawing compounds, cutting fluids, coolants, solder flux, and lubricants) from metal parts, electronics, or other articles in batch open-top vapor degreasers or closed-loop vapor degreasing in industrial or commercial settings.
This condition of use refers to the process of heating methylene chloride to its volatilization point and using its vapors to remove dirt, oils, greases, and other surface contaminants from textiles, glassware, metal surfaces, and other articles using conveyorized or continuous-web vapor degreasing machines in industrial or commercial settings.
This condition of use refers to the industrial or commercial use of methylene chloride as a non-boiling solvent in cold-cleaning to dissolve oils, greases, and other surface contaminants from textiles, glassware, metal surfaces, and other articles.
This condition of use refers to industrial or commercial use of methylene chloride in aerosol degreasing as an aerosolized solvent spray, typically applied from a pressurized can, to remove residual contaminants from fabricated parts or machinery (including circuit boards and electronics).
This condition of use refers to industrial or commercial use of methylene chloride in adhesives, sealants, and caulks to promote bonding between other substances, promote adhesion of surfaces, or prevent seepage of moisture or air.
This condition of use refers to industrial or commercial use of methylene chloride in paints or coatings applied to surfaces, usually to enhance properties such as water repellency, gloss, fade resistance, ease of application, or foam prevention, etc.
This condition of use refers to industrial or commercial use of methylene chloride or methylene chloride-containing products applied to surfaces to remove paint, coatings, and other finishes and to clean the underlying surface, including but not limited to furniture refinishing.
This condition of use refers to industrial or commercial use of methylene chloride in products in industrial or commercial settings applied to surfaces to unbind substances or remove sealants and to clean the underlying surface by softening adhesives, caulks, and other glues so they can be removed.
This condition of use refers to the industrial or commercial use of methylene chloride in aerosol degreasing as an aerosolized solvent spray, typically applied from a pressurized can, to remove residual contaminants from fabricated parts, machinery, or other metal substrate.
This condition of use refers to the industrial or commercial use of methylene chloride in liquid degreasing to remove residual contaminants from fabricated parts, machinery, or other metal substrate.
This condition of use refers to industrial or commercial use of methylene chloride in the finishing of fabrics at fabric or textile mills, including in products that impart color or other desirable properties to fabrics or textiles. The methylene chloride may be added during the manufacturing of the textile or during the finishing, such as pressing of the fabric.
This condition of use refers to the industrial or commercial use of methylene chloride for one or more operational properties in a closed system in products intended for automotive care and includes automotive air conditioner refrigerant and as a refrigerant with stop leak sealant.
This condition of use refers to the industrial or commercial use of methylene chloride in cleaning agents used to remove stains from interior carpets and textiles in automotive vehicles.
This condition of use refers to the industrial or commercial use of methylene chloride in liquid or aerosol degreasing to remove residual contaminants from automotive substrates and articles.
This condition of use refers to the industrial or commercial use of methylene chloride in apparel and footwear care products as post-market waxes, polishes, or other media and applied to footwear, textiles, or fabrics to impart color or other desirable properties.
This condition of use refers to the industrial or commercial use of methylene chloride or methylene chloride-containing products applied from squeeze bottles, hand-held spray bottles, or spray guns, either before or after a cleaning cycle on apparel and textiles. After application, the methylene chloride or product is removed by manually scraping or flushing away the stain by using a brush, spatula, pressurized air, or steam.
This condition of use refers to the industrial or commercial use of methylene chloride in liquids that reduce friction, heat generation, and wear between surfaces.
This condition of use refers to the industrial or commercial use of methylene chloride in sprays that reduce friction, heat generation, and wear between surfaces.
This condition of use refers to the industrial or commercial use of methylene chloride in aerosol degreasing as an aerosolized solvent spray, typically applied from a pressurized can, to remove residual contaminants from a fabricated part or other substrate.
This condition of use refers to the industrial or commercial use of methylene chloride in liquid degreasing to remove residual contaminants (such as oils, greases, and similar materials) from a fabricated part or other substrate (such as textiles, glassware, products, and other articles).
This condition of use refers to the industrial or commercial use of methylene chloride when typically applied in aerosolized form in products used in building and construction materials to provide insulation.
This condition of use refers to industrial or commercial use of methylene chloride added to a product (or product mixture) in an industrial or commercial setting.
This condition of use refers to the industrial or commercial use of methylene chloride to improve the processing characteristics or the operation of process equipment or to alter or buffer the pH of the substance or mixture, when added to a process or to a substance or mixture to be processed. Processing agents do not become a part of the reaction product and are not intended to affect the
This condition of use refers to the industrial or commercial use of methylene chloride in the production of polyurethane foam including as a blowing agent and as a solvent for cleaning equipment.
This condition of use refers to the industrial or commercial use of methylene chloride in a laboratory process or in specialized laboratory equipment for instrument calibration/maintenance chemical analysis, chemical synthesis, extracting and purifying other chemicals, dissolving other substances, executing research, development, test and evaluation methods, and similar activities. In response to a request for clarification, EPA agrees that use of methylene chloride in a closed-loop chiller system used to perform FAA-required aviation fuel testing is considered industrial and commercial use as a laboratory chemical (Ref. 31). The analogous use of methylene chloride in a chiller system in the Department of Defense McKinley Climactic Laboratory would likewise be considered industrial and commercial use as a laboratory chemical.
This condition of use refers to the industrial or commercial use of methylene chloride in electrical and electronic products; their maintenance; their manufacture, such as in the production of printed circuit boards; and at wholesalers and retail stores.
This condition of use refers to the industrial or commercial use of methylene chloride in the manufacture and processing of plastic and rubber products, including in interfacial polymerization for polycarbonate plastic manufacturing.
This condition of use refers to the industrial or commercial use of methylene chloride as a chemical processor for polycarbonate resins and cellulose triacetate (photographic film).
This condition of use refers to the industrial or commercial use of methylene chloride in formulations to prevent spatter from adhering to metal surfaces during welding.
This condition of use refers to the industrial or commercial use of methylene chloride in the extraction, development, and preparation of oil, liquid crude petroleum, and gas. Activities may include exploration for crude petroleum and natural gas, core sampling, drilling wells, operating separator, emulsion breakers, and distilling equipment.
This condition of use refers to the industrial or commercial use of methylene chloride in the manufacture of toys intended for children's use (and child-dedicated articles), including fabrics, textiles, and apparel (which may include stuffed toys, blankets, or comfort objects) as well as plastic articles (hard) (which may include dolls, toy cars, toy animals, or teething rings).
This condition of use refers to the industrial or commercial use of methylene chloride in lithographic printing for the cleaning of plates and rollers.
This condition of use refers to the industrial or commercial use of methylene chloride in formulated products to remove carbon and other dirt and residues from a variety of surfaces including floors and brushes.
This condition of use refers to consumer use of products containing methylene chloride as a solvent for cleaning or degreasing in the form of an aerosol spray degreaser or cleaner. The products are used to dissolve oils, greases, and similar materials from textiles, glassware, metal surfaces, and other articles.
This condition of use refers to consumer use of methylene chloride in single or two-component products used to fasten other materials together or prevent the passage of liquid or gas.
This condition of use refers to consumer use of products containing methylene chloride to clean brushes after using them to apply paints or coatings.
This condition of use refers to consumer use of products containing methylene chloride to remove, loosen, or deteriorate any adhesive or caulk from a substrate, such as floor adhesive removal.
This condition of use refers to consumer use of products containing methylene chloride for the degreasing of metals, such as coil cleaners and electronics cleaners.
This condition of use refers to consumer use of products containing methylene chloride for automotive care and includes automotive air conditioner refrigerant and leak sealant.
This condition of use refers to consumer use of products containing methylene chloride for automotive care and includes products for degreasing automotive parts, such as brakes, carburetors, engines, and gaskets.
This condition of use refers to consumer use of products containing methylene chloride to reduce friction, heat generation, and wear between solid surfaces, such as engines and brakes.
This condition of use refers to consumer use of products containing methylene chloride used in building and construction materials to provide insulation.
This condition of use refers to consumer use of arts, crafts, and hobby materials, such as glues, containing methylene chloride.
This condition of use refers to consumer use of products containing methylene chloride to prevent the spatter of the welding from sticking to welding material or a nearby surface (for example, workbenches).
This condition of use refers to consumer use of products containing methylene chloride for cleaning applications to remove carbon, inks and paints, grease, or other foreign matter. The cleaning operations include carbon removers (for example, to clean appliances, pots, and pans) and other applications that usually involve the use of a brush (for example, in lithographic printing cleaners, in taxidermy, and in wood and floor cleaners).
This condition of use refers to the process of disposing generated waste streams of methylene chloride that are collected either on-site or transported to a third-party site for disposal.
For the purposes of this proposed rulemaking, “occupational conditions of use” refers to the TSCA conditions of use described in Units III.B.1.a, b, c, and e. Although EPA identified both industrial and commercial uses in the 2020 Risk Evaluation for Methylene Chloride for purposes of distinguishing scenarios, the Agency clarified then and clarifies now that EPA interprets the authority Congress gave to the Agency to “regulat[e] any manner or method of commercial use” under TSCA section 6(a)(5) to reach both industrial and commercial uses.
Additionally, in the 2020 Risk Evaluation for Methylene Chloride, EPA identified and assessed all known, intended, and reasonably foreseen industrial, commercial, and consumer uses of methylene chloride (other than the use of methylene chloride in consumer paint and coating removers, which was subject to separate action under TSCA section 6 (84 FR 11420, March 27, 2019)). EPA determined that all industrial, commercial, and consumer use of methylene chloride evaluated in the 2020 Risk Evaluation for Methylene Chloride drives the unreasonable risk of injury to health. As such, for purposes of this risk management rulemaking, “consumer use” refers to all known, intended, or reasonably foreseen methylene chloride consumer uses. Likewise, for the purpose of this risk management rulemaking, “industrial and commercial use” refers to all known, intended, or reasonably foreseen methylene chloride industrial and commercial use.
EPA further notes that this proposed rule does not apply to any substance excluded from the definition of “chemical substance” under TSCA section 3(2)(B)(ii) through (vi). Those exclusions include, but are not limited to, any pesticide (as defined by the Federal Insecticide, Fungicide, and Rodenticide Act) when manufactured, processed, or distributed in commerce for use as a pesticide; and any food, food additive, drug, cosmetic, or device, as defined in section 201 of the Federal Food, Drug, and Cosmetic Act, when manufactured, processed, or distributed in commerce for use as a food, food additive, drug, cosmetic or device.
EPA is not proposing to incorporate the descriptions in Units III.B.1.a through III.B.1.e. into the regulatory text as definitions. EPA requests comment on whether a definition should be promulgated for each condition of use of methylene chloride and, if so, whether the descriptions in this Unit are consistent with the conditions of use evaluated in the 2020 Risk Evaluation for Methylene Chloride and whether they provide a sufficient level of detail such that they would improve the clarity and readability of the regulation if promulgated.
EPA has determined that methylene chloride presents an unreasonable risk of injury to human health under the conditions of use based on acute and chronic non-cancer risks and chronic cancer risks. As described in the TSCA section 6(b) 2020 Risk Evaluation for Methylene Chloride, EPA identified non-cancer adverse effects from both acute and chronic inhalation and dermal exposures to methylene chloride, and cancer from chronic inhalation and dermal exposures to methylene chloride (Ref. 1). EPA identified neurotoxicity effects (central nervous system) as the most sensitive endpoint of the non-cancer adverse effects from acute inhalation and dermal exposures, and liver effects as the most sensitive endpoint of the non-cancer adverse effects from chronic inhalation and dermal exposures for all conditions of use. However, EPA also identified additional risks associated with other adverse effects (
To make the unreasonable risk determination for methylene chloride, EPA evaluated exposures to workers, occupational non-users, consumer users, and bystanders using reasonably available monitoring and modeling data for inhalation and dermal exposures. In addition, EPA conducted a screening level analysis to assess risks from the air and water pathways to fenceline communities. A discussion of EPA's analysis and the expected effects of this rulemaking on fenceline communities is in Unit VI.A.
For the 2020 Risk Evaluation for Methylene Chloride, EPA considered potentially exposed or susceptible subpopulations identified as relevant to the risk evaluation by the Agency. There are several groups of individuals with greater exposure to methylene chloride relative to the general population, including: (1) Workers and occupational non-users, and (2) Consumer users and bystanders to consumer use of products containing methylene chloride (Ref. 1). EPA also identified several human subpopulations which may have greater susceptibility than the general population to the hazards of methylene chloride, including individuals with
EPA examined the TSCA section 6(a) requirements (listed in Unit III.A.) to identify which ones have the potential to eliminate the unreasonable risk from methylene chloride. This Unit summarizes the TSCA section 6 considerations for issuing regulations under TSCA section 6(a). Unit V. outlines how EPA applied these considerations specifically to managing the unreasonable risk from methylene chloride.
As required, EPA developed a proposed regulatory action and one primary alternative regulatory action, which are described in Units IV.A. and IV.B., respectively. To identify and select a regulatory action, EPA considered the two routes of exposure driving the unreasonable risk, inhalation and dermal, and the exposed populations. For occupational conditions of use (see Unit III.B.1.f.), EPA considered how it could directly regulate manufacturing (including import), processing, distribution in commerce, industrial and commercial use, or disposal to address the unreasonable risk. EPA does not have direct authority to regulate consumer use. Therefore, EPA considered how it could exercise its authority under TSCA to regulate the manufacturing (including import), processing, and/or distribution in commerce of methylene chloride at different levels in the supply chain to eliminate exposures or restrict the availability of methylene chloride and methylene chloride-containing products for consumer use in order to address the unreasonable risk.
As required by TSCA section 6(c)(2), EPA considered several factors, in addition to identified unreasonable risk, when selecting among possible TSCA section 6(a) requirements. To the extent practicable, EPA factored into its decisions: (i) the effects of methylene chloride on health and the environment, (ii) the magnitude of exposure to methylene chloride of human beings and the environment, (iii) the benefits of methylene chloride for various uses, and (iv) the reasonably ascertainable economic consequences of the rule. In evaluating the reasonably ascertainable economic consequences of the rule, EPA considered (1) The likely effect of the rule on the national economy, small business, technological innovation, the environment, and public health; (2) The costs and benefits of the proposed regulatory action and one or more primary alternative regulatory actions considered; and (3) The cost effectiveness of the proposed regulatory action and of the one or more primary alternative regulatory actions considered. TSCA section 6(c)(2)(A) considerations for methylene chloride are discussed in full in Unit VI., including the statement of effects of the proposed rule with respect to these considerations.
EPA also considered regulatory authorities under statutes administered by other agencies such as the OSH Act, the Consumer Product Safety Act (CPSA), and the Federal Hazardous Substances Act (FHSA), as well as other EPA-administered statutes, to examine (1) Whether there are opportunities for all or part of this risk management action to be addressed under other statutes, such that a referral may be warranted under TSCA section 9(a) or 9(b); or (2) Whether TSCA section 6(a) regulation could include alignment of requirements and definitions in and under existing statutes and regulations to minimize confusion to the regulated entities and the general public.
In addition, EPA followed other TSCA requirements such as considering the availability of alternatives when contemplating prohibition or a substantial restriction (TSCA section 6(c)(2)(C), as outlined in Unit III.B.4.), and setting proposed compliance dates in accordance with the requirements in TSCA section 6(d)(1)(B) (described in the proposed and alternative regulatory action in Unit IV.).
To the extent information was reasonably available, EPA considered pollution prevention strategies and the hierarchy of controls adopted by OSHA and NIOSH, as discussed in Unit II.C.4., when selecting regulatory actions, with the goal of identifying risk management control methods that are permanent, feasible, and effective. EPA also considered how to address the unreasonable risk while providing flexibility to the regulated community where appropriate, and took into account the information presented in the 2020 Risk Evaluation for Methylene Chloride, as well as input from stakeholders (as described in Unit III.A.) and anticipated compliance strategies from regulated entities.
Taken together, these considerations led EPA to the proposed regulatory action and primary alternative regulatory action described in Unit IV. Additional details related to how the requirements in this Unit were incorporated into development of those actions are in Unit V.
As demonstrated by the number of distinct programs addressed in this rulemaking and the structure of this proposed rule in addressing them independently, EPA generally intends the rule's provisions to be severable from each other. EPA expects to provide additional detail on severability in the final rule once the Agency has considered public comments and finalized the regulatory language.
This Unit describes the proposed regulatory action by EPA so that methylene chloride will no longer present an unreasonable risk of injury to health. In addition, as indicated by TSCA section 6(c)(2)(A), EPA must consider the costs and benefits and the cost-effectiveness of the proposed regulatory action and one or more primary alternative regulatory actions. In the case of methylene chloride, the proposed regulatory action is described in Unit IV.A. and the alternative regulatory action considered is described in Unit IV.B. An overview of the proposed regulatory action and primary alternative regulatory action for each condition of use is in Unit IV.C.
EPA is proposing under TSCA section 6(a) to: Require a WCPP, including inhalation exposure concentration limits and related monitoring, for ten conditions of use, outlined in Unit IV.A.1.; Prohibit most industrial and commercial use of methylene chloride, outlined in Unit IV.A.2.; Prohibit the
As described in Unit I., under TSCA section 6(a), 15 U.S.C. 2605(a), EPA is required to issue a regulation applying one or more of the TSCA section 6(a) requirements to the extent necessary so that the unreasonable risk of injury to human health or the environment from a chemical substance is no longer presented. The TSCA section 6(a) requirements provide EPA the authority to limit or prohibit a number of activities, including, but not limited to, restricting or regulating the manufacture, processing, distribution in commerce, commercial use, or disposal of the chemical substance. Given this statutory authority, EPA may find it appropriate in certain circumstances to propose a WCPP for certain occupational (
EPA uses the term “potentially exposed person” in this Unit and in the regulatory text to include workers, occupational non-users, employees, independent contractors, employers, and all other persons in the work area where methylene chloride is present and who may be exposed to methylene chloride under the conditions of use for which a WCPP would apply. EPA's intention is to require a comprehensive WCPP that would address the unreasonable risk from methylene chloride to workers directly handling the chemical or in the area where the chemical is being used. Similarly, the 2020 Risk Evaluation for Methylene Chloride did not distinguish between employers, contractors, or other legal entities or businesses that manufacture, process, distribute in commerce, use, or dispose of methylene chloride. For this reason, EPA uses the term “owner or operator” to describe the entity responsible for implementing the WCPP in any workplace where an applicable condition of use described in Units III.B.1.a. through III.B.1.e. and subject to the WCPP is occurring. The term includes any person who owns, leases, operates, controls, or supervises such a workplace.
EPA is proposing a WCPP for the following conditions of use: domestic manufacturing; import; processing as a reactant; processing for incorporation into a formulation, mixture, or reaction product; processing in repackaging; processing in recycling; industrial and commercial use as a laboratory chemical; industrial or commercial use for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and spacecraft by Federal agencies and their contractors; industrial or commercial use as a bonding agent for acrylic and polycarbonate in mission-critical military and space vehicle applications, including in the production of specialty batteries for such applications by Federal agencies and their contractors; and disposal (EPA's rationale is provided in Unit V.). EPA is additionally proposing to require that uses receiving an exemption under TSCA section 6(g), as outlined in Unit IV.A.5., comply with the WCPP. EPA is proposing that these requirements take effect 180 days after publication of the final rule, at which point entities would be required to conduct initial monitoring (as described in Unit IV.A.1.c.). Additionally, EPA would require the implementation of any needed exposure controls based on initial monitoring and development of an exposure control plan within 1 year of publication of the final rule (Unit IV.A.1.d.). EPA believes these timeframes are achievable because they are consistent with the timeframes in OSHA's 1997 standard for methylene chloride (62 FR 1494, January 10, 1997). EPA is requesting comment on these proposed implementation timeframes for the WCPP requirements.
When considering and developing a WCPP that includes an ECEL, EPA coordinates and consults with other Federal agencies to achieve the maximum enforcement of TSCA while avoiding imposing duplicative requirements, consistent with TSCA section 9(d). For methylene chloride, EPA's streamlined approach for implementing the ECEL would seek to align with, to the extent possible, certain elements of the existing OSHA standard for regulating methylene chloride under 29 CFR 1910.1052. The OSHA PEL, action level, STEL, and ancillary requirements have established a strong precedent for exposure limit threshold requirements within the regulated community. However, the existing PEL and STEL do not eliminate the unreasonable risk identified by EPA under TSCA, and EPA is therefore proposing to apply new, lower, exposure thresholds, derived from the TSCA 2020 Risk Evaluation for Methylene Chloride, while aligning with existing requirements wherever possible (Refs. 1, 11). For methylene chloride, this approach would eliminate the unreasonable risk driven by the conditions of use subject to the WCPP, enable continued industry use where appropriate, and provide the familiarity of a pre-existing framework for the regulated community.
EPA's proposed requirements include specific exposure limits and ancillary requirements necessary for the ECEL's successful implementation as part of a WCPP. Taken together, these WCPP requirements would apply to the extent necessary so that the unreasonable risk driven by the conditions of use listed earlier in this Unit would no longer be presented. EPA's proposal would align with existing requirements from the OSHA methylene chloride standard at 29 CFR 1910.1052 to the extent possible (also summarized in Unit V.A.). As discussed in Unit II.B.3., because the unreasonable risk driven by these occupational conditions of use cannot be addressed entirely through the continued application of the OSHA standard and associated requirements, EPA is proposing additional requirements for lower exposure limits, user notification, recordkeeping, periodic monitoring, and respirator selection criteria as part of the WCPP. EPA acknowledges that the values of the ECEL, the ECEL action level, and the EPA STEL, outlined in Unit IV.A.1.b., may mean that some entities that are
This Unit includes a summary of the WCPP, including a description of proposed exposure limits including an ECEL, ECEL action level, and EPA STEL; proposed implementation requirements including monitoring requirements; a description of potential exposure controls, including engineering controls, administrative controls, and PPE as it relates to dermal protections and respirator selection; and additional requirements proposed for recordkeeping, workplace participation, and notification in accordance with the hierarchy of controls. This Unit also describes compliance timeframes for these proposed requirements.
To reduce exposures in the workplace and address the inhalation exposures to methylene chloride for occupational conditions of use that drive to the unreasonable risk of injury to human health, EPA is proposing an ECEL under TSCA section 6(a) of 2 ppm (8 mg/m
If ambient exposures are kept at or below the 8-hour TWA ECEL of 2 ppm and at or below the 15-minute TWA EPA STEL of 16 ppm, a potentially exposed person would be protected against the effects described in Unit III.B.3., including effects resulting from acute exposure (central nervous system depression), chronic non-cancer effects (liver toxicity), and cancer. As an example, the incremental individual cancer risk at the 8-hour ECEL is 5.1 × 10
EPA is also proposing to establish an ECEL action level at half of the 8-hour ECEL, or 1 ppm (4 mg/m
In addition to the 8-hour TWA ECEL, EPA is proposing a STEL of 16 ppm (57 mg/m
In summary, EPA is proposing that owners or operators must ensure the airborne concentration of methylene chloride within the personal breathing zone of potentially exposed persons remains at or below 2 ppm as an 8-hour TWA ECEL, with an action level identified as 1 ppm as an 8-hour TWA. EPA is also proposing that owners or operators must ensure the airborne concentration of methylene chloride within the personal breathing zone of potentially exposed persons remains at or below a 15-minute TWA, or EPA STEL, of 16 ppm. EPA is proposing the ECEL and EPA STEL for certain occupational conditions of use to ensure that no person is exposed to inhalation of methylene chloride in excess of these concentrations resulting from those conditions of use, thus eliminating the unreasonable risk of injury to human health driven by those conditions of use. For the identified conditions of use for which the concentration thresholds are being proposed, EPA expects that the regulated community has the ability to detect the values for the ECEL, ECEL action level, and EPA STEL because these limits are above the detection limits of methylene chloride monitoring devices that are widely available in commerce, currently in use, and approved by OSHA and NIOSH, which generally range from 0.2 to 0.4 ppm (Ref. 11). EPA's methodology and inputs for the ECEL and EPA STEL values is directly derived from the peer reviewed analysis in the 2020 Risk Evaluation for Methylene Chloride, which was also subject to public comment (Ref 13). As with all aspects of this rulemaking, the public is welcome to comment on the methodology for the ECEL and EPA STEL values.
As discussed further in Unit V.A.1., for many of the conditions of use for which EPA is proposing a WCPP, data was submitted during the risk evaluation and SBAR process that indicates some facilities may already be in compliance with the proposed methylene chloride ECEL. As noted previously in this Unit, EPA expects that, if inhalation exposures for affected occupational conditions of use are kept at or below the ECEL and EPA STEL, potentially exposed persons reasonably likely to be exposed in the workplace would be protected from the unreasonable risk associated with covered occupational conditions of use. EPA is also proposing to require owners or operators to comply with additional requirements that would be needed to ensure successful implementation of the ECEL and EPA STEL.
Monitoring requirements are a key component of implementing EPA's proposed requirements for a WCPP. Initial monitoring for methylene chloride is critical for establishing a baseline of exposure for potentially exposed persons; similarly, periodic exposure monitoring assures continued
EPA proposes to require that owners or operators determine each potentially exposed person's exposure by taking a personal breathing zone air sample of each potentially exposed person's exposure, or by taking personal breathing zone air samples that are representative of each potentially exposed person's exposure. Owners or operators would be permitted to consider personal breathing zone air samples to be representative of each potentially exposed person's exposure when one or more samples are taken for at least one potentially exposed person in each job classification in a work area during every work shift, and the person sampled is expected to have the highest methylene chloride exposure; or when one or more samples are taken which indicate the highest likely 15-minute exposures during such operations for at least one potentially exposed person in each job classification in the work area during every work shift, and the person sampled is expected to have the highest methylene chloride exposure. Personal breathing zone air samples taken during one work shift may be used to represent potentially exposed person exposures on other work shifts where the owner or operator can document that the tasks performed and conditions in the workplace are similar across shifts. These requirements align with the approach taken for characterization of employee exposure in the 1997 OSHA standard for methylene chloride (see 29 CFR 1910.1052(d)(1)(i) and (ii)). EPA also proposes to require that the owner or operator ensure, for initial and periodic monitoring, that their methods and metering results used in performance of the exposure monitoring are accurate to a confidence level of 95% and are within (plus or minus) 25% of airborne concentrations of methylene chloride above the 8-hour TWA ECEL or the 15-minute TWA EPA STEL, or within (plus or minus) 35% for airborne concentrations of methylene chloride at or above the ECEL action level but at or below the 8-hour TWA ECEL. These requirements, including the 35%, would align with the approach taken in the 1997 OSHA standard for methylene chloride (see 29 CFR 1910.1052(d)(1)(iii)). EPA acknowledges that new monitoring methods or technologies may have been developed since 1997 that would allow for greater accuracy, and thus a smaller range for monitoring results, and EPA requests comment on the exposure monitoring accuracy requirements outlined in this Unit. Therefore, while the EPA requirements utilize the values of the ECEL, ECEL action level, and EPA STEL, the approach should be familiar to the regulated community. To ensure compliance for monitoring activities, EPA proposes recordkeeping requirements outlined in this Unit. EPA acknowledges that the 25% buffer for the 8-hour and 15-minute TWA potentially could allow some exposures above the exposure limits proposed here. EPA requests comment on these buffers' effects and any alternatives to account for measurement variance or uncertainty.
Under the proposed regulation, each owner or operator of a facility engaged in one or more of the conditions of use listed earlier in Unit IV.A.1.a. would be required to perform initial exposure monitoring 180 days after publication of the final rule to determine the extent of exposure of potentially exposed persons to methylene chloride. Initial monitoring would notify owners and operators of the magnitude of possible exposures to potentially exposed persons with respect to their work conditions and environments. Based on the magnitude of possible exposures in the initial exposure monitoring, the owner or operator may need to increase or decrease the frequency of future periodic monitoring, adopt new exposure controls (such as engineering controls, administrative controls, and/or a respiratory protection program), or to continue or discontinue certain compliance activities such as periodic monitoring. In addition, the monitoring sample would be required to be taken when and where the operating conditions are best representative of each potentially exposed person's full-shift exposures. If the owner or operator chooses to use a sample that is representative of potentially exposed persons' full shift exposures (rather than monitor every individual), such sampling should include persons closest to the source of methylene chloride, so that the monitoring results would be representative of the most highly exposed persons in the workplace. Additionally, analogous to the OSHA standard, EPA expects that owners and operators would conduct initial exposure monitoring representative of all tasks a potentially exposed person would be expected to do. EPA understands that certain tasks may occur less frequently or may reflect upset conditions (for example, due to malfunction). EPA is soliciting comments regarding how owners and operators could conduct initial exposure monitoring to ensure that it is representative of all tasks likely to be conducted by potentially exposed persons.
EPA also recognizes that the values for the ECEL action level and EPA STEL may mean that some owners or operators currently in compliance with the OSHA standard would have to re-establish a monitoring baseline. Aligning with the existing OSHA standard (29 CFR 1910.1052(d)(2)) to the extent possible, EPA is proposing that an owner or operator may temporarily forgo initial exposure monitoring if:
(i) An owner or operator could provide EPA with objective data generated during the last 5 years demonstrating that methylene chloride cannot be released in the workplace in airborne concentrations at or above the ECEL action level (1-ppm 8-hour TWA) and above the EPA STEL (16 ppm 15-minute TWA) and that the data represent the highest methylene chloride exposures likely to occur under reasonably foreseeable conditions of manufacturing, processing, use, or disposal, as applicable, including handling of methylene chloride during those activities. The oldest objective data used to demonstrate that exposures are below the ECEL action level and EPA STEL will indicate the beginning of the 5-year cycles of recurring initial exposure monitoring as described in this Unit;
(ii) Where potentially exposed persons are exposed to methylene chloride for fewer than 30 days per year and the owner or operator has measurements by direct-metering devices that give immediate results and provide sufficient information regarding potentially exposed persons' exposures to determine and implement the control measures that are necessary to reduce exposures to below the ECEL action level and EPA STEL.
As described in more detail later in this Unit, unlike the OSHA standards in 29 CFR 1910.1052(d)(2) to (d)(3), the owner or operator must conduct an initial monitoring at least once every 5 years since its last monitoring. This new initial monitoring would have to be representative of all the potentially exposed persons in the workplace and the tasks that they are expected to do. Additionally, if a facility were to
EPA's proposal is aligned with elements of the existing OSHA standard (29 CFR 1910.1052(d)(3)) to the extent possible. Based on the results from the initial exposure monitoring, EPA is proposing the following periodic monitoring for owners or operators. These proposed requirements are also outlined in Table 1.
• If all samples taken during the initial exposure monitoring reveal: a concentration below the ECEL action level (1 ppm 8-hour TWA) and at or below the EPA STEL (16 ppm 15-minute TWA), the ECEL and EPA STEL periodic monitoring would not be required, except when additional exposure monitoring (Unit IV.A.1.c.v.) measurements require it.
• If the initial exposure monitoring concentration is: below the ECEL action level (1 ppm 8-hour TWA) and above the EPA STEL (16 ppm 15-minute TWA), the ECEL periodic monitoring would not be required except when additional monitoring (Unit IV.A.1.c.v.) measurements require it, but EPA STEL periodic monitoring would be required every 3 months.
• If the initial exposure monitoring concentration is: at or above the ECEL action level (1 ppm 8-hour TWA) and at or below the ECEL (2 ppm 8-hour TWA), and at or below the EPA STEL (16 ppm 15-minute TWA), the ECEL would be required to be monitored every 6 months.
• If the initial exposure monitoring concentration is: at or above the ECEL action level (1 ppm 8-hour TWA) and at or below the ECEL (2 ppm 8-hour TWA), and above the EPA STEL, the ECEL would be required to be monitored every 6 months and EPA STEL would be required to be monitored every 3 months.
• If the initial exposure monitoring concentration is: above the ECEL (2 ppm 8-hour TWA) and below, at, or above the EPA STEL (16 ppm 15-minute TWA), the ECEL and EPA STEL would be required to be monitored every 3 months.
• The owner or operator would be permitted to alter the periodic exposure monitoring frequency from every 3 months to every 6 months if two consecutive monitoring events taken at least 7 days apart indicate that the potential exposure has decreased to or below the ECEL, but at or above the ECEL action level.
• The owner or operator would be permitted to transition from the periodic exposure monitoring frequency of every 6 months to an initial exposure monitoring frequency of once every 5 years if two consecutive monitoring events taken at least 7 days apart indicate that the potential exposure has decreased below the ECEL action level and at or below the EPA STEL. The second consecutive monitoring event would delineate the new date from which the next 5-year initial exposure monitoring must occur.
In addition to the periodic monitoring standards described earlier, EPA is proposing two additional provisions:
• Based on its monitoring results, if the owner or operator would be required to monitor either the ECEL or EPA STEL in a 3-month interval but does not engage in any of the conditions of use listed in Unit IV.A.1.a. for which the WCPP is proposed over the entirety of those 3 months, the owner or operator would be permitted to forgo the upcoming periodic monitoring event. However, documentation of cessation of use of methylene chloride would be required, and initial monitoring would be required when the owner or operator resumes or starts any of the conditions of use listed in Unit IV.A.1.a. for which the WCPP is proposed.
• Based on its monitoring results, if the owner or operator would be required to monitor the ECEL in a 6-month interval but does not engage in any of the conditions of use listed in Unit IV.A.1.a. for which the WCPP is proposed over the entirety of those 6 months, the owner or operator would be permitted to forgo the upcoming periodic monitoring event. However, documentation of cessation of use of methylene chloride would be required, and initial monitoring would be required when the owner or operator resumes or starts any of the conditions of use listed in Unit IV.A.1.a. for which the WCPP is proposed.
• Initial monitoring would be required to occur at least once every 5 years if methylene chloride is present. EPA requests comment on the timeframes for periodic monitoring outlined in this Unit, particularly whether more frequent monitoring may be possible or recommended.
EPA is proposing to require that an initial monitoring event be conducted at a minimum frequency of every 5 years by owners or operators using methylene chloride for any condition of use subject to the WCPP. This in contrast to OSHA's standards in 1910.1052(d)(2) to (d)(3) whereby employers would otherwise be permitted to discontinue monitoring indefinitely based on monitoring results. Moreover, EPA is proposing that monitoring requirements could only be made less frequent based on the results of the initial exposure monitoring or the periodic exposure monitoring outlined under Unit IV.A.1.c.iii.
OSHA's standards in 1910.1052(d)(2)(i) through (iii) allow for a discontinuation of initial monitoring which subsequently precludes the need for periodic monitoring unless additional monitoring is required under certain conditions. Given the steep dose response for methylene chloride that may lead up to and include fatalities as a result of inhalation exposure, EPA is instead proposing to require that a minimum initial monitoring frequency be established at 5-year intervals. EPA is requesting public comments on the proposed conditions for periodic monitoring for methylene chloride as part of implementation of the WCPP that differ from OSHA's existing monitoring requirements under 29 CFR 1910.1052.
In addition to initial and periodic monitoring, there are some additional circumstances that would require a new initial exposure monitoring. EPA is proposing that the owner or operator complying with the WCPP would carry out this additional exposure monitoring (analogous to those requirements outlined in 29 CFR 1910.1052(d)(4)) after any change that may reasonably be expected to introduce additional sources of exposure, or result in a change in exposure levels, to methylene chloride. Examples include changes in the production, production volume, use rate, process, control equipment, or work practices that may reasonably be anticipated to cause additional sources of exposure or result in increased exposure levels to methylene chloride; and start-up, shutdown, or malfunction of the facility or facility equipment that may reasonably be anticipated to cause additional sources of exposure or result in increased exposure levels to methylene chloride. This additional exposure monitoring event may result in increased frequency of periodic monitoring. The required additional exposure monitoring should not delay implementation of any necessary cleanup or other remedial action to reduce the exposures to potentially exposed persons.
EPA recommends and encourages the use of pollution prevention as a means of controlling exposures whenever practicable. Pollution prevention, also known as source reduction, is any practice that reduces, eliminates, or prevents pollution at its source (
Analogous to the OSHA Standard (29 CFR 1910.1052(e)), EPA is proposing to require that the owner or operator demarcate any area where airborne concentrations of methylene chloride are reasonably expected to exceed the ECEL or the EPA STEL. This regulated area would be demarcated using administrative controls,
EPA proposes to require regulated entities use the hierarchy of controls to the extent feasible and supplement
EPA also proposes to require that the owner or operator document their efforts to use elimination, substitution, engineering controls, and administrative controls to reduce exposure to or below the ECEL or EPA STEL in an exposure control plan. In addition, analogous to the requirements under 29 CFR 1910.1052(f)(2), an owner or operator would be prohibited from rotating work schedules to comply with the ECEL 8-hour TWA.
EPA proposes to require that the owner or operator include and document in the exposure control plan or through any existing documentation of the facility's safety and health program developed as part of meeting OSHA requirements or other safety and health standards the following:
(i) Identification of available exposure controls and rationale for using or not using available exposure controls in the following sequence (
(ii) If exposure controls were not selected, document the efforts identifying why these are not feasible, not effective, or otherwise not implemented;
(iii) Actions taken to implement exposure controls selected, including proper installation, maintenance, training, or other steps taken;
(iv) Regular inspections, evaluations, and updating of the exposure controls to ensure effectiveness and confirmation that all persons are using them accordingly;
(v) Occurrence and duration of any start-up, shutdown, or malfunction of exposure controls or of facility equipment that causes air concentrations above the ECEL or EPA STEL and subsequent corrective actions taken during start-up, shutdown, or malfunctions to mitigate exposures to methylene chloride; and
(vi) Objective data generated during the previous 5 years, when used to forgo the initial exposure monitoring, must include: the use of methylene chloride being evaluated, the source of objective data, measurement methods, measurement results, and measurement analysis of the use of methylene chloride, and any other relevant data to the operations, processes, or person's exposure.
Where elimination, substitution, engineering, and administrative controls are not feasible or sufficiently protective to reduce the air concentration to or below the ECEL, or if inhalation exposure above the ECEL is still reasonably likely, EPA proposes to set minimum respiratory PPE requirements based on an owner or operator's measured air concentration for one or more potentially exposed persons and the level of PPE needed to reduce exposure to or below the ECEL. In those circumstances, EPA is proposing to require that the owner or operator also comply with OSHA's General Requirements for PPE standard at 29 CFR 1910.132 for application of a PPE program. EPA is also proposing that the owner or operator comply with 29 CFR 1910.134 for proper use, maintenance, fit-testing, and training of respirators. EPA recognizes that there may be limitations in using certain types of PPE or respirator protection for various work scenarios such as cost, time burdens, ergonomic and dexterity considerations, climate, size, and capability.
EPA is proposing to require provision and use of chemically resistant gloves in combination with specific activity training (
EPA is proposing the following requirements for respiratory protection, based on the exposure monitoring concentrations measured as an 8-hour TWA that exceeds the ECEL (2 ppm) or 15-minute TWA that exceeds the EPA STEL (16ppm); see also the following table (Table 2). These requirements would apply after all other feasible controls are exhausted or proven ineffective to control inhalation exposure (including elimination, substitution, engineering controls, and administrative controls in accordance with the hierarchy of controls). EPA is proposing to establish minimum respiratory protection requirements, such that any respirator affording the same or a higher degree of protection than the following proposed requirements may be used. While this Unit includes respirator selection requirements for respirators of Assigned Protection Factor (APF) of 1,000 or greater, EPA does not anticipate that respirators beyond APF 25 will be widely or regularly used to address unreasonable risk, particularly when other controls are put in place. EPA anticipates that owners or operators would attempt to minimize respirator costs by reducing inhalation exposures levels so that, if a respirator is needed, a supplied-air respirator could be used in lieu of a self-contained breathing apparatus. Under this proposed regulatory option, as with existing OSHA regulations, air-purifying respirators (in contrast to air-supplied
• If the measured exposure concentration is at or below the ECEL (2 ppm 8-hour TWA) and EPA STEL (16 ppm 15-minute TWA): no respiratory protection would be required.
• If the measured exposure concentration is above 2 ppm and less than or equal to 50 ppm (25 times the ECEL): the respirator protection required would be any NIOSH-certified supplied-air respirator (SAR) or airline respirator in a continuous-flow mode equipped with a loose-fitting facepiece or helmet/hood (APF 25).
• If the measured exposure concentration is above 50 ppm and less than or equal to 100 ppm (50 times the ECEL): the respirator protection required would be: (i) Any NIOSH-certified Supplied-Air Respirator (SAR) or airline respirator in a demand mode equipped with a full facepiece (APF 50); or (ii) Any NIOSH-certified Self-Contained Breathing Apparatus (SCBA) in demand-mode equipped with a full facepiece or helmet/hood (APF 50).
• If the measured exposure concentration is unknown or at any value above 100 ppm and up to 2,000 ppm (1,000 times the ECEL): the respirator protection required would be: (i) Any NIOSH-certified Supplied-Air Respirator (SAR) or Airline Respirator in a continuous-flow mode equipped with a full facepiece or certified helmet/hood (APF 1,000); or (ii) Any NIOSH-certified Supplied-Air Respirator (SAR) or Airline Respirator in pressure-demand or other positive-pressure mode equipped with a full facepiece (APF 1,000); or (iii) Any NIOSH-certified Self-Contained Breathing Apparatus (SCBA) in a pressure-demand or other positive-pressure mode equipped with a full facepiece or certified helmet/hood (APF 1,000+).
EPA encourages owners and operators to consult with potentially exposed persons on the development and implementation of exposure control plans and PPE/respirator programs. EPA is proposing to require owners and operators to provide potentially exposed persons regular access to the exposure control plans, exposure monitoring records, PPE program implementation, and respirator program implementation (such as fit-testing and other requirements) described in 29 CFR 1910.134(l). To ensure compliance in workplace participation, EPA is proposing that the owner or operator document the notice to and ability of any potentially exposed person that may reasonably be affected by methylene chloride inhalation exposure to readily access the exposure control plans, facility exposure monitoring records, PPE program implementation, or any other information relevant to methylene chloride inhalation exposure in the workplace.
EPA proposes that when a potentially exposed person's exposure to methylene chloride exceeds the ECEL action level within a regulated area, the owner or operator would be required to inform each potentially exposed person of the quantity, location, manner of use, release, and storage of methylene chloride and the specific operations in the workplace that could result in exposure to methylene chloride, particularly noting where exposures may be above the ECEL or EPA STEL, analogous to those requirements outlined in 29 CFR 1910.1052(l). EPA proposes that the owner or operator must, within 15 working days after receipt of the results of any exposure monitoring, notify each potentially exposed person whose exposure is represented by that monitoring in writing, either individually to each potentially exposed person or by posting the information in an appropriate and accessible location, such as public spaces or common areas, for potentially exposed persons outside of the regulated area (as described in Unit IV.A.1.d.). The notice would be required to identify the ECEL, ECEL action level, and EPA STEL and what they mean in plain language, the exposure monitoring results, and any corresponding respiratory protection required. The notice would also be required to include a description of the actions taken by the owner or operator to reduce inhalation exposures to or below the ECEL, or refer to a document available to the potentially exposed persons which states the actions to be taken to reduce exposures, and to be posted in multiple languages if necessary (
For each monitoring event of methylene chloride, OSHA requires under 29 CFR 1910.1052(m) that the employer record information including, but not limited to, dates; operations involving exposure; sampling and analytical methods; the number of samples; durations, and results of each sample taken; the type of respirator and PPE worn (if any); the exposed employees' names, work shifts, and job classifications; and exposure of all the employees represented by monitoring, indicating which potentially exposed persons were actually monitored. EPA is requiring that this information is kept by the owner or operator of record for potentially exposed persons. In addition to the requirements outlined in 29 CFR 1910.1052(m)(2), EPA is proposing to require documentation of the following whenever monitoring for the WCPP is required under TSCA section 6(a):
(i) All measurements that may be necessary to determine the conditions (
(ii) All other potentially exposed persons whose exposure monitoring was not measured but whose exposure is intended to be represented by the area or representative sampling monitoring;
(iii) Use of established analytical methods such as those outlined in appendix A of the ECEL memo (Ref. 11) with a limit of detection below the ECEL action level and accuracy of monitoring within 25% for the ECEL and 35% for the EPA STEL, as discussed in Unit IV.A.1.c.ii., so that the owner or operator may identify when the implementation of additional exposure controls is necessary, determine the monitoring frequency according to the requirements described in this Unit, and properly identify and provide persons exposed to methylene chloride with the required respiratory equipment and PPE proposed in this Unit;
(iv) Compliance with the Good Laboratory Practice Standards at 40 CFR part 792;
(v) Information regarding air monitoring equipment, including: type, maintenance, calibrations, performance tests, limits of detection, and any malfunctions.
For owners and operators to demonstrate compliance with the WCPP provisions, EPA is proposing that owners and operators must retain compliance records for 5 years, unless a longer retention time is required under 29 CFR 1910.1020, or other applicable regulations. EPA is requiring the owner or operator to retain records of:
• Exposure control plan;
• Regulated areas and authorized personnel;
• Facility exposure monitoring records;
• Notifications of exposure monitoring results;
• PPE and respiratory protection used and program implementation; and
• Information and training required under 29 CFR 1910.1052 section (l) and appendix A, provided by the owner or operator to each potentially exposed person prior to or at the time of initial assignment to a job involving potential exposure to methylene chloride.
All records required to be maintained by this Unit could be kept in the most administratively convenient form (electronic or paper). The owner or operator would be required to document training or re-training (analogous to 29 CFR 1910.1052(l)(5)) of any potentially exposed person as necessary to ensure that, in the event of monitoring results that indicate exposure or possible exposures above the ECEL action level or the EPA STEL, the potentially exposed person has demonstrated understanding of how to safely use and handle methylene chloride and how to appropriately use required PPE. EPA expects that the content of such training will not exceed what is already required by 29 CFR 1910.1052 section (l) and appendix A. In addition, the owner or operator would be required to update the training and requisite documentation when there is reasonable expectation that exposure may exceed the ECEL action level due to change in tasks or procedures.
With regard to the compliance timeframe for those occupational conditions of use which are subject to the WCPP, EPA is proposing to require that owners and operators establish initial exposure monitoring according to the process outlined in this Unit by [DATE 180 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE IN THE
Except for those uses which will continue under the WCPP, EPA is proposing to prohibit industrial and commercial use of methylene chloride, including use of methylene chloride in: solvent for batch vapor degreasing; solvent for in-line vapor degreasing; solvent for cold cleaning; solvent for aerosol spray degreaser/cleaner; adhesives, sealants, and caulks; paints and coatings; paint and coating removers (including furniture refinishers); adhesive and caulk removers; metal aerosol degreasers; metal non-aerosol degreasers; finishing products for fabric, textiles and leather; automotive care products (functional fluids for air conditioners); automotive care products (interior car care); automotive care products (degreasers); apparel and footwear care products; spot removers for apparel and textiles; liquid lubricants and greases; spray lubricants and greases; aerosol
As Discussed in Unit III.B.1.f., the restrictions in this proposed rule do not apply to any substance that is excluded from the definition of “chemical substance” under TSCA section 3(2)(B)(ii) through (vi). However, EPA requests comment on the impacts, if any, the proposed prohibition described in this Unit, or other aspects of this proposal, may have on the production and availability of any food, food additive, drug, cosmetic, device, or other substance excluded from the definition of “chemical substance” under TSCA section 3(2)(B)(ii) through (vi).
As discussed in Unit III.B.3., based on consideration of alternatives, the broad range of work environments and activities, and the severity of the hazards of methylene chloride, EPA determined that prohibition is the best way to address the unreasonable risk from methylene chloride driven by the conditions of use identified in this Unit. EPA requests comment regarding the number of entities that could potentially close as well as associated costs with a prohibition of methylene chloride for certain industrial and commercial conditions of use identified in this Unit. EPA would also like comment on whether it should consider a
EPA is proposing that the prohibition for uses described in this section would become effective following prohibitions relevant to these uses in stages of the supply chain before the industrial and commercial use (
Additionally, EPA recognizes that there may be instances where an ongoing use of methylene chloride that has implications for national security or critical infrastructure as it relates to other Federal agencies (
In the 2020 Risk Evaluation for Methylene Chloride, EPA evaluated consumer use of methylene chloride: as a solvent in aerosol spray degreasers/cleaners; in adhesives and sealants in single component glues and adhesives and sealants in caulks; in paints and coatings in brush cleaners and in adhesive/caulk removers; in metal products in aerosol and non-aerosol degreasers and cleaners; in automotive care products in functional fluids for air conditioners and in degreasers; in lubricants and greases in liquid and spray lubricants and greasers and in aerosol and non-aerosol degreasers and cleaners; in building and construction
As discussed in Unit III.B.3., based on consideration of the severity of the hazards of methylene chloride in conjunction with the limited options available to adequately address the identified unreasonable risk to consumers and bystanders under TSCA section 6(a), EPA is proposing to address the unreasonable risk from consumer use by prohibiting the manufacturing (including import), processing, and distribution in commerce of methylene chloride for consumer use in order to remove methylene chloride and products containing methylene chloride from the market, thereby effectively eliminating instances of consumer use.
Additionally, EPA is proposing to prohibit retailers from distributing in commerce methylene chloride and all methylene chloride-containing products, in order to prevent products intended for industrial and commercial use under the WCPP outlined in Unit IV.A.1. from being purchased by consumers. A retailer is any person or business entity that distributes or makes available products to consumers, including through e-commerce internet sales or distribution. If a person or business entity distributes or makes available any product to at least one consumer, then it is considered a retailer (40 CFR 751.103). For a distributor not to be considered a retailer, the distributor must distribute or make available products solely to commercial or industrial end-users or businesses. Prohibiting manufacturers (including importers), processors, and distributors from distributing methylene chloride, or any products containing methylene chloride, to retailers would prevent retailers from making these products available to consumers, which would help address that part of the unreasonable risk driven by consumer use of methylene chloride (Ref. 37). EPA promulgated a similar prohibition for retailers in the 2019 final rule addressing unreasonable risk from consumer use of methylene chloride in Paint and Coating Removal (84 FR 11420, March 27, 2019), and has not received negative feedback from retailers regarding sales losses. EPA has continued to receive feedback from stakeholders, including small businesses, on particular strategies they suggest could be used to ensure that distribution only occurs to commercial entities, such as requiring a business number (Ref. 6). To that end, EPA would like comment on whether distributors that are not retailers should be required to use tax IDs or other verification methods prior to selling methylene chloride or products containing methylene chloride to ensure consumers are not purchasing methylene chloride or industrial or commercial products containing methylene chloride.
Additionally, during litigation on the 2019 final rule petitioners argued that EPA's definition of “retailer” was so broad as to cover all commercial entities, creating supply chain issues for commercial users seeking to attain and use the chemical for commercial activities (
EPA is proposing that the prohibitions of manufacturing, processing, and distribution in commerce of methylene chloride for consumer use described in this section would occur in 90 days for manufacturers, 180 days for processers, 270 days for distributing to retailers, and 360 days for all other distributors and retailers after the publication date of the final rule in the
For conditions of use that are not otherwise prohibited under this proposed regulation, EPA is also proposing that manufacturers, processors, and distributors maintain ordinary business records, such as invoices and bills-of-lading, that demonstrate compliance with restrictions and other provisions of this proposed regulation; and that they maintain such records for a period of 5 years from the date the record is generated. EPA notes that this 5-year record retention period is an increase from the 3-year requirements for records related to consumer paint and coating removal finalized in the 2019 final rule. However, the 3-year requirement still applies to records generated under that rule. EPA is proposing that this requirement begin at the effective date of the rule (60 days following publication of the final rule in the
For conditions of use that are not otherwise prohibited under this proposed regulation, EPA is proposing that manufacturers (including importers), processors, and distributors, excluding retailers, of methylene chloride and methylene chloride-containing products provide downstream notification of certain prohibitions through Safety Data Sheets
After [DATE 270 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE IN THE
The intention of downstream notification is to spread awareness throughout the supply chain of the restrictions on methylene chloride under TSCA as well as provide information to commercial end users about allowable uses of methylene chloride. Note that this requirement would amend and add to the downstream notification requirements promulgated in 2019 at 40 CFR 751.107 for paint and coating removers for consumer use, and additionally redesignate that section as 751.111(a). As they become effective, the new amended requirements would supersede those notification requirements promulgated in 2019.
To provide adequate time to update the SDS and ensure that all products in the supply chain include the revised SDS, EPA is proposing a 150-day period for manufacturers and a 210-day period for processors and distributors to implement the proposed SDS changes (following publication of the final rule).
EPA requests comments on the appropriateness of identified compliance timeframes for recordkeeping and downstream notification requirements described in this Unit.
Under TSCA section 6(g)(1), EPA may grant an exemption from a requirement of a TSCA section 6(a) rule for a specific condition of use of a chemical substance or mixture. TSCA section 6(g)(1)(B) permits such an exemption if EPA finds that compliance with the requirement, as applied with respect to the specific condition of use, would significantly disrupt the national economy, national security, or critical infrastructure.
TSCA section 6(g)(2) requires EPA to analyze the need for the exemption, and to make public the analysis and a statement describing how the analysis was taken into account when proposing an exemption under TSCA section 6(g). To that end, based on discussions and information provided by industry stakeholders, EPA has analyzed the need for different exemptions and is proposing to grant two of them, with conditions as required under TSCA section 6(g)(4) and described in Units IV.A.5.a.ii. and IV.A.5.b.ii. This Unit presents the results of that analysis.
EPA has preliminarily determined that a prohibition on the commercial use of methylene chloride for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and aerospace vehicles for commercial aviation and aerospace would significantly disrupt the national economy and critical infrastructure. Aviation has been designated by co-sector agencies DHS and DOT as a key subsector in the Transportation Systems Sector, one of 16 designated critical infrastructure sectors. There are no technically feasible alternatives currently available for methylene chloride used in paint and coating removal for safety-critical, corrosion-sensitive components of aircraft and aerospace vehicles. Thus, commercial aviation and aerospace compliance with the proposed ban on methylene chloride use in commercial paint and coating removal would significantly disrupt critical infrastructure.
As explained by a commenter on the 2017 Notice of Proposed Rulemaking (NPRM), all aircraft have similar safety-critical, corrosion-sensitive components of the type described by DOD (Ref. 38). For example, commercial aircraft often contain components, such as landing gear, that are made from high-strength alloy steels. According to this commenter, the aerospace industry, like DOD, has made significant investments in the evaluation of alternative methods and materials for removing coatings. The commenter states that the industry has had some success, depending upon the substrate, surface treatment, and coating system, but investigation continues into both chemical and non-chemical means. Non-chemical methods, such as plastic beads, were not suitable in all instances due to concerns about damaging the substrate. Many alternative chemical strippers were not effective on all coatings, which caused corrosion concerns in some cases. According to this commenter, benzyl alcohol is a qualified alternative paint remover for some paint formulations but cannot be considered a “drop-in” replacement for all applications due to performance concerns.
The concerns expressed by this commenter about corrosion-sensitive components on aircraft and aerospace equipment echo the concerns over methylene chloride alternatives expressed by DOD and discussed at length in the preamble to EPA's 2017 proposal. For example, both the commenter and DOD stated that currently available substitute chemicals cannot completely remove certain coatings (Ref. 38). This results in improperly applied, incompletely adhering replacement coatings, which may result in corrosion of underlying critical parts. For another example, according to the commenter and DOD, substitute chemicals are also incompatible with some underlying metallic, nonmetallic, and composite materials, resulting in material damage to critical components, and the potential for an increased risk of catastrophic failure of safety critical parts. The commenter on the 2017 NPRM also stated that the process for evaluating and then adopting alternatives in aviation applications is a multi-year process. According to the commenter, the materials required to remove coatings on aircraft parts must be developed by a material formulator to meet technical performance requirements and must be “qualified by the Original Equipment Manufacturer (OEM), and then shown to not cause harm to the aircraft or negatively affect performance to the FAA prior to implementation” (Ref. 38). The commenter stated that this can take years, with no guarantee of success, so
More recently, Boeing provided information to EPA indicating that the company has invested considerable resources over many years to qualify and implement alternatives to methylene chloride, including a combination of acid, alkaline, and hydrogen peroxide-activated benzyl alcohol removers and plastic media blast (Ref. 31). Boeing continues to evaluate potential alternatives, such as laser ablation, which the company believes will, if implemented, eliminate hazardous waste, address ergonomic challenges and save significant time over traditional paint and coating removal operations. According to Boeing, the company has identified several paint and coating removal applications with no feasible alternatives to methylene chloride (Ref. 31). These include:
• Large parts or parts with complex geometries that cannot undergo media blasting or strip tank immersion either due to size constraints or entrapment concerns, and where hand abrasion is impractical;
• Situations in which selective coating removal is needed,
• Effective removal of oven-cured paints and coatings;
• Localized removal of coatings on overhaul or rework parts to reveal part markings and serial numbers;
• Stripping of parts preceding non-destructive testing, where other coating removal methods such as media blasting could hide defects; and
• Removal of polyvinyl formal or polyurethane insulating enamel from copper magnet wire.
While there are alternatives available for many applications, the public comments on the 2017 NPRM, and the information provided by Boeing in 2022 demonstrate there are several aviation and aerospace applications for which there are limited alternatives to methylene chloride for paint and coating removal, due to concerns about damage to the substrate, and these limited alternatives take longer to work. EPA has preliminarily determined that lengthening the time that commercial aircraft and spacecraft are out of service due to necessary safety inspections and repairs will have a considerable adverse impact on air travel and other infrastructure elements such as satellite placement. Therefore, EPA has preliminarily determined that requiring commercial aviation and aerospace sectors to comply at this time with the ban on methylene chloride use in paint and coating removal would cause significant disruption to critical infrastructure. In addition, EPA has preliminarily determined that compliance at this time with the proposed ban on the manufacture, processing, and distribution in commerce of methylene chloride for commercial paint and coating removal for these specific commercial aviation and aerospace uses would also result in a significant disruption to critical infrastructure. EPA's proposed conditions for this exemption are described in this Unit, including proposed requirements to comply with the WCPP.
EPA acknowledges that in many cases commercial aviation facilities may be more sophisticated and industrialized than other commercial paint and coating removal operations. However, at the time of proposal, data available to EPA demonstrate that the risks from paint and coating removal in the aviation sector do not differ significantly from other commercial paint and coating removal (Ref. 1). As shown in the 2020 Risk Evaluation for Methylene Chloride, high-end and central tendency estimates for aircraft paint stripping are three orders of magnitude below the benchmark for acute inhalation risks and four orders of magnitude below the benchmark for chronic non-cancer inhalation risks (Ref. 1). Even if use of APF 50 air supplied respirators were assumed, the risks that remain for both high-end and central tendency would be an order of magnitude below the benchmark for both endpoints (Ref. 1). Therefore, while EPA expects that some of these facilities could successfully follow the requirements of the WCPP, based on qualitative information provided by stakeholders, this expectation is not sufficiently supported by monitoring data in the 2020 Risk Evaluation for Methylene Chloride. As a result, there is significant uncertainty whether the requirements of the WCPP could be implemented successfully in this sector for this particular use on a consistent and reliable basis, in part due to the diversity of facilities in this sector. EPA understands that generally large commercial aviation facilities could have industrial hygiene expertise, sophisticated engineering and administrative controls, and experience with rigorous safety requirements and methods for ensuring continuous strong safety records (Ref. 31). However, EPA is concerned about the ability of smaller aircraft repair shops to implement the WCPP over the long term, particularly for this condition of use. While EPA recognizes that the proposed TSCA section 6(g) exemption for commercial aircraft paint and coating removal could also cover these smaller aircraft repair shops, the exemption is time-limited and ultimately would result in these small shops using alternatives to methylene chloride. While Federal agencies and contractors should be regulated under the WCPP, the Agency is proposing that commercial use of methylene chloride for a similar type of paint and coating removal be regulated with a time-limited, conditional exemption under TSCA section 6(g), due to notable differences in the two sectors. Specifically, exposure information assessed by EPA resulted in key differences in risk estimates for paint and coating removal by civilian aviation and DOD (see discussion in this Unit and Unit V.A.1.). Additionally, as described in Unit V.A.1., Federal and Federal contractor facilities are subject to multiple levels of oversight as a result of the governmental and public nature of their activities, while many civilian aviation facilities are not likely to experience the same level of scrutiny. EPA emphasizes that in the absence of information, it must still ensure that unreasonable risks are addressed. Because EPA has found inadequate information to otherwise determine whether the unreasonable risk would be addressed when using methylene chloride under a WCPP for commercial use of methylene chloride for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and aerospace vehicles for commercial aviation and aerospace, EPA has determined that the proposed exemption under TSCA section 6(g) allowing for time-limited, conditional use of methylene chloride for this critical use is the appropriate approach.
EPA recognizes that in some situations, certain facilities may do both Federal contractor and commercial aviation work and may use methylene chloride for paint and coating removal from safety-critical, corrosion-sensitive components on military, Federal, or commercial aviation. EPA requests comment on whether such co-located activities in a facility should be subject to the WCPP, rather than the exemption under TSCA section 6(g). Additionally, EPA seeks additional information and requests comment on whether it is possible to distinguish between commercial aviation facilities that would be able to meet the WCPP and those that would not, including what criteria should be used for such distinctions (
For the reasons discussed in this Unit, EPA is proposing to provide a 10-year exemption for commercial aviation and commercial aerospace applications from the proposed prohibition on the use of methylene chloride in commercial paint and coating removal. In defining the scope of the exemption to limit the exemption to commercial aviation and aerospace, EPA looked to the definitions and provisions of the Federal Aviation Regulations in title 14 of the CFR. Air carriers and commercial operators are certificated under 14 CFR part 119. Repair stations are certificated under 14 CFR part 145. To effectively prevent significant disruptions to critical infrastructure including commercial aviation and aerospace, EPA would make this exemption available to three different groups of commercial entities. In each case, the exemption would be available only for the use of methylene chloride to remove paint and coatings from safety-critical, corrosion-sensitive components of aircraft or aerospace vehicles. The first group would consist of those facilities that primarily maintain and repair aircraft used by air carriers and commercial operators. More specifically, maintenance and repair facilities operated by air carriers and commercial operators certificated under 14 CFR part 119 would be eligible for the exemption, as would be repair stations certificated under 14 CFR part 145, if their primary business is performing maintenance, preventive maintenance, rebuilding, or alteration of aircraft operated by air carriers and commercial operators certificated under 14 CFR part 119. The second group would consist of manufacturers of aircraft intended for, or capable of being used by, air carriers and commercial operators certificated under 14 CFR part 119. The third group would consist of any person manufacturing or repairing spacecraft, space vehicles, or payloads or similar hardware that is intended for, or used in, commercial space transportation operations subject to 14 CFR chapter III.
The conditions for the proposed exemption would be: (1) The use of methylene chloride for commercial paint or coating removal by certificated air carriers, commercial operators, or repair stations, or by manufacturers of aircraft or aerospace vehicles or hardware, would be limited to the safety-critical, corrosion-sensitive components on aircraft and aerospace vehicles; (2) The use of methylene chloride for paint or coating removal would be required to be performed on the premises of the certificated air carrier or commercial operator or repair station, or of the manufacturer of aircraft or aerospace vehicles or hardware; and (3) The certificated air carrier, commercial operator, repair station, or manufacturer of aircraft or aerospace vehicles and hardware manufacturer would have to comply with the WCPP discussed in Unit IV.A.1.
EPA wishes to make clear that the exemption for the commercial aerospace and aviation industry would only be available for the purpose of paint and coating removal from components of aircraft and spacecraft that are corrosion-sensitive and safety critical components, such as landing gear, gear boxes, turbine engine parts, and other aircraft and spacecraft and components composed of metallic materials (specifically high-strength steel, aluminum, titanium, and magnesium) and composite materials. In addition, these components would have to be of the type that not only require their paint or coatings to be removed for inspection and maintenance but also would be so negatively affected by the use of paint and coating removal chemicals or methods other than methylene chloride that the safety of the system could be compromised. General paint and coating removal on aircraft and spacecraft would not be authorized under this exemption. One commenter on the 2017 proposal suggested that EPA clarify that only the manufacturer of the component may make this determination. In EPA's view, persons availing themselves of the exemption would need to have a reasonable basis to conclude that the components on which methylene chloride is used are corrosion-sensitive and safety critical components within the meaning of the definition. EPA believes such persons could rely, in part, on information supplied by the manufacturer of the component. A determination of whether a particular component of an aircraft or spacecraft is a safety-critical corrosion-sensitive component would be a fact-specific determination that takes into account the substrate and character of the component, the effects of methylene chloride paint or coating remover on the component, and other relevant factors.
The entities subject to the proposed exemption would nonetheless still be subject to the proposed general recordkeeping requirements discussed in Unit IV.A., the WCPP recordkeeping requirements discussed in Unit IV.A.1.f.iii., and requirements to maintain records that demonstrate compliance with the exemption conditions, including the condition that methylene chloride only be used for paint and coating removal from corrosion-sensitive and safety critical components of an aircraft or spacecraft. Pursuant to TSCA section 6(g)(3), if this proposed exemption is finalized, EPA may by rule later extend, modify, or eliminate the exemption, on the basis of reasonably available information and after adequate public justification, if EPA determines the exemption warrants a change. EPA would initiate this rulemaking process (
EPA requests comments on all aspects of the proposed TSCA section 6(g) exemption from the proposed prohibition on use of methylene chloride in commercial paint and coating removal for paint and coating removal essential for critical infrastructure by certificated commercial air carriers, commercial operators, or repair stations, or by manufacturers of aircraft or aerospace vehicles and hardware, noting that the proposed exemptions would be limited to the safety-critical, corrosion-sensitive components on aircraft and aerospace vehicles, including safety-critical components.
EPA also considered a TSCA section 6(g) exemption for emergency use of methylene chloride in the furtherance of NASA's mission. Under TSCA section 6(g)(1)(A), EPA may “grant an exemption from a requirement of a . . . rule for a specific condition of use of a chemical substance or mixture, if the Administrator finds that the specific condition of use is a critical or essential use for which no technically and economically feasible safer alternative is
NASA operates on the leading edge of science seeking innovative solutions to future problems where even small volumes of an otherwise prohibited chemical substance could be vital to crew safety and mission success. During interagency review, NASA expressed concerns that there will likely be circumstances where a specific, EPA-prohibited condition of use may be identified by NASA during an emergency as being needed in order to avoid or reduce situations of harm or immediate danger to human health, or the environment, or avoid imperiling NASA space missions. In such cases, it is possible that no technically and economically feasible safer alternative would be available that meets the stringent technical performance requirements necessary to remedy harm or avert danger to human health, the environment, or avoid imperiling NASA space missions.
An emergency is a serious and sudden situation requiring immediate action to remedy harm or avert danger to human health, the environment, or to avoid imperiling NASA space missions. In NASA's case, there may be instances where the emergency use of methylene chloride for specific conditions of use is critical or essential to remedying harm or averting danger to human health, the environment, or avoiding imperiling NASA space missions. Because of the immediate and unpredictable nature of emergencies described in this Unit and of the less forgiving environments NASA operates in that offer little to no margin for error, it is likely that, at the time of finalization of this proposal, alternatives to emergency methylene chloride use may not be available in a timely manner to avoid or reduce harm or immediate danger (Ref. 39). In this way, these emergencies for particular conditions of use meet the criteria for an exemption under TSCA section 6(g)(1)(A), because the emergency use of methylene chloride for listed conditions of use is critical or essential and no technically and economically feasible safer alternative will be available in a timely manner, taking into consideration hazard and exposure.
In support of the TSCA section 6(g)(1)(A) emergency use exemption, NASA submitted detailed criteria which they must use to screen, qualify, and implement materials to be used in spacecraft equipment, as well as historical case studies that outline the loss of life and loss of assets in the discharge of previous missions. In one of several examples detailed, the Apollo I command module fire that claimed the lives of three American astronauts demonstrated the need for careful testing and continuity of materials (Ref. 39). Moreover, due to NASA's rigorous safety testing requirements under various environmental conditions, technically and economically feasible safer alternatives may not be readily available during emergencies and may require certain conditions of use of methylene chloride to alleviate the emergency.
In another example, NASA identified a scenario concerning a mission to the International Space Station (ISS) whereby, during a launch evolution, the countdown was paused immediately prior to launch (T-2 minutes). NASA engineers identified a clogged filter and supply line as the primary issue, which required immediate attention (
As described in Unit IV.A.5.a., the identification and qualification of compatible materials in the context of aviation is iterative and involves expansive collaboration between original equipment manufacturers, Federal agencies, and qualifying institutions. This is equally, if not more so, the case in the context of human space flight operations undertaken by NASA (Ref. 39). NASA's mission architecture requirements often are developed many years in advance of an actual launch occurring. As part of mission planning, space systems are designed, full scale mock-ups are built, and mission critical hardware is constructed using materials qualified for spaceflight. Once NASA's mission architecture requirements are developed, NASA may need to retain emergency access to methylene chloride because its alternatives may not have yet gone through NASA's rigorous certification process before their use. Allowing NASA to retain emergency use of methylene chloride would reduce the chances that this rule will hinder future space missions for which mission architecture infrastructure is being developed or is already built. While NASA considers alternatives to the chemical substances it currently uses in its space system designs, NASA has not yet identified technically and economically feasible alternatives to proven chemistries in many current applications. While EPA acknowledges that the use of methylene chloride in emergency situations may be necessary in the near term, it is also EPA's understanding that NASA will continue its work to identify and qualify alternatives to methylene chloride. Thus, as with the exemption described in Unit IV.A.5.a., EPA is proposing an exemption duration of 10 years.
For the reasons discussed in this Unit, EPA is proposing a 10-year exemption for emergency use of methylene chloride in furtherance of NASA's mission for the following specific conditions of use: Industrial and commercial use as solvent for cold cleaning; Industrial and commercial use as a solvent for aerosol spray degreaser/cleaner; Industrial and commercial use in adhesives, sealants and caulks; Industrial and commercial use in adhesive and caulk removers; Industrial and commercial use in metal non-aerosol degreasers; Industrial and commercial use in non-aerosol degreasers and cleaners; and Industrial and commercial use as solvent that becomes part of a formulation or mixture. EPA is also proposing to include additional requirements as part of the exemption, pursuant to TSCA section 6(g)(4), including required notification and controls for exposure, to the extent feasible: (1) NASA and its contractors must provide notice to the EPA Administrator of each instance of emergency use within 15 days and; (2) NASA and its contractors would have to comply with the WCPP described in Unit IV.A.1. to the extent feasible.
EPA is proposing to require that NASA notify EPA within 15 days of the emergency use. The notification would include a description of the specific use of methylene chloride in the context of one of the conditions of use for which this exemption is being proposed, an explanation of why the use described qualifies as an emergency, and an explanation with regard to the lack of availability of technically and economically feasible alternatives.
As with the exemption described in Unit IV.A.5.a., EPA expects NASA and its contractors have the ability to implement a WCPP as described in Unit IV.A.1. for the identified uses in the context of an emergency, to some extent even if not to the full extent of WCPP implementation. Therefore, EPA is proposing to require that during emergency use, NASA must comply with the WCPP to the extent technically feasible in light of the particular emergency.
Under the proposed exemption, NASA and its contractors would still be subject to the proposed general recordkeeping requirements discussed in Unit IV.A.
EPA requests comment on this TSCA section 6(g) exemption for continued emergency use of methylene chloride in the furtherance of NASA's mission as described in this Unit, and whether any additional conditions of use should be included, in particular for any uses qualified for space flight for which no technically or economically feasible safer alternative is available. Additionally, EPA requests comment on what would constitute sufficient justification of an emergency.
While EPA in the past has proposed to exclude commercial furniture refinishing from regulation of the use of methylene chloride in commercial paint and coating removal, this proposed rule does not exclude commercial furniture refinishing from the proposed prohibition on the use of methylene chloride for commercial paint and coating removal, because EPA has determined that this use drives the unreasonable risk for methylene chloride, reasonably available information demonstrates that alternative methods or substitute chemicals are available to some extent, and, based on reasonably available information, EPA has not found that a TSCA section 6(g) exemption is warranted for the use of methylene chloride in commercial furniture refinishing.
The 2020 Risk Evaluation for Methylene Chloride identified risks for commercial use of methylene chloride in paint and coating removal, including furniture refinishing, as a result of acute and chronic non-cancer exposures that would not be mitigated by an APF 50 respirator. The 2020 Risk Evaluation for Methylene Chloride identified risks for commercial use of methylene chloride in paint and coating removal, including furniture refinishing, as a result of acute and chronic non-cancer exposures that would not be mitigated by an APF 50 respirator. EPA identified many alternative products for paint and coating removers. However, some may require longer periods of time or rework of equipment and processes in order to work for furniture refinishing uses, or, though they may be used as paint and coating removers in other contexts, may not be appropriate alternatives for use on wood substrates. EPA's consideration of alternatives, including for safety and flammability, is discussed further in Unit V.B., the Economic Analysis, and Alternatives Assessment (Ref. 3, Ref. 40). Mechanical or thermal methods (
As indicated by TSCA section 6(c)(2)(A)(iv)(II) through (III), EPA must consider the costs and benefits and the cost effectiveness of the proposed regulatory action and one or more primary alternative regulatory actions considered by the Agency. An overview of the proposed regulatory action and alternative regulatory action for each condition of use is in Unit IV.C.
The primary alternative regulatory action described in this notice combines prohibitions and requirements for a WCPP to address the unreasonable risk from methylene chloride driven by the various conditions of use, as well as time-limited exemptions under TSCA section 6(g) for two uses. While in some ways it is similar to the proposed regulatory action, the primary alternative regulatory action described in this notice would allow a WCPP, including requirements to meet an ECEL and EPA STEL, for several additional conditions of use than would be allowed under the proposed regulatory action. The alternative regulatory action additionally would include longer compliance timeframes for prohibitions and a WCPP, as described in this Unit.
As in the proposed regulatory action described in Unit IV.A.1., EPA's primary alternative regulatory action described in this notice would include WCPP, including requirements to meet an ECEL and EPA STEL for: manufacturing: domestic manufacture; manufacturing: import; processing: as a reactant; processing: incorporation into a formulation, mixture, or reaction product; processing: repackaging; processing: recycling; industrial and commercial use as a laboratory chemical; and disposal.
In addition, the primary alternative regulatory action described in this notice would require a WCPP for additional industrial and commercial conditions of use: industrial and commercial use in finishing products for fabric, textiles, and leather; industrial and commercial use as solvent that becomes part of a formulation or mixture; industrial and commercial use as a processing aid; industrial and commercial use for electrical equipment, appliance, and component manufacturing; industrial and commercial use for plastic and rubber products manufacturing; industrial and commercial use in cellulose triacetate film production; industrial and commercial use for oil and gas drilling, extraction, and support activities; and industrial and commercial use in paint or coating removal from safety-critical, corrosion-sensitive components of aircraft owned or operated by air carriers or commercial operators certificated under 14 CFR part 119.
EPA believes a WCPP may be a viable alternative to the proposed prohibition for these additional industrial and commercial conditions of use because, as discussed in Unit V.A., these conditions of use are generally industrial in nature; owners or operators are likely currently complying with the OSHA methylene chloride standard, so they should be familiar with what is being required to meet the ECEL; and, as far as the Agency is aware, these conditions of use have not resulted in any documented fatalities. Because of the industrial nature of the sectors relevant to these conditions of use, the owner or operator may have the capability to successfully implement a WCPP to ensure that the unreasonable risk, as a result of exposure to methylene chloride, are prevented. However, at the time of proposal, EPA has not yet received any monitoring data or detailed description of methylene chloride involving activities for these conditions of use to confirm that compliance with an ECEL of 2 ppm is possible. Therefore, concerns about the feasibility of implementing an ECEL for these additional industrial and commercial conditions of use, as discussed in Unit V.3., led EPA to propose that they be prohibited (see Unit IV.A.2.). EPA does not have sufficient information to confidently conclude that facilities engaged in these conditions of use could meet the ECEL for methylene chloride.
Therefore, EPA requests comment on the ways in which methylene chloride may be used in the conditions of use that would be prohibited (under the proposed regulatory action) due to concerns about feasibility of implementing an ECEL, and the degree to which users of methylene chloride in these sectors could successfully implement the WCPP, including requirements to meet an ECEL and EPA STEL, described in Unit IV.A.1. EPA is also requesting comment on whether to consider a regulatory alternative that would subject more conditions of use to a WCPP, instead of prohibition, than those currently contemplated in the primary alternative regulatory action. EPA also requests monitoring data and detailed descriptions of methylene chloride involving activities for these conditions of use to determine whether these additional conditions of use could comply with the WCPP such that risks are no longer unreasonable.
Specifically with regards to the condition of use “Industrial and commercial use as a processing aid,” EPA notes that the description of this condition of use (in Unit III.B.1.c.xxiii.) covers a broad range of chemical use activities. During the SBAR Panel, one SER provided process descriptions, diagrams, and monitoring data which indicated that particular entity may already be able to meet an ECEL of 2 ppm. This particular entity uses methylene chloride as a heat transfer fluid in a closed system. Information provided to EPA indicated that inhalation exposures were frequently below the ECEL and in some cases below the level of detection, and while dermal exposure were possible, they could be mitigated through use of PPE (Ref. 6). EPA's 2020 Risk Evaluation for Methylene Chloride incorporated exposure estimates from a different type of processing aid application that did not resemble the SER's use, which is highly specialized and may be considered a sub-use of the condition of use as a whole. EPA requests comment on the degree to which other entities using methylene chloride as a processing aid may otherwise comply with the proposed WCPP requirements for methylene chloride. In the case that several entities are able to demonstrate the continued use of methylene chloride without subjecting workers to unreasonable risk is possible, through a combination of monitoring data and process description, EPA acknowledges its willingness to finalize a regulation under which this particular sub-use of the condition of use, or the condition of use as a whole could continue under the WCPP.
Additionally, EPA notes that the alternatives analysis did not specifically identify any alternatives for this condition of use (Ref. 40). This is a limitation of the type of analysis done, which was specifically based on the use of alternative formulations currently on the market, and therefore not applicable to most processing uses. EPA emphasizes that this is not a positive finding that alternatives do not exist for this condition of use. To that end, EPA requests comment on the degree to which alternatives may or may not be available for use of methylene chloride as a heat transfer fluid and in other processing aid applications.
In the event that EPA is not able to identify any alternatives for this condition of use, and additional information is not provided that would allow EPA to determine that the WCPP could address unreasonable risk driven by this condition of use, EPA will consider finalizing a prohibition that allows for an appropriate phaseout in accordance with TSCA section 6(d). Alternatively, in the event that EPA is unable to identify alternatives for this condition of use, and EPA determines through new information provided that prohibition of the use would significantly impact national security or critical infrastructure, EPA will consider an exemption under TSCA section 6(g).
Under the primary alternative regulatory action, EPA would prohibit the manufacture, processing, and distribution in commerce of methylene chloride for all consumer use. Additionally, under the primary alternative regulatory action described in this notice and considered by EPA, other than those conditions of use listed earlier for inclusion under the WCPP, EPA would prohibit the remaining industrial and commercial uses, including two uses for which EPA is proposing the WCPP as the regulatory action: industrial or commercial use for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and spacecraft by Federal agencies and their contractors; and industrial or commercial use as a bonding agent in the production of specialty batteries for military or space applications by Federal agencies and their contractors. Recordkeeping and downstream notification would be required as described in Unit IV.A.4.
For industrial or commercial use for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and spacecraft by Federal agencies and their contractors, and industrial or commercial use as a bonding agent in the production of specialty batteries for military or space applications by Federal agencies and their contractors, the alternative regulatory action would include an exemption from the prohibition for 10 years under TSCA section 6(g). For the duration of this exemption, regulated entities would be required to comply with the WCPP to the extent practicable.
For these two uses, EPA has conducted an analysis of the application of this rulemaking and found that a TSCA section 6(g) exemption may be warranted if the primary alternative regulatory action considered by EPA is adopted, in its entirety or in relevant part, in the final rule. Based on discussions with and information provided by industry stakeholders, EPA understands that these two uses of methylene chloride by DoD, NASA, and other Federal agencies are essential for national security and critical infrastructure.
As discussed in greater detail in Unit V.B., EPA is aware that there are specific military uses for which methylene chloride is essential for paint and coating removal and for which there are no suitable alternatives currently available. The military readiness of DOD's warfighting capability is
EPA has evaluated the effect that a prohibition on methylene chloride for industrial or commercial paint and coating removal could have on military readiness and preliminarily determines that an exemption would be warranted under TSCA section 6(g)(1)(B) to avoid the significant deleterious impacts on national security that compliance with the proposed prohibition could entail, should the primary alternative regulatory action be adopted in the final rule in whole or in part. More specifically, because the available alternatives either cannot be used on certain substrates, such as high-strength steel or magnesium, or take an unacceptably long time to work in certain situations, compliance with the proposed prohibition would result in important military assets being off-line for significantly longer inspection and repair periods, which would significantly disrupt national security.
In addition, as noted by commenters on EPA's 2017 NPRM, there are other Federal agencies that use safety-critical, corrosion-sensitive components on aviation and space applications and stated that the proposed exemption should also apply to those Federal agencies and their contractors. These commenters asserted that, without an exemption for NASA, the Department of Homeland Security (DHS), and the Federal Aviation Administration (FAA), the proposed prohibition on the use of methylene chloride for industrial or commercial paint and coating removal could negatively affect national security and critical infrastructure.
EPA's analysis of the potential impacts on DOD's military readiness and national security is equally applicable to NASA, DHS, and FAA. As stated by commenters on EPA's 2017 NPRM (Ref. 46), aircraft and other assets operated by DHS, NASA, and the FAA also contain safety-critical, corrosion-sensitive components of the type described by DOD, and suitable alternatives to methylene chloride are similarly not available for all applications. Those agencies are also responsible for assets that are essential to national security or constitute critical infrastructure and contain safety-critical, corrosion-sensitive components on which methylene chloride is used for paint and coating removal. The Coast Guard, one of the five Armed Services of the United States, is a military branch within DHS. Like the four Armed Services within DOD, the Coast Guard is also responsible for warfighting assets that may require the use of methylene chloride for the removal of coatings from safety-critical, corrosion-sensitive components. The Coast Guard's military readiness is as important as the military readiness of the four Armed Services within DOD. Similarly, the readiness of U.S. Customs and Border Protection aviation for monitoring and protecting the borders of the United States is an integral part of national security. As for NASA, the United States Space Priorities Framework notes that space systems (
As discussed in Unit V.B., substitute chemicals for paint and coating removal for safety-critical, corrosion-sensitive components are not technically feasible as they have one or more technical limitations; are incompatible with underlying materials; and/or do not support the coating removal requirements of safety inspections, non-destructive inspection, material assessment, or field repair processes. Therefore, EPA has preliminarily determined that DHS, NASA, and FAA compliance with a prohibition on the use of methylene chloride for industrial or commercial paint and coating removal, which would preclude use of methylene chloride for removal of paint and coatings from safety-critical, corrosion-sensitive components of these agencies' aircraft and other assets, would significantly disrupt national security and critical infrastructure in the same way that DOD's compliance with a prohibition would. In addition, due to concerns about impacts to the availability of methylene chloride for use in removing paint and coatings from safety-critical, corrosion-sensitive components, EPA has preliminarily determined that a ban on the manufacture, processing, and distribution in commerce of methylene chloride for industrial or commercial paint and coating removal for these safety-critical, corrosion-sensitive components would also significantly disrupt national security and critical infrastructure. For this reason, if the primary alternative regulatory action considered by EPA is adopted, in its entirety or in relevant part, in the final rule, an exemption under TSCA section 6(g) would be warranted to prevent significant disruption of national security and critical infrastructure.
EPA has also analyzed the need for a TSCA section 6(g) exemption for use of methylene chloride as a bonding agent in the production of specialty batteries for use in critical energy storage applications in military and space exploration settings, including defense applications such as precision guided weapons, military airframes, satellites, space launch vehicles, and spacecraft. According to a maker of these batteries, all major military and space applications, such as aircraft (F-35, B2), radios, and Mars mission equipment, require these batteries to function in very harsh conditions, including operation to −40 °C and storage at −54 °C (Ref. 47). As discussed further in Unit V.B., EPA understands that methylene chloride is a superior bonding agent for this process because of its unique evaporative qualities, and that availability of technologically and economically feasible alternatives to methylene chloride is lacking.
As discussed in this Unit, EPA recognizes that military readiness is paramount to ensuring national security, and that space systems are part of our critical infrastructure and have impacts on national security. Therefore, EPA has preliminarily determined that DOD and NASA compliance with a prohibition on the use of methylene chloride as a bonding agent in the production of specialty batteries for use in critical energy storage applications in military and space exploration settings would significantly disrupt national security and critical infrastructure,
Given the potential severity of impacts from acute exposures, EPA's proposed regulatory action would include relatively rapid compliance timeframes. However, it is possible that longer timeframes would be needed for entities to come into compliance; therefore, the primary alternative regulatory action described in this notice would include longer timeframes for implementation than the proposed regulatory action. The prohibitions under the primary alternative regulatory action would take effect in 360 days for manufacturers, 450 days for processers, 540 days for distributing to retailers, 630 days for all other distributors and retailers, and 720 days for industrial and commercial users after publication of the final rule in the
As noted earlier in this Unit, for some conditions of use, both the proposed regulatory action and primary alternative regulatory action would result in a prohibition. EPA emphasizes that for those conditions of use, the primary alternative regulatory action includes a different timeline for implementation of the prohibition, in comparison to the proposed regulatory action. As discussed in more detail in Unit V.A., for those conditions of use, EPA also considered other regulatory approaches available under TSCA section 6(a). However, EPA found that none of these other regulatory approaches would address the unreasonable risk.
Where EPA has determined that a chemical substance presents unreasonable risk under TSCA section 6(b)(4), EPA must undertake rulemaking to “apply one or more of the [TSCA § 6(a)(1) through (7)] requirements to such substance . . . to the extent necessary so that the chemical substance . . . no longer presents such risk.” TSCA § 6(a). “In proposing and promulgating [such] a rule,” EPA must “consider and publish a statement based on reasonably available information with respect to . . . the reasonably ascertainable economic consequences of the rule, including consideration of . . . (II) the costs and benefits of the proposed . . . regulatory action and of the [one] or more primary alternative regulatory actions considered by [EPA]; and (III) the cost effectiveness of the proposed regulatory action and of the [one] or more primary alternative regulatory actions considered by [EPA].” EPA interprets this to mean that Congress intended this “primary alternative regulatory action” to be another regulatory option under TSCA § 6(a)(1) through (7) that would meet the requirements of TSCA § 6(a), namely address the unreasonable risk identified under TSCA section 6(b)(4) “to the extent necessary so that the chemical substance . . . no longer presents such risk.” Here, the proposed regulatory action is comprised of a mix of proposed options under TSCA section 6(a), each directed at specific conditions of use and with specified timeframes for compliance. The primary alternative regulatory options considered by the Agency would adjust the overall mix of TSCA section 6(a) requirements, including compliance timeframes, resulting in a proposed regulatory action that is more restrictive in some ways and less restrictive in others. For conditions of use where the only options that would address the unreasonable risk are prohibition options under TSCA § 6(a)(2), the proposed option and the primary alternative regulatory option are distinct because implementing prohibitions on differing timetables under TSCA section 6(d) would result in a different mix of regulatory options with different costs, benefits, and cost effectiveness than the proposed regulatory action.
The following Table 3 is a side-by-side depiction of the proposed regulatory action with the primary alternative regulatory action for each condition of use. Additionally, timeframes between the proposed and primary alternative regulatory action differ as outlined in Units IV.A. and B; those Units also contain additional details such as exemptions proposed under TSCA section 6(g) and delayed compliance dates under TSCA section 6(d) for specific applications.
This Unit describes how the considerations described in Unit III.B.3. were applied when selecting among the TSCA section 6(a) requirements to arrive at the proposed and primary alternative regulatory actions described in Unit IV.A. and B.
One option EPA considered for occupational conditions of use was establishing a WCPP, which would include an ECEL and related required implementation measures, such as monitoring. As described in Unit IV.A.1., the WCPP for methylene chloride would be non-prescriptive, in the sense that owners and operators would not be required to use specific equipment or engineering controls prescribed by EPA to achieve the exposure concentration limit. Rather, a performance-based exposure limit would enable owners and operators to determine how to most effectively meet the exposure limits based on conditions at their workplace, aligned with the hierarchy of controls. However, due to the low exposure levels and stringent requirements in the WCPP necessary to address the unreasonable risk from methylene chloride, EPA identified only a relatively small number of conditions of use where the Agency expects the WCPP can be successfully implemented.
The central components of the WCPP are the ECEL and EPA STEL. EPA has determined as a matter of risk management policy that ensuring exposures remain at or below the ECEL and EPA STEL would eliminate any unreasonable risk of injury to health driven by inhalation exposures for occupational conditions of use subject to the WCPP.
In the case of methylene chloride, EPA has calculated the ECEL for methylene chloride to be 2 ppm (8 mg/m
However, the well-established and severe acute hazard identified for methylene chloride, from blurred vision to death, can be experienced in much shorter timeframes. Therefore, EPA determined a short-term exposure limit, or EPA STEL, of 16 ppm (57 mg/m
Once EPA identified the appropriate risk-based inhalation limits to address identified unreasonable risk, EPA carefully considered the appropriateness of such a program for each occupational condition of use of methylene chloride, in the context of the unreasonable risk.
Particular factors related to work activities that may make it difficult for certain conditions of use to comply with an ECEL are worth further discussion. One example includes work activities that may take place in the field, such as on-site paint removal or the use of adhesives in construction or renovation, making it challenging to establish a regulated area and conduct monitoring. In other contexts, the donning of air-supplied respirators would create challenges for movement and feasibility of work activities that may take place in small, enclosed spaces. Similarly, work activities that require a high range of motion or for some other reason could create challenges for the implementation of respiratory PPE are not good candidates for a WCPP, such as use as an anti-spatter welding aerosol, where use of a welding mask would impede the donning of an air-supplied respirator.
EPA also considered the feasibility of exposure reduction sufficient to address the unreasonable risk, even in facilities currently complying with the OSHA methylene chloride standard. While EPA acknowledges the regulated community's expected familiarity with OSHA PELs generally, as well as facilities' past and ongoing actions to implement the methylene chloride PEL and corresponding methods of compliance in OSHA's methylene chloride standard, EPA's exposure limits would be a full order of magnitude lower than the OSHA PEL. (The differences between the ECEL and EPA STEL and the OSHA PEL are discussed in more detail in Unit II.C.4.) This creates a significant amount of uncertainty as to the ability of facilities engaging in most industrial and commercial conditions of use to meet the ECEL and EPA STEL (and associated action levels) without relying on the use of PPE (or as discussed previously, if the nature of the activity precludes use of PPE required to meet such a level), and, therefore, whether exposures could be reduced in a manner aligned with the hierarchy of controls, because under that hierarchy PPE is considered a measure of last resort.
EPA understands that this uncertainty extends to the applicability of respirators as well. Although respirators, specifically SCBAs, could reduce exposures to levels that are protective of non-cancer and cancer risks, not all workers may be able to wear respirators. Individuals with impaired lung function due to asthma, emphysema, or chronic obstructive pulmonary disease, for example, may be physically unable to wear a respirator. OSHA requires that a determination regarding the ability to use a respirator be made by a physician or other licensed health-care professional, and annual fit testing is required for tight-fitting, full-face piece respirators to provide the required protection. Individuals with facial hair, such as beards or sideburns that interfere with a proper face-to-respirator seal, cannot wear tight fitting respirators. In addition, respirators may also present communication problems, vision problems, worker fatigue, and reduced work efficiency (63 FR 1152, January 8, 1998). According to OSHA, “improperly selected respirators may afford no protection at all (for example, use of a dust mask against airborne vapors), may be so uncomfortable as to be intolerable to the wearer, or may hinder vision, communication, hearing, or movement and thus pose a risk to the wearer's safety or health” (63 FR 1189 through 1190).
In contrast to considerations that would weigh against the likelihood of a facility within a condition of use to successfully implement WCPP, there are certain considerations that indicate a condition of use is a good fit for effective risk management via WCPP. Based on reasonably available information, including monitoring data, and information related to considerations described previously in this Unit, EPA's confidence that requirements to meet an ECEL and EPA STEL can be implemented is highest for highly standardized and industrialized settings, such as where methylene chloride is used in a closed system.
For example, one of the conditions of use for which EPA is proposing to require compliance with the WCPP is processing of methylene chloride as a reactant. A large volume of methylene chloride is processed for this condition of use, which almost entirely goes towards the manufacture of the hydrofluorocarbon HFC-32 (Refs. 3, 44). Monitoring data and exposure information submitted by industry, including by small entity representatives as part of the SBAR process, suggests that methylene chloride exposures in some facilities may already be below levels that would be consistent with the proposed ECEL (Refs. 6, 45, 46). Additionally, HFC-32 is one of the regulated substances identified in the AIM Act. Among other things, the AIM Act authorizes EPA to address listed HFCs in three main ways: phasing down HFC production and consumption through an allowance allocation program; facilitating sector-based transitions to next-generation technologies; and issuing certain regulations for purposes of maximizing reclamation and minimizing releases of HFCs and their substitutes from equipment and ensuring the safety of technicians and consumers. EPA anticipates that many entities currently using HFCs with higher global warming potential will transition to alternatives with lower global warming potential as requirements under the AIM Act take effect. HFC-32, while being one regulated substance subject to the overall phasedown in production and consumption of regulated substances under the AIM Act, is likely to be used to facilitate the transition from other HFCs and HFC blends with higher global warming potential in certain applications. By allowing for the continued, controlled use of methylene chloride in the manufacture of HFC-32, efforts to shift to chemicals with lower global warming potential would not be impeded by this rulemaking. Allowing this use to continue, subject to compliance with the WCPP, would complement industry's ongoing effort to abate the use of hydrofluorocarbons with higher global warming potential.
An additional strong candidate for WCPP is industrial and commercial use of methylene chloride as a laboratory chemical. Laboratory settings are expected to be more conducive to the implementation of engineering controls such as fume hoods to ventilate vapors and adequately reduce overall exposure to methylene chloride consistent with the hierarchy of controls.
For both these conditions of use (processing of methylene chloride as a reactant and industrial and commercial use as a laboratory chemical), the 2020 Risk Evaluation for Methylene Chloride indicates that only small reductions in exposure are needed for WCPP compliance. Based on analysis in the 2020 Risk Evaluation for Methylene Chloride describing expected exposures with and without use of PPE, EPA identified an air-supplied respirator of APF 25 as the minimum respiratory PPE that is sufficient to mitigate the unreasonable risk driven by both of these conditions of use (note for OSHA APF 25 is the minimum allowable respiratory PPE for methylene chloride, as filter and cartridge respirators are not protective against methylene chloride vapors). This suggested that, for these conditions of use, the reductions in exposure required to achieve a level that would not present unreasonable risk may be less than in other instances, which, together with other considerations previously described, including monitoring data indicating exposures near or below the ECEL, adds to EPA's confidence that facilities engaging in these two conditions of use could meet the WCPP requirements. Additionally, industrial and commercial use of methylene chloride as a laboratory chemical is necessary to provide for the analysis of monitoring samples required to demonstrate compliance with the WCPP under this proposed regulation.
An additional candidate for the WCPP is paint and coating removal from safety-critical, corrosion-sensitive components on military and Federal aviation. Regarding military aviation, as part of interagency collaboration with the DOD on the NPRM issued in January 2017 (Ref. 47), EPA was made aware that there are specific military uses for which methylene chloride is essential for paint and coating removal for which there are no suitable alternatives currently available (see further discussion in Unit V.B.). These consist of the use of methylene chloride for the removal of coatings from corrosion-sensitive components on military aviation, including safety-critical components made of specialty metallic, nonmetallic, and composite materials. More specifically, this includes components such as landing gear, gear boxes, turbine engine parts, and other military aircraft components composed of metallic materials (specifically high-strength steel, aluminum, titanium, and magnesium) and composite materials that require their coatings be removed for inspection and maintenance. Similarly, as stated by commenters on EPA's 2017 NPRM (Ref. 38), aircraft and other assets operated by DHS, NASA, and the FAA also contain safety-critical, corrosion-sensitive components of the type described by DOD, and suitable alternatives to methylene chloride are similarly not available for all applications.
As described further in Unit V.B., EPA concluded that under TSCA section 6(c)(2)(C) that technologically and economically feasible alternatives that benefit health or the environment would not be readily available as a substitute for these specific safety-critical uses on corrosion-sensitive components. However, under TSCA section 6(a), EPA must still address identified risks such that they are no longer unreasonable. EPA considered the appropriateness of the WCPP for this subset of activities under industrial or commercial use of methylene chloride for commercial paint and coating removal, and emphasizes that this consideration was made very narrowly for the use of methylene chloride for paint and coating removal for safety-critical, corrosion-sensitive components, and not for more general use of methylene chloride in paint and coating removal by Federal agencies or their contractors, or for aircraft or spacecraft paint and coating removal more broadly. Rather, EPA's consideration of the appropriateness of the WCPP takes into account the specifics of the components from which the coatings are being removed (and thus the lack of suitable alternatives for this particular subset of uses), and the relevant paint and coating removal processes. EPA notes that these activities are expected to take place in highly industrialized facilities in which regulated areas may already be established, for compliance with current regulations for methylene chloride or other chemicals, and that the paint and coating removal work in these facilities would not take place in small or enclosed spaces (rather, parts would frequently be removed for coating removal) (Ref. 48). Additionally, EPA considered whether exposures could feasibly be reduced sufficiently so that the risks were no longer unreasonable. To that end, during the risk evaluation for methylene chloride, DOD submitted additional monitoring data for their particular activities involving use of methylene chloride for paint and coating removal. EPA's risk evaluation shows that, in comparison with other uses of methylene chloride for paint and coating removal, the magnitude of exposure, and thus the risks, are much lower for DOD's specified use. More specifically, EPA's risk evaluation found that central tendency risks for DOD uses of methylene chloride for commercial
Similarly, EPA has examined the use of methylene chloride as a bonding agent for acrylic and polycarbonate in mission-critical military and space vehicle applications by Federal agencies and their contractors (Ref. 43) and is proposing WCPP for this subset of the commercial use of methylene chloride in adhesives condition of use. Mission-critical applications potentially include fabrication of fixtures and enclosures for scientific research; production of optically clear articles such as space vehicle windows, space suit helmet components, or elements of extraterrestrial habitats; or sealing the plastic cases of specialty batteries.
A stakeholder that produces lithium and silver oxide zinc batteries described how they are used in critical energy storage applications in military and space exploration settings, including defense applications such as precision guided weapons, military airframes, satellites, space launch vehicles, and spacecraft. (The stakeholder also described use of these batteries in medical devices; EPA notes that the TSCA definition of “chemical substance” excludes, under TSCA section 3(2)(B)(vi), “any food, food additive, drug, cosmetic, or device . . . when manufactured, processed, or distributed in commerce for use as a food, food additive, drug, cosmetic, or device.” 15 U.S.C. 2602(2)(B)(vi). To the extent that bonding agents in the production of specialty batteries for medical applications qualify as a “device” as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act, those particular uses that qualify as a “device” would be excluded from the “chemical substance” definition if “manufactured, processed, or distributed in commerce for use as a . . . device,” and would therefore not be subject to the rule if finalized). This stakeholder requested an exemption under TSCA section 6(g) for this use of methylene chloride. According to the requester, all major military and space applications, such as aircraft (F-35, B2), radios, and Mars mission equipment, require these batteries to function in very harsh conditions, including operation to −40 °C and storage at −54 °C.
Methylene chloride is used as a bonding agent for assembly of the plastic casings for these specialty batteries. The requester views the casing as a critical component of the battery because it houses and protects the cell anodes and cathodes. The requester explains that, during the solvent bonding process, methylene chloride dissolves the plastic slightly, allowing the polymers to form a physical bond comprised of the parent material. This results in a fully bonded battery casing which acts as a single Unit, rather than individual pieces integrated with layers of a different material. According to the requester, methylene chloride is a superior bonding agent for this process because of its unique evaporative qualities. In the requester's view, methylene chloride's low evaporation rate results in a higher degree of polymer bonding and a stronger casing, with less residue to inhibit the bonding process. The requester is not aware of any substance other than methylene chloride that would enable the production of battery casings of sufficient strength and durability for these specialty batteries. The requester further contends that the governmental and other entities for whom the requester produces these batteries prevent the substitution for methylene chloride in their contract specifications.
EPA's consideration of the lack of availability of technologically and economically feasible alternatives, pursuant to TSCA section 6(c)(2)(C), was one factor in the proposed determination not to prohibit manufacture, processing, distribution in commerce, and use of methylene chloride as a bonding agent for acrylic and polycarbonate in mission critical military and space vehicle applications, such as in the production of specialty batteries for use in such applications (Ref. 48) (discussed further in Unit V.B.). However, under TSCA section 6(a), EPA must still address identified risks such that they are no longer unreasonable. Based on information provided by NASA and the vendor, EPA determined that the production of these specialty batteries necessarily occurs in a highly industrialized and well-controlled environment, which EPA does not expect to be replicated for most uses of methylene chloride in general use adhesives. Such a highly industrialized and well-controlled environment would allow for establishment of a regulated area and effective monitoring. Additionally, EPA expects that, for this specific use, facilities would be able to successfully implement the WCPP, including exposure reduction to levels below which the unreasonable risk would not be present due primarily to the small quantities of methylene chloride used, as well as to the engineering and other controls in place. For example, in the vendor's process, “methylene chloride is a component of the bonding cement that is moved through an entirely closed tubing system into a vented reservoir and vented enclosure for bonding and curing” (Ref. 48). In this way, use of methylene chloride as a bonding agent in specialty batteries resembles other uses of methylene chloride for which the WCPP is being proposed such as laboratory use and paint and coating
For methylene chloride to be available for processing as a reactant and industrial and commercial use as a laboratory chemical, it must be manufactured (including imported), processed, and distributed in commerce. Likewise, as long as methylene chloride remains in use, it must also be disposed of. The manufacturing, processing, and disposal conditions of use for methylene chloride include, to some extent, the factors described earlier in this Unit favor the successful implementation of the WCPP (
Additionally, for methylene chloride, the strong precedent for dermal protection set by 29 CFR 1910.1052, in combination with the risk characterization in the 2020 Risk Evaluation for Methylene Chloride which indicated chemically resistant gloves, together with activity specific training are sufficient to address the unreasonable risk, led EPA to propose a dermal PPE requirement as part of the WCPP (Ref. 1).
As discussed in the Economic Analysis, there is some uncertainty relative to the burden of recycling and disposal facilities that would be required to implement a WCPP under this proposed regulation, particularly in implementing an air monitoring program. For example, disposal facilities may be receiving methylene chloride intermittently; however, facilities that currently receive methylene chloride-containing products or formulations for disposal may not receive methylene chloride in the future, as restrictions are finalized. As many of these facilities are small entities, EPA is requesting comment on what regulatory flexibilities (
Because both EPA's 8-hour ECEL and 15-minute EPA STEL are significantly lower than the OSHA PEL and STEL, there is a high degree of uncertainty as to whether most industrial and commercial users will be able to comply with such a level and thus whether the unreasonable risk would be addressed. As discussed earlier in this Unit, this uncertainty, combined with the severity of the risks of methylene chloride and the prevalence of cost-effective alternative processes and products (Ref. 3), has led EPA to propose prohibitions, rather than compliance with the WCPP, for most industrial and commercial uses of methylene chloride, as outlined in Unit IV.A.2.
EPA also considered the potential for methylene chloride use to increase in particular sectors, such as vapor degreasing applications, where it has largely been phased out because of the well-established hazard (Refs. 3, 49). In order to prevent the potential for use of methylene chloride to increase in a sector that has already moved away from it, use of methylene chloride in vapor degreasing would be prohibited under the proposed regulatory and primary alternative regulatory action. The decline in use of methylene chloride was one of several considerations that led EPA to propose to prohibit use of methylene chloride in vapor degreasing.
Regarding industrial, commercial, and consumer uses of methylene chloride, TSCA section 6(a)(2) provides EPA with the authority to prohibit or otherwise restrict the manufacture (including import), processing, or distribution in commerce of a substance or mixture “for a particular use” to ensure that a chemical substance no longer presents unreasonable risk. For this rule, EPA proposes that “for a particular use” includes consumer use more broadly, as well as industrial and commercial use, which encompasses the individual industrial, commercial, and consumer uses evaluated in the 2020 Risk Evaluation for Methylene Chloride. Given the severity and ubiquitous nature of the risks identified in the 2020 Risk Evaluation for Methylene Chloride for all industrial, commercial, and consumer use, and noting that those conditions of use encompass all known, intended, and reasonably foreseen use of methylene chloride (other than use of methylene chloride in consumer paint and coating removers, which was subject to separate action under TSCA section 6 (84 FR 11420, March 27, 2019)), EPA proposes that prohibiting manufacture (including importing), processing, and distribution in commerce of methylene chloride for most industrial and commercial use and all consumer use is reasonable and necessary to eliminate the unreasonable risk of methylene chloride from industrial, commercial, and consumer use, including by precluding retailers from selling methylene chloride and methylene chloride-containing products to consumers for unspecified end-uses. (The proposed prohibitions would not extend to the use of methylene chloride in consumer paint and coating removers since manufacturing, processing, and distribution for that use are already prohibited.) EPA believes that any retailer selling methylene chloride-containing products to consumers for unspecified end-uses would be selling products for use by consumers for one of the consumer uses EPA evaluated in the 2020 Risk Evaluation for Methylene Chloride and found to drive the unreasonable risk for methylene chloride in the 2022 revised risk determination. EPA's proposed requirements to address unreasonable risk to consumers and bystanders to consumer use are described in Unit IV.A.
A key consideration regarding consumer uses is the role of retailers and other distributors. A retailer is defined in 40 CFR 751.103 as any entity that makes available a chemical substance or mixture to consumer end users, including through e-commerce internet sales or distribution, and is not specific to retailers of methylene chloride. Previously, in the 2019 methylene chloride TSCA section 6(a) risk management rulemaking addressing consumer use of methylene chloride in paint and coating removal (Ref. 37), EPA prohibited (
EPA acknowledges that for some of the occupational uses that it is proposing to prohibit, there may be some activities or facilities that could implement workplace protection requirements necessary to ensure that exposure remain below the ECEL and EPA STEL. In some cases, they may be able to undertake more extensive risk reduction measures than EPA currently anticipates. Therefore, for EPA's primary alternative regulatory action described in Unit IV.B., EPA is considering and requesting comment on a WCPP, including requirements to ensure exposures remain below an ECEL and EPA STEL, for some conditions of use of methylene chloride in addition to those conditions of use which are proposed to be subject to a WCPP under the proposed regulatory action (
Additionally, As discussed in Unit V.A.1. and 2., EPA acknowledges that for the occupational uses for which it is proposing the WCPP, there are varying degrees of uncertainty as to whether industrial and commercial owners and operators are able implement workplace protection requirements necessary to ensure that exposures remain below the ECEL and EPA STEL. For this reason, EPA's alternative regulatory action would prohibit two uses for which EPA is proposing the WCPP (industrial or commercial use for paint and coating removal from safety-critical, corrosion-sensitive components of aircraft and spacecraft by Federal agencies and their contractors; and industrial or commercial use as a bonding agent in the production of specialty batteries for military or space applications by Federal agencies and their contractors). Because of the importance of these uses for national security and critical infrastructure, EPA's alternative regulatory action would include a time-limited exemption under TSCA section 6(g) from the prohibition for these two uses, for a period of 10 years, during which time the regulated entity would comply with a WCPP to the extent practicable. The analyses for these exemptions are in Unit IV.B.
Since it is unlikely that all facilities with occupational exposures to methylene chloride would be able to implement a WCPP, including requirements to meet an ECEL and EPA STEL, EPA also examined the extent to which a certification and limited access program restricting methylene chloride use to trained and licensed users could ensure that only certain workers employed by a facility would be able to purchase and subsequently use methylene chloride. Under a limited access program, entities would submit a self-certification to the distributor at the point of purchasing the products. The self-certification could consist of a statement indicating that the facility is implementing a WCPP to control exposures to methylene chloride, as well as a connection between the purchaser and the facility (
Several commenters on the Advance Notice of Proposed Rulemaking for Methylene Chloride Commercial Paint and Coating Removal: Training, Certification and Limited Access Program identified what they believe would be insufficiencies in training, certification, and limited access to methylene chloride (Ref. 50). Commenters expressed concerns that this type of program would not provide enough safeguards and would not eliminate unreasonable risk to workers. Commenters were skeptical of a training program's efficacy noting that deaths related to methylene chloride exposure still occurred with workers who were trained and wearing PPE (Ref. 50).
Several commenters believed that a training, certification, and limited access program would not be feasible. A commenter suggested that an effective training model to examine is the Alaska Hazardous Paint Certification program, which includes hands-on training and practice in local exhaust ventilation techniques and equipment and PPE gloves, clothing, and respirators. In the Alaskan program, a minimum of 16 hours for initial training, with at least 6 hours of hands-on training as well as 8-hour refresher class every 3 years, are necessary requirements. Moreover, commenters expressed that a robust training, certification, and limited access program would include multiple layers of training and certification and supporting documentation. A commenter also highlighted that “small businesses do not have the same resources for implementing safety
Another option that EPA considered for occupational conditions of use was requiring specific, prescribed engineering controls, administrative controls, or PPE to reduce exposures to methylene chloride in occupational settings. These prescriptive requirements would be supported by information in the 2020 Risk Evaluation for Methylene Chloride. As described in Units III.A.1. and 2., EPA received input during required consultations and additional engagement that options that align with the hierarchy of controls (
EPA determined that such prescriptive controls (
EPA also considered limiting the weight fraction of methylene chloride in consumer products and conducted an analysis using the Consumer Exposure Models for the 2020 Risk Evaluation for Methylene Chloride to estimate whether this would reduce risks from consumer conditions of use that drive the unreasonable risk for methylene chloride, such that they no longer drive the unreasonable risk (Ref. 52). For all consumer conditions of use, the weight fraction or concentration identified through this modeling that would address the unreasonable risk through inhalation or dermal pathways was so low that it was highly unlikely that methylene chloride would still serve its functional purpose in the formulation. EPA thus concluded that a weight fraction limit would essentially function as a prohibition yet with a greater amount of uncertainty regarding compliance and no increased benefit to consumer users; it was therefore not a preferred option for consumer uses. (Refs. 1, 52).
After considering the different regulatory options under TSCA section 6(a), alternatives (described in Unit III.B.4.), compliance dates, and other requirements under TSCA section 6(c), EPA developed the proposed regulatory action described in Unit IV.A. to address the unreasonable risk from methylene chloride. To ensure successful implementation of this proposed regulatory action, EPA considered other requirements to support compliance with the proposed regulations, such as requiring monitoring and recordkeeping to demonstrate compliance with the WCPP, or downstream notification regarding the prohibition on manufacturing, processing, and distribution in commerce of methylene chloride, and products containing methylene chloride, for consumer use. These proposed requirements are described in Unit IV.A.
Under TSCA section 6(g)(1)(B), EPA may grant an exemption from a requirement of a TSCA section 6(a) rule for a specific condition of use of a chemical substance or mixture if compliance with the requirement would significantly disrupt the national economy, national security, or critical infrastructure. Based on reasonably available information, EPA has found that a TSCA section 6(g) exemption is warranted for certain uses. Therefore, EPA is proposing to grant exemptions from the rule requirements under TSCA section 6(g), as detailed in Unit IV.A.5. Unit IV.A.5. also provides a description of the request for exemption from the rule requirements that EPA is not proposing to grant. TSCA section 6(g) assumes a particular use cannot continue such that the risks are no longer unreasonable. However, EPA notes that information may be provided during the public comment period indicating this may not be case. For example, new information may demonstrate compliance with a WCPP is possible.
As required under TSCA section 6(d), any rule under TSCA section 6(a) must specify mandatory compliance dates, which shall be as soon as practicable with a reasonable transition period, but no later than 5 years after the date of promulgation of the final rule (except in the case of a use exempted under TSCA section 6(g)). For ban or phase-out requirements, EPA must specify mandatory compliance dates for the start of ban or phase-out requirements, which must be as soon as practicable but no later than 5 years after the date of promulgation of the final rule (except in the case of a use exempted under TSCA section 6(g)), and for full implementation of ban or phase-out requirements, which must be as soon as practicable. These compliance dates are detailed in Unit IV.A. and IV.B.
Under TSCA section 6(c)(2)(C), in deciding whether to prohibit or restrict in a manner that substantially prevents a specific condition of use of a chemical substance or mixture, and in setting an appropriate transition period for such action, EPA must consider, to the extent practicable, whether technically and economically feasible alternatives that benefit human health or the environment, compared to the use so proposed to be prohibited or restricted,
For this assessment, EPA identified and analyzed alternatives to methylene chloride in products relevant to industrial, commercial, and consumer conditions of use proposed to be prohibited or restricted, even if such restrictions are not anticipated to substantially prevent the condition of use. EPA is aware of the lack of viable alternatives to methylene chloride for several conditions of use and considered that information to the extent practicable in the development of the regulatory options as described in Unit III.B.3.
As an example, EPA's consideration of the lack of viable alternatives to processing methylene chloride in the manufacture of HFC-32 taken in context with the risk estimates, monitoring data, and expected work practices informed EPA's proposed approach of WCPP for this condition of use. Similarly, when proposing WCPP for industrial or commercial use of methylene chloride for paint and coating removal from mission- and safety-critical, corrosion sensitive components of aircraft and spacecraft by Federal agencies or their contractors, EPA considered how the safety-critical, corrosion-sensitive components would be so negatively affected by the use of technically incompatible, substitute paint removal chemicals or methods that the safe performance of the aircraft could be compromised. There are no known substitutes for methylene chloride for this particular use. As discussed in the preamble to the 2017 NPRM, DOD has actively sought to reduce its use of methylene chloride in paint and coating removal since 1990. DOD has replaced most of its usage of methylene chloride for paint and coating removal with mechanical methods, benzyl alcohol products, other solvents, and laser ablation. In an effort to reduce the use of all hazardous air pollutants (HAPs) such as methylene chloride, the Army has conducted tests to identify and test the effectiveness of HAP-free paint and coating removers on military high-performance coatings (Ref. 53). In another example, the Air Force in December 2015 significantly reduced the use of methylene chloride for removing coatings on flight control parts and is now using substitute chemical products, primarily those with benzyl alcohol formulations (Ref. 48). Similarly, the Navy has transitioned substitutes to paint methylene chloride use when alternatives with equal performance are identified. For DOD, this evaluation of and transition to safer alternatives is ongoing and substitutions are approved where technically feasible and commensurate with performance and mission-readiness requirements.
DOD continues to pursue potential substitutes for methylene chloride. However, for safety-critical, corrosion-sensitive components on military aviation, including safety-critical components, DOD has found that currently available substitute chemicals for paint and coating removal have one or more technical limitations. These include the inability to effectively remove specific military high performance or chemical resistant coatings and incompatibility with underlying metallic, nonmetallic, and composite materials, resulting in material damage to critical components. In addition, substitute chemicals or methods currently available do not support DOD's need for coating removers that enable critical safety inspection, non-destructive inspection, material assessment, or field repair processes. For example, benzyl alcohol has replaced methylene chloride in many DOD paint and coating removal applications. However, acid benzyl alcohol formulations, which work more quickly than alkaline formulations, cannot be used on high-strength steel or magnesium metals because there is the potential for resulting hydrogen embrittlement (Ref. 54). In DOD's experience, the alkaline benzyl alcohol formulations require 25 to 50% more time than methylene chloride and are more labor-intensive, particularly on very thick coatings or polyurethane coatings with water-based primers (Ref. 54). In addition, the reaction rate for alkaline benzyl alcohol formulations is very slow when the temperature is below 65 degrees, so paint and coating removal in cold locations with this alternative must be performed in a heated area (Ref. 54). As described earlier in Unit V.A.1., aircraft and other assets operated by DHS, NASA, and the FAA also contain safety-critical, corrosion-sensitive components of the type described by DOD, and suitable alternatives to methylene chloride are similarly not available for all applications. Substitute chemicals for paint and coating removal for safety-critical, corrosion-sensitive components are not technically feasible as they have one or more technical limitations; are incompatible with underlying materials; and/or do not support the coating removal requirements of safety inspections, non-destructive inspection, material assessment, or field repair processes. Therefore, EPA has evaluated the effect that a significant restriction on the use of methylene chloride would have for industrial and commercial paint and coating removal by DOD, DHS, NASA, and FAA and concluded that under TSCA section 6(c)(2)(C) that technologically and economically feasible alternatives that benefit health or the environment would not be readily available as a substitute. Due to the essential nature of this subset of activities under industrial or commercial use of methylene chloride as a paint and coating remover, EPA's consideration of the availability of technologically and economically feasible alternative was one factor in the proposed determination not to prohibit manufacture, processing, distribution in commerce, and use of methylene chloride for paint and coating removal for safety-critical, corrosion sensitive components.
As an additional example, EPA considered the information provided regarding a lack of viable alternatives for the use of methylene chloride in chemical bonding of acrylic and polycarbonate, specifically for specialty batteries for use in military and space applications. As described earlier in Unit V.A., EPA received information from a stakeholder, as part of a request for an exemption under TSCA section 6(g), describing how methylene chloride is uniquely suited as a bonding agent for these specialty batteries. Upon receipt of the TSCA section 6(g) exemption request summarized in this unit, EPA consulted with NASA, and NASA provided information on its effort to screen alternative adhesives for the chemical bonding of acrylic and polycarbonate. Specifically, NASA identified ten materials and completed screening-level testing for six of those ten materials as of the publication of this proposed rule. Results submitted to EPA indicate that none of the materials tested met the technical requirements for chemical bonding applications (Ref. 47). While vendors submitting the TSCA section 6(g) exemption request predicted a timeline of at least one year to find a replacement for the bonding agent for specialty batteries, NASA noted that the projected substitution timeline applies only to the vendor's own battery production process. The total timeline, including qualification testing for human spaceflight, is a complex, multi-year process that could only begin after the vendor's substitution was completed.
NASA additionally emphasized that losing access to qualified high-performance substances such as specialty batteries would have immediate effects for currently ongoing space-flight programs, including the Artemis Program, with the potential to introduce an unacceptable level of risk to crew, vehicle, and viability of the program. Qualification of materials for human spaceflight can take years and significant resources to accomplish, while potentially impacting program production schedule and launch manifest.
NASA has emphasized that specific Artemis components have been designed to work with the identified specialty batteries with polycarbonate casing bonded using methylene chloride. The safety and reliability of these batteries has been established in uncrewed Artemis I test missions, and the next flights will take humans back to the Moon. A c