[Federal Register Volume 66, Number 235 (Thursday, December 6, 2001)]
[Rules and Regulations]
[Pages 63446-63449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30182]



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Part III





Department of Veterans Affairs





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38 CFR Part 17



Copayments for Inpatient Hospital Care and Outpatient Medical Care, 
Copayments for Medications; Interim and Final Rule

  Federal Register / Vol. 66 , No. 235 / Thursday, December 6, 2001 / 
Rules and Regulations  

[[Page 63446]]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AK50


Copayments for Inpatient Hospital Care and Outpatient Medical 
Care

AGENCY: Department of Veterans Affairs.

ACTION: Interim and final rule.

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SUMMARY: This document amends VA's medical regulations to set forth a 
mechanism for determining copayments for inpatient hospital care and 
outpatient medical care. This is necessary to implement provisions of 
the Veterans Millennium Health Care and Benefits Act and to set forth 
exemptions from copayment requirements as mandated by statute.

DATES: Effective Date: December 6, 2001.
    Comment Date: Comments must be received by VA on or before February 
4, 2002.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1154, Washington, DC 20420; or fax comments to 
(202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK50.'' All comments received will be available for public 
inspection in the Office of Regulations Management, Room 1158, between 
the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except 
holidays).

FOR FURTHER INFORMATION CONTACT: Nancy L. Howard at (202) 273-8198, 
Revenue Office (174), Office of Finance, Veterans Health 
Administration, 810 Vermont Avenue, NW., Washington, DC 20420. (The 
telephone number is not a toll-free number.)

SUPPLEMENTARY INFORMATION: This document amends VA's medical 
regulations to set forth a mechanism for determining copayments for 
inpatient hospital care and outpatient medical care provided to 
veterans by VA. As explained below, a number of groups of veterans and 
services would be exempted from the copayment requirements.
    The provisions of 38 U.S.C. 1710(a), (f), and (g) state that 
certain veterans are not eligible for inpatient hospital care or 
outpatient medical care provided by VA under 38 U.S.C. 1710(a) unless 
they agree to pay a copayment.

Inpatient Hospital Care

    The rule restates provisions of 38 U.S.C. 1710(f), which state that 
the copayment for inpatient hospital care during any 365-day period is 
the sum of:
    (i) $10 for every day the veteran receives inpatient hospital care, 
and
    (ii) The lesser of:
    (A) The sum of the inpatient Medicare deductible for the first 90 
days of care and one-half of the inpatient Medicare deductible for each 
subsequent 90 days of care (or fraction thereof) after the first 90 
days of such care during such 365-day period, or
    (B) VA's cost of providing the care.

Outpatient Medical Care

    Previously, the copayment amount for outpatient medical care was 
$50.80. This was based on statutory provisions that required the 
copayment to be ``an amount equal to 20 percent of the estimated 
average cost (during the calendar year in which the services are 
furnished) of an outpatient visit in a * * * [VA] facility.''
    This statutory provision was changed by the Veterans Millennium 
Health Care and Benefits Act, Public Law 106-117, 113 Stat. 1545. VA 
now has authority to change the copayment amount to ``the applicable 
amount or amounts established by the Secretary by regulation.''
    HR Report 106-237, July 16, 1999, which accompanied the Veterans 
Millennium Health Care and Benefits Act, indicates that the previous 
copayment for routine outpatient medical care is too high. The 
Committee noted, at pp. 43 and 44, that ``[such copayments] may in many 
cases approach the full cost for the episode of treatment. Requiring so 
high a copayment for a routine, primary care visit appears to the 
Committee to be unreasonable. * * * The Committee recommends that the 
Secretary not set a single copayment amount, but consider practices 
within the health care industry to differentiate between primary care 
and specialty clinic visits.''
    Accordingly, based on the new statutory authority, we are 
establishing a copayment amount of $15 for primary care visits and $50 
for specialty care visits. Further, as discussed below, we would not 
charge a copayment for certain services.
    The $50 copayment for specialty care visits is essentially the same 
as the current copayment. However, the $15 copayment for primary care 
visits is more in line with copayment amounts charged in the private 
sector. A VHA copayment work group found that the mean copayment for 
primary care in HMOs is $6.84, the mean copayment for mental health 
care in HMOs is $15.32, and the mean copayment for emergency care in 
HMOs is $28.91. The work group also found that the most common 
copayment for all types of HMO care is $10.00. TRICARE Prime copayments 
range from $6 to $12 for primary and specialty care, from $6 to $25 for 
mental health care, and $10 to $30 for emergency care.
    A primary care outpatient visit is an episode of care furnished in 
a clinic that provides integrated, accessible healthcare services by 
clinicians who are accountable for addressing a large majority of 
personal healthcare needs, developing a sustained partnership with 
patients, and practicing in the context of family and community. 
Primary care includes, but is not limited to, diagnosis and management 
of acute and chronic biopsychosocial conditions, health promotion, 
disease prevention, overall care management, and patient and caregiver 
education. Each patient's identified primary care clinician delivers 
services in the context of a larger interdisciplinary primary care 
team. Patients have access to the primary care clinician and much of 
the primary care team without need of a referral. A specialty care 
outpatient visit is an episode of care furnished in a clinic that does 
not provide primary care, and is only provided through a referral. Some 
examples of specialty care provided at a specialty care clinic are 
radiology services requiring the immediate presence of a physician, 
audiology, optometry, magnetic resonance imagery (MRI), computerized 
axial tomography (CAT) scan, nuclear medicine studies, surgical 
consultative services, and ambulatory surgery.
    We believe these definitions of primary care and specialty care are 
consistent with the common understanding of these terms.
    The rule provides that if a veteran has more than one primary care 
encounter on the same day and no specialty care encounter on that day, 
the copayment amount is the copayment for one primary care outpatient 
visit. The rule also provides that if a veteran has one or more primary 
care encounters and one or more specialty care encounters on the same 
day, the copayment amount is the copayment for one specialty care 
outpatient visit. This is intended to encourage veterans to get as much 
care as they can get scheduled on the same day. Further, we believe 
that this will help veterans meet their appointments and, consequently, 
will help veterans obtain the care they need as quickly as possible.

Exceptions

    As mandated by statutory authority, the rule provides that the 
following veterans are not subject to the

[[Page 63447]]

copayment requirements for inpatient hospital care or outpatient 
medical care:
     A veteran with a compensable service-connected disability;
     A veteran who is a former prisoner of war;
     A veteran awarded a Purple Heart;
     A veteran who was discharged or released from active 
military service for a disability incurred or aggravated in the line of 
duty;
     A veteran who receives disability compensation under 38 
U.S.C. 1151;
     A veteran whose entitlement to disability compensation is 
suspended pursuant to 38 U.S.C. 1151, but only to the extent that the 
veteran's continuing eligibility for care is provided for in the 
judgment or settlement described in 38 U.S.C. 1151;
     A veteran whose entitlement to disability compensation is 
suspended because of the receipt of military retirement pay;
     A veteran of the Mexican border period or of World War I;
     A military retiree provided care under an interagency 
agreement as defined in section 113 of Public Law 106-117, 113 Stat. 
1545; and
     A veteran who VA determines to be unable to defray the 
expenses of necessary care under 38 U.S.C. 1722(a).
    Also, as mandated by statutory authority, the rule provides that 
veterans are not subject to the copayment requirements for inpatient 
hospital care or outpatient medical care authorized under 38 U.S.C. 
1710(e) for Vietnam-era herbicide-exposed veterans, radiation-exposed 
veterans, Gulf War veterans, or post-Gulf War combat-exposed veterans. 
Further, as mandated by statutory authority, the rule provides that 
care provided for a veteran's noncompensable zero percent service-
connected disability is not subject to the copayment requirements for 
inpatient hospital care or outpatient medical care.
    We have authority to impose a copayment for inpatient hospital care 
and outpatient medical services only if the care or services are 
provided under 38 U.S.C. 1710. Accordingly, the rule also exempts the 
following from the copayment requirements for inpatient hospital care 
and outpatient medical services because they are provided under 
authorities other than 38 U.S.C. 1710:
     Special registry examinations (including any follow-up 
examinations or testing ordered as part of the special registry 
examination) offered by VA to evaluate possible health risks associated 
with military service;
     Counseling and care for sexual trauma as authorized under 
38 U.S.C 1720D;
     Compensation and pension examinations requested by the 
Veterans Benefits Administration;
     Care provided as part of a VA-approved research project 
authorized by 38 U.S.C. 7303;
     Outpatient dental care provided under 38 U.S.C. 1712;
     Readjustment counseling and related mental health services 
authorized under 38 U.S.C 1712A;
     Emergency treatment paid for under 38 U.S.C. 1725 or 1728;
     Extended care services authorized under 38 U.S.C. 1710B; 
and
     Care or services authorized under 38 U.S.C. 1720E for 
certain veterans regarding cancer of the head or neck.
    The rule also exempts publicly announced VA public health 
initiatives (e.g., health fairs) or outpatient visits solely consisting 
of preventive screening and immunizations (e.g. influenza immunization, 
pneumonococcal immunization, hypertension screening, hepatitis C 
screening, tobacco screening, alcohol screening, hyperlipidemia 
screening, breast cancer screening, cervical cancer screening, 
screening for colorectal cancer by fecal occult blood testing, and 
education about the risks and benefits of prostate cancer screening). 
These initiatives are viewed as cost-effective for health care in that 
they often provide early detection of irregularities or abnormalities 
that can be resolved without major intervention. Charging a copayment 
for these services would deter a veteran from obtaining these services. 
Also, these health care screenings often are provided at no charge to 
the patient in private health care settings.
    The rule provides that laboratory services, flat film radiology 
services, and electrocardiograms are not subject to the copayment 
requirements. These services are considered to be a part of the initial 
provision of care and a separate copayment would not be charged.
    The rule provides that outpatient care is not subject to the 
outpatient copayment requirements under this section when provided to a 
veteran during a day for which the veteran is required to make a 
copayment for extended care services that were provided either directly 
by VA or obtained for VA by contract. We believe that this will 
encourage veterans to obtain outpatient care needed which should reduce 
medical problems for patients in a hospital, nursing home, or 
domiciliary.

Administrative Procedure Act

    We have found good cause to dispense with the notice-and-comment 
and delayed effective date provisions of the Administrative Procedure 
Act (5 U.S.C. 553) because compliance with such provisions would be 
impracticable and contrary to the public interest. It is necessary to 
reduce primary care copayments for outpatient medical care as quickly 
as possible to encourage enrolled veterans to utilize VA primary 
outpatient care services, thereby helping to avoid potentially more 
costly specialty services.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

OMB Review

    This document has been reviewed by OMB under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. This amendment would not directly affect any small 
entities. Only individuals could be directly affected. Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers for the 
programs affected by this document are 64.005, 64.007, 64.008, 
64,009, 64.010, 64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 
64.018, 64.019, 64.022, and 64.025.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government

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contracts, Grant programs-health, Grant programs-veterans, Health care, 
Health facilities, Health professions, Health records, Homeless, 
Medical and dental schools, Medical devices, Medical research, Mental 
health programs, Nursing homes, Philippines, Reporting and record-
keeping requirements, Scholarships and fellowships, Travel and 
transportation expenses, Veterans.

    Approved: November 30, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 17 is amended 
as set forth below:

PART 17--MEDICAL

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

    Authority: 38 U.S.C. 501, 1721, unless otherwise noted.


    2. An undesignated center heading and Sec. 17.108 are added to read 
as follows:

Copayments


Sec. 17.108  Copayments for inpatient hospital care and outpatient 
medical care.

    (a) General. This section sets forth requirements regarding 
copayments for inpatient hospital care and outpatient medical care 
provided to veterans by VA.
    (b) Copayments for inpatient hospital care. (1) Except as provided 
in paragraphs (d) or (e) of this section, a veteran, as a condition of 
receiving inpatient hospital care provided by VA (provided either 
directly by VA or obtained by VA by contract), must agree to pay VA 
(and is obligated to pay VA) the applicable copayment, as set forth in 
paragraph (b)(2) of this section.
    (2) The copayment for inpatient hospital care shall be, during any 
365-day period, a copayment equaling the sum of:
    (i) $10 for every day the veteran receives inpatient hospital care, 
and
    (ii) The lesser of:
    (A) The sum of the inpatient Medicare deductible for the first 90 
days of care and one-half of the inpatient Medicare deductible for each 
subsequent 90 days of care (or fraction thereof) after the first 90 
days of such care during such 365-day period, or
    (B) VA's cost of providing the care.


    Note to Sec. 17.108(b): The requirement that a veteran agree to 
pay the copayment would be met by submitting to VA a signed VA Form 
10-10EZ. This is the application form for enrollment in the VA 
healthcare system and also is the document used for providing means-
test information annually.


    (c) Copayments for outpatient medical care. (1) Except as provided 
in paragraphs (d), (e) or (f) of this section, a veteran, as a 
condition of receiving outpatient medical care provided by VA, must 
agree to pay VA (and is obligated to pay VA) a copayment as set forth 
in paragraph (c)(2) of this section.
    (2) The copayment for outpatient medical care is $15 for a primary 
care outpatient visit and $50 for a specialty care outpatient visit. If 
a veteran has more than one primary care encounter on the same day and 
no specialty care encounter on that day, the copayment amount is the 
copayment for one primary care outpatient visit. If a veteran has one 
or more primary care encounters and one or more specialty care 
encounters on the same day, the copayment amount is the copayment for 
one specialty care outpatient visit.
    (3) For purposes of this section, a primary care visit is an 
episode of care furnished in a clinic that provides integrated, 
accessible healthcare services by clinicians who are accountable for 
addressing a large majority of personal healthcare needs, developing a 
sustained partnership with patients, and practicing in the context of 
family and community. Primary care includes, but is not limited to, 
diagnosis and management of acute and chronic biopsychosocial 
conditions, health promotion, disease prevention, overall care 
management, and patient and caregiver education. Each patient's 
identified primary care clinician delivers services in the context of a 
larger interdisciplinary primary care team. Patients have access to the 
primary care clinician and much of the primary care team without need 
of a referral. In contrast, specialty care is generally provided 
through referral. A specialty care outpatient visit is an episode of 
care furnished in a clinic that does not provide primary care, and is 
only provided through a referral. Some examples of specialty care 
provided at a specialty care clinic are radiology services requiring 
the immediate presence of a physician, audiology, optometry, magnetic 
resonance imagery (MRI), computerized axial tomography (CAT) scan, 
nuclear medicine studies, surgical consultative services, and 
ambulatory surgery.


    Note to Sec. 17.108(c): The requirement that a veteran agree to 
pay the copayment would be met by submitting to VA a signed VA Form 
10-10EZ. This is the application form for enrollment in the VA 
healthcare system and also is the document used for providing means-
test information annually.


    (d) Veterans not subject to copayment requirements for inpatient 
hospital care or outpatient medical care. The following veterans are 
not subject to the copayment requirements of this section:
    (1) A veteran with a compensable service-connected disability;
    (2) A veteran who is a former prisoner of war;
    (3) A veteran awarded a Purple Heart;
    (4) A veteran who was discharged or released from active military 
service for a disability incurred or aggravated in the line of duty;
    (5) A veteran who receives disability compensation under 38 U.S.C. 
1151;
    (6) A veteran whose entitlement to disability compensation is 
suspended pursuant to 38 U.S.C. 1151, but only to the extent that the 
veteran's continuing eligibility for care is provided for in the 
judgment or settlement described in 38 U.S.C. 1151;
    (7) A veteran whose entitlement to disability compensation is 
suspended because of the receipt of military retirement pay;
    (8) A veteran of the Mexican border period or of World War I;
    (9) A military retiree provided care under an interagency agreement 
as defined in section 113 of Public Law 106-117, 113 Stat. 1545; or
    (10) A veteran who VA determines to be unable to defray the 
expenses of necessary care under 38 U.S.C. 1722(a).
    (e) Services not subject to copayment requirements for inpatient 
hospital care or outpatient medical care. The following are not subject 
to the copayment requirements under this section:
    (1) Care provided to a veteran for a noncompensable zero percent 
service-connected disability;
    (2) Care authorized under 38 U.S.C. 1710(e) for Vietnam-era 
herbicide-exposed veterans, radiation-exposed veterans, Gulf War 
veterans, or post-Gulf War combat-exposed veterans;
    (3) Special registry examinations (including any follow-up 
examinations or testing ordered as part of the special registry 
examination) offered by VA to evaluate possible health risks associated 
with military service;
    (4) Counseling and care for sexual trauma as authorized under 38 
U.S.C 1720D;
    (5) Compensation and pension examinations requested by the Veterans 
Benefits Administration;
    (6) Care provided as part of a VA-approved research project 
authorized by 38 U.S.C. 7303;
    (7) Outpatient dental care provided under 38 U.S.C. 1712;
    (8) Readjustment counseling and related mental health services 
authorized under 38 U.S.C 1712A;
    (9) Emergency treatment paid for under 38 U.S.C. 1725 or 1728;

[[Page 63449]]

    (10) Care or services authorized under 38 U.S.C. 1720E for certain 
veterans regarding cancer of the head or neck;
    (11) Publicly announced VA public health initiatives (e.g., health 
fairs) or an outpatient visit solely consisting of preventive screening 
and immunizations (e.g. influenza immunization, pneumonococcal 
immunization, hypertension screening, hepatitis C screening, tobacco 
screening, alcohol screening, hyperlipidemia screening, breast cancer 
screening, cervical cancer screening, screening for colorectal cancer 
by fecal occult blood testing, and education about the risks and 
benefits of prostate cancer screening); and
    (12) Laboratory services, flat film radiology services, and 
electrocardiograms.
    (f) Additional care not subject to outpatient copayment. Outpatient 
care is not subject to the outpatient copayment requirements under this 
section when provided to a veteran during a day for which the veteran 
is required to make a copayment for extended care services that were 
provided either directly by VA or obtained for VA by contract.

(Authority: 38 U.S.C. 1710)

[FR Doc. 01-30182 Filed 12-5-01; 8:45 am]
BILLING CODE 8320-01-P