[Federal Register Volume 68, Number 16 (Friday, January 24, 2003)]
[Rules and Regulations]
[Pages 3401-3404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1577]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AK08


Payment or Reimbursement for Emergency Treatment Furnished at 
Non-VA Facilities

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document affirms amendments to VA's medical regulations 
establishing provisions for payment or reimbursement for certain non-VA 
emergency services furnished to veterans for nonservice-connected 
conditions. Those amendments were made by an interim final rule and 
were necessary to implement provisions of ``The Veterans Millennium 
Health Care and Benefits Act.'' Based on comments received from the 
public in response to the interim final rule, some changes are added 
for purposes of clarity.

DATES: Effective Date: March 25, 2003.

FOR FURTHER INFORMATION CONTACT: Roscoe Butler, Chief, Policy & 
Operations, Health Administration Service (10C3), Veterans Health 
Administration, Department of Veterans Affairs, 810 Vermont Avenue, 
NW., Washington, DC 20420, (202) 273-8302. (This is not a toll-free 
number.)

SUPPLEMENTARY INFORMATION: An interim final rule amending VA's medical 
regulations at 38 CFR 17.1000-1008 was published in the Federal 
Register on July 12, 2001. These amendments implemented the provisions 
of section 111 of Public Law 106-117, The Veterans Millennium Health 
Care and Benefits Act. These statutory provisions, which are set forth 
at 38 U.S.C. 1725, authorize VA to establish provisions regarding 
payment of or reimbursement for the reasonable value of non-VA 
emergency services provided for nonservice-connected conditions of 
certain veterans who have no medical insurance and no other recourse 
for payment.
    We provided a 60-day comment period that ended September 10, 2001 
for comments on the interim final rule, including comments on the 
information collection provisions (except for the emergency information 
collection approval provisions which had a deadline for comments of 
July 19, 2001). We received no comments as to the emergency approval. 
Nevertheless, we did receive comments on the interim final rule and on 
the information collection provisions.

[[Page 3402]]

Conditions for Reimbursement or Payment for Emergency Services

    One commenter requested clarification regarding when a facility 
will be considered to have held itself out as providing emergency care 
pursuant to Sec.  17.1002(a). They believe that this language is 
unclear as currently written. No changes are made based on this 
comment. We believe that the current language is sufficiently 
descriptive to identify appropriate facilities that provide emergency 
services to the public without being unduly restrictive, especially in 
regard to facilities located in rural areas.
    This commenter further stated agreement that veterans should be 
encouraged to seek care at the closest emergency department, regardless 
of whether it is a VA or other Federal facility, when they believe this 
is necessary. The commenter further stated that VA should also be aware 
that state and local Emergency Medical Services (EMS) regulations or 
ordinances may require that a patient always be taken to the closest 
emergency department, regardless of his or her status as a veteran. In 
such cases, they indicated that Sec.  17.1002 (c) should be met. We 
concur with the comment, but no changes are made since, in our opinion, 
Sec.  17.1002 (c) states that proposition and reasonably permits that 
interpretation under those facts.
    Another commenter suggested that the inclusion of the parenthetical 
information in Sec.  17.1002(d) may be redundant and therefore 
unnecessary. No change is made based on this comment. In our opinion, 
Sec.  17.1002(d) appropriately interprets the legislative authority.
    Another commenter suggested that VA clarify in Sec.  17.1002(d) 
that the determination of a safe transfer is to be made solely by the 
attending emergency care physician provider. No change to Sec.  17.1002 
is made based on this comment. Section 17.1002(d) is concerned with 
review of claims for payment, not with clinical determinations 
concerning transfer of patients. Moreover, Sec.  17.1006 already 
identifies the appropriate VA clinical officials who are responsible 
for making all needed medical determinations in connection with VA's 
review of a claim for reimbursement or payment of the costs of non-VA 
emergency treatment rendered to a veteran.
    This commenter also suggested that VA clarify that payment or 
reimbursement may be made in situations where the veteran is discharged 
(as opposed to transfer). The commenter is concerned that Sec.  
17.1002(d) could be interpreted to preclude payment or reimbursement 
where the veteran was discharged after receiving emergency treatment. 
We agree and have incorporated that term as appropriate.
    One commenter suggested that VA remove the 24-month requirement in 
Sec.  17.1002(e) because otherwise VA may process numerous claims which 
will have to be denied due to the providers' inability to determine 
whether the veterans had received care during that time-period. Based 
on the comment, we believe modifying the certification requirement in 
Sec.  17.1004(b) to exclude confirmation of enrollment status and 
receipt of VA care within the previous 24 months preceding the 
furnishing of the emergency care will clarify that the onus is not on 
the provider but, rather, on VA to certify this information. We believe 
this satisfies the commenter's concern.

Delegations of Authority

    One commenter agrees that VA's physicians must make all clinical 
determinations required for purposes of Sec.  17.1002. However, the 
commenter advises VA to instruct its physicians to apply a prudent lay 
person standard, not the higher standard of a medical professional, 
when making determinations under Sec.  17.1002(b) and (c). No changes 
are made based on this comment. We believe the existing regulation 
adequately provides that the prudent lay person standard applies to 
both the initial evaluation and treatment of the emergent medical 
condition.

48-Hour Notice

    One commenter stated that the 48-hour notice provision was too 
broad and should be amended to apply only to patients who are admitted 
to a facility for inpatient care. We concur and have changed that 
provision accordingly.

Claims

    One commenter believes that the false claims notice in Sec.  
17.1004(b) should be eliminated since the current HCFA 1500 form 
includes a similar false claims notice. While we agree that the 
additional certification would not be necessary when the HCFA 1500 form 
is submitted, the rule allows for claims to be submitted on other 
standard medical billing forms, such as the UB92 form. Consequently, we 
have amended the rule to require the additional certification only when 
the form used does not contain a similar false claims notice.
    Another commenter stated that requiring a separate written 
certification would preclude filing claims electronically. This 
commenter suggests that provisions be made to accept claims centrally 
and electronically to limit claims filing and processing costs. No 
changes are made based on this comment. VA is currently exploring 
centralizing the payment process and utilizing industry standards, such 
as electronic claims processing, fraud detection, and claims scrubbing.
    One commenter states that VA's regulations provide for detailed 
timeframes for filing claims, but that there are no corresponding 
provisions establishing prompt payment by VA to claimants. No changes 
are made based on this comment. VA is studying the feasibility of 
centralizing the payment process, which would take into account prompt 
payment requirements.
    One commenter indicated that filing a claim within the time periods 
of Sec.  17.1004(d) is unrealistic. In support of his position, the 
commenter explains that in many emergency conditions the patient is 
unable to communicate coverage information to the provider when 
presenting for emergency care services. The commenter therefore 
recommends adding a provision to Sec.  17.1004(d) to allow for claims 
to be submitted within 90-days after the date the veteran provided 
evidence to the facility/provider of emergency treatment of the 
veteran's eligibility for coverage under this rule.
    No changes are made based on this comment. Adding such a provision 
would be at cross-purposes with this rule, which was designed to help 
ensure that claims are decided in a reasonable period of time. We 
believe that the rule provides ample time for the veteran, the 
veteran's family, or the veteran's legal representative to provide the 
required information, as the 90-day periods do not generally begin 
until after seminal events, e.g., the veteran's discharge or death, by 
which time the veteran, the veteran's family, or the veteran's legal 
representative has been made aware of the veteran's personal liability 
for the non-VA emergency medical treatment rendered and the need to 
gather the veteran's insurance and other payment information.

Payment Limitations

    Several commenters stated that Sec.  17.1005(b) provides that 
reimburse-ment for payment for emergency treatment may be made only for 
the period from the beginning of the treatment until such time as the 
veteran could be transferred safely to a VA facility or other federal 
facility. They asked that we modify this statement by adding ``initial 
evaluation and'' before ``treatment.'' We concur with these

[[Page 3403]]

comments and have changed that provision accordingly.
    Another commenter suggested that VA provide payment for emergency 
treatment sought by veterans under the prudent layperson standard in 
Sec.  17.1002(b) from the beginning of treatment (including the 
evaluation) until the attending emergency physician provider determines 
the veteran is stabilized and may be safely transferred to a VA 
facility, other Federal facility, or discharged. No change to Sec.  
17.1002 is made based on this comment. Section 17.1006 already 
identifies the appropriate VA clinical officials who are responsible 
for making all needed medical determinations in connection with VA's 
review of a claim for reimbursement or payment for the costs of non-VA 
emergency treatment rendered to a veteran.
    Further, this commenter believes that ``emergency treatment'' 
should be clarified to include ``evaluation'' of the condition. No 
change is made based on this comment. This is covered by the prudent 
layperson standard.
    Another commenter strongly believes that VA should periodically re-
examine the reimbursement rate under Sec.  17.1005(a). That provision 
currently provides that VA will pay the lesser of the amount for which 
the veteran is personally liable or 70% of the amount under the 
applicable Medicare fee schedule. No change is made based on this 
comment. Medicare rates are adjusted annually. Consequently, VA's 70% 
rule will effectively reflect annual adjustments made to applicable 
Medicare rates.

Emergency Transportation

    One commenter recommended that VA pay for emergency transportation 
services in cases where a ``prudent lay person'' would reasonably 
expect that the absence of such transport would result in placing the 
health of such individual in serious jeopardy. In the commenter's view, 
it would be unjust to hold the veteran liable for the cost of emergency 
transportation if they erroneously but reasonably believed those 
services were needed. No change is made based on this comment, which we 
interpret as essentially seeking to delete the limitations in Sec.  
17.1003. A claim for reimbursement for payment of emergency transport 
services under this section must, similar to other emergency medical 
services which are the subject of a claim under this rule, meet all the 
conditions of 38 U.S.C. 1725 to be reimbursable or payable at VA 
expense. We therefore do not make the recommended changes as the rule 
is consistent with statutory authority. We also note that because 
emergency transportation is subject to the requirements of 38 U.S.C. 
1725, this section already incorporates a prudent lay person standard.

Paperwork Reduction Act

    OMB has approved the information collections in Sec. Sec.  17.004, 
17.1007, and 17.1008 under control number 2900-0620. VA is not 
authorized to impose a penalty on persons for failure to comply with 
information collection requirements which do not display a current OMB 
control number, if required.

Compliance With the Congressional Review Act and E.O. 12866--Cost-
Benefit Analysis

    This rule is necessary to implement the provisions of section 111 
of Public Law 106-117, The Veterans Millennium Health Care and Benefits 
Act. These provisions, which are set forth at 38 U.S.C. 1725, authorize 
VA to establish a mechanism for payment of or reimbursement for the 
reasonable value of non-VA emergency services provided for nonservice-
connected conditions of certain veterans who have no medical insurance 
and no other recourse for payment. This rule would directly impact 
these veterans positively by avoiding full recourse or payment 
responsibility for medical care and resulting potential debt collection 
repercussions. This rule implements a detailed statutory mandate, and 
we found no potentially effective and reasonably feasible alternatives.
    We estimate that the five-year cost of this rule from appropriated 
funds would be $2.1 billion in benefits costs and $21 million in 
government operating expenses. Since it is likely that the adoption of 
the rule may have an annual effect on the economy of $100 million or 
more, the Office of Management and Budget has designated this rule as a 
major rule under the Congressional Review Act, 5 U.S.C. 802, and an 
economically significant regulatory action under Executive Order 12866, 
Regulatory Planning and Review. The following information is provided 
pursuant to the Congressional Review Act and Executive Order 12866.

I. Benefits Costs

    The estimated cost for implementation of the emergency care 
provisions of the Millennium Act are based on enrollment projections 
developed by a private actuarial firm and contained in the FY 2001 
Enrollment Level Decision Analysis. This baseline population was 
adjusted, using a survey of enrollees and existing enrollment 
databases, to calculate the projected number of veterans who had no 
private or public insurance and who had used VA care within the 
previous 24 months. These adjustments reflect the criteria contained in 
the Millennium Act.
    Private sector ER-related health care utilization was adjusted to 
reflect veteran enrollee demographics and relative morbidity, as well 
as uninsured enrollee reliance on the VA health care system. These 
utilization estimates, along with Medicare allowable charge levels, 
were applied to the estimated 990,000 veteran enrollees affected by the 
emergency care provisions. This resulted in projected estimates for 
emergency room visits ($93,480,145), ambulance use ($34,108,803), and 
ER-related inpatient care ($468,221,072). The total of $595,810,019 was 
then multiplied by the 70 percent reimbursement rate VA will use to pay 
emergency care providers. This comes to $417,067,014.
    This total, however, reflects full implementation of the emergency 
care provisions. VA believes that it will take time before both 
providers and eligible veterans are aware of these new benefits and 
begin to submit acceptable bills to VA for reimbursement. Current 
experience shows that without widespread dissemination of information, 
there is limited use of these benefits. VA believes that with the 
publication of final regulations the submission of claims will increase 
significantly and could reach 50 percent of the full implementation 
costs in the first full year after the rule is in effect. Only 
experience will demonstrate the real demand for this new benefit.

II. Administrative Costs

    The administrative workload caused by this rule is expected to be 
241,457 claims filed in 2001. Administrative workloads assume that not 
all claims would be granted; it is probable that non-VA related claims 
will be received from veterans who are not eligible. Medical Care costs 
are computed on the average cost of a GS4/5 @ $12/hour x 30 minutes x 
241,457 claims/60 which equals $1,448,742.00. In addition, the clinical 
review costs are estimated at $46/hour x 15 minutes x 241,457 claims/60 
which equals $2,776,755.00 for total Medical Care costs of $4,225,497.

OMB Review

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

[[Page 3404]]

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule would not have 
a significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This rule would apply only to an extremely small amount of the 
business of a hospital or health care provider. Otherwise, the rule 
would only apply to individuals. Accordingly, pursuant to 5 U.S.C. 
605(b), this rule is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Unfunded Mandates Reform Act

    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.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this rule 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 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 recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Approved: October 11, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    Accordingly, the interim final rule amending 38 CFR part 17 which 
was published at 66 FR 36467 on July 12, 2001 is adopted as a final 
rule with the following changes:

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.

Sec.  17.1000  [Amended]

    2. The Note following Sec.  17.1000 is amended by removing 
``Health'' and adding, in its place, ``In cases where a patient is 
admitted for inpatient care, health''; and removing ``the veteran 
begins receiving'' and adding, in its place, ``admission for''.


Sec.  17.1002  [Amended]

    3. In Sec.  17.1002, paragraph (d) is amended by removing 
``safely'' and adding, in its place, ``safely discharged or''.


Sec.  17.1004  [Amended]

    4. In Sec.  17.1004, paragraph (b) is amended by removing ``1500). 
The'' and adding, in its place, ``1500). Where the form used does not 
contain a false claims notice, the''; and by removing ``and 17.1003.'' 
and adding, in its place, ``(except for paragraph (e)) and 17.1003.''


Sec.  17.1005  [Amended]

    5. In Sec.  17.1005, paragraph (b) is amended by removing 
``beginning of the'' and adding, in its place, ``beginning of the 
initial evaluation''; and by removing, ``transferred safely'', and 
adding, in its place, ``safely discharged or transferred''.

[FR Doc. 03-1577 Filed 1-23-03; 8:45 am]
BILLING CODE 8320-01-P