[Federal Register Volume 67, Number 186 (Wednesday, September 25, 2002)]
[Notices]
[Pages 60241-60246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24311]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration


Children's Hospitals Graduate Medical Education (CHGME) Payment 
Program: Proposed Methodology for Calculating Reconciliation Payment, 
Calculating Indirect Medical Education Payment, Disseminating CHGME 
Payment Program Data and Audit and Clarification of Policy on Hospital 
Eligibility

AGENCY: Health Resources and Services Administration, HHS.

ACTION: Notice.

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SUMMARY: This notice requests comments on proposed methodology for 
determining payments during the Children's Hospitals Graduate Medical 
Education (CHGME) Payment Program's reconciliation process, calculating 
indirect medical education (IME) payment, disseminating CHGME Payment 
Program data, and audit. The Program is authorized by section 340E of 
the Public Health Service Act (42 U.S.C. 256e), as amended by Pub. L. 
106-310, The Children's Health Act, 2000. The notice also sets forth 
clarification of policies on hospital eligibility.

DATES: Interested persons are invited to comment by October 25, 2002. 
All comments received on or before October 25, 2002, will be considered 
in the development of the final notice concerning the proposed 
methodology. The Department will address comments individually or by 
group and publish a final notice on these comments in the Federal 
Register. Comments will also be available for public inspection, 
beginning October 25, 2002, at the address below from 8:30 a.m.-5 p.m. 
on weekdays, except for federal holidays.

ADDRESSES: Submit all written comments concerning this notice to Ayah 
E. Johnson, Ph.D., Chief, Graduate Medical Education Branch, Division 
of Medicine and Dentistry, Bureau of Health Professions, Health 
Resources and Services Administration, Room 9A-05, Parklawn Building, 
5600 Fishers Lane, Rockville, Maryland 20857; or by e-mail to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Ayah E. Johnson, Ph.D., Chief, 
Graduate Medical Education Branch, Division of Medicine and Dentistry, 
Bureau of Health Professions, Health Resources and Services 
Administration, Room 9A-05, Parklawn Building, 5600 Fishers Lane, 
Rockville, Maryland 20857; telephone (301) 443-1058 or e-mail address 
[email protected].

SUPPLEMENTARY INFORMATION: The CHGME Payment Program, as authorized by 
section 340E of the Public Health Service (PHS) Act (the Act) (42 
U.S.C. 256e), provides funds to children's hospitals that operate 
graduate medical education (GME) programs. Public Law 106-310 amended 
the CHGME statute to continue the Program through fiscal year (FY) 
2005.
    Subsequent to the publication of this notice, CHGME policies will 
be put forth in regulations through the rulemaking procedures in 
accordance with Title 5 of the United States Code, as required by 
amendments to the CHGME statute made by Pub. L. 106-310, the Children's 
Health Act, 2000.
    The Department wishes to provide clarification on the policy 
related to hospital eligibility. This policy was first described in the 
March 1, 2001 (66 FR 12940), and the July 20, 2001 (66 FR 37980) 
Federal Register.
    The Department wishes to clarify the relationship between the list 
of children's hospitals published in the March 1, 2001 Federal Register 
and those hospitals eligible to participate in the CHGME Payment 
Program.
    The March 1, 2001 Federal Register notice list is comprised of 
hospitals that the CHGME Payment Program believed at that time to be 
potentially eligible based upon their Medicare provider number. 
However, all hospitals must meet the eligibility criteria set forth in 
the CHGME statute and applicable policy notices.
    The Department will update the list of hospitals potentially 
eligible to participate in the CHGME Payment Program on an annual 
basis. The annual update will be available on the CHGME Web site: 
http://bhpr.hrsa.gov/childrenshospitalgme. The list is not a final 
determination of eligibility. A hospital omitted from this list, 
including a new hospital, can obtain an application by downloading it 
from the CHGME Web site.

Provisions Proposed for Comment

    The Department is soliciting comments on the following proposed 
provisions within these rules: (1) Methodology for determining direct 
and indirect medical education (DME and IME, respectively) payments 
during the withholding and reconciliation process stipulated in the 
CHGME statute--a methodology is proposed for children's teaching 
hospitals and ``new children's teaching hospitals'' that are eligible 
to participate in the CHGME Payment Program; (2) methodology for 
calculating IME payments; (3) dissemination of CHGME Payment Program 
data.

I. Proposed Methodology for Calculating Reconciliation Payments

    The CHGME statute, prior to its amendment, provided for a 
withholding and reconciliation process designed to increase the 
accuracy of the DME payments made to hospitals. The amendments revised 
this provision to include IME payments in the withholding and 
reconciliation process.
    As revised, the CHGME statute requires the Secretary to withhold up 
to 25 percent from each interim installment payment for both DME and 
IME as necessary to ensure that a hospital will not be overpaid on an 
interim basis. In accordance with the CHGME statute, the Department 
must determine, prior to the end of the

[[Page 60242]]

Federal fiscal year (FY), any changes to the number of residents 
reported by a hospital in its yearly initial application for CHGME 
Payment Program funding to determine the final amount payable to the 
hospital for that FY. Funding withheld will be paid to children's 
hospitals following the determination of changes, if any, to the number 
of residents initially reported by participating hospitals.
    Beginning in FY2002, the Department will implement the Program's 
withholding process for both DME and IME payments to reduce the 
likelihood that a hospital is overpaid on an interim basis. The 
Department proposes the following methodology for the determination of 
revised resident counts and reconciliation processes beginning in 
FY2002:

Reporting Revised Resident Counts

    During the third quarter of each FY (March 1--June 30) for which 
payments are being made, CHGME would release a reconciliation 
application providing hospitals the opportunity to report changes in 
the resident FTE counts previously reported in their initial 
applications. The reconciliation application would include forms HRSA-
99 (Hospital Demographics), HRSA-99-1 (Reconciliation of FTE counts), 
HRSA-99-3 (Certification), and HRSA-99-4 (Required Data Reporting for 
Government Performance and Results Act). This collection of information 
has been approved under OMB No. 0915-0247. Hospitals would have 30 days 
to complete and return the reconciliation application. If a hospital 
fails to complete and return the reconciliation application according 
to the terms and conditions of the CHGME Payment Program, HHS may 
suspend the award, pending corrective action or may terminate the award 
for cause.
    Several respondents to the March 1, 2001 Federal Register notice 
requested clarification on whether the reconciliation process would 
include only adjustments to changes in resident counts or would it 
include other changes. The CHGME Payment Program currently reconciles 
resident FTE counts only.
    Hospitals that were not eligible to participate or did not apply 
for funding during the initial application cycle are not eligible to 
apply for and receive funding during the reconciliation process. These 
hospitals must wait until the next ``initial'' application cycle to 
apply.

Determining Revised Resident Counts

    Hospitals must use the methodology described in the July 20 Federal 
Register notice to determine and report revised resident counts to the 
CHGME Payment Program. The revised resident FTE counts must be for the 
same Medicare cost report (MCR) period(s) identified in the hospital's 
initial application for CHGME Payment Program funding. For purposes of 
clarification, an FTE resident is measured in terms of time worked 
during a residency training year. It is not a measure of individual 
residents who are working.
    Hospitals would report their updated resident counts by completing 
and submitting a new form HRSA 99-1. Hospitals whose resident counts 
have not changed are not exempt from completing and submitting a CHGME 
Payment Program reconciliation application. Revised resident FTE counts 
reported by hospitals that file a full MCR must be in accordance with 
CHGME rules. The resident counts reported in the reconciliation 
application must be consistent and attested to by the hospital's fiscal 
intermediary (FI) to be accepted by HRSA.
    Hospitals which file a low or no-utilization MCR and report changes 
to the resident FTE counts reported in their initial CHGME Payment 
Program application must provide a detailed explanation of the revision 
with supporting documentation in accordance with CHGME requirements. 
Revised resident FTE counts that are submitted without an explanation 
and supporting documentation will not be accepted.

Determining Revised Resident Counts for ``New Children's Teaching 
Hospitals''

    ``New children's teaching hospitals'' would calculate resident FTE 
counts for the reconciliation application process in one of two ways:
    1. If a hospital has filed an MCR by the CHGME Payment Program 
reconciliation application deadline, the hospital would report the 
actual number of resident FTEs trained during that cost reporting 
period; or
    2. If a hospital has not filed an MCR by the CHGME Payment Program 
reconciliation application deadline, the hospital use the methodology 
described in the July 20 Federal Register notice, with an appropriate 
adjustment to the timeframe, to determine and report its revised 
resident counts. The timeframe used to determine revised resident 
counts for the reconciliation application process is the beginning of 
the FY for which payments are made up to the reconciliation application 
deadline date. The revised FTE resident count would equal the average 
number of FTE residents trained per day during this period multiplied 
by the total number of days the hospital will be training residents 
during the FY for which payments are being made. These hospitals would 
calculate their revised FTE resident count for reconciliation payments 
as follows:
    a. Determine the number of days from the beginning of the FY for 
which payments are made to the CHGME Payment Program reconciliation 
application deadline date during which the hospital will be training 
residents.
    b. Count the actual (raw) number of unweighted resident FTEs for 
allopathic and osteopathic residents trained during the period 
specified in (a).
    c. Divide the total number of unweighted FTEs trained in ``(b)'' by 
the number of days during the eligibility period specified in ``(a)'' 
above. This number is the average number of unweighted FTE residents 
trained per day for the period between the beginning of the FY for 
which payments are being made and the date the CHGME Payment Program 
reconciliation application is due.
    d. Determine the number of days the hospital will be training 
residents in the fiscal year for which payments are being made. 
Although the majority of hospitals will be likely to train residents 
for a full fiscal year (i.e., 365 days (366 days in leap year)), it is 
possible that some hospitals may not train residents for an entire 
year. Those hospitals should determine the number of days they will be 
training residents and use that number in subsequent calculations.
    e. Multiply the average number of unweighted resident FTE count for 
allopathic and osteopathic residents trained per day ``(c)'' by the 
number of days that your hospital will be training residents during the 
fiscal year in which payments are being made ``(d)''.
    f. Use the same methodology (steps a through e above) to determine 
the weighted resident FTE count of allopathic and osteopathic 
residents.
    g. Use the same methodology (steps a through e above) to determine 
the unweighted and weighted resident FTE count for dental and podiatric 
residents.
    ``New children's teaching hospitals'' would report these updated 
resident counts on form HRSA 99-1 of the reconciliation application.
    Although this methodology delineates the method by which partial 
year residents are counted for ``new children's teaching hospitals'', 
it is important to note that all counts are subjected to the cap set by 
the affiliation agreement with any existing approved residency program. 
Since the CHGME

[[Page 60243]]

Payment Program is paying hospitals for training residents during the 
FY for which payments are being made, the Program would convert a 
partial training period to reflect the amount of time the hospital will 
be training residents during the FY for which payments are being made.
    Example:
    Children's Hospital A (CHA) is a ``new children's teaching 
hospital'' that submitted an application to the CHGME Payment Program 
in FY 2002. CHA intends to participate in the CHGME reconciliation 
process and needs to determine its revised FTE resident count. CHA 
would not have filed a Medicare cost report prior to the reconciliation 
application deadline. In order to calculate its revised FTE resident 
count, CHA would need to complete the following steps:
    a. Calculate the number of days from beginning of FY2002 to the 
reconciliation application deadline (October 1, 2001 to May 1, 2002). 
The total number of days is 212.
    b. Calculate the actual ``raw'' number of unweighted allopathic and 
osteopathic resident FTEs trained during this period. CHA determined 
that it trained 55 FTEs.
    c. Determine the average number of unweighted allopathic and 
osteopathic residents trained per day: 55 FTEs/212 days = 0.2594 FTEs/
day.
    d. Determine the number of days in FY 2002 that CHA will be 
training residents: 365.
    e. Determine the estimated number of unweighted allopathic and 
osteopathic residents that CHA will be training in FY 2002: 365 days x 
0.2594 FTEs/day = 94.69 (rounded from 94.69339).
    f. CHA would repeat the above steps to determine the estimated 
number of weighted allopathic and osteopathic residents as well as the 
weighted and unweighted dental and podiatric residents.

Determining IME Payments for ``New Children's Teaching Hospitals''

    The Department wants to use the most accurate data it can obtain to 
calculate hospitals' payments. Therefore, the Department proposes that 
``new children's teaching hospitals'' participating in the CHGME 
Payment Program that had not filed an MCR or completed a full Medicare 
cost reporting period at the time of submission of their initial CHGME 
Payment Program application, complete and resubmit a revised form HRSA 
99-2 as part of the reconciliation application process.
    ``New children's teaching hospitals'' would calculate the variables 
initially reported on HRSA 99-2 using the methodology previously 
described in one of two ways:
    1. If a hospital has filed an MCR or completed a full Medicare cost 
reporting period by the CHGME Payment Program reconciliation 
application deadline, the hospital would report the data requested from 
the completed cost reporting period; or
    2. If a hospital has not filed an MCR or completed a full Medicare 
cost reporting period by the CHGME Payment Program reconciliation 
application deadline, the hospital would use the methodology described 
in the July 20 Federal Register notice, with an appropriate adjustment 
to the timeframe, to determine and report its revised data. The 
timeframe to be used for the reconciliation application process is the 
beginning of the FY for which payments are made until the CHGME 
reconciliation application deadline date.

Withholding and Reconciliation Payment

    The Secretary would determine any balance due or any overpayment 
made to individual hospitals following the determination of changes, if 
any, to the number of residents reported by hospitals in their 
reconciliation applications. Hospitals would be notified, in writing, 
of the Secretary's final reconciliation payment determination during 
the fourth quarter (July 1--September 30) of the FY in which payments 
are being made.
    Hospitals that have been notified of an overpayment would have 30 
days to return the overpayment to the Department without accrual of 
interest. Hospitals that fail to return overpayments within the 
specified timeframe would accrue and be responsible for any interest.
    Reconciliation payments would be made to individual hospitals on or 
before the end of the FY (September 30) in which payments are being 
made. The Secretary would include in the reconciliation payments 
funding initially withheld from the hospital as a result of withholding 
and underpayment based on any increase in FTEs. Also included in the 
payments would be each hospital's portion of any funds that are 
returned to the Department during the course of the FY as a result of 
overpayment or other hospitals' loss of eligibility.
    Hospitals that report no changes to their resident FTE counts 
during the reconciliation process can expect changes to their final 
payment determination as a result of resident FTE count changes 
reported by other participating hospitals. This is based upon the 
payment methodology used to determine CHGME Payment Program funding to 
individual hospitals. Payments to individual hospitals are based upon 
the hospital's share of the total amount of DME and IME funding 
available for a given FY. A hospital's portion of the total IME and DME 
funding available is calculated based on payment variables in the CHGME 
Payment Program statute and regulations. This individual hospital 
portion (the numerator) is then divided by the sum of all hospitals' 
portion (the denominator) to determine its ``share'' of the available 
funding. Hence, although an individual hospital's FTE count and 
subsequent portion (numerator) may not change at the time of the 
reconciliation application process, the denominator of the payment 
calculation may change as a result of changes in FTE counts reported by 
other hospitals.
    As provided by statute, a hospital may request a hearing on the 
Secretary's payment determination by the Provider Reimbursement Review 
Board under section 1878 of the Social Security Act (42 U.S.C. 1395oo), 
implemented by regulations at 42 CFR part 405, subpart R.
    It should also be noted that the reconciliation process proposed 
does not take the place of a separate audit process to which the 
hospitals may be subject. Participating children's hospitals are 
subject to audit (other than OMB Circular 133) to determine whether the 
applicant hospital has complied with applicable laws and regulations in 
its application for funding.
    Example: Assume in FY 2001 the total amount of funding available 
for disbursement to four children's hospitals was $5 million. Based 
upon this funding level and the data reported by hospitals, the 
following CHGME DME payments were calculated using the methodology 
described in the March 1 Federal Register notice.

----------------------------------------------------------------------------------------------------------------
                                   Weighted FTE
            Hospital                  rolling       Wage index    Relative value  Hospital share    DME payment
                                      average                                         of DME
----------------------------------------------------------------------------------------------------------------
Children's Hospital A...........           92.19          0.9310     87.66725079     0.451948742   $2,259,743.71

[[Page 60244]]

 
Children's Hospital B...........           71.50          1.1969     81.50970685     0.420204913    2,101,024.57
Children's Hospital C...........           25.50          0.4621     15.74760405     0.081183221      405,916.11
Children's Hospital D...........            6.50          1.5521      9.05153015     0.046663122      233,315.61
                                 -----------------
      Total Value...............          195.69             N/A     193.9760918             N/A    5,000,000.00
----------------------------------------------------------------------------------------------------------------

    During the reconciliation application process, Children's Hospitals 
B, C and D reported no changes to the resident FTE counts reported in 
their initial applications; however, Children's Hospital ``A'' reported 
a decrease in its resident count of 8.94. In accordance with CHGME 
Payment Program statutes, payments were recalculated based upon the 
changes in resident FTE counts reported by hospitals. Payment variables 
affected by Children's Hospital A's change in the resident FTE count 
reported are bolded in the chart below.

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                                   Weighted FTE
            Hospital                  rolling       Wage index    Relative value  Hospital share    DME payment
                                      average                                         of DME
----------------------------------------------------------------------------------------------------------------
Children's Hospital A...........           83.25          0.9310     79.16583825     0.426828279   $2,134,141.40
Children's Hospital B...........           71.50          1.1969     81.50970685     0.439465414    2,197,327.07
Children's Hospital C...........           25.50          0.4621     15.74760405     0.084904333      424,521.67
Children's Hospital D...........            6.50          1.5521      9.05153015     0.048801972      244,009.86
                                 -----------------
      Sum, where applicable.....          189.19             N/A     185.4746793             N/A    5,000,000.00
----------------------------------------------------------------------------------------------------------------

II. Proposed Methodology for Calculation of Indirect Medical Education 
(IME) Payment

    For the FY 2000, 2001 and 2002 funding cycles, the CHGME Payment 
Program used the Centers for Medicare and Medicaid Services (CMS) 
published wage index (WI) from FY 1999 to calculate the DME and IME 
payment formulas for children's hospitals. The CHGME statute requires 
that the FY 1999 WI be used to calculate DME payments, and the 
Department maintained its use in the IME payment calculations for 
purposes of consistency.
    Beginning with FY 2003, the Department proposes to use the CMS 
published WI from the most recent fiscal year available for calculating 
IME payments. Although this would result in two different WIs being 
used in calculating payments received by children's hospitals, one for 
DME and another for IME, it would allow a calculation of IME that is 
more current, fair and equitable, as it would use the WI currently used 
by CMS in the calculation of IME payments to all Prospective Payment 
System (PPS) hospitals.
    One potential concern in making this decision was the potential 
impact on funding to children's hospitals given the recent changes in 
methodology used to determine the WI. Beginning in FY 2000, the 
derivation of the WI phases out the inclusion of costs associated with 
teaching faculty at a rate of 20% per year--this ``phase out'' will 
continue over 5 years. The WI will tend to be most impacted in those 
areas with high numbers of teaching hospitals.
    The CHGME Payment Program evaluated the resulting changes in the WI 
between FY 1999 and FY 2002 for the children's hospitals participating 
in the program in FY 2002. The analysis indicates that the majority of 
hospitals would experience a change in their WI, either an increase or 
a decrease, of less than five percent, as shown in the table below. 
Given this relatively small change, the Department determined that it 
was reasonable to use the WI from the FY for which payments are being 
made in the calculation of IME payments. In addition, by employing this 
methodology, the CHGME Payment Program would be consistent with current 
Medicare policy regarding use of the WI for calculation of IME 
payments. In the event that the CHGME Payment Program statute is 
amended regarding the use of WI, the program would implement the 
statutorily mandated changes.

------------------------------------------------------------------------
                                                              Number of
Percentage change in area wage index values between FY 1999      and
                        and FY 2002                           children's
                                                              hospitals
------------------------------------------------------------------------
Increase more than 10 percent..............................            2
Increase more than 5 percent and less than 10 percent......            9
Increase or decrease less than 5 percent...................           45
Decrease more than 5 percent and less than 10 percent......            3
Decrease more than 10 percent..............................            0
------------------------------------------------------------------------

    The Department has received inquiries related to the 
appropriateness of using the WI calculated by CMS, derived from PPS 
hospital data, as it is not necessarily well applied to children's 
hospitals. To determine the WI, data are gathered from non-federal, 
short-term, acute care hospitals from Worksheet S-3, Parts II and III 
of the Medicare Cost Report (Form 2552-96). Hospitals provide 
information on wages, employee hours and benefits including details of 
total salaries and the amounts for physicians and non-physicians. They 
must separately report contract and non-contract amounts, as well as 
teaching and non-teaching amounts for physicians and other employees. 
CMS totals the gross allowable wages of PPS-eligible hospitals within a 
defined labor market area and divides them by the total paid hours for 
the area and thereby develops an hourly wage for the area. The WI is 
calculated by dividing this average by the national average hourly 
wage.
    CMS WI calculations currently include data from children's 
hospitals participating in the CHGME Program that file full Medicare 
cost reports. Given these participating hospitals' data already are 
captured in calculating the CMS WI, an independent WI calculation would 
be both administratively and fiscally burdensome. The Department 
considers the CMS derived WI to be the most appropriate tool for 
calculating payments.

III. Proposed Dissemination of CHGME Payment Program Data

    Currently, any requests for program data or application information 
must be submitted to Steven Merrill, Freedom of Information Act (FOIA) 
Officer, Health Resources and Services Administration (HRSA) FOIA 
Office, 5600 Fishers Lane, Room 14-45, Rockville Maryland 20857.

[[Page 60245]]

    The Department proposes that all data related to the CHGME Payment 
Program, including all information submitted in the program 
application, all information used to calculate DME and IME payments, 
and hospital-specific payments, be available to the public upon written 
request to a member of the CHGME Payment Program staff or the HRSA FOIA 
officer.
    This information dissemination policy is similar to the one used by 
the Medicare program to disseminate Medicare cost report (MCR) 
information, 42 CFR 401.135. The MCR information is considered to be 
fully disclosable; that is, its release to the public poses no 
potential harm to the hospital(s) that originally submitted the MCR.
    In addition, the Department proposes that the CHGME Payment Program 
follow the policies regarding fees and charges associated with release 
of information as stated in 45 CFR part 5, subpart D.

Other Applicable Laws, Executive Orders, and Policies

IV. Audit

    In the March 1 Federal Register notice, the Department announced 
that awards under the CHGME Payment Program must be audited under OMB 
Circular A-133. The Department is reconsidering its position with 
respect to this requirement and proposes that this program not be 
considered Federal awards expended under OMB Circular A-133. The only 
compliance requirements the Department needs tested for this program 
are application and reconciliation application reporting. There are no 
other compliance requirements the Department believes need to be tested 
for this program under OMB Circular A-133 Audits. Since the Secretary 
must account for change in the number of residents prior to the close 
of each fiscal year, it is important to assess the accuracy of counts 
per the application prior to year end. The Department will establish a 
process to assess the accuracy of the FTE counts submitted by 
children's hospitals in their application for funds from the CHGME 
Payment Program. The process will be based on the current assessment 
process utilized by CMS in their review of FTE counts included on the 
Medicare cost reports. The process will be implemented by Department 
contractors familiar with both CMS procedures and CHGME Payment Program 
requirements. The Department will publish more details for comment 
about this common assessment process in the Federal Register at a 
future date. The Department believes this approach is more effective, 
as it provides up-front assurance on the mandated reconciliation of FTE 
counts which are the basis for awards. Excluding this program from the 
definition of Federal awards expended under OMB Circular A-133 will 
remove a potential duplication of the auditor testing FTE counts that 
the Department has already verified and in many cases will allow these 
audit resources to be used to test other Federal programs of higher 
risk. The Department proposes to make this change effective for Federal 
fiscal year 2003 awards.

Economic and Regulatory Impact

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when rulemaking is 
necessary, to select regulatory approaches that provide the greatest 
net benefits (including potential economic, environmental, public 
health, safety distributive and equity effects). In addition, under the 
Regulatory Flexibility Act (RFA of 1980), if a rule has a significant 
economic effect on a substantial number of small entities, the 
Secretary must specifically consider the economic effect of a rule on 
small entities and analyze regulatory options that could lessen the 
impact of the rule.
    Executive Order 12866 requires that all regulations reflect 
consideration of alternatives of costs, of benefits, of incentives, of 
equity, and of available information. Regulations must meet certain 
standards, such as avoiding an unnecessary burden. Regulations which 
are ``significant'' because of cost, adverse effects on the economy, 
inconsistency with other agency actions, effects on the budget, or 
novel legal or policy issues, require special analysis.
    The Department has determined that the only burden this action will 
impose on children's hospitals is the resources required to submit an 
application to the CHGME Payment Program. Therefore, in accordance with 
the RFA and the Small Business Regulatory Enforcement Act of 1996, 
which amended the RFA, the Secretary certifies that this action will 
have a significant impact on a substantial number of small entities in 
that this action will provide significant funding to eligible 
children's hospitals. However, since this action will not impose a 
significant burden on a substantial number of small entities, we have 
not examined any alternatives for reducing the burden on children's 
hospitals. The Secretary has also determined that this action does not 
meet criteria for a major rule as defined by Executive Order 12866 and 
would have no major effect on the economy of Federal expenditures.
    We have determined that the proposed rule is not a ``major rule'' 
within the meaning of the statute providing for Congressional Review of 
Agency Rulemaking, 5 U.S.C. 801.
    Similarly, the proposed rule will not have effects on State, local 
and tribal governments and on the private sector such as to require 
consultation under the Unfunded Mandates Reform Act of 1995.
    Further, Executive Order 13132 establishes certain requirements 
that an agency must meet when it promulgates a rule that imposes 
substantial direct compliance costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. We have 
reviewed this action under the threshold criteria of Executive Order 
13132, Federalism, and, therefore, have determined that this action 
would not have substantial direct effects on the rights, roles, and 
responsibilities of States.

Paperwork Reduction Act of 1995

    In accordance with section 3507(a) of the Paperwork Reduction Act 
(PRA) of 1995, the Department is required to solicit public comments, 
and receive final Office of Management and Budget (OMB) approval, on 
collections of information. As indicated, in order to implement the 
CHGME Payment Program, certain information is required as set forth in 
this notice in order to determine eligibility for payment and amount of 
payment. In accordance with the PRA, we have received final OMB 
approval on the collection of information for the reconciliation 
procedures in the FY02 cycle (OMB No. 0915-0247).
    Collection of Information: The Children's Hospitals Graduate 
Medical Education Payment Program.
    Description: Data is collected on the number of full-time 
equivalent residents in applicant children's hospital training programs 
to determine the amount of direct and indirect medical education 
payments to participating children's hospitals. Indirect medical 
education payments will also be derived from a formula that requires 
the reporting of discharges, beds, and case mix index information from 
participating children's hospitals. Hospitals will be requested to 
submit such information in an annual application. Hospitals will also 
be requested to submit data on the number of full-time equivalent 
residents a second time during the fiscal year to participate in the 
reconciliation payment process.
    Description of Respondents: Children's hospitals operating approved

[[Page 60246]]

graduate medical residency training programs.
    Estimated Annual Reporting: The estimated average annual reporting 
for this data collection is approximately 150 hours per hospital. The 
estimated annual burden is as follows:

----------------------------------------------------------------------------------------------------------------
                                                    Number of     Responses per     Hours per      Total burden
                      Form                         respondents     respondent        response          hours
----------------------------------------------------------------------------------------------------------------
HRSA-99-1......................................              54               1             99.9           5,395
HRSA 99-1 (Reconciliation of FTE counts).......              54               1              8               432
HRSA 99-2......................................              54               1             14               756
HRSA-99-4......................................              54               1             28             1,512
                                                -----------------
      Total....................................              54  ..............  ...............            8095
----------------------------------------------------------------------------------------------------------------

National Health Objectives for the Year 2010

    The Public Health Service is committed to achieving the health 
promotion and disease prevention objectives of Healthy People 2000, and 
its successor, Healthy People 2010. These are Department-led efforts to 
set priorities for national attention. The CHGME Payment Program is 
related to the priority area 1 (Access to Quality Health Services) in 
Healthy People 2010, which is available online at http://www.health.gov/healthypeople.

Education and Service Linkage

    As part of its long-range planning, HRSA will be targeting its 
efforts to strengthening linkages between Department education programs 
and programs which provide comprehensive primary care services to the 
underserved.

Smoke-Free Workplace

    The Department strongly encourages all award recipients to provide 
a smoke-free workplace and promote abstinence from all tobacco 
products, and Public Law 103-227, the Pro-Children Act of 1994, 
prohibits smoking in certain facilities that receive Federal funds in 
which education, library, day care, health care, and early childhood 
development services are provided to children.
    This program is not subject to the Public Health Systems Reporting 
Requirements.

    Dated: April 17, 2002.
Elizabeth M. Duke,
Administrator, Health Resources and Services Administration.
    Dated: June 5, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-24311 Filed 9-24-02; 8:45 am]
BILLING CODE 4165-15-P