Agricultural Marketing Service
Grain Inspection, Packers and Stockyards Administration
Engineers Corps
National Foundation on the Arts and the Humanities
National Oceanic and Atmospheric Administration
Engineers Corps
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Children and Families Administration
Food and Drug Administration
Coast Guard
Fish and Wildlife Service
National Park Service
Reclamation Bureau
Employment and Training Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
National Highway Traffic Safety Administration
Surface Transportation Board
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.
Nuclear Regulatory Commission.
Direct final rule.
The Nuclear Regulatory Commission (NRC) is amending its regulations revising the NAC International, Inc., NAC-UMS Universal Storage System listing within the “List of approved spent fuel storage casks” to include Amendment No. 4 to Certificate of Compliance (CoC) Number 1015. Amendment No. 4 to the NAC-UMS CoC will modify the cask design by replacing the specific term “zircaloy” with the more generic term “zirconium alloy”; revising the definitions of “operable” and “site specific fuel”; revising vacuum drying pressure and time limits; revising short-term temperature limits and completion times for the heat removal system; clarifying the surface dose rate surveillance; adding a dissolved boron concentration option; deleting a redundant boron concentration administrative control; adding an alternate site-specific design basis earthquake analysis; and incorporating editorial and administrative changes.
The final rule is effective October 11, 2005, unless significant adverse comments are received by August 24, 2005. A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. If the rule is withdrawn, timely notice will be published in the
You may submit comments by any one of the following methods. Please include the following number (RIN 3150-AH75) in the subject line of your comments. Comments on rulemakings submitted in writing or in electronic form will be made available for public inspection. Because your comments will not be edited to remove any identifying or contact information, the NRC cautions you against including personal information such as social security numbers and birth dates in your submission.
Mail comments to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, ATTN: Rulemakings and Adjudications Staff.
E-mail comments to:
Hand deliver comments to: 11555 Rockville Pike, Rockville, Maryland 20852, between 7:30 a.m. and 4:15 p.m. Federal workdays (telephone (301) 415-1966).
Fax comments to: Secretary, U.S. Nuclear Regulatory Commission at (301) 415-1101.
Publicly available documents related to this rulemaking may be viewed electronically on the public computers located at the NRC's Public Document Room (PDR), O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland. Selected documents, including comments, can be viewed and downloaded electronically via the NRC rulemaking Web site at
Publicly available documents created or received at the NRC after November 1, 1999, are available electronically at the NRC's Electronic Reading Room at
CoC No. 1015, the revised TS, the underlying SER for Amendment No. 4, and the Environmental Assessment (EA), are available for inspection at the NRC PDR, 11555 Rockville Pike, Rockville, MD. Single copies of these documents may be obtained from Jayne M. McCausland, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6219, e-mail
Jayne M. McCausland, telephone (301) 415-6219, e-mail
Section 218(a) of the Nuclear Waste Policy Act of 1982, as amended (NWPA), requires that “[t]he Secretary [of the Department of Energy (DOE)] shall establish a demonstration program, in cooperation with the private sector, for the dry storage of spent nuclear fuel at civilian nuclear power reactor sites, with the objective of establishing one or more technologies that the [Nuclear Regulatory] Commission may, by rule, approve for use at the sites of civilian nuclear power reactors without, to the maximum extent practicable, the need for additional site-specific approvals by the Commission.” Section 133 of the NWPA states, in part, that “[t]he Commission shall, by rule, establish procedures for the licensing of any technology approved by the Commission under Section 218(a) for use at the site of any civilian nuclear power reactor.”
To implement this mandate, the NRC approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in 10 CFR part 72 entitled, “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July
On August 10, 2004, and as supplemented on December 23, 2004, and February 17, 2005, the certificate holder, NAC International, Inc. (NAC) submitted an application to the NRC to amend CoC No. 1015 to: (1) Replace the specific term “zircaloy” with the more generic term “zirconium alloy”; (2) revise the definitions of “operable” and “site specific fuel”; (3) revise vacuum drying pressure and time limits; (4) revise short-term temperature limits and completion times for the concrete cask heat removal system; (5) clarify the surface dose rate surveillance frequency; (6) add a dissolved boron concentration option; (7) delete a redundant boron concentration administrative control; (8) add an alternate site-specific design basis earthquake analysis for unbounded site conditions; and (9) incorporate editorial and administrative changes. No other changes to the NAC-UMS cask system design were requested in this application. The NRC staff performed a detailed safety evaluation of the proposed CoC amendment request and found that an acceptable safety margin is maintained. In addition, the NRC staff has determined that there continues to be reasonable assurance that public health and safety and the environment will be adequately protected.
This direct final rule revises the NAC-UMS Universal Storage System listing in § 72.214 by adding Amendment No. 4 to CoC No. 1015. The amendment consists of changes to the TS to enhance operations and operational flexibility. The particular TS which are changed are identified in the NRC staff's SER for Amendment No. 4.
The amended NAC-UMS Universal Storage System, when used in accordance with the conditions specified in the CoC, the TS, and NRC regulations, will meet the requirements of part 72; thus, adequate protection of public health and safety will continue to be ensured.
Certificate No. 1015 is revised by adding the effective date of Amendment Number 4.
This rule is limited to the changes contained in Amendment 4 to CoC No. 1015 and does not include other aspects of the NAC-UMS Universal Storage System. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The amendment to the rule will become effective on October 11, 2005. However, if the NRC receives significant adverse comments by August 24, 2005, then the NRC will publish a document that withdraws this action and will address the comments received in response to the proposed amendments published elsewhere in this issue of the
(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:
(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;
(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or
(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.
(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.
(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or TS.
These comments will be addressed in a subsequent final rule. The NRC will not initiate a second comment period on this action.
The National Technology Transfer Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC would revise the NAC-UMS Universal Storage System listed in § 72.214 (List of NRC-approved spent fuel storage cask designs). This action does not constitute the establishment of a standard that establishes generally applicable requirements.
Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the
The Presidential Memorandum dated June 1, 1998, entitled “Plain Language in Government Writing,” directed that the Government's writing be in plain language. The NRC requests comments on this direct final rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the heading
Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The rule would amend the CoC for the NAC-UMS Universal Storage System within the list of approved spent fuel storage casks that power reactor licensees can use to store
This direct final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.
On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in § 72.214. On October 19, 2000 (65 FR 62581), the NRC issued an amendment to part 72 that approved the NAC-UMS Universal Storage System by adding it to the list of NRC-approved cask designs in § 72.214. On August 10, 2004, and as supplemented on December 23, 2004, and February 17, 2005, the certificate holder, NAC, submitted an application to the NRC to amend CoC No. 1015 to: (1) Replace the specific term “zircaloy” with the more generic term “zirconium alloy”; (2) revise the definitions of “operable” and “site specific fuel”; (3) revise vacuum drying pressure and time limits; (4) revise short-term temperature limits and completion times for the concrete cask heat removal system; (5) clarify the surface dose rate surveillance frequency; (6) add a dissolved boron concentration option; (7) delete a redundant boron concentration administrative control; (8) add an alternate site-specific design basis earthquake analysis for unbounded site conditions; and (9) incorporate editorial and administrative changes.
The alternative to this action is to withhold approval of this amended cask system design and issue an exemption to each general license. This alternative would cost both the NRC and the utilities more time and money because each utility would have to pursue an exemption.
Approval of the direct final rule will eliminate this problem and is consistent with previous NRC actions. Further, the direct final rule will have no adverse effect on public health and safety. This direct final rule has no significant identifiable impact or benefit on other Government agencies. Based on this discussion of the benefits and impacts of the alternatives, the NRC concludes that the requirements of the direct final rule are commensurate with the NRC's responsibilities for public health and safety and the common defense and security. No other available alternative is believed to be as satisfactory, and thus, this action is recommended.
In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the NRC certifies that this rule will not, if issued, have a significant economic impact on a substantial number of small entities. This direct final rule affects only the licensing and operation of nuclear power plants, independent spent fuel storage facilities, and NAC. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR part 121.
The NRC has determined that the backfit rule (10 CFR 50.109 or 10 CFR 72.62) does not apply to this direct final rule because this amendment does not involve any provisions that would impose backfits as defined. Therefore, a backfit analysis is not required.
In accordance with the Congressional Review Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Management and Budget.
Administrative practice and procedure, Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Penalties, Radiation protection, Reporting and recordkeeping requirements, Security measures, Spent fuel, Whistleblowing.
Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L. 91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135, 137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 10155, 10157, 10161, 10168); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note).
Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230
Certificate Number: 1015.
Initial Certificate Effective Date: November 20, 2000.
Amendment Number 1 Effective Date: February 20, 2001.
Amendment Number 2 Effective Date: December 31, 2001.
Amendment Number 3 Effective Date: March 31, 2004.
Amendment Number 4 Effective Date: October 11, 2005.
SAR Submitted by: NAC International, Inc.
SAR Title: Final Safety Analysis Report for the NAC-UMS Universal Storage System.
Docket Number: 72-1015.
Certificate Expiration Date: November 20, 2020.
Model Number: NAC-UMS.
For the Nuclear Regulatory Commission.
Railroad Retirement Board.
Final rule.
The Railroad Retirement Board (Board) amends its regulations to explain the effective date of consolidated employer records that result in the issuance of a joint contribution rate under the experience rating provisions of section 8 of the Railroad Unemployment Insurance Act. In addition, as a result of an agency reorganization, there has been a change in the title of the Board employee to whom requests for consolidation should be addressed. The Board amends its regulations to reflect this change.
Effective July 25, 2005.
Marguerite P. Dadabo, Assistant General Counsel, (312) 751-4945, TDD (312) 751-4701.
Effective January 1, 1990, the manner by which payroll taxes on railroad employers are determined moved from a universal tax rate to a tax rate based upon a formula which takes into consideration the amount of benefits that have been paid under the Railroad Unemployment Insurance Act (RUIA) to an employer's employees. This new method of computing employers' contribution rates is commonly referred to as experience rating. Part 345 of the Board's regulations deals with the manner by which experience rating contribution rates are determined and how employers report such contributions. Various business transactions throughout the year can impact employers' contribution rates. The existence of more than one rate for an employer during a calendar year creates a significant administrative burden for the Board, due to the design of the experience rating database. Therefore, the Board has adopted a policy of updating contribution rates to reflect relevant business transactions effective with the calendar year following the Board's determination related to the transaction.
In accordance with an agency reorganization, the revision to § 345.202 amends the title of the Board official to whom requests for the consolidation of employer records should be addressed from the Director of Unemployment and Sickness Insurance to the Director of Assessment and Training.
The revision to § 345.203 notifies employers of the date upon which an individual employer record will be updated to reflect a merger or combination of two or more employers. Where the entity surviving the merger is not a new employer, the individual employer record will not be updated to reflect the combined record until the calendar year following the year of the Board's determination. Where the entity surviving the merger becomes an employer under part 202 of subchapter B by virtue of the merger, the individual employer record shall consist of the combined record effective with its employer effective date.
The revision to § 345.204 notifies employers of the date upon which an individual employer record will be updated to reflect the acquisition of assets from another employer. Where the employer acquiring the assets is not a new employer under part 202 of subchapter B, the individual employer record for that employer will take into consideration the acquired assets effective with the calendar year following the year of the Board's determination. Otherwise, the individual employer record for the entity that becomes an employer by virtue of the acquisition will take the acquired assets into consideration as of the employer effective date.
In order to comply with the President's June 1, 1998 memorandum directing the use of plain language for all proposed and final rulemaking, the regulatory paragraphs introduced by the above rule changes have been written in plain language.
The amendments to this part do not impose additional information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995.
Prior to publication of this final rule, the Board submitted the rule to the Office of Management and Budget for review pursuant to Executive Order 12866. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for rules that constitute significant regulatory action, including rules that have an economic effect of $100 million or more annually. This final rule is not a major rule in terms of the aggregate costs involved. Specifically, we have determined that this final rule is not a major rule with economically significant effects because it would not result in increases in total expenditures of $100 million or more per year.
The amendments made by this final rule are not significant. The amendments explain the effective date when an employer's individual employer records under the Railroad Unemployment Insurance Act (RUIA) will be updated to reflect various business transactions for purposes of establishing the employer's contribution rate under the experience rating provisions of section 8 of the RUIA. The
Both the Regulatory Flexibility Act and the Unfunded Mandates Act of 1995 define “agency” by referencing the definition of “agency” contained in 5 U.S.C. 551(1). Section 551(1)(E) excludes from the term “agency” an agency that is composed of representatives of the parties or of representatives of organizations of the parties to the disputes determined by them. The Railroad Retirement Board falls within this exclusion (45 U.S.C. 231f(a)) and is therefore exempt from the Regulatory Flexibility Act and the Unfunded Mandates Act.
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 final rule under the threshold criteria of Executive Order 13132 and have determined that it would not have a substantial direct effect on the rights, roles, and responsibilities of States or local governments.
The Board published the proposed rule on June 14, 2004 (69 FR 32927), and invited comments by August 13, 2004. No comments were received. Accordingly, the proposed rule is being published as a final rule without change.
Electronic filing, Paperwork elimination, Railroad unemployment insurance, Reporting and recordkeeping requirements.
45 U.S.C. 362(l).
(a)
(b)
In the event of a merger or combination of two or more employers, or an employer and non-employer, the individual employer record of the employer surviving the merger (or any person that becomes an employer as the result of the merger or combination) shall consist of the combination of the individual employer records of the entities participating in the merger. Where the person surviving the merger is an existing employer under part 202 of this chapter, the individual employer record for the surviving employer will not be updated to reflect the combined record until the calendar year following the year of the Board's determination. Where the entity surviving the merger becomes an employer under part 202 of this chapter by virtue of the merger, the individual employer record shall consist of the combined record effective with its employer effective date.
(a) In the event property of an employer is sold or transferred to another employer (or to a person that becomes an employer as the result of the sale or transfer) or is partitioned among two or more employers or persons, the individual employer record of such employer shall be prorated among the employer or employers that receive the property (including any person that becomes an employer by reason of such transaction or partition), in accordance with any agreement among the respective parties (including an agreement that there shall be no proration of the employer record). Such agreement shall be subject to the approval of the Board. Where the employer acquiring the assets is an existing employer under part 202 of this chapter, that employer's individual employer record will take into consideration the acquired assets no earlier than the calendar year following the year of the Board's determination, unless an agreement among the respective parties provides otherwise. Where the employer acquiring the assets becomes an employer under part 202 of this chapter by virtue of such acquisition, the individual employer record for such employer shall consider the acquired assets as of such person's employer effective date, subject to any agreement between the respective parties and the provisions of paragraph (b) of this section.
By authority of the Board.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone around a fireworks launch site while it launches fireworks. The safety zone includes all waters within 500 yards in any direction of the fireworks launch site located at Sisters Creek Marina, Jacksonville, Florida. The rule prohibits entry into the safety zone without the permission of the Captain of the Port (COTP) Jacksonville or his designated representative. The rule is needed to protect participants, vendors, and spectators from the hazards associated with the launching of fireworks.
This rule is effective from 9 p.m. on July 23, 2005, until 10 p.m. on July 23, 2005.
Documents indicated in this preamble as being available in the docket are part of docket [COTP Jacksonville 05-092] and are available for inspection or copying at Coast Guard Marine Safety Office Jacksonville, 7820 Arlington Expressway, Suite 400, Jacksonville, Florida, 32211, between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays.
Lieutenant Jamie Bigbie at Coast Guard Marine Safety Office Jacksonville, FL, telephone: (904) 232-2640, ext. 105.
We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM. Publishing a NPRM, which would incorporate a comment period before a final rule could be issued and delay the rule's effective date, is contrary to public interest because immediate action is necessary to protect the public and waters of the United States from the dangers associated with the launching of fireworks.
For the same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
This rule is needed to protect persons and spectator craft in the vicinity of the fireworks presentation from the hazards associated with the storage, preparation and launching of fireworks. Anchoring, mooring, or transiting within this zone is prohibited, unless authorized by the Captain of the Port, Jacksonville, FL or his designated representative.
The temporary safety zone encompasses all waters within 500 yards in any direction around the fireworks launch site during the storage, preparation and launching of fireworks. During the fireworks show, the launch site will be located at Sisters Creek Marina.
This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under the order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS) because these regulations will only be in effect for a short period of time and the impact on navigation is expected to be minimal.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. 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 rule will not have a significant economic impact upon a substantial number of small entities because the regulations will only be in effect for a short period of time and the impact on routine navigation is expected to be minimal.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. If the rule will affect your small business, organization, or government jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed under
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule calls for no 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 State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
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 my result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation because this is a safety zone. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone during preconstruction for the Tacoma Narrows Bridge construction project. The Coast Guard is taking this action to safeguard the public from hazards associated with the transport and construction of the cable wires and cable bands being used to construct the catwalk for the new bridge. Entry into this zone is prohibited unless authorized by the Captain of the Port, Puget Sound or his designated representatives.
This rule is effective daily 5 a.m. to 9 p.m., Pacific Daylight Time, from July 19 to July 30, 2005.
Documents indicated in this preamble as being available in the docket are part of docket CGD13-05-028 and are available for inspection or copying at the Waterways Management Division, Coast Guard Sector Seattle, 1519 Alaskan Way South, Seattle, WA, 98134, between 8 a.m. and 3 p.m., Monday through Friday, except Federal holidays.
Lieutenant Junior Grade Jessica Hagen, Waterways Management Division, Coast Guard Sector Seattle, at (206) 217-6958.
Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) has not been published for this regulation and good cause exists for making it effective without publication of an NPRM in the
The Coast Guard is adopting a temporary safety zone regulation on the waters of Tacoma Narrows, Washington, for the Tacoma Narrows Bridge construction project. The Coast Guard has determined it is necessary to limit access to 250 yards on either side of a line from the approximate position of 47°16′23″ N, 122°33′25″ W, the Gig Harbor shoreline in the vicinity of Point Evans, to 47°16′15″ N, 122°33′15″ W in order to safeguard people and property from hazards associated with this project. These safety hazards include, but are not limited to, hazards to navigation, collisions with the cables,
This temporary rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Homeland Security (DHS).
We expect the economic impact of this temporary rule to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DHS is unnecessary. This expectation is based on the fact that the regulated area established by this regulation would encompass a small area that should not impact commercial or recreational traffic. For the above reasons, the Coast Guard does not anticipate any significant economic impact.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. 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.
This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit this portion of Tacoma Narrows during the time this regulation is in effect. The zone will not have a significant economic impact on a substantial number of small entities due to its short duration and small area. Because the impacts of this rule are expected to be so minimal, the Coast Guard certifies under 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601-612) that this temporary rule will not have a significant economic impact on a substantial number of small entities.
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 rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the (
This temporary rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this temporary rule under Executive Order 13132 and have determined that this rule does not have implications for federalism under that Order.
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 State, local, or tribal government, in the aggregate, or the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This temporary rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This temporary rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian tribal governments, because it does 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.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule does not use technical standards. Therefore, we did not
We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation.
Harbors, Marine Safety, Navigation (water), Reporting and Recordkeeping Requirements, Security Measures, Waterways.
33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is temporarily suspending a portion of the regulation relating to security zones around Designated Vessels within the Captain of the Port New York Zone, and adding a temporary section to allow the Captain of the Port to protect Mass Transit Ferries and other vessels that are certificated to carry 150 or more passengers as Designated Vessels. This action is necessary to safeguard these vessels from sabotage, subversive acts, or other threats. This rule prohibits entry into or movement within these security zones without permission from the Captain of the Port of New York.
This rule is effective from July 8, 2005 until January 8, 2006.
Documents as indicated in this preamble are available for inspection and copying at Coast Guard Sector New York, 212 Coast Guard Drive, room 301, Staten Island, New York 10305, between 8 a.m. and 3 p.m., Monday through Friday, except Federal holidays.
Commander Brian Willis, Waterways Management Division, Coast Guard Sector New York, at (718) 354-4220.
Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) was not published for this regulation, and good cause exists for making it effective less than 30 days after
On July 7, 2005 the mass transit system in London, UK was devastated by simultaneous explosive attacks resulting in numerous fatalities and injuries. These attacks illustrate the potential vulnerability of mass transit systems and other means of passenger conveyance within the United States, including those maritime transit systems such as Mass Transit Ferries and other vessels certificated to carry 150 passengers or more. These acts were unforeseen and accomplished without warning. These security zones are needed to protect and safeguard the public, vessels, and vessel crews from consequences of attacks of similar nature.
The Coast Guard is temporarily suspending the regulations contained in 33 CFR 165.160 relating to Designated Vessels found in paragraphs (a)(2) and (b), replacing them with a temporary regulation containing a revised definition of “Designated Vessel.” The temporary section will decrease the number of passengers a vessel must be certificated to carry to qualify for Designated Vessel status from 500 to 150 and increases the types of vessels that the Captain of the Port (COTP) may effectuate in the security zone. This will allow the COTP to establish a security zone on all waters within 100 yards of any Mass Transit Ferry or any other passenger vessel certificated to carry 150 or more passengers that operates within the New York Captain of the Port Zone. Requirements from paragraph 165.160(c) will still apply to the temporary rule. All other requirements and stipulations contained in paragraphs (a)(1) and (c) of 33 CFR 165.160 will remain unchanged and in full effect.
This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory
We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. This regulation may have some impact on the public, but these potential impacts will be minimized for the following reasons: the safety and security zones are only effective when the Captain of the Port so directs and, when effective, vessels may, at all times, transit in all areas around the Designated Vessel zones thus having a minimal impact upon navigability of the waterway.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. 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 rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit within 100 yards of a vessel certificated to carry more than 150 passengers.
For the reasons outlined in the Regulatory Evaluation section above, this rule will not have a significant impact on a substantial number of small entities.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under subsection 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 [Pub. L. 104-121], the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Commander Brian Willis, Waterways Management Division, at (718) 354-4220.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule calls for no 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 State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
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 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not concern an environmental risk to health or risk to safety that may disproportionately affect children.
This 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.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This proposed rule fits paragraph 34(g) as it suspends a portion of an existing safety and security zone and adds a temporary safety and security zone.
A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
33 U.S.C. 1226 and 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b) Designated Vessels (DVs). For the purposes of this section,
(c)
(2) All persons and vessels must comply with the Coast Guard Captain of the Port or designated on-scene patrol personnel. On-scene Coast Guard patrol personnel include commissioned, warrant, and petty officers of the Coast Guard on board Coast Guard, Coast Guard Auxiliary, and local, state, and federal law enforcement vessels. Upon being hailed by siren, radio, flashing light or other means from a U.S. Coast Guard vessel or other vessel with on-scene patrol personnel aboard, the operator of the vessel shall proceed as directed.
(3) The Captain of the Port will notify the maritime community of periods during which these zones will be enforced by methods in accordance with 33 CFR 165.7.
(d)
Environmental Protection Agency (EPA).
Direct final rule.
On July 9, 2002, the Indiana Department of Environmental Management (IDEM) submitted a request that EPA approve a revision to its process weight rate rule into the Indiana State Implementation Plan (SIP). The revision clarifies rule applicability, corrects incorrect weights presented in the process weight rate table included in the rule, allows certain sources to demonstrate compliance with the rule by adopting and substituting work standard practices, clarifies the definitions of particulate and particulate matter, and reduces duplicative recordkeeping requirements contained in the rule. EPA is approving the State's request.
This “direct final” rule is effective on September 23, 2005, unless EPA receives adverse written comments by August 24, 2005. If EPA receives adverse comment, it will publish a timely withdrawal of the rule in the
Submit comments, identified by Regional Material in EDocket (RME) ID No. R05-OAR-2004-IN-0001, by one of the following methods: Federal eRulemaking Portal:
Agency Web site:
E-mail:
Fax: (312) 886-5824.
Mail: You may send written comments to: John M. Mooney, Chief, Criteria Pollutant Section, (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.
Hand delivery: Deliver your comments to: John M. Mooney, Chief, Criteria Pollutant Section, (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, 18th floor, Chicago, Illinois 60604.
Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m. excluding Federal holidays.
Christos Panos, Environmental Engineer, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 353-8328;
This action is rulemaking on a revision to the process weight rate rules in the Indiana SIP. The rules establish limitations for particulate emissions from manufacturing processes in Indiana.
1. The Regional Office has established an electronic public rulemaking file available for inspection at RME under ID No. R05-OAR-2004-IN-0001, and a hard copy file which is available for inspection at the Regional Office. The official public file consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public rulemaking file does not include CBI or other information whose disclosure is restricted by statute. The official public rulemaking file is the collection of materials that is available for public viewing at the Air Programs Branch, Air and Radiation Division, EPA Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604. EPA requests that, if at all possible, you contact the person listed in the
2. Electronic Access. You may access this
For public commenters, it is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing at the EPA Regional Office, as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in the official public rulemaking file. The entire printed comment, including the copyrighted material, will be available at the Regional Office for public inspection.
You may submit comments electronically, by mail, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate rulemaking identification number by including the text “Public comment on proposed rulemaking Region 5 Air Docket R05-OAR-2004-IN-0001” in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.
For detailed instructions on submitting public comments and on what to consider as you prepare your comments see the
On July 9, 2002, the State of Indiana submitted a requested revision to the Indiana SIP. These amendments concern Title 326 of the Indiana Administrative Code (326 IAC) 6-3, the State's process weight rate rule. The main purposes of the rule amendments were to:
(1) Clarify rule applicability by narrowing the definition of “process” to manufacturing processes and by expanding the list of exempted sources;
(2) Correct incorrect weights presented in the process weight rate table included in this rule;
(3) Substitute work standard practices for surface coating manufacturing processes instead of demonstrating compliance with the emission factor derived from the process weight rate table;
(4) Clarify the definitions of “particulate” and “particulate matter”; and
(5) Reduce duplicative record keeping requirements.
These changes are discussed in greater detail below.
In section 1(a), the new term “manufacturing processes” has been
This definition change clarifies IDEM's original intent in promulgating the rule. Thus, “manufacturing process” encompasses all of the sources and activities of the former definition of “process.” The State made this change to increase the rule's precision and to distinguish the term “manufacturing process” from the term “process” in 326 IAC 1-2-58. This revision will neither add to nor delete sources that are currently subject to 326 IAC Article 6.
Section 1(b) adds additional manufacturing process exemptions for the following sources: (1) For dip coating, roll coating, flow coating and brush coating processes subject to the requirements of 326 IAC 11-1, (2) for welding using less than 635 pounds of rod or wire per day, (3) for torch cutting using less than 3,400 inches per hour of stock one inch or less in diameter, (4) for noncontact cooling tower systems, (5) for applications of aerosol coating products used to repair minor surface damage and imperfections, (6) for trivial activities as defined in 326 IAC 2-7-1(40),
All but five of these exemptions are for sources whose emissions Indiana considers to be “de minimis,”
Revised Section 1(c) states that Rule 326 IAC 6-3-1 shall not apply if a particulate matter limitation established in a new source permit or other rule is more stringent.
This new section of this rule contains definitions for “aerosol coating products,” “manufacturing process,” “particulate,” “particulate matter” and “surface coating.” These definitions are to be used if there is a conflict between 326 IAC 6-3 and 326 IAC 1-2.
Revised Section 2(a) states that any manufacturing process listed in subsections (b) through (d) shall follow the stated work practices and control technologies. All other manufacturing processes subject to rule 326 IAC 6-3 shall calculate emission limitations according to requirements in subsection(e). Subsection (a) also provides for the calculation of a particulate emission limit based on the following equation: E=8.6P
Revised Section 2(c) provides that catalytic cracking units commencing operation prior to December 6, 1968 and equipped with cyclone separators, electrostatic precipitators or other gas-cleaning systems shall recover 99.97% or more of the circulating catalyst or total gas-borne particulate.
Revised Section 2(d) provides that surface coating, reinforced plastics composites fabricating manufacturing processes and graphic arts manufacturing processes shall be controlled by a dry particulate filter, waterwash, or an equivalent control device subject to: (1) Operation in accordance with manufacturer's specifications; and (2) if overspray is visibly detected at the exhaust or accumulates on the ground, the source shall inspect the control device and either repair it or operate it so that no overspray is visibly detectable. If overspray is detected, the source shall maintain a record of the action taken as a result of the inspection, any repairs of the control device, or change in operations so that overspray is not visibly detected. These records must be maintained for 5 years. The significant change in 2(d) is that the rule acknowledges that if overspray is detected a repair may be unnecessary, where an operating change can eliminate the overspray.
Revised Section 2(d)(3) exempts sources from the requirements of Section 2(d)(2) so long as they operate according to a valid permit issued under 326 IAC 2-7, 326 IAC 2-8 or 326 IAC 2-9.
Revised Section 2(d)(4) exempts surface coating manufacturing processes that use less than five gallons of coating per day, as defined in 326 IAC 1(b)(15) of this rule. If coating application rates increase to greater than five gallons per day, at any time, control devices must be in place. A manufacturing process that is subject to this subsection shall remain subject to it notwithstanding any subsequent decrease in gallons of coating used.
Revised Section 2(e) provides that manufacturing processes, to which control measures listed in subsections (b) through (d) above do not apply, shall calculate allowable emissions utilizing the process weight rate table incorporated in this subsection of the rule. The allowable rate of emission shall be based on the process weight rate for a manufacturing process. When the process weight rate is less than 100 pounds per hour, the allowable rate of emissions is 0.551 pound per hour. When the process weight rate exceeds 200 tons per hour, the allowable emission may exceed that shown in the table, provided the concentration of particulate in the discharge gasses to the atmosphere is less than 0.10 pound per 1,000 pounds of gasses.
EPA has reviewed these rule revisions and determined that incorporating them into the Indiana SIP is appropriate. The changes made to the rules are minor in scope. They clarify rule applicability, correct incorrect weights presented in the process weight rate table included in the rule, allow certain sources to demonstrate compliance with the rule by adopting and substituting work standard practices, clarify the definitions of particulate and particulate matter, and reduce duplicative record keeping requirements contained in the rule.
Indiana did not intend for low-emitting processes to be subject to the original process weight rule. These source do not jeopardize the PM National Ambient Air Quality Standards, nor are they subject to Prevention of Significant Deterioration, New Source Review, or other State permitting requirements. Applying this rule to such small sources would impose unreasonable administrative and compliance burdens on these sources.
For the reasons stated above, EPA approves the incorporation into the Indiana SIP of 326 IAC 6-3-1, 6-3-1.5 and 6-3-2. We are publishing this action without prior proposal because we view this as a noncontroversial
The State of Indiana Air Pollution Control Board (Board) held three public hearings on these rule revisions. Four commenters provided testimony at the first public hearing held on April 12, 2001. Seven commenters provided testimony at the second public hearing held on August 1, 2001. These comments led to revisions of the rule which was then presented to the Board for final adoption at the third public hearing held on February 6, 2002. Although two commenters provided testimony at this hearing, the Board determined that these comments were previously addressed and warranted no further action.
Under Executive Order 12866 (
Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (
This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
This rule also does not have tribal implications because it will 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, as specified by Executive Order 13175 (
This action also does not have federalism implications because it does not have 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, as specified in Executive Order 13132 (
This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.
This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 23, 2005. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
42 U.S.C. 7401
(c) * * *
(160) On July 9, 2002, Indiana submitted revised process weight rate rules as a requested revision to the Indiana State Implementation Plan. The changes clarify rule applicability, correct errors in the process weight rate table, allow sources to substitute work standard practices instead of the process weight rate table. They clarify the definitions of particulate and particulate matter. They also reduce duplicative recordkeeping.
(i) Incorporation by reference.
(A) Indiana Administrative Code Title 326: Air Pollution Control Board, Article 6: Particulate Rules Rule 3: Particulate Emission Limitations for Manufacturing Process. 6-3-1 Applicability, 6-3-1.5 Definitions and 6-3-2 Particulate emission limitations, work practices, and control technologies. Adopted by the Indiana Air Pollution Control Board on February 6, 2002. Filed with the Secretary of State May 13, 2002, effective June 12, 2002.
Environmental Protection Agency.
Final rule.
Environmental Protection Agency (EPA) is granting a petition submitted by Bayer Material Science LLC (Bayer) to exclude (or delist) a certain liquid waste generated by its Baytown, TX plant from the lists of hazardous wastes. This final rule responds to the petition submitted by Bayer to delist K027, K104, K111, and K112 treated effluent generated from the facility's waste water treatment plant.
After careful analysis and use of the Delisting Risk Assessment Software (DRAS) EPA has concluded the petitioned waste is not hazardous waste. This exclusion applies to 18,071,150 cubic yards (5.745 billion gallons) per year of the Outfall 007 Treated Effluent. Accordingly, this final rule excludes the petitioned waste from the requirements of hazardous waste regulations under the Resource Conservation and Recovery Act (RCRA) when discharged in accordance with the facility's TPDES permit.
July 25, 2005.
The public docket for this final rule is located at the Environmental Protection Agency Region 6, 1445 Ross Avenue, Dallas, Texas 75202, and is available for viewing in EPA Freedom of Information Act review room on the 7th floor from 9 a.m. to 4 p.m., Monday through Friday, excluding Federal holidays. Call (214) 665-6444 for appointments. The reference number for this docket is [R6-TXDEL-FY04-BAYER]. The public may copy material from any regulatory docket at no cost for the first 100 pages and at a cost of $0.15 per page for additional copies.
Ben Banipal, Section Chief of the Corrective Action and Waste Minimization Section, Multimedia Planning and Permitting Division (6PD-C), Environmental Protection Agency Region 6, 1445 Ross Avenue, Dallas, Texas 75202.
For technical information concerning this document, contact Michelle Peace, Environmental Protection Agency Region 6, 1445 Ross Avenue, (6PD-C), Dallas, Texas 75202, at (214) 665-7430, or
The information in this section is organized as follows:
After evaluating the petition, EPA proposed, on October 4, 2004 to exclude the waste from the lists of hazardous waste under 40 CFR 261.31 and 261.32 (see 69 FR 59156). EPA is finalizing the decision to grant Bayer's delisting petition to have its Outfall 007 Treated Effluent generated from treating waste waters at the plant subject to certain continued verification and monitoring conditions.
Bayer's petition requests a delisting from the K027, K104, K111, and K112, waste listings under 40 CFR 260.20 and 260.22. Bayer does not believe that the petitioned waste meets the criteria for which EPA listed it. Bayer also believes no additional constituents or factors could cause the waste to be hazardous. EPA's review of this petition included consideration of the original listing criteria and the additional factors required by the Hazardous and Solid Waste Amendments of 1984. See section 3001(f) of RCRA, 42 U.S.C. 6921(f), and 40 CFR 260.22 (d)(1)-(4) (hereinafter all sectional references are to 40 CFR unless otherwise indicated). In making the final delisting determination, EPA evaluated the petitioned waste against the listing criteria and factors cited in § 261.11(a)(2) and (a)(3). Based on this review, EPA agrees with the petitioner that the waste is nonhazardous with respect to the original listing criteria. If EPA had found, based on this review, that the waste remained hazardous based on the factors for which the waste
This exclusion applies to the waste described in the petition only if the requirements described in 40 CFR part 261, appendix IX, table 2 and the conditions contained herein are satisfied.
The treated effluent will continue to be piped and discharged from Bayer's TPDES-permitted Outfall 007 after the delisting is effective. The waste is delisted from its exit from the outfall tank to its point of discharge.
This rule is effective July 25, 2005. The Hazardous and Solid Waste Amendments of 1984 amended Section 3010 of RCRA, 42 U.S.C. 6930(b)(1), allows rules to become effective less than six months after the rule is published when the regulated community does not need the six-month period to come into compliance. That is the case here because this rule reduces, rather than increases, the existing requirements for persons generating hazardous waste. This reduction in existing requirements also provides a basis for making this rule effective immediately, upon publication, under the Administrative Procedure Act, pursuant to 5 U.S.C. 553(d).
Because EPA is issuing this exclusion under the Federal RCRA delisting program, only states subject to Federal RCRA delisting provisions would be affected. This would exclude states which have received authorization from EPA to make their own delisting decisions.
EPA allows states to impose their own non-RCRA regulatory requirements that are more stringent than EPA's, under section 3009 of RCRA, 42 U.S.C. 6929. These more stringent requirements may include a provision that prohibits a Federally issued exclusion from taking effect in the state. Because a dual system (that is, both Federal (RCRA) and State (non-RCRA) programs) may regulate a petitioner's waste, EPA urges petitioners to contact the State regulatory authority to establish the status of their wastes under the State law.
EPA has also authorized some states (for example, Louisiana, Oklahoma, Georgia, and Illinois) to administer an RCRA delisting program in place of the Federal program; that is, to make state delisting decisions. Therefore, this exclusion does not apply in those authorized states unless that state makes the rule part of its authorized program. If Bayer transports the petitioned waste to or manages the waste in any state with delisting authorization, Bayer must obtain delisting authorization from that state before it can manage the waste as nonhazardous in the state.
A delisting petition is a request from a generator to EPA, or another agency with jurisdiction, to exclude or delist from the RCRA list of hazardous waste, certain wastes the generator believes should not be considered hazardous under RCRA.
Under §§ 260.20 and 260.22, facilities may petition EPA to remove their wastes from hazardous waste regulation by excluding them from the lists of hazardous wastes contained in §§ 261.31 and 261.32. Specifically, § 260.20 allows any person to petition the Administrator to modify or revoke any provision of 40 CFR parts 260 through 265 and 268. Section 260.22 provides generators the opportunity to petition the Administrator to exclude a waste from a particular generating facility from the hazardous waste lists.
Petitioners must provide sufficient information to EPA to allow EPA to determine that the waste to be excluded does not meet any of the criteria under which the waste was listed as a hazardous waste. In addition, the Administrator must determine, where he/she has a reasonable basis to believe that factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste and that such factors do not warrant retaining the waste as a hazardous waste.
On June 25, 2003, Bayer petitioned EPA to exclude from the lists of hazardous waste contained in § 261.32, Outfall 007 Treated Effluent generated from its facility located in Baytown, Texas. The waste falls under the classification of a listed waste under § 261.30.
Specifically, in its petition, Bayer requested that EPA grant a conditional exclusion for 18,071,150 cubic yards (5.745 billion gallons) per year of the treated effluent.
To support its petition, Bayer submitted:
(1) Results of the total constituent analysis for volatile and semivolatile organics, pesticides, herbicides, dioxins/furans, PCBs, and metals for six samples; and
(2) Descriptions of the waste water treatment process and effluent.
Comments were submitted by the Texas Commission on Environmental Quality (TCEQ) to correct information contained in the proposed rule.
TCEQ noted that the name of the facility has been changed from Bayer Polymers LLC to Bayer Material Science LLC. EPA has noted this name change and made appropriate changes to the final rule and exclusion language to reflect this change.
TCEQ also noted that the carbon regeneration unit referred to in the proposed rule has been certified closed. EPA has verified that the carbon regeneration has been closed. EPA's
TCEQ has recommended that the exclusion language include language that minimizes the potential for leaks in the effluent pipe line. The maintenance and management requirements for the effluent pipe line are not included in the TPDES permit and TCEQ is concerned that the delisting exclusion will relax Bayer's maintenance of the effluent pipe line. EPA will add language to the exclusion which requires Bayer to perform regular and routine maintenance on the pipe line to prevent and repair leaks as soon as they are discovered.
In addition, on October 30, 2002, (67 FR 66251), EPA proposed the Methods Innovation Rule to remove from the regulations unnecessary requirements other than those considered to be Method Defined Parameters (MDP). An MDP is a method that, by definition or design, is the only one capable of measuring the particular property (
Under Executive Order 12866, EPA must conduct an “assessment of the potential costs and benefits” for all “significant” regulatory actions.
The proposal to grant an exclusion is not significant under Executive Order 12866 since its effect, if promulgated, would be to reduce the overall costs and economic impact of EPA's hazardous waste management regulations. This reduction would be achieved by excluding waste generated at a specific facility from EPA's lists of hazardous wastes, thus enabling a facility to manage its waste as nonhazardous.
Because there is no additional impact from this final rule, section would not be a significant regulation, and no cost/benefit assessment is required. The Office of Management and Budget (OMB) has also exempted this rule from the requirement for OMB review under section (6) of Executive Order 12866.
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, whenever an agency is required to publish a general notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis which describes the impact of the rule on small entities (that is, small businesses, small organizations, and small governmental jurisdictions). No regulatory flexibility analysis is required, however, if the Administrator or delegated representative certifies that the rule will not have any impact on small entities.
This rule, if promulgated, will not have an adverse economic impact on small entities since its effect would be to reduce the overall costs of EPA's hazardous waste regulations and would be limited to one facility. Accordingly, EPA hereby certifies that this final regulation, if promulgated, will not have a significant economic impact on a substantial number of small entities. This regulation, therefore, does not require a regulatory flexibility analysis.
Information collection and record-keeping requirements associated with this final rule have been approved by the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501
Under section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501
When such a statement is required for EPA rules, under section 205 of the UMRA EPA must identify and consider alternatives, including the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. EPA must select that alternative, unless the Administrator explains in the final rule why it was not selected or it is inconsistent with law.
Before EPA establishes regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must develop under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, giving them meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising them on compliance with the regulatory requirements.
The UMRA generally defines a Federal mandate for regulatory purposes as one that imposes an enforceable duty upon state, local, or tribal governments or the private sector.
EPA finds that this delisting decision is deregulatory in nature and does not impose any enforceable duty on any state, local, or tribal governments or the private sector. In addition, the final delisting decision does not establish any regulatory requirements for small governments and so does not require a small government agency plan under UMRA section 203.
The Executive Order 13045 is entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This order applies to any rule that EPA determines (1) is economically significant as defined under Executive Order 12866, and (2) the environmental health or safety risk addressed by the rule has a disproportionate effect on children. If the regulatory action meets both criteria, EPA must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by EPA. This final rule is not subject to Executive Order 13045 because this is not an economically significant regulatory action as defined by Executive Order 12866.
Because this action does not involve any requirements that affect Indian Tribes, the requirements of section 3(b) of Executive Order 13084 do not apply.
Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly affects or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments.
If the mandate is unfunded, EPA must provide to the OMB, in a separately identified section of the preamble to the
In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected and other representatives of Indian tribal governments to have “meaningful and timely input” in the development of regulatory policies on matters that significantly or uniquely affect their communities or Indian tribal governments. This action does not involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.
Under Section 12(d) of the National Technology Transfer and Advancement Act, 15 U.S.C. 3701
This rule does not establish any new technical standards and thus, EPA has no need to consider the use of voluntary consensus standards in developing this final rule.
Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “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.”
Under section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by state and local governments, or EPA consults with state and local officials early in the process of developing the final regulation. EPA also may not issue a regulation that has federalism implications and that preempts state law unless EPA consults with state and local officials early in the process of developing the final regulation.
This action does not have federalism implications. It will not have a substantial direct effect on 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, as specified in Executive Order 13132, because it affects only one facility.
This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution and Use” (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.
As required by section 3 of Executive Order 12988, “Civil Justice Reform,” (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct.
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Hazardous waste, Recycling, Reporting and recordkeeping requirements.
Sec. 3001(f) RCRA, 42 U.S.C. 6921(f).
42 U.S.C. 6905, 6912(a), 6921, 6922, and 6938.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Final rule.
This final rule amends regulations on insurer reporting requirements. The appendices list those passenger motor vehicle insurers that are required to file reports on their motor vehicle theft loss experiences. An insurer included in any of these appendices must file three copies of its report for the 2002 calendar year before October 25, 2005. If the passenger motor vehicle insurers remain listed, they must submit reports by each subsequent October 25.
This final rule becomes effective on September 23, 2005. Insurers listed in the appendices are required to submit reports before October 25, 2005.
Rosalind Proctor, Office of International Policy, Fuel Economy and Consumer Programs, NHTSA, 400 Seventh Street, SW., Washington, DC 20590, by electronic mail to
Pursuant to 49 U.S.C. 33112,
(1) Issuers of motor vehicle insurance policies whose total premiums account for 1 percent or more of the total premiums of motor vehicle insurance issued within the United States;
(2) Issuers of motor vehicle insurance policies whose premiums account for 10 percent or more of total premiums written within any one state; and
(3) Rental and leasing companies with a fleet of 20 or more vehicles not covered by theft insurance policies issued by insurers of motor vehicles, other than any governmental entity.
Pursuant to its statutory exemption authority, the agency exempted certain passenger motor vehicle insurers from the reporting requirements.
Section 33112(f)(2) provides that the agency shall exempt small insurers of passenger motor vehicles if NHTSA finds that such exemptions will not significantly affect the validity or usefulness of the information in the reports, either nationally or on a state-by-state basis. The term “small insurer” is defined, in Section 33112(f)(1)(A) and (B), as an insurer whose premiums for motor vehicle insurance issued directly or through an affiliate, including pooling arrangements established under state law or regulation for the issuance of motor vehicle insurance, account for less than 1 percent of the total premiums for all forms of motor vehicle insurance issued by insurers within the United States. However, that section also stipulates that if an insurance company satisfies this definition of a “small insurer,” but accounts for 10 percent or more of the total premiums for all motor vehicle insurance issued in a particular state, the insurer must report about its operations in that state.
In the final rule establishing the insurer reports requirement (52 FR 59; January 2, 1987), 49 CFR part 544, NHTSA exercised its exemption authority by listing in Appendix A each insurer that must report because it had at least 1 percent of the motor vehicle insurance premiums nationally. Listing the insurers subject to reporting, instead of each insurer exempted from reporting because it had less than 1 percent of the premiums nationally, is administratively simpler since the former group is much smaller than the latter. In Appendix B, NHTSA lists those insurers required to report for particular states because each insurer had a 10 percent or greater market share of motor vehicle premiums in those states. In the January 1987 final rule, the agency stated that it would update Appendices A and B annually. NHTSA updates the appendices based on data voluntarily provided by insurance companies to A.M. Best, which A.M. Best,
In addition, upon making certain determinations, NHTSA grants exemptions to self-insurers,
(1) The cost of preparing and furnishing such reports is excessive in relation to the size of the business of the insurer; and 33112(e)(1) and (2),
(2) The insurer's report will not significantly contribute to carrying out the purposes of Chapter 331.
In a final rule published June 22, 1990 (55 FR 25606), the agency granted a class exemption to all companies that rent or lease fewer than 50,000 vehicles, because it believed that the largest companies' reports sufficiently represent the theft experience of rental and leasing companies. NHTSA concluded that smaller rental and leasing companies' reports do not significantly contribute to carrying out NHTSA's statutory obligations and that exempting such companies will relieve
Under part 544, as long as an insurer is listed, it must file reports on or before October 25 of each year. Thus, any insurer listed in the appendices must file a report before October 25, and by each succeeding October 25, absent an amendment removing the insurer's name from the appendices.
On March 15, 2005, NHTSA published a notice of proposed rulemaking (NPRM) to update the list of insurers in Appendices A, B, and, C required to file reports (70 FR 12635). Appendix A lists insurers that must report because each had 1 percent of the motor vehicle insurance premiums on a national basis. The list was last amended in a final rule published on July 13, 2004 (69 FR 41974). Based on the 2002 calendar year data market shares from A.M. Best, we proposed to remove CGU Group and Great American P&C Group and add the Mercury General Group and Auto-Owners Insurance Group to Appendix A.
Each of the 19 insurers listed in Appendix A are required to file a report before October 25, 2005, setting forth the information required by part 544 for each State in which it did business in the 2002 calendar year. As long as these 19 insurers remain listed, they are required to submit a report by each subsequent October 25 for the calendar year ending slightly less than 3 years before.
Appendix B lists insurers required to report for particular States for calendar year 2002, because each insurer had a 10 percent or greater market share of motor vehicle premiums in those States. Based on the 2002 calendar year data for market shares from A.M. Best, we proposed to add the Nodak Mutual Group (North Dakota) to Appendix B.
The nine insurers listed in Appendix B are required to report on their calendar year 2002 activities in every State where they had a 10 percent or greater market share. These reports must be filed by October 25, 2005, and set forth the information required by part 544. As long as these nine insurers remain listed, they would be required to submit reports on or before each subsequent October 25 for the calendar year ending slightly less than 3 years before.
Appendix C lists rental and leasing companies required to file reports. Based on information in
In response to the NPRM, the agency received no comments. Accordingly, this final rule adopts the proposed changes to Appendices A, B, and C.
Passenger motor vehicle insurers listed in the appendices can forward their theft loss reports to the agency in several ways:
a. Mail: Rosalind Proctor, Office of International Policy, Fuel Economy and Consumer Programs, NHTSA, NVS-131, 400 Seventh Street, SW., Washington, DC 20590
b. E-Mail:
c. Fax: (202) 493-2290.
Theft loss reports may also be submitted to the docket electronically by:
d. logging onto the Dockets Management System Web site at
This notice has not been reviewed under Executive Order 12866, Regulatory Planning and Review. NHTSA has considered the impact of this proposed rule and determined that the action is not “significant” within the meaning of the Department of Transportation's regulatory policies and procedures. This proposed rule implements the agency's policy of ensuring that all insurance companies that are statutorily eligible for exemption from the insurer reporting requirements are in fact exempted from those requirements. Only those companies that are not statutorily eligible for an exemption are required to file reports.
NHTSA does not believe that this proposed rule, reflecting current data, affects the impacts described in the final regulatory evaluation prepared for the final rule establishing part 544 (52 FR 59; January 2, 1987). Accordingly, a separate regulatory evaluation has not been prepared for this rulemaking action. Using the Bureau of Labor Statistics Consumer Price Index for 2004 (
Interested persons may wish to examine the 1987 final regulatory evaluation. Copies of that evaluation were placed in Docket No. T86-01; Notice 2. Any interested person may obtain a copy of this evaluation by writing to NHTSA, Docket Section, Room 5109, 400 Seventh Street, SW., Washington, DC 20590, or by calling (202) 366-4949.
The information collection requirements in this final rule were submitted and approved by the Office of Management and Budget (OMB) pursuant to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501
The agency also considered the effects of this rulemaking under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action has been analyzed according to the principles and criteria contained in Executive Order 12612, and it has been determined that the proposed rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment.
In accordance with the National Environmental Policy Act, NHTSA has considered the environmental impacts of this proposed rule and determined that it would not have a significant impact on the quality of the human environment.
This final rule does not have any retroactive effect, and it does not preempt any State law, 49 U.S.C. 33117 provides that judicial review of this rule may be obtained pursuant to 49 U.S.C. 32909, and section 32909 does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.
The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading, at the beginning, of this document to find this action in the Unified Agenda.
Executive Order 12866 requires each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:
• Have we organized the material to suit the public's needs?
• Are the requirements in the proposal clearly stated?
• Does the proposal contain technical language or jargon that is not clear?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?
• Would more (but shorter) sections be better?
• Could we improve clarity by adding tables, lists, or diagrams?
• What else could we do to make the proposal easier to understand?
If you have any responses to these questions, you can forward them to me several ways:
a.
b.
c.
Crime insurance, Insurance, Insurance companies, Motor vehicles, Reporting and recordkeeping requirements.
49 U.S.C. 33112; delegation of authority at 49 CFR 1.50.
(a) Each insurer to which this part applies shall submit a report annually before October 25, beginning on October 25, 1986. This report shall contain the information required by § 544.6 of this part for the calendar year 3 years previous to the year in which the report is filed (
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS is allowing any agent or employee of NMFS, the U.S. Fish and Wildlife Service (FWS), the U.S. Coast Guard, or any other Federal land or water management agency, or any agent or employee of a state agency responsible for fish and wildlife, when acting in the course of his or her official duties, to take endangered sea turtles encountered in the marine environment if such taking is necessary to aid a sick, injured, or entangled endangered sea turtle, or dispose of a dead endangered sea turtle, or salvage a dead endangered sea turtle that may be useful for scientific and educational purposes. This action is necessary to provide equal conservation and protection measures to stranded endangered sea turtles as is afforded for threatened sea turtles under 50 CFR 223.206.
Effective August 24, 2005.
Therese Conant, phone: 301-713-1401, fax:301-427-2523.
All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the Endangered Species Act (ESA). Kemp's ridley (
Under the ESA and its implementing regulations, taking endangered sea turtles - even incidentally - is prohibited. The ESA allows take of threatened species; however, section 4(d) of the ESA allows NMFS to implement regulations for the conservation of threatened species. NMFS implemented a section 4(d) regulation that extended the take prohibitions to threatened sea turtles with exceptions identified in 50 CFR 223.206 which allows appropriate handling of sick, injured, entangled, or dead threatened sea turtles found in the marine environment. The take of endangered species may be authorized by an incidental take statement pursuant to section 7 or a permit or programmatic permit regulation issued pursuant to section 10 of the ESA.
Surveying, documenting and responding to sick, injured, entangled, and dead turtles have been ongoing for over 30 years and became institutionalized in 1980 with the establishment of the NMFS' Sea Turtle Stranding and Salvage Network (STSSN). The STSSN consists of agents or employees of NMFS, the FWS, the U.S. Coast Guard, or any other Federal land or water management agency, or any agent or employee of a state agency responsible for fish and wildlife. The FWS grants authority to each state with an official ESA section 6 agreement for permitting land-based activities (i.e., on the beach and in holding facilities) related to the STSSN. FWS also implemented regulations to allow any employee or agent of FWS, NMFS, or a state conservation agency, to aid, dispose, salvage or humanely remove endangered species that constitute a demonstrable threat to human safety (50 CFR 17.21). NMFS currently has ESA section 6 agreements with only 10 states/territories: Florida, Georgia, South Carolina, North Carolina, Maryland, New Jersey, New York, Massachusetts, Puerto Rico, and U.S. Virgin Islands (note: On June 11, 1997, NMFS entered into a Memorandum of Agreement with the California Department of Fish and Game, Office of Oil Spill Prevention and Response to aid sick, injured or stranded sea turtles impacted by oil and other hazardous material spills) . The STSSN encompasses all U.S. states and territories. The ESA does not allow exceptions to takings for endangered species through section 4(d). Therefore, NMFS is granting authority under ESA section 10(a)(1)(A) to provide for the aid, collection, and disposition of, stranded endangered sea turtles found in the marine environment. By definition, the term 'stranded' includes live endangered sea turtles that are sick, injured, or entangled and dead endangered sea turtles found in the marine environment. Because the activities of the STSSN are similar in nature and scope, NMFS is issuing this final programmatic permit by regulation pursuant to section 10(a)(1)(A). Implementing this section 10(a)(1)(A) provides consistency with FWS regulations that allow such activities on land as described in 50 CFR 17.21. For a description of the activities related to the STSSN, see the proposed rule published on March 29, 2005 (70 FR 15800).
NMFS did not receive any public comments germane to the proposed rule. However, upon further internal agency review, NMFS is making two minor changes to clarify the requirements of the final rule. First, NMFS is requiring that all equipment (tagging equipment, tape measures, etc.) that comes in contact with turtles exhibiting fibropapilloma, be cleaned with a mild bleach solution. Fibropapilloma is a tumor-forming and debilitating transmissible disease of sea turtles. A herpes virus and retrovirus have been identified in association with fibropapilloma, but the etiology of the disease has not been determined. Cleaning equipment that has come in contact with fibropapilloma turtles may help prevent transmission. Second, NMFS is replacing the specification that passive integrated transponder (PIT)
The STSSN was established in response to the need to better understand threats to sea turtles in the marine environment and to provide aid to stranded sea turtles, or dispose of a dead endangered sea turtle, or salvage a dead endangered sea turtle that may be useful for scientific and educational purposes. Maintaining a stranding network is identified as a recovery task in all federal sea turtle recovery plans. The extensive training requirements, comprehensive data collection, and frequent review and evaluation of these programs, satisfy the requirements described for individual directed research permits. Actions taken by stranding and entanglement networks improve survivability of sick, injured, entangled or stranded turtles and improve our knowledge about population structure, the etiology of disease, environmental stressors and manmade threats in the marine environment. This final rule authorizes activities that clearly provide a bona fide and desirable benefit to the enhancement and survival of endangered sea turtles.
For the reasons described above, the Assistant Administrator for Fisheries has determined that this permit by regulation complies with section 10 of the ESA. The activity and the exceptions provided for in this permit by regulation are being undertaken in good faith. No individual or organization receives any financial gain or any career advancement as a result of their volunteer activities for the STSSN. Further, the activity will increase the probability, for each rescued endangered sea turtle, of survival and reproduction of that sea turtle. This activity can therefore operate only to the advantage of endangered species involved. Further, this activity is consistent with relevant purposes and policy set forth in ESA section 2. The STSSN was established for the sole purpose of the conservation of endangered sea turtles. Maintaining a stranding network is identified as a recovery task in all federal sea turtle recovery plans. NMFS is using its authority under 10(a)(1)(A) to issue this regulation for the specific purpose of conserving endangered sea turtles. While the STSSN and the rescuing of endangered sea turtles does not impact water resources in any state, it is worth noting that the STSSN is at its heart a cooperative effort between NMFS, FWS and state conservation agencies.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
This final rule does not contain new reporting or recordkeeping requirements.
This final rule does not duplicate, overlap or conflict with other Federal rules.
This final rule does not limit state policymaking or preempt state law and, therefore, does not contain policies with federalism implications under Executive Order 13132.
For the proposed rule, the Assistant General Counsel for Legislation and Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that the rule, if adopted, would not have a significant economic impact on a substantial number of small businesses, organizations, or governments pursuant to the Regulatory Flexibility Act, 5 U.S.C. § 601
Administrative practice and procedure, Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements.
16 U.S.C. 1531
(a) This section constitutes a programmatic permit, pursuant to 16 U.S.C. 1539(a)(1)(A), that authorizes activities by agents and employees of Federal and state agencies, as described in paragraph (b) of this section, to aid stranded endangered sea turtles, and to salvage, collect data from, and dispose of, dead carcasses of endangered sea turtles in the marine environment. For purposes of this section, 'stranded' means endangered sea turtles, in the marine environment, that are alive but sick, injured, or entangled.
(b) If any member of any endangered species of sea turtle is found stranded or dead in the marine environment, any agent or employee of the National Marine Fisheries Service, the Fish and Wildlife Service, the U.S. Coast Guard, or any other Federal land or water management agency, or any agent or employee of a state agency responsible for fish and wildlife who is designated by his or her agency for such purposes, may, when acting in the course of his or her official duties, take such endangered sea turtles if such taking is necessary to aid a stranded sea turtle, or dispose of or salvage a dead sea turtle, or collect data from a dead sea turtle which may be useful for scientific and educational purposes. Live turtles will be handled as described in § 223.206(d)(1). Whenever possible, live sea turtles shall be returned to their aquatic environment as soon as possible. The following data collection activities for live turtles while they are in the marine environment are allowed:
(1) Turtles may be flipper and passive integrated transponder (PIT) tagged, prior to release. Flipper tags would be applied to the trailing edge of either the front or rear flippers with standard tagging applicators after the tagging area has been cleaned with alcohol or iodine solution. PIT tags would be inserted according to best practice, approved scientific protocols, after cleaning the insertion site with alcohol or iodine solution. Before application of flipper tags or insertion of PIT tags, all flippers and the neck/shoulder area will be examined and scanned for the presence of any pre-existing flipper or PIT tags.
(2) Turtles may also be weighed, measured, and photographed prior to release.
(3) When handling turtles exhibiting fibropapilloma, all equipment (tagging equipment, tape measures, etc.) that
(c) Every action shall be reported in writing to the Assistant Administrator, or authorized representative, via the agency or institution designated by the state to record such events. Reports shall contain the following information:
(1) Name and position of the official or employee involved;
(2) Description of the sea turtle(s) involved including species and condition of the animal;
(3) When applicable, description of entangling gear, its location on the turtle, and the amount of gear left on the turtle at release;
(4) Method, date and location of disposal of the sea turtle(s), including, if applicable, where the sea turtle(s) has been retained in captivity; and
(5) Such other information as the Assistant Administrator, or authorized representative, may require.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; interim measures; request for comments.
This temporary rule implements management measures for the recreational grouper fishery in the exclusive economic zone (EEZ) of the Gulf of Mexico, as requested by the Gulf of Mexico Fishery Management Council (Council), to reduce overfishing of red grouper. This rule establishes a seasonal closure of the recreational fishery for all Gulf grouper species and reduces both the recreational bag limit for red grouper and the aggregate grouper bag limit. The intended effects are to reduce overfishing of red grouper in the Gulf of Mexico and to minimize potential adverse impacts on other grouper stocks that could result from a shift in fishing effort from red grouper to other grouper species.
This rule is effective August 9, 2005 through January 23, 2006.
Comments must be received no later than 5 p.m., eastern standard time, on August 24, 2005.
You may submit comments on this temporary rule by any of the following methods:
•
•
•
•
Requests for copies of documents supporting this rule may be obtained from the Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701.
Phil Steele, telephone: 727-551-5784; fax: 727-824-5308; e-mail:
The reef fish fishery of the Gulf of Mexico is managed under the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP). The FMP was prepared by the Council and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.
In October 2000, based on the results of a 1999 stock assessment, NMFS declared the red grouper stock overfished and undergoing overfishing. The 2002 stock assessment indicated the red grouper stock was in an improved condition and no longer overfished. However, the stock had not yet reached the biomass level (B
The 10-year red grouper rebuilding plan is based on a stepped rebuilding strategy. During the first 3-year interval (2003-2005) of the plan, the allowable biological catch (ABC) is 6.56 million lb (2.98 million kg) gutted weight (GW), which equates approximately to a 9.4-percent reduction in both commercial and recreational landings compared to the average landings during 1999-2001. Based on historical landings, the commercial fishery would account for 81 percent of the ABC (5.31 million lb (2.41 million kg)), and the recreational fishery would account for 19 percent (1.25 million lb (0.57 million kg)). In both 2003 and 2004, recreational red grouper landings exceeded the 1.25-million lb (0.57-million kg) GW target level, while commercial landings were less than the 5.31-million lb (2.41-million kg) GW commercial quota. Recreational landings in 2003 were only slightly greater than the target level and totaled 1.35 million lb (0.61 million kg) GW. However, in 2004, recreational landings were nearly 2.5 times greater than the recreational target level, totaling 3.10 million lb (1.4 million kg) GW.
During the March 7-10, 2005, Council meeting, the Council reviewed red grouper landings and concluded that without additional regulations recreational red grouper landings in 2005 are again likely to exceed the recreational target level. Based on average recreational landings during 2003 and 2004, it is estimated that as much as a 43-percent reduction in recreational red grouper landings is needed to end overfishing in 2005. Although the Council intends to consider permanent recreational management measures as part of a regulatory amendment in 2006, action is needed in the interim to reduce recreational red grouper landings in 2005. The Council passed a motion and subsequently submitted a letter requesting NMFS to implement an interim rule to reduce the 2005 recreational red grouper catch to levels consistent with the rebuilding plan specified in Secretarial Amendment 1.
The purpose of this temporary rule is to reduce the likelihood of overfishing red grouper, while minimizing biological impacts on gag and other groupers that could result from shifts in effort due to red grouper management actions. To achieve this objective, this temporary rule reduces the red grouper
This temporary rule reduces the red grouper bag limit from 2 fish per person per day to 1 fish per person per day and establishes a closure of the recreational fishery, from November through December 2005, for all grouper species. The combined effect of these measures will reduce red grouper recreational harvest by 21.5 percent and will reduce recreational harvest of other grouper by 17.8 percent. Because red grouper are part of a multispecies fishery, prohibiting harvest of all groupers during the seasonal closure will reduce bycatch of red grouper and subsequent discard mortality. Applying the closure to all groupers will also protect other grouper species from a potential shift of fishing effort from red grouper to other groupers.
The aggregate grouper bag limit applies to all groupers, except goliath grouper (formerly jewfish) and Nassau grouper, for which no harvest is allowed. Within the aggregate bag limit, further limitations apply to possession of red grouper, speckled hind, and warsaw grouper. This temporary rule reduces the aggregate bag limit to 3 grouper, combined, per person per day, excluding Goliath grouper and Nassau grouper, but not to exceed 1 speckled hind or 1 warsaw grouper per vessel per day, or 1 red grouper per person per day. Note that this also incorporates the red grouper bag limit reduction discussed previously. Prior to this temporary rule, the aggregate bag limit was 5 grouper, combined, per person per day, excluding Goliath grouper and Nassau grouper, but not to exceed 1 speckled hind or 1 warsaw grouper per vessel per day or 2 red grouper per person per day. The effect of this reduction in the aggregate bag limit is a 5.2-percent reduction in recreational harvest of groupers other than red grouper. The reduction in the aggregate bag limit will provide protection to other grouper species from redirected red grouper fishing effort and may reduce bycatch mortality of red grouper, assuming anglers cease fishing when the aggregate limit is reached.
NMFS finds that this temporary rule is necessary to reduce overfishing of red grouper in the Gulf of Mexico. NMFS issues this temporary rule, effective for not more than 180 days, as authorized by section 305(c) of the Magnuson-Stevens Act. This interim rule may be extended for an additional 180 days, provided that the public has had an opportunity to comment on the interim rule and provided that the Council is actively preparing proposed regulations to address this overfishing on a permanent basis. Public comments on this interim rule are invited and will be considered in determining whether to maintain or extend this rule to address overfishing of red grouper. The Council is preparing a regulatory amendment under the FMP framework procedure to address, on a permanent basis, red grouper overfishing issues that are the subject of this rule.
The Assistant Administrator for Fisheries, NOAA (AA), has determined that this temporary rule is necessary to reduce overfishing of red grouper in the Gulf of Mexico and is consistent with the Magnuson-Stevens Act and other applicable laws.
This temporary rule has been determined to be not significant for purposes of Executive Order 12866.
This temporary rule is exempt from the procedures of the Regulatory Flexibility Act because the rule is issued without opportunity for prior notice and public comment.
This temporary rule addresses overfishing. Delaying action to reduce overfishing in the red grouper fishery of the Gulf of Mexico to provide further notice and an opportunity for public comment prior to implementation would increase the likelihood of a loss of long-term productivity from the fishery and increase the probable need for more severe restrictions in the future. Recreational red grouper landings during January through December 2004 totaled 3.10 million lb. (1.5 million kg), which exceeded the target catch level of 1.25 million lb. (0.6 million kg). These landings data were not fully analyzed and verified until early 2005, when complete landings data for 2004 had been collected. Therefore, there was no basis to assume the target catch level would be exceeded in 2005. Once landings for 2004 had been verified, NMFS determined that this interim rule was necessary to address overfishing. Based on the new information and other information regarding landings trends, recreational landings are now estimated to range from 1.66 million lb. (0.75 million kg) to 2.10 million lb. (0.95 million kg), which is potentially well in excess of the 1.25 million lb. (0.6 million kg) target catch level. Therefore there is a need to implement these measures in a timely fashion to reduce the potential recreational harvest and prevent an overrun of the recreational target catch level.
Accordingly, under authority set forth at 5 U.S.C. 553(b)(B), the AA finds, for good cause, namely the reasons set forth above, that providing prior notice and the opportunity for prior public comment would be contrary to the public interest. Similarly, the need to implement these measures in a timely manner for the reasons stated above constitutes good cause under authority contained in 5 U.S.C. 553(b)(B) to establish an effective date less than 30 days after date of publication. To provide adequate time to inform the recreational fishing sector of the impending changes in bag limits and the closed season and to allow recreational fishers to plan and adjust their fishing activities accordingly, the effective date of this rule will be delayed until 15 days after the date of publication of this rule in the
Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping requirements, Virgin Islands.
16 U.S.C. 1801
(q)
(b) * * *
(1) * * *
(viii) Groupers, combined, excluding goliath grouper and Nassau grouper—3 per person per day, but not to exceed 1 speckled hind or 1 warsaw grouper per vessel per day or 1 red grouper per person per day.
(ix) Gulf reef fish, combined, excluding those specified in paragraphs (b)(1)(i), (iii), (iv), (vi), (vii), and (viii) of this section and excluding dwarf sand perch and sand perch—20.
(a) * * *
(1) * * *
(iii)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for pelagic shelf rockfish in the West Yakutat District of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the 2005 total allowable catch (TAC) of pelagic shelf rockfish in the West Yakutat District of the GOA.
Effective 1200 hrs, Alaska local time (A.l.t.), July 20, 2005 through 2400 hrs, A.l.t., December 31, 2005.
Josh Keaton, 907-586-7228.
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 2005 TAC of pelagic shelf rockfish in the West Yakutat District of the GOA is 211 metric tons (mt) as established by the 2005 and 2006 harvest specifications for groundfish of the GOA (70 FR 8958, February 24, 2005).
In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2005 TAC of pelagic shelf rockfish in the West Yakutat District of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 200 mt, and is setting aside the remaining 11 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 pelagic shelf rockfish in the West Yakutat District of the GOA.
After the effective date of this closure the maximum retainable amounts at §§ 679.20(e) and (f) apply at any time during a trip.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is 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 pelagic shelf rockfish in the West Yakutat District of the GOA.
The AA 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.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Agricultural Marketing Service, USDA.
Extension of comment period.
Notice is hereby given that the comment period on proposed changes in the regulatory periods when minimum grade, size, quality, and maturity requirements apply to southeastern California grapes under Marketing Order No. 925 (order), and to imported grapes under the table grape import regulation is extended until September 25, 2005.
Comments must be received by September 25, 2005.
Interested persons are invited to submit written comments concerning this proposal. Comments should be sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938, E-mail:
California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (559) 487-5901, Fax: (559) 487-5906; or George Kelhart, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Fax: (202) 720-8938.
Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail:
A proposed rule was issued on May 20, 2005, and published in the
Extensions were requested on behalf of the Chilean government and ASOEX, a trade association of Chilean fruit growers and fresh fruit exporters. ASOEX stated that its members represent approximately 90 percent of Chilean table grape imports to the United States. The extension will provide additional time for interested persons to analyze the proposal data and to submit written comments on the proposed rule.
After reviewing the requests, USDA is extending the comment period for 60 additional days or until September 25, 2005. This will provide interested persons a total of 120 days to review the proposed rule, perform a more complete analysis, and submit written comments. Interested persons who seek the data and reports referenced and discussed in the proposed rule published May 25, 2005 (70 FR 30001), may request such records pursuant to the Freedom of Information Act (5 U.S.C. 552). Such requests should be sent to Ms. Zipora Bullard, FOIA/PA Officer, Agricultural Marketing Service, USDA, Room 3517-S, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237.
Accordingly, the period in which to file written comments is reopened until September 25, 2005. This notice is issued pursuant to the Agricultural Marketing Agreement Act of 1937.
7 U.S.C. 601-674.
Nuclear Regulatory Commission.
Proposed rule.
The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations revising the NAC International, Inc., NAC-UMS Universal Storage System listing within the “List of approved spent fuel storage casks” to include Amendment No. 4 to Certificate of Compliance (CoC) Number 1015. Amendment No. 4 to the NAC-UMS CoC would modify the cask design by replacing the specific term “zircaloy” with the more generic term “zirconium alloy”; revising the definitions of “operable” and “site specific fuel”; revising vacuum drying pressure and time limits; revising short-term temperature limits and completion times for the heat removal system; clarifying the surface dose rate surveillance; adding a dissolved boron concentration option; deleting a redundant boron concentration administrative control; adding an alternate site-specific design basis earthquake analysis; and incorporating editorial and administrative changes.
Comments on the proposed rule must be received on or before August 24, 2005.
You may submit comments by any one of the following methods. Please include the following number (RIN 3150-AH75) in the subject line of your comments. Comments on rulemakings submitted in writing or in electronic form will be made available for public inspection. Because your
Mail comments to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, ATTN: Rulemakings and Adjudications Staff.
E-mail comments to:
Hand deliver comments to: 11555 Rockville Pike, Rockville, Maryland 20852, between 7:30 a.m. and 4:15 p.m. Federal workdays (telephone (301) 415-1966).
Fax comments to: Secretary, U.S. Nuclear Regulatory Commission at (301) 415-1101.
Publicly available documents related to this rulemaking may be viewed electronically on the public computers at the NRC's Public Document Room (PDR), O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland. Selected documents, including comments, can be viewed and downloaded electronically via the NRC rulemaking Web site at
Publicly available documents created or received at the NRC after November 1, 1999, are available electronically at the NRC's Electronic Reading Room at
Jayne M. McCausland, telephone (301) 415-6219, e-mail,
For additional information see the direct final rule published in the final rules section of this
This rule is limited to the changes contained in Amendment 4 to CoC No. 1015 and does not include other aspects of the NAC-UMS cask design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The direct final rule will become effective on October 11, 2005. However, if the NRC receives significant adverse comments by August 24, 2005, then the NRC will publish a document that withdraws the direct final rule and will subsequently address the comments received in a final rule. The NRC will not initiate a second comment period on this action.
A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:
(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:
(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;
(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or
(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.
(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.
(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or TS.
Administrative practice and procedure, Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Penalties, Radiation protection, Reporting and recordkeeping requirements, Security measures, Spent fuel, Whistleblowing.
For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 553; the NRC is proposing to adopt the following amendments to 10 CFR part 72.
1. The authority citation for part 72 continues to read as follows:
Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L. 91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135, 137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 10155, 10157, 10161, 10168); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note).
Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42 U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101, 10137(a), 10161(h)). Subparts K and L are also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).
2. In § 72.214, Certificate of Compliance 1015 is revised to read as follows:
Certificate Number: 1015.
Initial Certificate Effective Date: November 20, 2000.
Amendment Number 1 Effective Date: February 20, 2001.
Amendment Number 2 Effective Date: December 31, 2001.
Amendment Number 3 Effective Date: March 31, 2004.
Amendment Number 4 Effective Date: October 11, 2005.
SAR Submitted by: NAC International, Inc.
SAR Title: Final Safety Analysis Report for the NAC-UMS Universal Storage System.
Docket Number: 72-1015.
Certificate Expiration Date: November 20, 2020.
Model Number: NAC-UMS.
For the Nuclear Regulatory Commission.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede an existing airworthiness directive (AD) for Rolls-Royce Deutschland (formerly Rolls-Royce plc) (RRD) models Tay 650-15 and 651-54 turbofan engines. That AD currently requires borescope inspection of the high pressure compressor (HPC) stage 12 disc assembly to detect damage caused by HPC outlet guide vane (OGV) retaining bolt failure, and replacement of unserviceable parts with serviceable parts. That AD also requires as terminating action, the incorporation of a new design retention arrangement for the HPC OGV to prevent HPC OGV retaining bolt failure. This proposed AD would require the same actions but extends the terminating action compliance time for Tay 650-15 engines. This proposed AD would also include references to later revisions of two of the applicable RRD service bulletins (SBs). This proposed AD results from findings that the terminating action compliance time for Tay 650-15 engines can be extended. We are proposing this AD to prevent an uncontained failure of the HPC stage 11/12 disc spacer, which could result in damage to the airplane.
We must receive any comments on this proposed AD by September 23, 2005.
Use one of the following addresses to submit comments on this proposed AD:
• By mail: Federal Aviation Administration (FAA), New England Region, Office of the Regional Counsel, Attention: Rules Docket No. 2001-NE-02-AD, 12 New England Executive Park, Burlington, MA 01803-5299.
• By fax: (781) 238-7055.
• By e-mail:
You can get the service information identified in this proposed AD from Rolls-Royce plc, P.O. Box 31 Derby, DE24 8BJ, United Kingdom; telephone 011-44-1332-242424; fax 011-44-1332-249936.
You may examine the AD docket, by appointment, at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA.
Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803-5299; telephone (781) 238-7747; fax (781) 238-7199.
We invite you to submit any written relevant data, views, or arguments regarding this proposal. Send your comments to an address listed under
You may examine the AD Docket (including any comments and service information), by appointment, between 8 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. See
On January 18, 2002, the FAA issued AD 2002-01-29, Amendment 39-12624 (67 FR 4652, January 31, 2002). That AD requires borescope inspection of the HPC stage 12 disc assembly to detect damage caused by HPC OGV retaining bolt failure, and replacement of unserviceable parts with serviceable parts. That AD also requires as terminating action, the incorporation of a new design retention arrangement for the HPC OGV, to prevent HPC OGV retaining bolt failure.
Since we issued AD 2002-01-29, the FAA and the Luftfhart Bundesamt (LBA), which is the airworthiness authority for Germany, reassessed the time period allowed for incorporation of the terminating action compliance time for Tay 650-15 engines. Part of that reassessment takes into consideration the major reduction in flying time of the Tay 650-15 airliner fleet, since September 11, 2001. The FAA and LBA concluded that the terminating action compliance time for the Tay 650-15 engines can be safely extended by 25 months.
Paragraph (f) of the current AD, AD 2002-01-29, contains a paragraph pertaining to special flight permits. Even though this proposed AD does not contain a similar paragraph, we have made no changes with regard to the use of special flight permits to operate the airplane to a repair facility to do the work required by this AD. In July 2002, we published a new part 39 that contains a general authority regarding special flight permits and airworthiness directives; see Docket No. FAA-2004-8460, Amendment 39-9474 (69 FR 47998, July 22, 2002). Thus, when we now supersede ADs we will not include a specific paragraph on special flight permits unless we want to limit the use of that general authority granted in section 39.23.
We have reviewed and approved the technical contents of RRD SB No. TAY-72-1498, Revision 2, dated December 31, 2004. That SB describes procedures for installing new design retaining and locking hardware for the HPC OGV and outer seal housing assembly. The LBA classified this service bulletin as mandatory and issued AD D-2004-365, dated January 31, 2005, in order to ensure the airworthiness of these RRD engines in Germany.
This engine model is manufactured in Germany and is type certificated for operation in the United States under the provisions of Section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. In keeping with this bilateral airworthiness agreement, the LBA has kept the FAA informed of the situation described above. We have examined the findings of the LBA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other products of this same type design. Therefore, we are proposing this AD, which would require:
• Initial and repetitive borescope inspections of the stage 12 rotor disc assembly for damage due to failed HPC OGV retaining bolts, and removal of engine from service if damage is observed on the stage 12 rotor disc.
• As terminating action to the repetitive inspections, removal from service of existing HPT rotor inner seal support assembly, HP compressor outlet guide vane (5-span), HP compressor outlet guide vane (6-span), HP rotor thrust bearing housing assembly, and diffuser case assembly.
The proposed AD would require that you do these actions using the service information described previously.
There are about 400 Tay 650-15 and 651-54 turbofan engines of the affected design in the worldwide fleet. We estimate that 105 engines installed on airplanes of U.S. registry would be affected by this proposed AD. We also estimate that it would take about 3 work hours per engine to perform the proposed borescope inspection, and that the average labor rate is $65 per work hour. Required parts would cost about $3,200 per engine. We estimate that one third of the engines will have the parts replaced at time of engine overhaul. We also estimate that one third of the engines will have the parts replaced during an engine mid-life shop visit. We also estimate that one third of the engines will have the parts replaced at an engine shop visit dedicated for these parts replacements, at a cost of about $90,000 per engine. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $3,600,000.
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.
We are 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.
We have 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. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); 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.
We prepared a summary of the costs to comply with this proposal and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under
Air transportation, Aircraft, Aviation safety, Safety.
Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by removing Amendment 39-12624 (67 FR 4652, January 31, 2002) and by adding a new airworthiness directive, to read as follows:
(a) The Federal Aviation Administration (FAA) must receive comments on this airworthiness directive (AD) action by September 23, 2005.
(b) This AD supersedes AD 2002-01-29, Amendment 39-12624.
(c) This AD applies to Rolls-Royce Deutschland (formerly Rolls-Royce plc) (RRD) models Tay 650-15 and 651-54 turbofan engines with high pressure compressor (HPC) outlet guide vane (OGV) retaining bolts part numbers (P/Ns) BLT3602, DU909, and DU818 installed. These engines are installed on, but not limited to Boeing 727 and Fokker F.28 Mark 0100 airplanes.
(d) This AD results from RRD relaxing the terminating action compliance time for Tay 650-15 engines due to reassessment by RRD. We are proposing this AD to prevent an uncontained failure of the HPC stage 11/12 disc spacer, which could result in damage to the airplane.
(e) You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done.
(f) Perform a borescope inspection of the rear side of the stage 12 rotor disc at or before accumulating 8,000 cycles-since-new on the OGV retaining bolts, or within 30 days from the effective date of this AD, whichever occurs later. Use paragraph 3.A.(1) of the Accomplishment Instructions of RRD Mandatory Service Bulletin (MSB) Tay-72-1483, Revision 2, dated October 20, 2000, to do the inspection. If damage is observed on the stage 12 rotor disc, remove the engine from service.
(g) Thereafter, perform repetitive borescope inspections of the rear side of the stage 12 rotor disc no earlier than 1,800 and no later than 2,200 cycles-since-last-inspection, or no later than 18 months since-last-inspection,
(h) For engines that had OGV bolts replaced with new bolts P/Ns BLT3602, DU909, and DU818 as specified in RRD SB Tay-72-1484, dated November 15, 1999, or Revision 1, dated December 17, 1999, the initial and repetitive inspection requirements, based on engine cycles-since-bolt installation, are the same as specified in paragraphs (f) and (g) of this AD.
(i) As terminating action for the inspections required by this AD, do the following:
(1) Before November 1, 2007 for Tay 650-15 engines, and before October 1, 2012 for Tay 651-54 engines, remove from service the parts listed in the following Table 1:
(2) Information on removing these parts from service can be found in RRD MSB Tay-72-1498, dated October 20, 2000, or RRD MSB Tay-72-1498, Revision 1, dated December 1, 2000, or RRD SB Tay-72-1498, Revision 2, dated December 31, 2004.
(j) After performing the actions specified in paragraph (i) of this AD, the inspections specified in paragraphs (f) through (h) of this AD are no longer required.
(k) The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19.
(l) Luftfhart Bundesamt airworthiness directive D-2004-365, dated January 31, 2005, also addresses the subject of this AD.
Railroad Retirement Board.
Proposed rule.
The Railroad Retirement Board (Board) proposes to amend its regulations to include the option of electronic filing by railroad employers of requests for reconsideration of initial decisions under the Railroad Unemployment Insurance Act (RUIA). Part 320 currently requires that reconsideration requests be submitted in writing. The proposed rule would allow reconsideration requests to be made by railroad employers either in writing or electronically. In addition, §§ 320.10(c) and 320.10(d) inadvertently contain inaccurate references. This proposed rule would correct those references.
Submit comments on or before September 23, 2005.
Address any comments concerning this proposed rule to Beatrice Ezerski, Secretary to the Board, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092.
Marguerite P. Dadabo, Assistant General General Counsel, (312) 751-4945, TTD (312) 751-4701.
Part 320 of the Board's regulations deals generally with administrative review of initial determinations of claims or requests for waiver of recovery of overpayments under the Railroad Unemployment Insurance Act (RUIA). Currently, the regulations require all requests for reconsideration of initial decisions to be made in writing. The proposed rule would allow railroad employers to use updated technology, such as computers and e-mail, to request reconsideration of an initial decision. Specifically, the Board proposes to amend section 320.10(a) to allow railroad employers to file requests for reconsideration under the RUIA via an electronic program that has been approved by the agency.
In addition, the proposed rule would amend section 320.10(c) to change the incorrect references to “§ 310.12” to the correct references of “§ 320.12” in the last two sentences of this section.
Section 320.10(d) is proposed to be amended to change the incorrect reference to “§ 310.5” to the correct reference of “§ 320.5” in the first sentence of this section. This section would also be amended to provide that a railroad employer's request for reconsideration can be made in writing or electronically.
There is an information collection impacted by the proposed rule:
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the Railroad Retirement Board (Board) has submitted the following proposal(s) for the collection of information to the Office of Management and Budget for review and approval.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
The purpose of the RUIA Claims Notification System is to provide to every unemployment and sickness claimant's base-year employer or current employer, notice of each claim for benefits under the RUIA and to provide an opportunity for employers to convey information relevant to the proper adjudication of the claim. Railroad employers currently receive notice of applications and claims by one of two options. The first option, Form ID-4K, is a computer generated form letter notice of all unemployment applications, unemployment claims and sickness claims received from employees of a railroad company on a particular day. Forms Letters ID-4K are mailed on a daily basis to officials designated by railroad employers.
The second option is an Electronic Data Interchange (EDI) version of the Form Letter ID-4K notice. EDI notices of applications are transmitted to participating railroads on a daily basis, generally on the same day that unemployment applications and unemployment and sickness claims are received. Railroad employers can respond to Board notices of applications and claims manually by mailing a completed ID-4K back to the Board or electronically via EDI. No changes are being proposed to Form ID-4K. However, the Board is proposing the establishment of a third option, an Internet equivalent ID-4K which will provide for the required notification by the Board and response from railroad employers through the Board's Internet-based Employer Reporting System. Completion is voluntary.
Upon receipt of notice the Board has allowed a claim, either in whole or in part, the claimant's base-year employer (s) may request a review of the determination to pay benefits, if the employers believe the determination is incorrect. The Board will utilize proposed Form Letter ID-4E, Notice of RUIA Claim Determinations and a proposed Internet equivalent ID-4E to notify base-year employers when the Board has made a determination to pay benefits and to allow them to request the Board to review the determination. Form Letter ID-4E will be mailed on a daily basis to officials designated by railroad employers. The Internet equivalent option of the ID-4E notice will be sent to participating railroads via the Internet on a daily basis, generally on the same day that the claims are approved for payment. Railroad employers will be able to request that the Board review the determination by either filing a completed ID-4E with the Board by Mail or via the Internet. Completion is voluntary.
To request more information or to obtain a copy of the information collection justification, forms, and/or supporting material, please contact the Board Clearance Officer at (312) 751-3363 or
Administrative practice and procedure, Claims, Railroad unemployment insurance, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, the Railroad Retirement Board proposes to amend title 20, chapter II, subchapter C, part 320 of the Code of Federal Regulations as follows:
1. The authority citation for part 320 continues to read as follows:
45 U.S.C. 355 and 362(l).
2. Section 320.10 is amended as follows:
a. Add a new sentence at the end of paragraph (a);
b. Amend paragraph (c) by removing the reference to “§ 310.12” and adding a reference to “§ 320.12” in its place wherever it appears; and
c. Revise paragraph (d).
The addition and revision read as follows:
(a) * * * A railroad employer may fulfill the written request requirement by using an electronic system that has been approved by the agency in the manner prescribed by the agency.
(d)
By Authority of the Board.
Environmental Protection Agency (EPA).
Proposed rule.
On July 9, 2002, the Indiana Department of Environmental Management (IDEM) submitted a request that EPA approve a revision to its process weight rate rules into the Indiana State Implementation Plan (SIP). The revision clarifies language and applicability to better establish IDEM's interpretation of the rule and to correct rates that were previously calculated incorrectly in the process weight rate table incorporated in the rule. EPA is proposing to approve the SIP revision request.
In the rules section of this
Written comments must be received on or before August 24, 2005.
Submit comments, identified by Regional Material in EDOCKET (RME) ID No. R05-OAR-2004-IN-0001 by one of the following methods:
Federal eRulemaking Portal:
Agency Web site:
E-mail:
Fax: (312) 886-5824.
Mail: You may send written comments to: John M. Mooney, Chief, Criteria Pollutant Section, (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.
Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m. excluding Federal holidays.
Christos Panos, Environmental Engineer, Criteria Pollutant Section, Air Programs Branch (AR-18J), EPA Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 353-8328;
This action is rulemaking on a revision to the process weight rate rules in the Indiana SIP. The revision clarifies language and applicability to clarify IDEM's interpretation of the rule and to correct rates that were previously calculated incorrectly in the process weight rate table incorporated in the rule.
1.
2.
a. Identify the rulemaking by docket number and other identifying information (subject heading,
b. Follow directions—The agency may ask you to respond to specific questions
c. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
d. Describe any assumptions and provide any technical information and/or data that you used.
e. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
f. Provide specific examples to illustrate your concerns, and suggest alternatives.
g. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
h. Make sure to submit your comments by the comment period deadline identified.
For additional information, see the Direct Final Rule which is located in the Rules section of this
Fish and Wildlife Service, Interior.
Notice of reopening of public comment period.
We, the U.S. Fish and Wildlife Service (Service), announce the reopening of the public comment period for the status review initiated by the 90-day finding on a petition to list Gentry indigo bush (
Comments must be submitted directly to the Service (see
If you wish to comment, you may submit your comments and materials by any one of several methods:
1. You may submit written comments and information by mail or hand-delivery to Steve Spangle, Field Supervisor, Arizona Ecological Services Field Office, 2321 W. Royal Palm Road, Suite 103, Phoenix, Arizona 85021.
2. Written comments may be sent by facsimile to (602) 242-2513.
3. You may send your comments by electronic mail (e-mail) to
All comments and materials received, as well as supporting documentation used in preparation of the 90-day finding, will be available for public inspection, by appointment, during normal business hours at our Arizona Ecological Services Field Office at the above address.
Mima Falk, Arizona Ecological Services, Tucson Suboffice, 201 N. Bonita Ave., Tucson, Arizona 85745 (520) 670-6150 ext. 225).
On January 7, 2002, we received a petition dated January 2, 2002, requesting that we list the Gentry indigo bush as an endangered species with critical habitat. On January 25, 2005, we made our 90-day administrative finding on the petition to list the Gentry indigo bush under the Act in which we found that the petition presented substantial information indicating that listing the Gentry indigo bush may be warranted (70 FR 5401; February 2, 2005). Therefore, we initiated a status review to determine if listing the species is warranted. The review comment period closed on April 4, 2005.
Pursuant to 50 CFR 424.16(c)(2), we may extend or reopen a comment period upon finding that there is good cause to do so. The original comment period closed before the Gentry indigo bush flowering season. One of the primary characters for this species' identification can only be seen on the flower. We are reopening the comment period in order to accept additional status and survey information obtained after April 4, 2005, that we believe is significant and may affect our determination of the status of the species, and to allow appropriate public comment on these materials. These survey materials include trip reports and an interim report on surveys in Mexico received after the comment period closed, as well as status survey reports for Sycamore Canyon and the Northern Altar Valley which we anticipate receiving in early July. We deem these considerations as sufficient cause to reopen the comment period.
Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address, which we will honor to the extent allowable by law. If you wish us to withhold your name or address, you must state this request prominently at the beginning of your comments. However, we will not consider anonymous comments. To the extent consistent with applicable law, we will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.
The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments and information.
NMFS has received a request from BP Exploration (Alaska), 900 East Benson Boulevard, Anchorage, AK 99519 (BP) for renewal of an
Comments and information must be postmarked no later than August 24, 2005.
You may submit comments on the application and proposed rule, using the identifier 083104A, by any of the following methods:
E-mail:
Federal e-Rulemaking Portal:
Hand-delivery or mailing of paper, disk, or CD-ROM comments should be addressed to: Stephen L. Leathery, Chief, Permits, Conservation and Education Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910-3225.
A copy of the application containing a list of references used in this document may be obtained by writing to this address, by telephoning one of the contacts listed under
Comments regarding the burden-hour estimate or any other aspect of the collection of information requirement contained in this proposed rule should be sent to NMFS via the means stated above, and to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attention: NOAA Desk Officer, Washington, DC 20503,
Kenneth R. Hollingshead, NMFS, 301-713-2055, ext 128 or Brad Smith, NMFS, (907) 271-5006.
Section 101(a)(5)(A) of the Marine Mammal Protection Act (16 U.S.C. 1361
An authorization may be granted for periods of 5 years or less if the Secretary finds that the total taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses, and regulations are prescribed setting forth the permissible methods of taking and the requirements pertaining to the monitoring and reporting of such taking.
NMFS has defined “negligible impact” in 50 CFR 216.103 as “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” Except for certain categories of activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which
(i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].
In 1999, BP petitioned NMFS to issue regulations governing the taking of small numbers of whales and seals incidental to oil and gas development and operations in arctic waters of the United States. That petition was submitted pursuant to section 101(a)(5)(A) of the MMPA. Regulations were promulgated by NMFS on 25 May 2000 (65 FR 34014). These regulations authorize the issuance of annual LOAs for the incidental, but not intentional, taking of small numbers of six species of marine mammals in the event that such taking occurred during construction and operation of an oil and gas facility in the Beaufort Sea offshore from Alaska. The six species are the ringed seal (
On August 30, 2004, BP requested a renewal of its authorization to take small numbers of marine mammals incidental to operation of an offshore oil and gas platform at the Northstar facility in the Beaufort Sea in state waters. This will require new regulations. Although injury or mortality is unlikely during routine oil production activities, BP requests that the LOA authorize a small number of incidental, non-intentional, injurious or lethal takes of ringed seals in the unlikely event that they might occur. A copy of this application can be found at:
BP is currently producing oil from an offshore oil and gas facility in the Northstar Unit. This development is the first in the Beaufort Sea that makes use of a subsea pipeline to transport oil to shore and then into the Trans-Alaska Pipeline System. The Northstar facility was built in State of Alaska waters approximately 6 statute miles (9.6 km) north of Point Storkersen and slightly less than 3 nautical miles (nm; 5.5 km) from the closest barrier island. It is located adjacent to Prudhoe Bay, and is approximately 54 mi (87 km) northeast of Nuiqsut, an Inupiat community. The main facilities associated with Northstar include a gravel island work surface for drilling and oil production facilities, and two pipelines connecting the island to the existing infrastructure at Prudhoe Bay. One pipeline transports crude oil to shore, and the second imports gas from Prudhoe Bay for gas injection and power generation at Northstar. Permanent living quarters and supporting oil production facilities are also located on the island. The construction of Northstar began in early 2000, and continued through 2001. Well drilling began on December 14, 2000 and oil production commenced on October 31, 2001. The well-drilling
On September 23, 2004 (69 FR 56995), NMFS published a notice of receipt of BP's application for an incidental take authorization and requested comments, information and suggestions concerning the request and the structure and content of regulations to govern the take. During the 30-day public comment period, NMFS received comments from the Alaska Eskimo Whaling Commission (AEWC), the Trustees for Alaska (Trustees, on behalf of themselves, the Sierra Club and the Northern Alaska Environmental Center), and the Marine Mammal Commission (Commission).
However, NMFS must make a determination that the activity for which the take authorization is requested, and not the total impact of all activities taking place in the Beaufort Sea, is not having an unmitigable adverse impact on the subsistence uses
During the previous 5-year rule and LOAs, NMFS and BP were concerned that construction and production sounds from Northstar had the potential to cause Level A harassment of marine mammals. Monitoring since 2000 indicated that the loudest noise levels anticipated at the Northstar facility are from pile driving. The impact pipe driving in June and July 2000 did not produce received levels as high as 180 dB re 1 microPa (rms) at any location in the water. This was attributable to attenuation by the gravel and sheetpile walls (Blackwell
However, this monitoring program is in addition to the acoustic monitoring program proposed for bowheads during the fall migration, both of which are described later in this document (see Mitigation/Monitoring).
The unknown sound source was not detectable via similar recorders 6.5 21.5 km (4-13 mi) northeast of the island, except in one instance when the sound included a 130-Hz tone. That tone was detected by four instruments at distances of 6.5 14.3 km (4-8.9 mi). The measured rate of propagation loss of the tone was 32 dB/tenfold change in distance. Most noise recorded during periods in September 2003, when the underwater sound emanating from Northstar was strongest, was attributable to this sound. As with all sounds produced around Northstar, sounds were monitored for potential impacts to bowheads and other marine mammals. Results of the bowhead monitoring for 2003 can be found in Chapters 7, 8, and 9 in Richardson and Williams [eds]. (2004).
In addition to monitoring required of BP, it should be recognized that research and monitoring of Beaufort Sea marine mammals are also conducted by government agencies, or through government agency funding. This includes, for example, the Minerals Management Service's aerial bowhead whale surveys, an annual population assessment survey for bowhead whales, a study on contaminant levels in bowhead whale tissue, and a bowhead whale health assessment study. These latter three studies are funded by or through NMFS. Information on these projects has been provided in the past to the Commission by NMFS. Based on this multi-faceted monitoring program, NMFS has determined that the current and proposed monitoring programs for both open-water and wintertime are adequate to identify impacts on marine mammals, both singly from the project and cumulatively throughout the industry.
Both the Northstar and Liberty Final EISs analyzed cumulative effects from oil production.
The best scientific data indicates that, between 1979 and 1997, a period of 18 years of data collection, bowheads came within 10 km (6.2 mi) of the site of the Northstar facility only during 1997 (BPXA, 1999). However, NMFS determined in 2000 (65 FR 34014, May 25, 2000) that, because this close-approach occurred in a recent year, a more reliable estimate of take can be made by presuming that the bowhead take level could occur again once or twice within the next 5 year period. Therefore, NMFS determined that an average annual take by harassment, due to noise from construction and operation at Northstar, as calculated by BP (i.e., 173 (maximum 1,533) per year) would result in a maximum of 717 bowheads annually or approximately 9 percent of the revised 1993 estimated population size of 8,200 (95 percent CI, 7,200-9,400) (Hill and DeMaster, 1999; IWC, 1996). NMFS notes that this harassment will be limited to a deflection in migration and would be considered a taking by Level B harassment. Such a taking would result in small numbers being taken and would have no more than a negligible impact on bowhead whales.
From 2000-2003 bowhead whales were monitored acoustically to determine the number of whales that might have been exposed to Northstar related sounds. Data from 2001-2003 were useable for this purpose. The results showed that, during the late summer and early autumn of 2001, a small number of bowheads in the southern part of the migration corridor (closest to Northstar) were apparently affected by vessel or Northstar operations. The best estimates of the numbers of bowheads that were apparently “deflected” offshore by ≥ 2 km (1.2 mi) were 19 in 2001, 49 in 2002, and 0 in 2003; these values are all ≤0.5 percent of the bowhead population (BP, 2004; McDonald and Richardson, 2004). However, 2003 was considered a
Scientists believe the relationship through the 1980s is that in moderate-light ice years the whales are closer to shore and in heavy ice years they are farther offshore. The best reference is Moore (2000)(Variability in cetacean distribution and habitat selection in the Alaskan Arctic, Autumn 1982-91. Arctic 53(4):448-460). Based on the relationship described by Moore, global warming would result in “on average” light-ice conditions and whales would be more likely to be closer to shore than farther away. During 2003 and 2004 the bowhead migration corridor has been exceptionally close to shore and the shorefast ice could be described as “light”.
During the eastward (springtime) migration the shore-fast ice margin is approximately 75 km (46.6 mi) from Northstar and no bowheads are expected to be harassed during this time period.
The following six species of seals and cetaceans can be expected to occur in the region of proposed activity and be affected by the Nortstar facility: ringed, spotted and bearded seals, and bowhead, gray and beluga whales. General information on these species can be found in NMFS Stock Assessment Reports. These documents are available at:
In addition to these six species for which a incidental take authorization is sought, other species that may occur rarely in the Alaskan Beaufort Sea include the harbor porpoise (
The potential impacts of the offshore oil development at Northstar on marine mammals involve both acoustic and non-acoustic effects. Potential non-acoustic effects could result from the physical presence of personnel, structures and equipment. The visual presence of facilities, support vessels, and personnel, and the unlikely occurrence of an oil spill, are potential sources of non-acoustic effects. There is a small chance that a seal pup might be injured or killed by on-ice construction or transportation activities.
Acoustic effects involve sounds produced by activities such as power generation and oil production on Northstar Island, heavy equipment operations on ice, impact hammering, drilling, and camp operations. Some of these sounds were more prevalent during the construction and drilling periods, and sound levels emanating from Northstar are expected to be lower during the ongoing production period. During average ambient conditions, some Northstar-related activities are expected to be audible to marine mammals at distances up to 10 km (5.4 nm) away. However, because of the poor transmission of airborne sounds from the Northstar facility into the water, and their low effective source levels, sounds from production operations are not expected to disturb marine mammals at distances beyond a few kilometers from the Northstar development.
Responses by pinnipeds to noise are highly variable. Responses observed to date by ringed seals during the ice-covered season are limited to short-term behavioral changes in close proximity to activities at Northstar. During the open-water season responses by ringed seals are expected to be even less than during the ice-covered season. A major oil spill is unlikely (please see response to comments 2 and 3 in 66 FR 65923 (December 21, 2001)) for a discussion on potential for an oil spill to affect marine mammals in the Beaufort Sea), but the impact of an oil spill on seals could be lethal to some heavily oiled pups or adults. In the unlikely event of a major spill, the overall impacts to seal populations would be minimal due to the small fraction of those exposed to recently spilled oil that are likely to be seriously affected.
Responses to Northstar activities by migrating and feeding bowhead whales and beluga whales will be short-term and limited in scope due to the typically small proportion of whales that will migrate near Northstar and the relatively low levels of underwater sounds propagating seaward from the island at most times. Limited deflection effects may occur when vessels are operating for prolonged periods near Northstar. An oil spill is unlikely and it is even less likely to disperse into the main migration corridor for either whale species. The effects of oiling on bowhead and beluga whales are unknown, but could include fouling of baleen and irritation of the eyes, skin, and respiratory tract (if heavily oiled).
Impacts to marine mammal food resources or habitat are not expected from any of the continued drilling or operational activities at Northstar.
Inupiat hunters emphasize that all marine mammals are sensitive to noise, and, therefore, they make as little extraneous noise as possible when hunting. Bowhead whales often show avoidance or other behavioral reactions to strong underwater noise from industrial activities, but often tolerate the weaker noise received when the same activities are occurring farther away. Various studies have provided information about these sound levels and distances (Richardson and Malme, 1993; Richardson
Underwater sounds associated with drilling and production operations have lower source levels than do the seismic pulses and drillship sounds that have been the main concern of the Inupiat hunters. Sounds from vessels supporting activities at Northstar will attenuate below ambient noise levels at closer distances than do seismic or drillship sounds. Thus, reaction/ deflection distances for bowhead whales approaching Northstar are expected to be considerably shorter than those for
Recently, there has been concern among Inupiat hunters that barges and other vessels operating within or near the bowhead migration/feeding corridor may deflect whales for an extended period (J.C. George, NSB-DWM, pers. comm to Williams). It has been suggested that, if the headings of migrating bowheads are altered through avoidance of vessels, the whales may subsequently maintain the “affected” heading well past the direct zone of influence of the vessel. This might result in progressively increasing deflection as the whale progresses west. However, crew boats and barges supporting Northstar remain well inshore of the main migration corridor. As a result, BP believes this type of effect is unlikely to occur in response to these types of Northstar-related vessel traffic.
Potential effects on subsistence could result from direct actions of oil development upon the biological resources or from associated changes in human behavior. For example, the perception that marine mammals might be contaminated or “tainted” by an oil spill could affect subsistence patterns whether or not many mammals are actually contaminated. The BP application discusses both aspects in greater detail.
A Conflict Avoidance Agreement/Plan of Cooperation (CAA/Plan) has been negotiated between BP, the AEWC, and the North Slope Borough in past years, and discussions regarding future agreements are on-going. A new Plan will address concerns relating to the subsistence harvest of marine mammals in the region surrounding Northstar.
Mitigation proposed by BP includes avoidance of seal lairs by 100 m (328 ft), if new activities occur on the floating sea ice after 20 March. In addition, BP proposes to mitigate potential acoustic effects that might occur due to exposure of whales or seals to strong pulsed sounds. If BP needs to conduct an activity capable of producing underwater sound with levels ≥ 180 or ≥ 190 dB re 1 μPa (rms) at locations where whales or seals could be exposed, BP proposes to monitor safety zones corresponding to those levels. Activities producing underwater sound levels ≥180 or ≥190 dB re 1 μPa (rms) would be temporarily shut down if whales and seals, respectively, occur within the relevant radii. The purposes of these mitigation measures are to minimize potentially harmful impacts to marine mammals and their habitat, and to ensure the availability of marine mammals for subsistence purposes.
The monitoring proposed by BP includes some research components to be implemented annually and others to be implemented on a contingency basis. Basking and swimming ringed seals will be counted annually by Northstar personnel in a systematic fashion to document the long-term stability of ringed seal abundance and habitat use near Northstar. BP proposes to monitor the bowhead migration in 2005 and subsequent years using two Directional Autonomous Seafloor Acoustic Recorders (DASARs) to record near-island sounds and two to record whale calls. If BP needs to conduct an activity capable of producing underwater sound with levels ≥180 or ≥190 dB re 1 μPa (rms) at locations where whales or seals could be exposed, BP proposes to monitor safety zones defined by those levels. The monitoring proposed would be used in estimating the numbers of marine mammals that may potentially be disturbed (i.e., taken by Level B harassment), incidental to operations of Northstar.
BP proposes to submit annual monitoring reports, with the first report to cover the activities from May (or the effective date of these regulations) through October 2005 (i.e., the bowhead migration period), and subsequent reports to cover activities from November of one year through October of the next year. BP proposes that the 2005 report would be due on March 31, 2006. For subsequent years, it is proposed that the annual report (to cover monitoring during a 12-month November-October period) would be submitted on 31 March of the following year.
The annual reports will provide summaries of BP's Northstar activities. These summaries will include the following: dates and locations of ice-road construction, on-ice activities, vessel/hovercraft operations, oil spills, emergency training, and major repair or maintenance activities thought to alter the variability or composition of sounds in a way that might have detectable effects on ringed seals or bowhead whales. The annual reports will also provide details of ringed seal and bowhead whale monitoring, the monitoring of Northstar sound via the nearshore DASAR, estimates of the numbers of marine mammals exposed to project activities, descriptions of any observed reactions, and documentation concerning any apparent effects on accessibility of marine mammals to subsistence hunters.
BP also proposes to submit a single comprehensive report on the monitoring results from 2005 to mid-2009 no later than 240 days prior to expiration of the renewed regulations, i.e., by September 2009.
If specific mitigation is required for activities on the sea ice initiated after 20 March (requiring searches with dogs for lairs), or during the operation of strong sound sources (requiring visual observations and shut-down), then a preliminary summary of the activity, method of monitoring, and preliminary results will be submitted within 90 days after the cessation of that activity. The complete description of methods, results and discussion will be submitted as part of the annual report.
Any observations concerning possible injuries, mortality, or an unusual marine mammal mortality event will be transmitted to NMFS within 48 hours.
NMFS has preliminarily determined that the impact of operation of the Northstar facility in the U.S. Beaufort Sea will result in no more than a temporary modification in behavior by certain species of cetaceans and pinnipeds. During the ice-covered season, pinnipeds close to the island may be subject to incidental harassment due to the localized displacement from construction of ice roads, from transportation activities on those roads, and from oil production-related activities at Northstar. As cetaceans will not be in the area during the ice-covered season, they will not be affected.
During the open-water season, the principal operations-related noise activities will be impact hammering, helicopter traffic, vessel traffic, and other general production activity on Seal Island. Sounds from production activities on the island are not expected to be detectable more than about 5-10 km (3.1-6.2 mi) offshore of the island. Helicopter traffic will be limited to nearshore areas between the mainland and the island and is unlikely to approach or disturb whales. Barge traffic will be located mainly inshore of the whales and will involve vessels moving slowly, in a straight line, and at constant speed. Little disturbance or displacement of whales by vessel traffic is expected. While behavioral modifications may be made by these species to avoid the resultant noise, this behavioral change is expected to have no more than a negligible impact on the animals.
The number of potential incidental harassment takes will depend on the
Because most of the bowhead whales are east of the Northstar area in the Canadian Beaufort Sea until late August/early September, activities at Northstar are not expected to impact subsistence hunting of bowhead whales prior to that date. Appropriate mitigation measures to avoid an unmitigable adverse impact on the availability of bowhead whales for subsistence needs will be the subject of consultation between BP and subsistence users.
Also, while production at Northstar has some potential to influence seal hunting activities by residents of Nuiqsut, because (1) the peak sealing season is during the winter months, (2) the main summer sealing is off the Colville Delta, and (3) the zone of influence from Northstar on seals is fairly small, NMFS believes that Northstar oil production will not have an unmitigable adverse impact on the availability of these stocks for subsistence uses.
NMFS has preliminarily determined that the potential for an offshore oil spill occurring is low (less than 10 percent over 20-30 years (Corps, 1999)) and the potential for that oil intercepting whales or seals is even lower (about 1.2 percent (Corps, 1999)). In addition, there will be an oil spill response program in effect that will be as effective as possible in Arctic waters. Accordingly, and because of the seasonality of bowheads, NMFS has preliminarily determined that the taking of marine mammals incidental to operations at the Northstar oil production facility will have no more than a negligible impact on them. Also, NMFS has preliminarily determined that there will not be an unmitigable adverse impact on subsistence uses of marine mammals.
On March 4, 1999, NMFS concluded consultation with the Corps on permitting the construction and operation at the Northstar site. The finding of that consultation was that construction and operation at Northstar is not likely to jeopardize the continued existence of the bowhead whale stock. No critical habitat has been designated for this species; therefore, none will be affected. Because issuance of a small take authorization to BPXA under section 101(a)(5) of the MMPA is a Federal action, NMFS has section 7 responsibilities for this action. Preliminarily, NMFS has determined that this rulemaking action is not different from that analyzed in 1999 in the Biological Opinion. Prior to issuing the final rule, if NMFS determines that there are no impacts on listed species different from the analysis in the 1999 Biological Opinion, NMFS will issue an Incidental Take Statement under section 7 of the ESA at the time it issues an LOA for this activity.
On June 12, 1998 (63 FR 32207), the Environmental Protection Agency (EPA) noted the availability for public review and comment a Draft EIS prepared by the Corps under NEPA on Beaufort Sea oil and gas development at Northstar. Comments on that document were accepted by the Corps until August 31, 1998 (63 FR 43699, August 14, 1998). On February 5, 1999 (64 FR 5789), EPA noted the availability for public review and comment of a Final EIS prepared by the Corps under NEPA on Beaufort Sea oil and gas development at Northstar. Comments on that document were accepted by the Corps until March 8, 1999. Based upon a review of the Final EIS, the comments received on the Draft EIS and Final EIS, and the comments received during the previous rulemaking, on May 18, 2000, NMFS adopted the Corps Final EIS and determined that it is not necessary to prepare supplemental NEPA documentation (see 65 FR 34014, May 25, 2000).
NMFS requests interested persons to submit comments, information, and suggestions concerning BP's application and proposed regulations on the taking of marine mammals incidental to construction and operation of an offshore oil and gas facility in the U.S. Beaufort Sea. The proposed regulations re-promulgate those formerly codified at §§ 216.200 through 216.210 (expired on May 25, 2005), but contain new effective dates in § 216.201; makes minor changes for clarity to § 216.204 (the word “possible” is removed and the word “practicable” is inserted in its place), § 216.207 (the first sentence of paragraph (d) is revised by removing the superfluous phrase “, in accordance with Administrative Procedure Act requirements,”) and § 216.210 (the first sentence of paragraph (a) is revised by removing the phrase “In addition to complying with the provisions in §§ 216.106 and 216.208,”); and modifies the monitoring and reporting requirements in § 216.206 as noted in this document's preamble.
Prior to submitting comments, NMFS recommends reviewers of this document read the responses to comments made previously (see 65 FR 34014, May 25, 2000; and 66 FR 65923, December 21, 2001), for the previous rulemaking and LOAs as NMFS does not intend to address these issues further without the submission of additional scientific information or policy considerations.
This action has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities since it would have no effect, directly or indirectly, on small businesses. It may affect a small number of contractors providing services related to reporting the impact of the activity on marine mammals, some of whom may be small businesses, but the number involved would not be substantial. Further, since the monitoring and reporting requirements are what would lead to the need for their services, the economic impact on them would be beneficial. Because of this certification, a regulatory flexibility analysis is not required and none has been prepared.
Notwithstanding any other provision 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
The reporting burden for the approved collections-of-information is estimated to be approximately 80 hours for the annual applications for an LOA, a total of 80 hours each for the winter monitoring program reports and a total of 120-360 hours for the interim and final annual open-water reports (increasing complexity in the analysis of multi-year monitoring programs in the latter years of that program requires additional time to complete). These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection-of-information. Send comments regarding these burden estimates, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS and OMB (see
Exports, Fish, Imports, Indians, Labeling, Marine mammals, Penalties, Reporting and recordkeeping requirements, Seafood, Transportation.
For reasons set forth in the preamble, 50 CFR part 216 is proposed to be amended as follows:
1. The authority citation for part 216 continues to read as follows:
16 U.S.C. 1361
2. Subpart R is added to part 216 to read as follows:
Regulations in this subpart apply only to the incidental taking of those marine mammal species specified in paragraph (b) of this section by U.S. citizens engaged in oil and gas development activities in areas within state and/or Federal waters in the U.S. Beaufort Sea specified in paragraph (a) of this section. The authorized activities as specified in a Letter of Authorization issued under §§ 216.106 and 216.208 include, but may not be limited to, site construction, including ice road and pipeline construction, vessel and helicopter activity; and oil production activities, including ice road construction, and vessel and helicopter activity, but excluding seismic operations.
(a)(1) Northstar Oil and Gas Development; and
(2) [Reserved]
(b) The incidental take by harassment, injury or mortality of marine mammals under the activity identified in this section is limited to the following species: bowhead whale (
Regulations in this subpart are effective from September 1, 2005 through August 31, 2010.
(a) Under Letters of Authorization issued pursuant to §§ 216.106 and 216.208, the Holder of the Letter of Authorization may incidentally, but not intentionally, take marine mammals by harassment, injury, and mortality within the area described in §216.200(a), provided the activity is in compliance with all terms, conditions, and requirements of these regulations and the appropriate Letter of Authorization.
(b) The activities identified in §216.200 must be conducted in a manner that minimizes, to the greatest extent practicable, any adverse impacts on marine mammals, their habitat, and on the availability of marine mammals for subsistence uses.
Notwithstanding takings authorized by § 216.200 and by a Letter of Authorization issued under §§ 216.106 and 216.208, no person in connection with the activities described in § 216.200 shall:
(a) Take any marine mammal not specified in §216.200(b);
(b) Take any marine mammal specified in § 216.200(b) other than by incidental, unintentional harassment, injury or mortality;
(c) Take a marine mammal specified in § 216.200(b) if such taking results in more than a negligible impact on the species or stocks of such marine mammal; or
(d) Violate, or fail to comply with, the terms, conditions, and requirements of these regulations or a Letter of Authorization issued under § 216.106.
The activity identified in § 216.200(a) must be conducted in a manner that minimizes, to the greatest extent practicable, adverse impacts on marine mammals and their habitats. When conducting operations identified in § 216.200, the mitigation measures contained in the Letter of Authorization issued under §§ 216.106 and 216.208 must be utilized.
When applying for a Letter of Authorization pursuant to § 216.207, or a renewal of a Letter of Authorization pursuant to § 216.209, the applicant must submit a Plan of Cooperation that identifies what measures have been taken and/or will be taken to minimize any adverse effects on the availability of marine mammals for subsistence uses. A plan must include the following:
(a) A statement that the applicant has notified and met with the affected subsistence communities to discuss proposed activities and to resolve potential conflicts regarding timing and methods of operation;
(b) A description of what measures the applicant has taken and/or will take to ensure that oil development activities will not interfere with subsistence whaling or sealing;
(c) What plans the applicant has to continue to meet with the affected communities to notify the communities of any changes in operation.
(a) Holders of Letters of Authorization issued pursuant to §§ 216.106 and 216.208 for activities described in § 216.200 are required to cooperate with the National Marine Fisheries Service, and any other Federal, state or local agency monitoring the impacts of the activity on marine mammals. Unless specified otherwise in the Letter of Authorization, the Holder of the Letter of Authorization must notify the Administrator, Alaska Region, National Marine Fisheries Service, or his/her designee, by letter or telephone, at least 2 weeks prior to initiating new activities potentially involving the taking of marine mammals.
(b) Holders of Letters of Authorization must designate qualified on-site individuals, approved in advance by the National Marine Fisheries Service, to conduct the mitigation, monitoring and reporting activities specified in the Letter of Authorization issued pursuant to § 216.106 and § 216.208.
(c) Holders of Letters of Authorization must conduct all monitoring and/or research required under the Letter of Authorization.
(d) Unless specified otherwise in the Letter of Authorization, the Holder of that Letter of Authorization must submit an annual report to the Director, Office of Protected Resources, National Marine Fisheries Service, no later than March 31 of the year following the conclusion of the previous open water monitoring season. This report must contain all information required by the Letter of Authorization.
(e) A final annual comprehensive report must be submitted within the time period specified in the governing Letter of Authorization.
(f) A final comprehensive report on all marine mammal monitoring and research conducted during the period of these regulations must be submitted to the Director, Office of Protected Resources, National Marine Fisheries Service at least 240 days prior to expiration of these regulations or 240 days after the expiration of these regulations if renewal of the regulations will not be requested.
(a) To incidentally take bowhead whales and other marine mammals pursuant to these regulations, the U.S. citizen (see definition at § 216.103) conducting the activity identified in § 216.200, must apply for and obtain either an initial Letter of Authorization in accordance with §§ 216.106 and 216.208, or a renewal under § 216.209.
(b) The application for an initial Letter of Authorization must be submitted to the National Marine Fisheries Service at least 180 days before the activity is scheduled to begin.
(c) Applications for initial Letters of Authorization must include all information items identified in § 216.104(a).
(d) NMFS will review an application for an initial Letter of Authorization in accordance with § 216.104(b) and, if adequate and complete, will publish a notice of receipt of a request for incidental taking and a proposed amendment to § 216.200(a). In conjunction with amending § 216.200(a), the National Marine Fisheries Service will provide a minimum of 45 days for public comment on the application for an initial Letter of Authorization.
(e) Upon receipt of a complete application for an initial Letter of Authorization, and at its discretion, the National Marine Fisheries Service may submit the monitoring plan to members of a peer review panel for review and/or schedule a workshop to review the plan. Unless specified in the Letter of Authorization, the applicant must submit a final monitoring plan to the Assistant Administrator prior to the issuance of an initial Letter of Authorization.
(a) A Letter of Authorization, unless suspended, revoked or not renewed, will be valid for a period of time not to exceed the period of validity of this subpart, but must be renewed annually subject to annual renewal conditions in § 216.209.
(b) Each Letter of Authorization will set forth:
(1) Permissible methods of incidental taking;
(2) Means of effecting the least practicable adverse impact on the species, its habitat, and on the availability of the species for subsistence uses; and
(3) Requirements for monitoring and reporting, including any requirements for the independent peer-review of proposed monitoring plans.
(c) Issuance and renewal of each Letter of Authorization will be based on a determination that the number of marine mammals taken by the activity will be small, that the total number of marine mammals taken by the activity as a whole will have no more than a negligible impact on the species or stock of affected marine mammal(s), and will not have an unmitigable adverse impact on the availability of species or stocks of marine mammals for taking for subsistence uses.
(d) Notice of issuance or denial of a Letter of Authorization will be published in the
(a) A Letter of Authorization issued under § 216.106 and § 216.208 for the activity identified in § 216.200 will be renewed annually upon:
(1) Notification to the National Marine Fisheries Service that the activity described in the application submitted under
§ 216.207 will be undertaken and that there will not be a substantial modification to the described work, mitigation or monitoring undertaken during the upcoming season;
(2) Timely receipt of the monitoring reports required under § 216.205, and the Letter of Authorization issued under § 216.208, which have been reviewed by the National Marine Fisheries Service and determined to be acceptable, and the Plan of Cooperation required under § 216.205; and
(3) A determination by the National Marine Fisheries Service that the mitigation, monitoring and reporting measures required under § 216.204 and the Letter of Authorization issued under §§ 216.106 and 216.208, were undertaken and will be undertaken during the upcoming annual period of validity of a renewed Letter of Authorization.
(b) If a request for a renewal of a Letter of Authorization issued under §§ 216.106 and 216.208 indicates that a substantial modification to the described work, mitigation or monitoring undertaken during the upcoming season will occur, the National Marine Fisheries Service will provide the public a minimum of 30 days for review and comment on the request. Review and comment on renewals of Letters of Authorization are restricted to
(1) New cited information and data that indicates that the determinations made in this document are in need of reconsideration,
(2) The Plan of Cooperation, and
(3) The proposed monitoring plan.
(c) A notice of issuance or denial of a Renewal of a Letter of Authorization will be published in the Federal Register within 30 days of a determination.
(a) Except as provided in paragraph (b) of this section, no substantive modification (including withdrawal or
(b) If the Assistant Administrator determines that an emergency exists that poses a significant risk to the well-being of the species or stocks of marine mammals specified in § 216.200(b), a Letter of Authorization issued pursuant to §§ 216.106 and 216.208 may be substantively modified without prior notification and an opportunity for public comment. Notification will be published in the Federal Register within 30 days subsequent to the action.
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 regarding (a) 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; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) 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 should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
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.
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 regarding (a) 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; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) 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 should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
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
Grain Inspection, Packers and Stockyards Administration, USDA.
Notice and request for comments.
We propose to post 16 stockyards. We have received information that the stockyards meet the definition of a stockyard under the Packers and Stockyards Act and, therefore, need to be posted. Posted stockyards are subject to the provisions of the Packers and Stockyards Act. We have posted 2 stockyards. We determined that the stockyards meet the definition of a stockyard under the Packers and Stockyards Act and, therefore, needed to be posted.
For the proposed posting of stockyards, we will consider comments that we receive by August 9, 2005.
We invite you to submit comments on this notice. You may submit comments by any of the following methods:
• E-Mail: Send comments via electronic mail to
• Mail: Send hardcopy written comments to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 20250-3604.
• Fax: Send comments by facsimile transmission to: (202) 690-2755.
• Hand Delivery or Courier: Deliver comments to: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 20250-3604.
The Grain Inspection, Packers and Stockyards Administration (GIPSA) administers and enforces the Packers and Stockyards Act of 1921, as amended and supplemented (7 U.S.C. 181-229) (P&S Act). The P&S Act prohibits unfair, deceptive, and fraudulent practices by livestock market agencies, dealers, stockyard owners, meat packers, swine contractors, and live poultry dealers in the livestock, poultry, and meatpacking industries.
Section 302(a) of the P&S Act (7 U.S.C. 202(a)) defines the term “stockyard” as follows:
Section 302(b) of the P&S Act (7 U.S.C. 202(b)) requires the Secretary to determine which stockyards meet this definition, and to notify the owner of the stockyard and the public of that determination by posting a notice in each designated stockyard. After giving notice to the stockyard owner and to the public, the stockyard will be subject to the provisions of Title III of the P&S Act (7 U.S.C. 201-203 and 205-217a) until the Secretary deposts the stockyard by public notice.
This document notifies the stockyard owners and the public that the following 16 stockyards meet the definition of stockyard and that we propose to designate the stockyards as posted stockyards.
This document also notifies the public that the following two stockyards meet the definition of stockyard and that we have posted the stockyards. We published notices proposing to post the two stockyards on November 7, 2003 (68 FR 63055-63056). We received no comments in response to the proposed posting notice. To post stockyards, we assign the stockyard a facility number, notify the owner of the stockyard facility, and send notices to the owner of the stockyard to post on display in public areas of the stockyard. The date of posting is the date on which the posting notices are physically displayed.
7 U.S.C. 202.
Fish and Wildlife Service (FWS), Interior; National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of intent to conduct scoping meetings.
The U.S. Fish and Wildlife Service and National Marine Fisheries Service (Services) advise interested parties of their intent to conduct public scoping under the National Environmental Policy Act (NEPA) to gather information to prepare an Environmental Impact Statement (EIS) related to a permit application from Lewis County, Washington for the incidental take of listed species. The permit application would be associated with the Family Forest Habitat Conservation Plan in the Chehalis and Cowlitz River watersheds located in Lewis County, Washington.
The public scoping meeting will be held on July 28, 2005, from 5 p.m. - 8 p.m.
Written comments should be received on or before September 8, 2005.
The meeting will be held at the Forest Grange, 3397 Jackson Highway, Chehalis, WA 98532.
All comments concerning the preparation of the EIS and the NEPA process should be addressed to: Mark Ostwald, FWS, 510 Desmond Drive S.E., Suite 102, Lacey, WA 98503, facsimile (360)753-9518 or Laura Hamilton, NMFS, 510 Desmond Drive S.E., Suite 103, Lacey, WA 98503-1273, facsimile (360)753-9517. Comments may be submitted by e-mail to the following address:
Mark Ostwald, FWS, (360)753-9564, or Laura Hamilton, NMFS, (360)753-5820.
Persons needing reasonable accommodations in order to attend and participate in the public meeting should contact Mark Ostwald (see
Section 9 of the Endangered Species Act (16 U.S.C. 1532
Section 10 of the ESA specifies requirements for the issuance of incidental take permits (ITPs) to non-Federal landowners for the take of endangered and threatened species. Any proposed take must be incidental to otherwise lawful activities, not appreciably reduce the likelihood of the survival and recovery of the species in the wild and minimize and mitigate the impacts of such take to the maximum extent practicable. In addition, an applicant must prepare a habitat conservation plan describing the impact that will likely result from such taking, the strategy for minimizing and mitigating the incidental take, the funding available to implement such steps, alternatives to such taking, and the reason such alternatives are not being implemented.
NEPA (42 U.S.C. 4321
The EIS will analyze the potential issuance of two ITPs, one by NMFS and one by the FWS. To obtain an ITP, the applicant must prepare a habitat conservation plan that meets the issuance criteria established by the ESA and Service regulations (50 CFR 17.22(b)(2) and 222.307). Should a permit or permits be issued, the permit(s) may include assurances under the Services' “No Surprises” regulations.
On June 29, 2000, NMFS and the FWS published a notice in the
Lewis County is seeking ITPs from the Services that would provide regulatory certainty for family forest landowners making long-term commitments to forest resource protection. Lewis County believes these assurances may encourage family forest landowners to remain in forest management instead of converting lands to non-forest uses. As currently proposed, incidental take permits would be issued to Lewis County. The county would in turn provide certificates of inclusion to landowners after verifying they meet eligibility criteria and agree to comply with the HCP. Eligible landowners would be those that hold lands below elevation of 1,250 feet within the Chehalis and Cowlitz River watersheds in Lewis County, and harvest less than two million board feet of timber per calendar year.
As of 2004, approximately 133,000 acres were owned by small forest landowners who met these criteria in Lewis County. The permits, if issued would provide incidental take coverage for activities on a maximum of 200,000 acres in the County. A permit amendment would be required to exceed the acreage, which could be subject to additional NEPA review. The Washington Department of Natural Resources (DNR) would verify compliance with the HCP concurrent with harvest activities, and Lewis County and the Services would conduct additional compliance monitoring at other times. Annual Implementation reports would be provided by Lewis County to the Services.
Forestry activities that Lewis County is proposing for ITP coverage, and for which minimization and mitigation measures are being developed, include the following:
• All activities involved in timber management and harvest including: mechanical site preparation, prescribed burning, reforestation, vegetation management (other than with herbicides), pre-commercial thinning, commercial thinning, timber salvage, other commercial harvest (felling, bucking, limbing, yarding, skidding, processing, loading, and hauling) of timber, fire prevention, fire suppression (including mop-up activities), and non-chemical pest control;
• Construction, reconstruction, improvement, maintenance, abandonment, closure, and use of logging roads, spurs, landings, and decking areas;
• Quarrying, processing, and transporting of stone, gravel, and/or dirt for use in roads;
• Administrative activities, such as land surveying, timber cruising, and other resource inventorying;
• All activities required by the HCP or ITP; and
• Entering into and administering access rights, utility rights-of-ways, and recreational and hunting leases.
Species for which Lewis County seeks coverage include 33 species of fish and up to 44 species of wildlife. Seven of the species are currently listed as threatened under the ESA, including: Lower Columbia River Chinook salmon (
The draft HCP to be prepared by Lewis County in support of the ITP applications will describe the impacts of take on proposed covered species, and will propose a conservation strategy to minimize and mitigate those impacts on each covered species to the maximum extent practicable. This conservation strategy would follow the basic strategies employed in the current State Forest Practices Rules with modifications to address site-specific ecological conditions of the eligible lands. Streams would be protected with combinations of no-harvest and partial harvest buffers; roads would be designed, constructed, and maintained to minimize erosion and mass wasting; specified numbers of snags, logs, and residual live trees would be retained in uplands; and the size of timber harvests would be constrained to minimize potential cumulative effects. Protection of steep and unstable slopes, road construction, and road maintenance would follow State Forest Practices Rules, including any changes made to those rules through the adaptive management process associated with the Forest Practices Habitat Conservation Plan. Harvest unit size would be restricted to a maximum of 60 acres.
The draft HCP will identify HCP alternatives considered by Lewis County and will explain why those alternatives were not selected. The Services are responsible for determining whether the HCP satisfies ESA section 10 permit issuance criteria.
Under NEPA, a reasonable range of alternatives to a proposed project must be developed and considered in the Services' environmental review. The Services have identified the following preliminary alternatives for public comment during the public scoping period:
Additional project alternatives may be developed based on input received from the public scoping process.
The primary purpose of the scoping process is for the public to assist the Services in developing the EIS by identifying important issues and alternatives related to the applicant's proposed action. A scoping workshop will allocate time for informal discussion and questions with presentations by the Services and Lewis County.
Written comments from interested parties are welcome to ensure that the full range of issues related to the proposed ITP are identified. All comments and materials received, including names and addresses, will become part of the administrative record and may be released to the public.
Comments and materials received will be available for public inspection, by appointment, during normal business hours at the offices listed in the
The Services request that comments be specific. In particular, we request information regarding: direct, indirect, and cumulative impacts that implementation of the proposed HCP or other alternatives could have on endangered and threatened and other covered species, and their communities and habitats; other possible alternatives that meet the purpose and need; potential adaptive management and/or monitoring provisions; funding issues; existing environmental conditions in the plan area; other plans or projects that might be relevant to this proposed project; permit duration; maximum acreage that should be covered; limited entry time-frame for issuing certificates of inclusion; specific species that should or should not be covered; specific landforms that should or should not be covered; and minimization and mitigation efforts. NMFS and FWS estimate that the draft EIS will be available for public review in the spring of 2006.
The environmental review of this project will be conducted in accordance with the requirements of the NEPA of 1969 as amended (42 U.S.C. 4321
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce; U.S. Fish and Wildlife Service, Interior.
Receipt of permit amendment request.
Notice is hereby given that the Museum of Natural History Collections, Department of Environmental Studies, University of California, Santa Cruz, CA 95064 [Principal Investigator: Tonya Haff], has requested an amendment to scientific research permit no. 960-1528/PRT01789.
Written, telefaxed, or e-mail comments must be received on or before August 24, 2005.
The amendment request and related documents are available for review upon written request or by appointment in the following office(s):
Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301)713-2289; fax (301)427-2521;
Southwest Region, NMFS, 501 West Ocean Blvd., Suite 4200, Long Beach, CA 90802-4213; phone (562)980-4001; fax (562)980-4018; and
U.S. Fish and Wildlife Service, Division of Management Authority, 4401 North Fairfax Drive, Room 700, Arlington, VA 22203 (1-800-358-2104).
Written comments or requests for a public hearing on this application should be mailed to the Chief, Permits, Conservation and Education Division, F/PR1, Office of Protected Resources, NMFS or Chief, Branch of Permits, Division of Management Authority, U.S. Fish and Wildlife Service. Those individuals requesting a hearing should set forth the specific reasons why a hearing on this particular request would be appropriate.
Comments may also be submitted by facsimile at (301)427-2521, provided the facsimile is confirmed by hard copy submitted by mail and postmarked no later than the closing date of the comment period.
Comments may also be submitted by e-mail. The mailbox address for providing email comments is
Ruth Johnson or Jennifer Skidmore, Office of Protected Resources, NMFS, (301)713-2289; and Monica Farris, Branch of Permits, USFWS (1-800-358-2104).
The subject amendment to permit no. 960-1582/PRT017891 is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
Permit no. 960-1528/PRT017891 authorizes the Holder to acquire, import/export marine mammal specimens of the Orders Cetacea, Pinnipedia and Sirenia for purposes of scientific research and for deposit into a museum collection. The import/export may occur on a worldwide basis. The Holder now requests a 5-year extension of the joint NMFS and USFWS permit.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
Notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Consideration will be given to all comments received by August 24, 2005.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice of request for public comments regarding an extension to an existing OMB clearance.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Federal Acquisition Regulation (FAR) Secretariat has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a currently approved information collection requirement concerning transportation requirements. A request for public comments was published at 70 FR 28921, May 19, 2005. No comments were received.
Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the FAR, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology.
Submit comments on or before August 24, 2005.
Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503 and a copy to the General Services Administration, FAR Secretariat (VIR), 1800 F Street, NW, Room 4035, Washington, DC 20405.
Jeritta Parnell, Contract Policy Division, GSA (202) 501-4082.
FAR Part 47 and related clauses contain policies and procedures for applying transportation and traffic management considerations in the acquisition of supplies and acquiring transportation or transportation-related services. Generally, contracts involving transportation require information regarding the nature of the supplies, method of shipment, place and time of shipment, applicable charges, marking of shipments, shipping documents and other related items. This information is required to ensure proper and timely shipment of Government supplies.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice of request for public comments regarding an extension to an existing OMB clearance.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Federal Acquisition Regulation (FAR) Secretariat has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a currently approved information collection requirement concerning evaluation of export offers. A request for public comments was published in the
Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the FAR, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology.
Submit comments on or before August 24, 2005.
Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, FAR Secretariat (VIR), 1800 F Street, NW, Room 4035, Washington, DC 20405.
Jeritta Parnell, Contract Policy Division, GSA (202) 501-4082.
Offers submitted in response to Government solicitations must be evaluated and awards made on the basis of the lowest laid down cost to the Government at the overseas port of discharge, via methods and ports compatible with required delivery dates and conditions affecting transportation known at the time of evaluation. Offers are evaluated on the basis of shipment through the port resulting in the lowest cost to the Government. This provision collects information regarding the vendor's preference for delivery ports. The information is used to evaluate offers and award a contract based on the lowest cost to the Government.
Department of the Army, U.S. Army Corps of Engineers, DoD.
Notice of intent.
The U.S. Army Corps of Engineers, New Orleans District (CEMVN) is initiating a Supplemental Environmental Impact Statement (SEIS) for the Henderson Lake Management Unit feature, including the freshwater distribution structure element, of the Henderson Lake Area Atchafalaya Basin, Louisiana project, pursuant to the authority of the Flood Control Act of May 15, 1928 (Pub. L. 391, 70th Congress); and for the Recreational Development feature of the Atchafalaya Basin Floodway System, Louisiana project (hereinafter “ABFS” project), pursuant to the authority of the Flood Control Act of May 15, 1928 (Pub. L. 391, 70th Congress), as amended by the Supplemental Appropriations Act of 1985, Pub. L. 99-88 and as reauthorized and further amended by Section 601(a) of the Water Resources Development Act of 1986 (WRDA 1986), Pub. L. 99-662.
The CEMVN is initiating this study to implement construction and operation of the Henderson Lake Management Unit, St. Martin and St. Landry Parishes, which is one of two authorized pilot management units for the Management Unit feature of the ABFS Project; the freshwater distribution structure element, of the Henderson Lake Area Atchafalaya Basin, Louisiana project in St. Martin and St. Landry Parishes, Louisiana; and the Recreational Development feature of the Atchafalaya Basin Floodway System, Louisiana project in St. Martin, Iberia, St. Mary, Iberville, St. Landry, and Pointe Coupee Parishes, Louisiana. The authorized goals of the Management Unit feature of the ABFS project are to improve water quality and interior water circulation; remove barriers to reestablish north to south water flow; provide input of oxygenated low temperature water; and reduce or manage sediment input into the interior swamp. Action is necessary due to the existing poor water quality resulting from the lack of internal circulation and oxygenated water inputs, and increased sedimentation. In addition if action is not taken, both deep-water and shallow water habitat utilized by fish and wildlife resources will continue to be lost, reduced, or degraded. The intended result of the proposed work is to prolong the life expectancy of the productive habitat (primarily aquatic and cypress tupelo habitats) by restricting or redirecting sediments, while simultaneously achieving a healthy water circulation pattern that would maintain or restore water quality and reestablish north to south water movement. The Henderson Lake Management Unit is hydrologically separate and independent from the Buffalo Cove, Flat Lake, Cocodrie Swamp and Beau Bayou Management Unit elements of the ABFS project.
The authorized goal of the freshwater distribution structure element, of the Henderson Lake Area Atchafalaya Basin, Louisiana project is to provide water inflow to the Henderson Lake area and, together with the Henderson Lake Management Unit, restore overflow patterns to the extent practicable, and to encourage water movement through the Henderson Lake Management Unit for the benefit of the aquatic environment.
The goals and objectives of the Recreational Development feature of the ABFS project are the development of facilities such as boat launching ramps for the provision of interior and peripheral access to the ABFS project area, including those lands acquired for the Public Access feature of the ABFS
Questions concerning this SEIS should be addressed to Mr. Richard Boe at U.S. Army Corps of Engineers, PM-RP, P.O. Box 60267, New Orleans, LA 70160-0267, phone (504) 862-1505, fax number (504) 862-2572 or by e-mail at
A. Henderson Lake Management Unit: The Henderson Lake Management Unit represents one of two pilot management units authorized by WRDA 1986 for the Management Unit feature of the ABFS Project in accordance with the Atchafalaya Basin Feasibility Study and the accompanying Environmental Impact Statement dated January 1982, as approved by the Report of the Chief of Engineers dated February 28, 1983. Because the Henderson Lake Management Unit constitutes one of the “pilot” management units for the Management Unit feature of the ABFS project, the SEIS will clearly identify the possibility that additional future work may be recommended in the Henderson Lake Management Unit if the analysis of the operational monitoring data supports a finding that the Henderson Lake Management Unit elements initially proposed in the 1982 EIS for construction do not fully accomplish the goals and objectives of the authorized Management Unit feature of the ABFS project. The Henderson Lake Management Unit is hydrologically separate and independent from the other pilot management unit (Buffalo Cove Management Unit) and from the three conditionally authorized management units, Cocodrie Swamp, Flat Lake and Beau Bayou. Additionally, the management unit objectives, public interests and concerns that will be addressed at the Henderson Lake Management Unit differ substantially from those present for the other management units at Buffalo Cove, Flat Lake, Cocodrie Swamp and Beau Bayou. As such, Buffalo Cove, Flat Lake, Cocodrie Swamp and Beau Bayou will be the subject of a separate SEIS.
B. The development of the freshwater distribution structure element, of the Henderson Lake Area will serve as a source of freshwater for the Henderson Lake Management Unit which, with the implementation of the Henderson Lake Management Unit, will restore overflow patterns to the extent practicable and encourage water movement within the Henderson Lake Management Unit area for the benefit of the aquatic environment.
C. The development of the Recreational Development feature of the ABFS project will include, but is not limited to; campgrounds for recreational vehicles, tent, and primitive camping; paddling, hiking and biking trails; interpretive trails; bird watching facilities; boat launches; a project visitor center; and certain special and unique areas. These facilities will accommodate and support public-use in the ABFS, provide for additional entry into the ABFS to access its resources, and protect and aide in interpreting specific environmentally and culturally significant resources. The proposals for the freshwater distribution structure element of the Henderson Lake Area Atchafalaya Basin, Louisiana project, the Recreational Development feature of the ABFS project and the Henderson Lake Management Unit element of the Management Unit feature of the ABFS project are being investigated in the same document because the operation of the Henderson Lake Management Unit will have an impact on the nature and scope of recreational development that can take place in the area affected by the Henderson Lake Management Unit.
Public scoping meetings will be held in the vicinity of Lafayette, St. Martinville, and Baton Rouge, Louisiana. Depending on public interest, and if further public coordination is warranted, additional meetings may be scheduled.
Department of the Army; U.S. Army Corps of Engineers, DoD.
Notice; extension of submission deadline.
In response to a request from potential applications the submission deadline for project applications had been extended from July 25, 2005 as stated in the original notice published on June 8, 2005 in
Proposed must be received on or before August 8, 2005.
Proposed forms may be accessed at
Ms. Ellen Cummings, Headquarters, U.S. Army Corps of Engineers, Washington, DC 20314-1000, (202) 761-4750, e-mail:
None.
Department of the Army, DoD.
Notice of availability.
The Department of the Army announces the general availability of exclusive, partially exclusive or non-exclusive licenses relative to a novel tamper detection technology as described in U.S. Patent No. 6,831,990 “System and Method for Image Tamper Detection via Thumbnail Hiding”; December 14, 2004; Marvel,
Michael D. Rausa, U.S. Army Research Laboratory, Office of Research and Technology Applications, Attn: AMSRL-DP-T/Bldg. 434, Aberdeen Proving Ground, MD 21005-5425, Telephone: (410) 278-5028.
None.
Department of Education.
The Leader, Information Management Case Services Team, Regulatory Information Management Services, Office of the Chief Information Officer invites comments on the submission for OMB review as required by the Paperwork Reduction Act of 1995.
Interested persons are invited to submit comments on or before August 24, 2005.
Written comments should be addressed to the Office of Information and Regulatory Affairs, Attention: Carolyn Lovett, Desk Officer, Department of Education, Office of Management and Budget, 725 17th Street, NW., Room 10235, New Executive Office Building, Washington, DC 20503 or faxed to (202) 395-6974.
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that the Office of Management and Budget (OMB) provide interested Federal agencies and the public an early opportunity to comment on information collection requests. OMB may amend or waive the requirement for public consultation to the extent that public participation in the approval process would defeat the purpose of the information collection, violate State or Federal law, or substantially interfere with any agency's ability to perform its statutory obligations. The Leader, Information Management Case Services Team, Regulatory Information Management Services, Office of the Chief Information Officer, publishes that notice containing proposed information collection requests prior to submission of these requests to OMB. Each proposed information collection, grouped by office, contains the following: (1) Type of review requested,
Requests for copies of the information collection submission for OMB review may be accessed from
Comments regarding burden and/or the collection activity requirements should be directed to Sheila Carey at her e-mail address
National Advisory Committee on Institutional Quality and Integrity, Department of Education (The Advisory Committee).
The purpose of this notice is to invite written comments on accrediting agencies and State approval agencies whose applications to the Secretary for renewed recognition, requests for expansion of scope of recognition, or reports will be reviewed at the Advisory Committee meeting to be held on December 7-9, 2005, at the DoubleTree Hotel “ Crystal City in Arlington, Virginia.
Please submit your written comments by mail, fax, or e-mail no later than August 24, 2005 to Ms. Robin Greathouse, Accreditation and State Liaison. You may contact her at the U.S. Department of Education, room 7105, MS 8509, 1990 K Street, NW., Washington, DC 20006, telephone: (202) 219-7011, fax: (202) 219-7005, or e-mail:
The National Advisory Committee on Institutional Quality and Integrity is established under Section 114 of the Higher Education Act (HEA), as amended, 20 U.S.C. 1011c. One of the purposes of the Advisory Committee is to advise the Secretary of Education on the recognition of accrediting agencies and State approval agencies.
Yes, this notice announces the only opportunity you will have to submit written comments. However, a subsequent
We will review your comments, in response to this notice, as part of our evaluation of the agencies' compliance with Section 496 of the Higher Education Act of 1965, as amended, and the Secretary's Criteria for Recognition of Accrediting Agencies and State Approval Agencies. The Criteria are regulations found in 34 CFR part 602 (for accrediting agencies) and in 34 CFR part 603 (for State approval agencies) and are found at the following site:
We will also include your comments with the staff analyses we present to the Advisory Committee at its December 2005 meeting. Therefore, in order for us to give full consideration to your comments, it is important that we receive them by August 24, 2005. In all instances, your comments about agencies seeking continued recognition and/or an expansion of an agency's scope of recognition must relate to the Criteria for Recognition. In addition, your comments for any agency whose interim report or progress report is scheduled for review must relate to the issues raised and the Criteria for Recognition cited in the Secretary's letter that requested the interim report.
We will review any comments received after the deadline. If such comments, upon investigation, reveal that the accrediting agency or State approval agency is not acting in accordance with the Criteria for Recognition, we will take action either before or after the meeting, as appropriate.
The Secretary of Education recognizes accrediting agencies and State approval agencies for public postsecondary vocational education and nurse education if the Secretary determines that they meet the Criteria for Recognition. Recognition means that the Secretary considers the agency to be a reliable authority as to the quality of education offered by institutions or programs it accredits that are encompassed within the scope of recognition she grants to the agency.
The following agencies will be reviewed during the December 2005 meeting of the Advisory Committee:
1. Accrediting Commission of Career Schools and Colleges of Technology (Current scope of recognition: The accreditation of private, postsecondary, non-degree-granting institutions and degree-granting institutions in the United States, including those granting associate and baccalaureate degrees, that are predominantly organized to educate students for occupational, trade and technical careers, and including institutions that offer programs via distance education.) (Requested scope of recognition: The accreditation of private, postsecondary, non-degree-granting institutions and degree-granting institutions in the United States, including those granting associate, baccalaureate, and master's degrees, that are predominantly organized to educate students for occupational, trade and technical careers, and including institutions that offer programs via distance education.)
1. Accreditation Commission for Acupuncture and Oriental Medicine (Current scope of recognition: The accreditation throughout the United States of first-professional master's degree and professional master's level certificate and diploma programs in acupuncture and Oriental medicine, as well as freestanding institutions and colleges of acupuncture or Oriental medicine that offer such programs.) (Requested scope of recognition: The accreditation and preaccreditation throughout the United States of first-professional Master's degree and professional Master's level certificate and diploma programs in acupuncture and Oriental medicine, as well as freestanding institutions and colleges of acupuncture or Oriental medicine that offer such programs.)
2. American Association for Marriage and Family Therapy, Commission on Accreditation for Marriage and Family Therapy Education (Current and requested scope of recognition: The accreditation and preaccreditation (“Candidacy”) throughout the United States of clinical training programs in marriage and family therapy at the master's, doctoral, and postgraduate levels.)
3. American Bar Association, Council of the Section of Legal Education and Admissions to the Bar (Current and requested scope of recognition: The accreditation throughout the United States of programs in legal education that lead to the first professional degree in law, as well as freestanding law schools offering such programs.)
4. American Osteopathic Association, Commission on Osteopathic College Accreditation (Current and requested scope of recognition: The accreditation and preaccreditation (“Provisional Accreditation”) throughout the United States of freestanding, public and private non-profit institutions of osteopathic medicine and programs leading to the degree of Doctor of Osteopathy or Doctor of Osteopathic Medicine.)
5. American Podiatric Medical Association, Council on Podiatric Medical Education (Current and requested scope of recognition: The accreditation and preaccreditation (“Candidate Status”) throughout the United States of freestanding colleges of podiatric medicine and programs of podiatric medicine, including first professional programs leading to the degree of Doctor of Podiatric Medicine.)
6. Council on Occupational Education (Current scope of recognition: The accreditation and preaccreditation (“Candidacy status”) throughout the United States of non-degree granting postsecondary occupational/vocational institutions and those postsecondary occupational/vocational education institutions that have state authorization to grant the applied associate degree in specific vocational/occupational fields.) (Requested scope of recognition: The accreditation and preaccreditation (“Candidacy status”) throughout the United States of non-degree granting postsecondary occupational/vocational institutions and those postsecondary occupational/vocational education institutions that have state authorization to grant the applied associate degree in specific vocational/occupational fields, including institutions that offer programs via distance education.)
7. National Council for Accreditation of Teacher Education (Current and requested scope of recognition: The accreditation throughout the United States of professional education units providing baccalaureate and graduate degree programs for the preparation of teachers and other professional personnel for elementary and secondary schools.)
8. New England Association of Schools and Colleges, Commission on Technical and Career Institutions (Current and requested scope of recognition: The accreditation and preaccreditation (“Candidate status”) of secondary institutions with vocational-technical programs at the 13th and 14th grade level, postsecondary institutions, and institutions of higher education that provide primarily vocational/technical education at the certificate, associate, and baccalaureate degree levels in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. This recognition extends to the Board of Trustees of the Association jointly with the Commission for decisions involving preaccreditation, initial accreditation, and adverse actions.)
1. Middle States Commission on Secondary Schools.
2. National Association of Schools of Art and Design, Commission on Accreditation.
3. National Association of Schools of Dance, Commission on Accreditation.
4. National Association of Schools of Music, Commission on Accreditation, Commission on Non-Degree-Granting Accreditation, Commission on Community/Junior College Accreditation.
5. National Association of Schools of Theatre, Commission on Accreditation.
6. North Central Association Commission on Accreditation and School Improvement, Board of Trustees.
7. North Central Association of Colleges and Schools, The Higher Learning Commission.
8. New England Association of Schools and Colleges, Commission on Institutions of Higher Education.
9. Western Association of Schools and Colleges, Accrediting Commission for Schools.
1. American Academy for Liberal Education.
1. Pennsylvania State Board for Vocational Education, Bureau of Career and Technical Education.
2. Oklahoma Board of Career and Technology Education
1. Montana State Board of Nursing.
All petitions and those third-party comments received in advance of the meeting, will be available for public inspection at the U.S. Department of Education, room 7105, MS 8509, 1990 K Street, NW., Washington, DC 20006, telephone (202) 219-7011 between the hours of 8 a.m. and 3 p.m., Monday through Friday, until November 4, 2005. They will be available again after the December 7-9, 2005 Advisory Committee meeting. An appointment must be made in advance of such inspection.
You may view this document, as well as all other Department of Education documents published in the
To use PDF you must have Adobe Acrobat Reader, which is available free
The official version of this document is the document published in the
5 U.S.C. Appendix 2.
Take notice that the Commission received the following electric rate filings.
Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St. NE., Washington, DC 20426.
The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed dockets(s). For assistance with any FERC Online service, please e-mail
Take notice that the Commission received the following electric rate filings.
Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference to filings initiating a new proceeding, interventions or protests submitted on or before the comment deadline need not be served on persons other and the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St. NE., Washington, DC 20426.
The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed dockets(s). For assistance with any FERC Online service, please e-mail
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA or Agency) Science Advisory Board (SAB) Staff Office announces a public teleconference of the Clean Air Scientific Advisory Committee (CASAC) Particulate Matter (PM) Review Panel (Panel) to review the EPA staff recommendations concerning a potential thoracic coarse PM standard in the final PM Staff Paper.
August 11, 2005. The teleconference meeting will be held on August 11, 2005, from 1 to 5 p.m. (eastern time).
Any member of the public who wishes to obtain the teleconference call-in numbers and access codes; would like to submit written or brief oral comments; or wants further information concerning this teleconference meeting, should contact Mr. Fred Butterfield, Designated Federal Officer (DFO), EPA Science Advisory Board (1400F), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; via telephone/voice mail: (202) 343-9994; fax: (202) 233-0643; or e-mail at:
This teleconference meeting is being held for the CASAC PM Review Panel to review EPA staff recommendations concerning a potential thoracic coarse PM standard found in the Review of the National Ambient Air Quality Standards for Particulate Matter: Policy Assessment of Scientific and Technical Information (OAQPS Staff Paper, EPA-452/R-05-005, June 2005).
Environmental Protection Agency (EPA).
Notice.
EPA received a petition, dated April 5, 2005, from the People for the Ethical Treatment of Animals (PETA). The petition requests EPA initiate rulemaking to require that: All chemical testing conducted in connection with test rules and voluntary consent orders under the Toxic Substances Control Act (TSCA), as well as testing under the voluntary High Production Volume (HPV) Challenge Program, adhere to certain animal welfare principles contained in guidance provided to participants in the voluntary HPV Challenge Program; and EPA enforce those guidelines where they are not followed. The petition states that it is filed under section 21 of TSCA and section 553(e) of the Administrative Procedure Act (APA). Although EPA believes the petitioner's request is outside the scope of TSCA section 21, EPA responded to the petitioners within the 90-day timeframe established in TSCA for section 21 petitions. EPA has responded to the petition by denying the request and is announcing the public availability of this response.
This action is directed to the public in general, and may be of particular interest to participants in the voluntary HPV Challenge Program and persons who are or may be required to conduct testing of chemical substances under TSCA. Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be interested in this action. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under
1.
2.
Certain types of information will not be placed in the EPA Dockets. Information claimed as CBI and other information whose disclosure is restricted by statute, which is not included in the official public docket, will not be available for public viewing in EPA's electronic public docket. EPA's policy is that copyrighted material will not be placed in EPA's electronic public docket but will be available only in printed, paper form in the official public docket. To the extent feasible, publicly available docket materials will be made available in EPA's electronic public docket. When a document is selected from the index list in EPA Dockets, the system will identify whether the document is available for viewing in EPA's electronic public docket. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit I.B.1. EPA intends to work towards providing electronic access to all of the publicly available docket materials through EPA's electronic public docket.
This action announces the availability of EPA's response to the petition. The public may access both the petition and EPA's response as described in Unit I.B.
Environmental protection, Animal welfare, Toxic substances, Voluntary High Production Volume Challenge Program.
Section 7A of the Clayton Act, 15 U.S.C. 18a, as added by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, requires persons contemplating certain mergers or acquisitions to give the Federal Trade Commission and the Assistant Attorney General advance notice and to wait designated periods before consummation of such plans. Section 7A(b)(2) of the Act permits the agencies, in individual cases, to terminate this waiting period prior to its expiration and require that notice of this action be published in the
The following transactions were granted early termination of the waiting period provided by law and the premerger notification rules. The grants were made by the Federal Trade Commission and the Assistant Attorney General for the Antitrust Division of the Department of Justice. Neither agency intends to take any action with respect to these proposed acquisitions during the applicable waiting period.
By Direction of the Commission.
Federal Trade Commission (FTC).
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before August 18, 2005.
Interested parties are invited to submit written comments. Comments should refer to “Novartis AG, File No. 051 0106,” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room 135-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing confidential material must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule 4.9(c). 16 CFR 4.9(c) (2005).
The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at
Elizabeth A. Jex, Bureau of Competition, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3273.
Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 of the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for July 19, 2005), on the World Wide Web, at
Public comments are invited, and may be filed with the Commission in either paper or electronic form. All comments should be filed as prescribed in the
The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) from Novartis AG (“Novartis”), which is designed to remedy the anticompetitive effects of the acquisition of Eon Labs, Inc. (“Eon”) by Novartis. Under the terms of the proposed Consent Agreement, Novartis, including its generic pharmaceuticals division Sandoz, Inc. (“Sandoz”), would be required to divest to Amide Pharmaceutical, Inc. (“Amide”) the Eon assets necessary to manufacture and market generic desipramine hydrochloride tablets, and the Sandoz assets necessary to manufacture and market orphenadrine citrate ER tablets and rifampin oral capsules in the United States. Further, Novartis, through Sandoz, has agreed to enter into a supply agreement with Amide to enable Amide to market these products until Amide obtains Food and Drug Administration (“FDA”) approval to manufacture the products itself. Further, Novartis is required to provide technology transfer assistance to enable Amide to obtain all necessary FDA approvals as soon as possible.
The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again review the proposed Consent Agreement and the comments received, and will decide whether it should withdraw from the proposed Consent Agreement, modify it, or make final the Decision and Order (“Order”).
Pursuant to an Agreement for Purchase and Sale of Stock dated February 20, 2005, Novartis agreed to purchase 60 million shares of Eon from Santo Holding AG (“Santo”) for $1.72 billion in cash. These shares represent approximately 67% of the outstanding stock of Eon. Further, Novartis has made a definitive agreement, approved by the Eon Board of Directors, to offer to acquire the remaining 31.9 million fully diluted shares of Eon for $31.00 per share cash. The Commission's Complaint alleges that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45, in the markets for the manufacture and sale of: (1) Generic desipramine hydrochloride tablets, (2) generic orphenadrine citrate ER tablets, and (3) generic rifampin oral capsules. The proposed Consent Agreement will remedy the alleged violations by replacing in each of these markets the lost competition that would result from the acquisition.
Desipramine hydrochloride is a tricyclic antidepressant. The branded desipramine product, Norpramin, does not offer any significant price pressure in the generic desipramine market other than setting a price ceiling that is currently many times higher than the generic pricing level. The brand price is essentially irrelevant with respect to the pricing of generic desipramine tablets. In contrast, the competition between producers of generic desipramine tablets has a direct and substantial effect on generic desipramine pricing. Annual U.S. sales of generic desipramine hydrochloride tablets are reported to be less than $6 million. The U.S. market for the manufacture and sale of generic desipramine hydrochloride tablets is highly concentrated. Only Novartis and Eon make all six strengths of generic desipramine hydrochloride tablets. Watson Pharmaceuticals, Inc., the only other firm supplying generic desipramine hydrochloride tablets, sells only three of the six strengths. The acquisition of Eon by Novartis would increase significantly the concentration in the generic desipramine hydrochloride market. Post-acquisition, only Novartis would supply the full line, accounting for more than 95% of U.S. generic desipramine hydrochloride sales.
Orphenadrine citrate is a muscle relaxant. The branded orphenadrine citrate product, Norflex, does not impact the pricing of generic orphenadrine citrate other than setting a price ceiling that is currently many times higher than the generic pricing level. In contrast, the competition between producers of generic orphenadrine citrate tablets has a direct and substantial effect on generic orphenadrine citrate pricing. Annual U.S. sales of generic orphenadrine citrate ER tablets is slightly under $10 million. The U.S. market for the manufacture and sale of generic orphenadrine citrate ER tablets is highly concentrated. Only Eon, Novartis, and Impax Laboratories, Inc. (through its generic marketing division, Global Pharmaceuticals) manufacture and market generic orphenadrine citrate ER tablets in the United States. The acquisition would result in a duopoly with Novartis accounting for approximately 70% of all prescriptions of generic orphenadrine citrate. The acquisition of Eon by Novartis would increase the concentration in the market significantly.
Rifampin is one of several drugs used in a multi-drug cocktail for the treatment of tuberculosis. Rifampin is indicated for the treatment of tuberculosis. The branded rifampin product, Rifadin, does not offer any significant price pressure in the generic rifampin oral capsule market other than setting a price ceiling that is currently many times higher than the generic pricing level. In contrast, the competition between producers of generic rifampin capsules has a direct and substantial effect on generic rifampin pricing. Annual U.S. sales of generic rifampin oral capsules is about $14.5 million. The U.S. market for the manufacture and sale of generic rifampin oral capsules is highly concentrated. Only Eon, Novartis, and VersaPharm, Incorporated market generic rifampin oral capsules in the United States. The acquisition would result in a duopoly with Novartis accounting for more than 70% of sales of generic rifampin in the United States.
Entry into manufacture and sale of: (1) Generic desipramine hydrochloride tablets, (2) generic orphenadrine citrate ER tablets, and (3) generic rifampin oral capsules would not be timely, likely, or sufficient in its magnitude, character, and scope to deter or counteract the anticompetitive effects of the acquisition. Developing and obtaining FDA approval for the manufacture and sale of generic desipramine hydrochloride tablets, generic orphenadrine citrate ER tablets, and generic rifampin oral capsules takes at least two years due to substantial regulatory, technological, and intellectual property barriers.
The proposed acquisition would cause significant anticompetitive harm to consumers in the U.S. markets for generic desipramine hydrochloride tablets, generic orphenadrine citrate ER tablets, and generic rifampin oral capsules by eliminating actual, direct, and substantial competition between Novartis and Eon; by increasing the likelihood that Novartis will be able to unilaterally exercise market power; by increasing the likelihood and degree of coordinated interaction between the few remaining competitors; and by increasing the likelihood that consumers will pay higher prices.
The proposed Consent Agreement preserves competition in the generic desipramine hydrochloride tablets, generic orphenadrine citrate ER tablets, and generic rifampin oral capsules markets by requiring that Novartis divest all of the Sandoz orphenadrine citrate ER and rifampin assets and all of Eon's desipramine hydrochloride assets to Amide no later than ten days after the acquisition. Amide, a reputable generic manufacturer, is particularly well-positioned to manufacture and market generic rifampin, because Amide already currently contract manufactures generic rifampin capsules for Novartis. Amide is also well-positioned to obtain FDA approval to manufacture and market generic desipramine hydrochloride and orphenadrine citrate ER in the near future. If the Commission determines that Amide is not an acceptable purchaser, or that the manner of the divestiture is not acceptable, Novartis must rescind the transaction with Amide and divest the assets to a Commission-approved buyer not later than six months from the date the Order becomes final. If Novartis fails to divest within the six months, the Commission may appoint a trustee to divest the desipramine hydrochloride, rifampin, and orphenadrine citrate ER assets.
The proposed remedy contains several provisions designed to ensure the successful divestiture of the desipramine hydrochloride, rifampin, and orphenadrine citrate ER assets to Amide. Novartis must provide various transitional services to enable Amide to compete against Novartis immediately following the divestiture. Novartis is obligated to provide Amide with all inventory of the three divested products and to supply Amide the two products that Amide does not currently manufacture—desipramine hydrochloride and orphenadrine citrate ER—while Amide attempts to obtain FDA approval to manufacture the products for itself in its own facility. Novartis will supply Amide with desipramine hydrochloride for two years, and Amide will have options to extend that supply for two additional one-year periods if Amide is making progress toward approval and needs the additional time to obtain FDA approval. Novartis will supply Amide with orphenadrine citrate ER for four years, and Amide will again have options to extend the supply up to two additional one-year periods as it seeks FDA approval to manufacture orphenadrine citrate for itself. Novartis is also required to provide technology transfer assistance to enable Amide to obtain all necessary FDA approvals to manufacture and sell desipramine hydrochloride, rifampin, and orphenadrine citrate for itself.
The proposed remedy does not provide for a technology transfer or supply obligation for rifampin because Amide is already in possession of the manufacturing technology, having contract manufactured generic rifampin for Novartis for several years.
The proposed remedy also incorporates the use of an Interim Trustee, experienced in obtaining regulatory approval and the manufacture of pharmaceuticals, to oversee the technology transfer and to assist Amide and the Commission in the event of difficulties with supply or delays in obtaining approval. As part of the proposed remedy, Novartis is required to execute an agreement conferring all rights and powers necessary for the Interim Trustee to satisfy his responsibilities under the Order to assure successful divestitures of the desipramine hydrochloride, rifampin, and orphenadrine citrate assets. Novartis has selected Francis J. Civille to be the Interim Monitor and Amide has consented to his selection. The monitor will ensure that the Commission remains informed about the status of the proposed divestitures and asset transfers.
The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Consent Agreement or to modify its terms in any way.
By direction of the Commission.
Office of the Secretary, Office of Assistant Secretary for Planning & Evaluation
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed collection for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access the HHS Web site address at
A notice announcing the availability of Fiscal Year (FY) 2005 funds to award a Cooperative Agreement for Diffusion of Partnership for Health to Health Care and Medical Agencies Serving Persons Living with HIV/AIDS was published in the
The notice is amended as follows:
On page 40704, First column, please change the LOI deadline date to: July 27, 2005. Please change the application deadline date to: August 11, 2005.
On page 40706, Third column, please change the LOI deadline date to: July 27, 2005. Please change the application deadline date to: August 11, 2005.
Over the same time period, as part of a collective national response, the Emergency Plan goals specific to Côte d'Ivoire are to treat at least 77,000 HIV-infected individuals; care for 385,000 HIV-affected individuals, including orphans; and prevent 265,000 new HIV infections.
Under the leadership of the U.S. Global AIDS Coordinator, as part of the President's Emergency Plan, the U.S. Department of Health and Human Services (HHS) works with host countries and other key partners to assess the needs of each country and design a customized program of assistance that fits within the host nation s strategic plan.
HHS focuses on two or three major program areas in each country. Goals and priorities include the following:
• Achieving primary prevention of HIV infection through activities such as expanding confidential counseling and testing programs, building programs to reduce mother-to-child transmission, and strengthening programs to reduce transmission via blood transfusion and medical injections.
• Improving the care and treatment of HIV/AIDS, sexually transmitted diseases (STDs) and related opportunistic infections by improving STD management; enhancing care and treatment of opportunistic infections, including tuberculosis (TB); and initiating programs to provide anti-retroviral therapy (ART).
• Strengthening the capacity of countries to collect and use surveillance data and manage national HIV/AIDS
This announcement is only for non-research activities supported by HHS, including the Centers for Disease Control and Prevention (CDC). If an applicant proposes research activities, HHS will not review the application. For the definition of research, please see the HHS/CDC Web site at the following Internet address:
Applicants should describe activities in detail as part of a four-year action plan (U.S. Government Fiscal Years 2005-2008 inclusive) that reflects the policies and goals outlined in the five-year strategy for the President's Emergency Plan.
The grantee will produce an annual operational plan in the context of this four-year plan, which the U.S. Government Emergency Plan team on the ground in Côte d'Ivoire will review as part of the annual Emergency Plan for AIDS Relief Country Operational Plan review and approval process managed by the Office of the U.S. Global AIDS Coordinator. The grantee may work on some of the activities listed below in the first year and in subsequent years, and then progressively add others from the list to achieve all of the Emergency Plan performance goals, as cited in the previous section. HHS/CDC, under the guidance of the U.S. Global AIDS Coordinator, will approve funds for activities on an annual basis, based on documented performance toward achieving Emergency Plan goals, as part of the annual Emergency Plan for AIDS Relief Country Operational Plan review and approval process.
Awardee activities for covering all program areas are as follows:
1. Work to link activities described here with related HIV care and other social services in the area, and promote coordination at all levels, including through bodies such as village, district, regional and national HIV coordination committees and networks of faith-based organizations.
2. Participate in relevant national technical coordination committees and in national process(es) to define, implement and monitor simplified small grants program(s)for faith- and community-based organizations, to ensure local stakeholders receive adequate information and assistance to engage and access funding opportunities supported by the President's Emergency Plan and other donors.
3. Progressively reinforce the capacity of faith- and community-based organizations and village and district AIDS committees to promote quality, local ownership, accountability and sustainability of activities.
4. Develop and implement a project-specific participatory monitoring and evaluation plan by drawing on national and U.S. Government requirements and tools, including the strategic information guidance provided by the Office of the U.S. Global AIDS Coordinator.
Based on its competitive advantage and proven field experience, the winning applicant will undertake a broad range of activities to meet the numerical Emergency Plan targets outlined above. For each of these activities, the grantee will give priority to evidence-based, yet culturally adapted, innovative approaches including:
1. Abstinence and Be Faithful Behavior-Change Interventions
a. Develop pertinent behavior-change communication (BCC) tools and strategies that build on existing tools and strategies, such as the HIV/AIDS lexicon in local languages, and that reflect and respect local cultural and religious mores.
b. Implement mass media (especially radio) and proximity abstinence and faithfulness BCC prevention campaigns to target youth and other populations in rural settings.
2. Other Complementary Behavior-Change Interventions—Implement a condom social-marketing program specifically targeted at populations who are engaged in high-risk behaviors,
1. Confidential HIV Counseling and Testing (VCT)
a. Develop and implement a BCC campaign to promote confidential HIV counseling and testing as a routine part of medical care and overcome barriers to HIV testing for rural and underserved populations, by building on and complementing existing tools and campaigns.
b. Increase access to confidential HIV counseling and testing for rural and underserved populations through innovative approaches, such as mobile outreach confidential HIV counseling and testing services linked to existing static confidential HIV counseling and testing centers and making confidential HIV counseling and testing a routine part of medical care, in partnership with health professionals.
2. Care and Support for Orphans and Vulnerable Children (OVC)
a. Perform a preliminary needs assessment to determine priorities for OVC in rural areas, by assuring coordination with the Ivoirian technical Ministry responsible for OVC.
b. Provide expanded care and support to meet the needs of OVC in rural areas, consistent with the major findings of the initial needs assessment; this could include small grants to rural community and faith-based organizations.
3. Palliative Care: Basic Health Care and Support—Establish and monitor comprehensive palliative care activities by using innovative approaches to increase access to underserved populations through expanded community-level care supported by and linked to existing care and/or mobile outreach clinics/teams in rural areas.
1. Implement treatment literacy programs to target rural and underserved populations by building on and complementing existing strategies and tools, which could include the use of the recently-developed HIV/AIDS lexicon in local languages, testimonies/advocacy by persons living with HIV/AIDS (PLWHA), the training of faith leaders and HIV village action committees.
2. Develop or enhance a functional referral network to link rural and underserved HIV-positive persons and their families to health care and other social services.
1. Using participatory approaches, develop and implement a strategic information/monitoring and evaluation plan consistent with national policies and the strategic information guidance established by the Office of the U.S. Global AIDS Coordinator that draws on available data and national tools and uses quantitative and qualitative methods.
2. Collect, analyze and disseminate data to ensure adequate baseline data and regular data reports to support targeted service delivery, program monitoring and evaluation, and appropriate information systems.
3. Progressively expand the capacity of the Ivoirian government and local non-governmental organizations to use data for policy and planning.
4. Report data to relevant local and national stakeholders in Côte d'Ivoire, including by making it available to the general public in local languages.
Comply with all HHS management requirements for meeting participation and progress and financial reporting for this cooperative agreement. (See HHS Activities and Reporting sections below for details.) Comply with all policy directives established by the Office of the U.S. Global AIDS Coordinator.
In a cooperative agreement, HHS staff is substantially involved in the program activities, above and beyond routine grant monitoring.
HHS Activities for this program are as follows:
1. Organize an orientation meeting with the grantee to brief them on applicable U.S. Government, HHS, and Emergency Plan expectations, regulations and key management requirements, as well as report formats and contents. The orientation could include meetings with staff from HHS agencies and the Office of the U.S. Global AIDS Coordinator.
2. Review and approve the process used by the grantee to select key personnel and/or post-award subcontractors and/or subgrantees to be involved in the activities performed under this agreement, as part of the Emergency Plan for AIDS Relief Country Operational Plan review and approval process, managed by the Office of the U.S. Global AIDS Coordinator.
3. Review and approve grantee's annual work plan and detailed budget, as part of the Emergency Plan for AIDS Relief Country Operational Plan review and approval process, managed by the Office of the U.S. Global AIDS Coordinator.
4. Review and approve grantee's monitoring and evaluation plan, including for compliance with the strategic information guidance established by the Office of the U.S. Global AIDS Coordinator.
5. Meet on a monthly basis with grantee to assess monthly expenditures in relation to approved work plan and modify plans as necessary.
6. Meet on a quarterly basis with grantee to assess quarterly technical and financial progress reports and modify plans as necessary.
7. Meet on an annual basis with grantee to review annual progress report for each U.S. Government Fiscal Year, and to review annual work plans and budgets for subsequent year, as part of the Emergency Plan for AIDS Relief review and approval process for Country Operational Plans, managed by the Office of the U.S. Global AIDS Coordinator.
8. Provide technical assistance, as mutually agreed upon, and revise annually during validation of the first and subsequent annual work plans. This could include expert technical assistance and targeted training activities in specialized areas, such as strategic information, project management, confidential counseling and testing, palliative care, treatment literacy, and adult learning techniques.
9. Provide in-country administrative support to help grantee meet U.S. Government financial and reporting requirements.
Measurable outcomes of the program will be in alignment with the following performance goals for the Emergency Plan:
Number of individuals trained to provide HIV prevention interventions, including abstinence, faithfulness,
1. Abstinence (A) and Be Faithful (B)
• Number of community outreach and/or mass media (radio) programs that are A/B focused.
• Number of individuals reached through community outreach and/or mass media (radio) programs that are A/B focused.
1. Confidential counseling and testing
• Number of patients who accept confidential counseling and testing in a health-care setting.
• Number of clients served, direct.
• Number of people trained in confidential counseling and testing, direct, including health-care workers.
2. Orphans and Vulnerable Children (OVC)
Number of service outlets/programs, direct and/or indirect.
• Number of clients (OVC) served, direct and/or indirect.
• Number of persons trained to serve OVC, direct.
3. Palliative Care: Basic Health Care and Support
• Number of service outlets/programs that provide palliative care, direct and/or indirect.
• Number of service outlets/programs that link HIV care with malaria and tuberculosis care and/or referral, direct and/or indirect.
• Number of clients served with palliative care, direct and/or indirect.
• Number of persons trained in providing palliative care, direct.
• Number of clients enrolled in ART, direct and indirect.
• Number of persons trained in providing ART, direct.
• Number of persons trained in strategic information, direct.
• Project-specific quantifiable milestones to measure:
a. Indigenous capacity-building.
b. Progress toward sustainability.
Throughout the project period, HHS' commitment to continuation of awards will be conditioned on the availability of funds, evidence of satisfactory progress by the recipient (as documented in required reports), and the determination that continued funding is in the best interest of the Federal Government, through the Emergency Plan for AIDS Relief review and approval process for Country Operational Plans, managed by the Office of the U.S. Global AIDS Coordinator.
Public and private non-profit and for-profit organizations may submit applications, such as:
• Public non-profit organizations
• Private non-profit organizations
• For-profit organizations
• Community-based organizations
• Faith-based organizations
• Universities
• Colleges
• Hospitals
• Small, minority-owned, and women-owned businesses
While both U.S.-based and Ivoirian organizations are eligible to apply, we will give preference to well-established Ivoirian organizations, legally incorporated in Côte d'Ivoire, that have well-developed management and financial control systems and established HIV activities that reach to rural areas of that country.
Matching funds are not required for this program. Although matching funds are not required, preference will go to organizations that can leverage additional funds to contribute to program goals.
If applicants request a funding amount greater than the ceiling of the award range, HHS/CDC will consider the application non-responsive, and it will not enter into the review process. We will notify you that your application did not meet the submission requirements.
• HHS/CDC will consider late applications non-responsive. See section “IV.3. Submission Dates and Times” for more information on deadlines.
• Applicants may be U.S.-based or Ivoirian, but we will give preference to existing organizations legally incorporated in Côte d'Ivoire with well-developed management and financial control and established HIV activities with reach to rural areas of Côte d'Ivoire. Applicant must provide documentation that substantiates eligibility criteria. Such proof could include, but is not limited to, official documents that describe legal organizational status, annual, financial, and audit reports, etc.
•
To apply for this funding opportunity use application form PHS 5161-1.
HHS strongly encourages you to submit your application electronically by using the forms and instructions posted for this announcement at
Application forms and instructions are available on the HHS/CDC Web site, at the following Internet address:
If you do not have access to the Internet, or if you have difficulty accessing the forms on-line, you may contact the HHS/CDC Procurement and Grants Office Technical Information Management Section (PGO-TIM) staff at: 770-488-2700. We can mail application forms to you.
• Maximum number of pages: 25. If your narrative exceeds the page limit, we will only review the first pages within the page limit.
• Font size: 12 point unreduced
• Double-spaced
• Paper size: 8.5 by 11 inches
• Page margin size: One inch
• Printed only on one side of page
• Held together only by rubber bands or metal clips; not bound in any other way.
Your narrative should address activities to be conducted over the entire project period, and must include the following items in the order listed:
• Project Context and Background (Understanding and Need)
• Project Strategy—Description and Methodologies
• Project Goals
• Project Outputs
• Project Contribution to the Goals and Objectives of the Emergency Plan for AIDS Relief
• Work Plan and Description of Project Components and Activities
• Performance Measures
• Timeline (
• Management of Project Funds and Reporting.
You may include additional information in the application appendices. The appendices will not count toward the narrative page limit. This additional information includes the following:
• Project Budget and Justification
• Curriculum vitae of current staff who will work on the activity
• Job descriptions of proposed key positions to be created for the activity
• Quality-Assurance, Monitoring-and-Evaluation, and Strategic-Information Forms
• Applicant's Corporate Capability Statement
• Letters of Support
• Evidence of Legal Organizational Structure
• Applicants must provide documentation that substantiates their well-developed management and financial controls and ability to implement HIV activities with reach to rural areas of Côte d'Ivoire. Such proof could include, but is not limited to, annual, financial, and audit reports, etc.
The budget justification will not count in the narrative page limit.
Although the narrative addresses activities for the entire project, the applicant should provide a detailed budget only for the first year of activities, while addressing budgetary plans for subsequent years.
You must have a Dun and Bradstreet Data Universal Numbering System (DUNS) number to apply for a grant or cooperative agreement from the Federal Government. The DUNS number is a nine-digit identification number, which uniquely identifies business entities. Obtaining a DUNS number is easy, and there is no charge. To obtain a DUNS number, access
For more information, see the HHS/CDC Web site at:
Additional requirements that could require you to submit additional documentation with your application are listed in section “VI.2. Administrative and National Policy Requirements.”
You may submit your application electronically at
If you submit your application electronically with Grants.gov, your application will be electronically time/date stamped, which will serve as receipt of submission. You will receive an e-mail notice of receipt when HHS/CDC receives the application.
If you submit your application by the United States Postal Service or commercial delivery service, you must ensure the carrier will be able to guarantee delivery by the closing date and time. If HHS/CDC receives your submission after closing because: (1) Carrier error, when the carrier accepted the package with a guarantee for delivery by the closing date and time, or (2) significant weather delays or natural disasters, you will have the opportunity to submit documentation of the carriers guarantee. If the documentation verifies a carrier problem, HHS/CDC will consider the submission as received by the deadline.
If you submit a hard copy application, HHS/CDC will not notify you upon receipt of your submission. If you have a question about the receipt of your application, first contact your courier. If you still have a question, contact the PGO-TIM staff at: (770) 488-2700. Before calling, please wait two to three days after the submission deadline. This will allow time for us to process and log submissions.
This announcement is the definitive guide on application content, submission address, and deadline. It supersedes information provided in the application instructions. If your submission does not meet the deadline above, it will not be eligible for review, and we will discard it. We will notify you that you did not meet the submission requirements.
Executive Order 12372 does not apply to this program.
Restrictions, which you must take into account while writing your budget, are as follows:
• Funds may not be used for research.
• Needle Exchange—No funds appropriated under this Act shall be used to carry out any program of distributing sterile needles or syringes for the hypodermic injection of any illegal drug.
• Funds may be spent for reasonable program purposes, including personnel, training, travel, supplies and services. Equipment may be purchased and renovations completed if deemed necessary to accomplish program objectives; however, prior approval by HHS/CDC officials must be requested in writing.
• All requests for funds contained in the budget shall be stated in U.S. dollars. Once an award is made, HHS/CDC will not compensate foreign grantees for currency exchange fluctuations through the issuance of supplemental awards.
• The costs that are generally allowable in grants to domestic organizations are allowable to foreign institutions and international organizations, with the following exception: With the exception of the American University, Beirut, and the World Health Organization, Indirect Costs will not be paid (either directly or through sub-award) to organizations located outside the territorial limits of the United states or to international organizations, regardless of their location.
• The applicant may contract with other organizations under this program; however, the applicant must perform a substantial portion of the activities (including program management and operations, and delivery of prevention services for which funds are required) relating to the management of sub-grants to local organizations and improving their capacity.
• You must obtain an annual audit of these HHS/CDC funds (program-specific audit) by a U.S.-based audit firm with international branches and current licensure/authority in-country, and in accordance with International Accounting Standards or equivalent standard(s) approved in writing by HHS/CDC.
A fiscal Recipient Capability Assessment may be required, prior to or post award, to review the applicant's business management and fiscal capabilities regarding the handling of U.S. Federal funds.
The U.S. Government is opposed to prostitution and related activities, which are inherently harmful and dehumanizing, and contribute to the phenomenon of trafficking in persons.
Any entity that receives, directly or indirectly, U.S. Government funds in connection with this document (“recipient”) cannot use such U.S. Government funds to promote or advocate the legalization or practice of prostitution or sex trafficking. Nothing in the preceding sentence shall be construed to preclude the provision to individuals of palliative care, treatment, or post-exposure pharmaceutical prophylaxis, and necessary pharmaceuticals and commodities,
A recipient that is otherwise eligible to receive funds in connection with this document to prevent, treat, or monitor HIV/AIDS shall not be required to endorse or utilize a multisectoral approach to combating HIV/AIDS, or to endorse, utilize, or participate in a prevention method or treatment program to which the recipient has a religious or moral objection. Any information provided by recipients about the use of condoms as part of projects or activities that are funded in connection with this document shall be medically accurate and shall include the public health benefits and failure rates of such use.
In addition, any recipient must have a policy explicitly opposing prostitution and sex trafficking. The preceding sentence shall not apply to any “exempt organizations” (defined as the Global Fund to Fight AIDS, Tuberculosis and Malaria, the World Health Organization and its six Regional Offices, the International AIDS Vaccine Initiative or any United Nations agency).
The following definition applies for purposes of this clause:
• Sex trafficking means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. 22 U.S.C. 7102(9).
All recipients must insert provisions implementing the applicable parts of this section, “Prostitution and Related Activities, ” in all subagreements under this award. These provisions must be express terms and conditions of the subagreement, must acknowledge that compliance with this section, “Prostitution and Related Activities,” is a prerequisite to receipt and expenditure of U.S. government funds in connection with this document, and must acknowledge that any violation of the provisions shall be grounds for unilateral termination of the agreement prior to the end of its term. Recipients must agree that HHS may, at any reasonable time, inspect the documents and materials maintained or prepared by the recipient in the usual course of its operations that relate to the organization's compliance with this section, “Prostitution and Related Activities.”
All prime recipients that receive U.S. Government funds (“prime recipients”) in connection with this document must certify compliance prior to actual receipt of such funds in a written statement that makes reference to this document (
Recipients' compliance with this section, “Prostitution and Related Activities,” is an express term and condition of receiving U.S. Government funds in connection with this document, and any violation of it shall be grounds for unilateral termination by HHS of the agreement with HHS in connection with this document prior to the end of its term. The recipient shall refund to HHS the entire amount furnished in connection with this document in the event HHS determines the recipient has not complied with this section, “Prostitution and Related Activities.”
You may find guidance for completing your budget on the HHS/CDC Web site, at the following Internet address:
HHS/CDC recommends that you submit your application to Grants.gov early enough to resolve any unanticipated difficulties prior to the deadline. You may also submit a back-up paper submission of your application. We must receive any such paper submission in accordance with the requirements for timely submission detailed in Section IV.3. of the grant announcement. You must clearly mark the paper submission: “BACK-UP FOR ELECTRONIC SUBMISSION.”
The paper submission must conform to all requirements for non-electronic submissions. If we receive both electronic and back-up paper submissions by the deadline, we will consider the electronic version the official submission.
We strongly recommended that you submit your grant application by using Microsoft Office products (
Submit the original and two hard copies of your application by mail or express delivery service to the following address: Technical Information Management—AA057, CDC Procurement and Grants Office, U.S. Department of Health and Human Services, 2920 Brandywine Road, Atlanta, GA 30341.
Applicants must provide measures of effectiveness that will demonstrate the accomplishment of the various identified objectives of the cooperative agreement. Measures of effectiveness must relate to the performance goals stated in the “Purpose” section of this announcement. Measures must be objective and quantitative, and must measure the intended outcome. Applicants must submit these measures of effectiveness with the application, and they will be an element of evaluation.
We will evaluate your application against the following criteria:
1. Understanding the national HIV/AIDS response and cultural and political context in Côte d'Ivoire and fitting into the five-year strategy and goals of the President's Emergency Plan (30 points).
Does the applicant demonstrate an understanding of the national cultural and political context and the technical and programmatic areas covered by the project? Does the applicant display knowledge of the five-year strategy and goals of the President's Emergency Plan, such that it can build on these to develop a comprehensive, collaborative project to reach underserved populations in Côte d'Ivoire and meet the goals of the Emergency Plan?
2. Capacity-Building (20 points).
Does the applicant describe a plan to progressively build the indigenous capacity of local organizations and of target beneficiaries and communities to respond to the epidemic, such that, if the applicant is not an Ivoirian organization, at the end of the project period the applicant can turn over management of the project to a local partner or partners?
3. Work Plan (20 points).
Does the applicant describe strategies that are pertinent and match those identified in the five-year strategy of the
4. Ability to Carry Out the Proposal (15 points).
Does the applicant demonstrate the local experience and capability to achieve the goals of the project? Do the staff members have appropriate experience? Are the staff roles clearly defined? Does the applicant currently have the capacity to reach rural populations in Côte d'Ivoire despite the complex political situation?
5. Management Plan (15 points).
Is there a plan to manage the resources of the program, prepare reports, monitor and evaluate activities and audit expenditures?
6. Budget (not scored).
Is the budget itemized, well-justified and consistent with the five-year strategy and goals of the President's Emergency Plan and Emergency Plan activities in Côte d'Ivoire?
The HHS/CDC Procurement and Grants Office (PGO) staff will review applications for completeness, and HHS Global AIDS program will review them for responsiveness. Incomplete applications and applications that are non-responsive to the eligibility criteria will not advance through the review process. Applicants will receive notification that their application did not meet submission requirements.
An objective review panel will evaluate complete and responsive applications according to the criteria listed in the “V.1. Criteria” section above. All persons who serve on the panel will be external to the U.S. Government Country Program Office. The panel may include both Federal and non-Federal participants.
In addition, the following factors could affect the funding decision:
While U.S.-based organizations are eligible to apply, we will give preference to existing national/Ivorian organizations. It is possible for one organization to apply as lead grantee with a plan that includes partnering with other organizations, preferably local. Although matching funds are not required, preference will be go to organizations that can leverage additional funds to contribute to program goals.
Applications will be funded in order by score and rank determined by the review panel. HHS/CDC will provide justification for any decision to fund out of rank order.
August 31, 2005.
Successful applicants will receive a Notice of Award (NoA) from the HHS/CDC Procurement and Grants Office. The NoA shall be the only binding, authorizing document between the recipient and HHS/CDC. An authorized Grants Management Officer will sign the NoA, and mail it to the recipient fiscal officer identified in the application. Unsuccessful applicants will receive notification of the results of the application review by mail.
For more information on the Code of Federal Regulations, see the National Archives and Records Administration at the following Internet address:
The following additional requirements apply to this project:
Applicants can find additional information on these requirements on the HHS/CDC Web site at the following Internet address:
You need to include an additional Certifications form from the PHS 5161-1 application in your Grants.gov electronic submission only. Please refer to
You must provide HHS/CDC with an original, plus two hard copies, of the following reports (in English and French):
1. Interim progress report, due no less than 90 days before the end of the budget period. The progress report will serve as your non-competing continuation application, and must contain the following elements:
a. Current Budget Period Activities Objectives.
b. Current Budget Period Financial Progress.
c. New Budget Period Program Proposed Activity Objectives.
d. Budget.
e. Measures of Effectiveness, including progress against the numerical goals of the President's Emergency Plan for AIDS Relief for Côte d'Ivoire.
f. Additional Requested Information.
2. Annual progress report, due no more than 60 days after the end of the budget period. Reports should include progress against the numerical goals of the President's Emergency Plan for AIDS Relief for Côte d'Ivoire.
3. Financial status report, due no more than 90 days after the end of the budget period.
4. Final financial and performance reports, no more than 90 days after the end of the project period.
Recipients must mail these reports to the Grants Management or Contract Specialist listed in the “Agency Contacts” section of this announcement.
The grantee is responsible for accurate translation of all reports, and should submit French-language versions to the local HHS/CDC office in Abidjan and English-language versions to the HHS/CDC Grants office in the United States, by the established deadlines. See the HHS/CDC project management officer in Abidjan for more details.
We encourage inquiries concerning this announcement.
For general questions, contact: Technical Information Management Section, CDC Procurement and Grants Office, U.S. Department of Health and Human Services, 2920 Brandywine Road, Atlanta, GA 30341, Telephone: (770) 488-2700.
For program technical assistance, contact: Monica Nolan, Director, HHS/CDC/Projet RETRO-CI, 2010 Abidjan Place, Dulles, Virginia 20189-2010, Telephone: (225) 21-25-41-89, E-mail:
For financial, grants management, or budget assistance, contact: Diane Flournoy, Grants Management Specialist, CDC Procurement and Grants Office, U.S. Department of Health and Human Services, 2920 Brandywine Road, Atlanta, GA 30341, Telephone: (770) 488-2072, E-mail:
Applicants can find this and other HHS funding opportunity announcements on the HHS/CDC Web site, Internet address:
Special Emphasis Panels (SEP): Reducing Racial and Ethnic Disparities in Childhood Immunization, RFA IP 05-087; Influenza Vaccination of Healthcare Workers in Hospitals, RFA IP 05-089; Expanding Utilization of Pro-Active Pharmacist Pneumococcal Vaccination Programs, RFA IP 05-092; and CDC Disparities in Elderly Pneumococcal Vaccination, RFA IP 05-093.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following meeting:
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS).
Notice of Computer Matching Program (CMP).
In accordance with the requirements of the Privacy Act of 1974, as amended, this notice establishes a CMP that CMS plans to conduct with the Ohio Department of Jobs & Family Services (ODJFS). We have provided background information about the proposed matching program in the
CMS filed a report of the CMP with the Chair of the House Committee on Government Reform and Oversight, the Chair of the Senate Committee on Governmental Affairs, and the Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB) on July 14, 2005. We will not disclose any information under a matching agreement until 40 days after filing a report to OMB and Congress or 30 days after publication.
The public should address comments to: CMS Privacy Officer, Division of Privacy Compliance Data Development (DPCDD), Enterprise Databases Group, Office of Information Services, CMS, Mail-stop N2-04-27, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. Comments received will be available for review at this location, by appointment, during regular business hours, Monday through Friday from 9 a.m.-3 p.m., eastern daylight time.
Linda Guenin, Government Task Leader, Centers for Medicare & Medicaid Services, Division of Medicare Financial Management, Program Integrity Branch, 233 N. Michigan Avenue, 6th Floor, Chicago, Illinois 60601. The telephone number is (312) 353-1279 and e-mail is
Description of the Matching Program
The Computer Matching and Privacy Protection Act of 1988 (Public Law (Pub. L.) 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the manner in which computer matching involving Federal agencies could be performed and adding certain protections for individuals applying for and receiving Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such individuals. The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, state, or local government records. It requires Federal agencies involved in computer matching programs to:
1. Negotiate written agreements with the other agencies participating in the matching programs;
2. Obtain the Data Integrity Board approval of the match agreements;
3. Furnish detailed reports about matching programs to Congress and OMB;
4. Notify applicants and beneficiaries that the records are subject to matching; and,
5. Verify match findings before reducing, suspending, terminating, or denying an individual's benefits or payments.
CMS has taken action to ensure that all CMPs that this Agency participates in comply with the requirements of the Privacy Act of 1974, as amended.
“Computer Matching Agreement (CMA) Between the Centers for Medicare & Medicaid Services (CMS) and the State of Ohio Department of Job & Family Services (ODJFS) for Disclosure of Medicare and Medicaid Information”.
Level Three Privacy Act Sensitive.
The Centers for Medicare & Medicaid Services, and State of Ohio Department of Job & Family Services.
This CMA is executed to comply with the Privacy Act of 1974 (Title 5 United States Code (U.S.C.) 552a), as amended, (as amended by Public Law (Pub. L.) 100-503, the Computer Matching and Privacy Protection Act (CMPPA) of 1988), the Office of Management and Budget (OMB) Circular A-130, titled “Management of Federal Information Resources” at 65
This Agreement provides for information matching fully consistent with the authority of the Secretary of the Department of Health and Human Services (Secretary). Section 1816 of the Social Security Act (the Act) permits the Secretary to contract with Fiscal Intermediaries (FI) to “make such audits of the records of providers as may be necessary to insure that proper payments are made under this part,” and to “perform such other functions as are necessary to carry out this subsection” (42 U.S.C. 1395h (a)).
Section 1842 of the Act provides that the Secretary may contract with entities known as carriers to “make such audits of the records of providers of services as may be necessary to assure that proper payments are made” (42 U.S.C. 1395u(a)(1)(C)); “assist in the application of safeguards against unnecessary utilization of services furnished by providers of services and other persons to individuals entitled to benefits” (42 U.S.C. 1395u(a)(2)(B)); and “to otherwise assist * * * in discharging administrative duties necessary to carry out the purposes of this part” (42 U.S.C. 1395u(a)(4)).
Furthermore, § 1874(b) of the Act authorizes the Secretary to contract with any person, agency, or institution to secure on a reimbursable basis such special data, actuarial information, and other information as may be necessary in the carrying out of his functions under this title (42 U.S.C. 1395kk(b)).
Section 1893 of the Act establishes the Medicare Integrity Program, under which the Secretary may contract with eligible entities to conduct a variety of program safeguard activities, including fraud review employing equipment and software technologies that surpass the existing capabilities of FIs and Carriers (42 U.S.C. § 1395ddd)). The contracting entities are called Program Safeguards Contractors.
Authority for ODJFS to participate in this computer-matching program is given under the provisions of §§ 5101.27-30 of the Ohio Revised Code, and 42 CFR 431.300 through 431.307. ODJFS is charged with administration of the Medicaid program in Ohio and is the single state agency for such purpose. ODJFS may act as an agent or representative of the Federal Government for any purpose in furtherance of ODJFS's functions or administration of the Federal funds granted to the state. In Ohio, the Medicaid program provides qualifying individuals with health care and related remedial or preventive services, including both Medicaid services and services authorized under state law that are not provided under Federal law.
The purpose of this agreement is to establish the conditions, safeguards, and procedures under which CMS will conduct a computer matching program with ODJFS to study claims, billing, and eligibility information to detect suspected instances of fraud and abuse (F&A) in the State of Ohio. CMS and ODJFS will provide a CMS contractor (hereinafter referred to as the “Custodian”) with Medicare and Medicaid records pertaining to eligibility, claims, and billing which the Custodian will match in order to merge the information into a single database. Utilizing fraud detection software, the information will then be used to identify patterns of aberrant practices requiring further investigation. The following are examples of the type of aberrant practices that may constitute F&A by practitioners, providers, and suppliers in the State of Ohio expected to be identified in this matching program: (1) Billing for provisions of more than 24 hours of services in one day, (2) providing treatment and services in ways more statistically significant than similar practitioner groups, and (3) up-coding and billing for services more expensive than those actually performed.
This CMP will enhance the ability of CMS and ODJFS to detect F&A by matching claims data, eligibility, and practitioner, provider, and supplier enrollment records of Medicare beneficiaries, practitioners, providers, and suppliers in the State of Ohio against records of Medicaid beneficiaries, practitioners, providers, and suppliers in the State of Ohio.
The data for CMS are maintained in the following Systems of Records (SOR): National Claims History (NCH), System No. 09-70-0005 was most recently published in the
Carrier Medicare Claims Record, System No. 09-70-0501 was published in the
Enrollment Database, System No. 09-70-0502 was published in the
Intermediary Medicare Claims Record, System No. 09-70-0503 was published in the
Unique Physician/Provider Identification Number, System No. 09-70-0525, was most recently published in the
Medicare Supplier Identification File, System No. 09-70-0530 was most recently published in the
Medicare Beneficiary Database, System No. 09-70-0536 was published in the
The data for ODJFS are/is maintained in the following Medical Data Warehouse Files:
ODJFS may change files maintained in the Medical Data Warehouse after giving reasonable notice to CMS and the Custodian.
The CMP shall become effective no sooner than 40 days after the report of the Matching Program is sent to OMB and Congress, or 30 days after publication in the
Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS).
Notice of Computer Matching Program (CMP).
In accordance with the requirements of the Privacy Act of 1974, as amended, this Notice announces the establishment of a CMP that CMS plans to conduct with the Washington Department of Social and Health Services (DSHS). We have provided background information about the proposed Matching Program in the
CMS filed a report of the CMP with the Chair of the House Committee on Government Reform and Oversight, the Chair of the Senate Committee on Governmental Affairs, and the Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB) on July 14, 2005. We will not disclose any information under a Matching Agreement until 40 days after filing a report to OMB and Congress or 30 days after publication.
The public should address comments to: CMS Privacy Officer, Division of Privacy Compliance Data Development (DPCDD), Enterprise Databases Group, Office of Information Services, CMS, Mailstop N2-04-27, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. Comments received will be available for review at this location, by appointment, during regular business hours, Monday through Friday from 9 a.m.-3 p.m., eastern daylight time.
Phillip Kauzlarich, Health Insurance Specialist, Centers for Medicare & Medicaid Services, Office of Financial Management, Program Integrity Group, Mail-stop C3-02-16, 7500 Security Boulevard, Baltimore Maryland 21244-1850. The telephone number is (410)-786-7170 and e-mail is
The Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the manner in which computer matching involving Federal agencies could be performed and adding certain protections for individuals applying for and receiving Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such individuals. The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
1. Negotiate written agreements with the other agencies participating in the matching programs;
2. Obtain the Data Integrity Board approval of the match agreements;
3. Furnish detailed reports about matching programs to Congress and OMB;
4. Notify applicants and beneficiaries that the records are subject to matching; and,
5. Verify match findings before reducing, suspending, terminating, or denying an individual's benefits or payments.
CMS has taken action to ensure that all CMPs that this Agency participates in comply with the requirements of the Privacy Act of 1974, as amended.
“Computer Matching Agreement Between the Centers for Medicare & Medicaid Services (CMS) and the State of Washington Department of Social and Health Services for Disclosure of Medicare and Medicaid Information.”
Level Three Privacy Act Sensitive.
The Centers for Medicare & Medicaid Services, and State of Washington Department of Social and Health Services.
This CMA is executed to comply with the Privacy Act of 1974 (Title 5 United States Code (U.S.C.) 552a), as amended, (as amended by Pub. L. 100-503, the Computer Matching and Privacy Protection Act (CMPPA) of 1988), the Office of Management and Budget (OMB) Circular A-130, titled “Management of Federal Information Resources” at 65
This Agreement provides for information matching fully consistent
Section 1842 of the Act provides that the Secretary may contract with entities known as carriers to “make such audits of the records of providers of services as may be necessary to assure that proper payments are made” (42 U.S.C. 1395u(a)(1)(C)); “assist in the application of safeguards against unnecessary utilization of services furnished by providers of services and other persons to individuals entitled to benefits' (42 U.S.C. 1395u(a)(2)(B)); and “otherwise assist * * * in discharging administrative duties necessary to carry out the purposes of this part” (42 U.S.C. 1395u(a)(4)).
Furthermore, § 1874(b) of the Act authorizes the Secretary to “contract with any person, agency, or institution to secure on a reimbursable basis such special data, actuarial information, and other information as may be necessary in the carrying out of his functions” under this title (42 U.S.C. 1395kk(b)).
Section 1893 of the Act establishes the Medicare Integrity Program, under which the Secretary may contract with eligible entities to conduct a variety of program safeguard activities, including fraud review employing equipment and software technologies that surpass the existing capabilities of Fiscal Intermediaries and carriers (42 U.S.C. 1395ddd). The contracting entities are called Program Safeguards Contractors (PSC).
DSHS is charged with the administration of the Medicaid program in Washington and is the single state agency for such purpose. The Revised Code of Washington (RCW) 74.09.500 established the Medical Assistance Program and authorized DSHS to comply with Federal requirements for the medical assistance program provided in the Social Security Act and Title XIX of Public Law (89-97) in order to secure Federal matching funds for the program. DSHS provides eligible individuals with health care and remedial or preventive services, including both Medicaid services and Medical Care Services defined in RCW 74.09.035 and authorized for payment solely from State funds.
DSHS' disclosure of the Medicaid data pursuant to this Agreement is for purposes directly connected with the administration of the Medicaid Program, in compliance with 42 CFR 431.300 through 431.307 and RCW 74.09.200, 74.09.210 and 74.09.290. Those purposes include the detection, prosecution and deterrence of fraud and abuse (F&A) in the Medicaid Program.
The purpose of this Agreement is to establish the conditions, safeguards, and procedures under which the Centers for Medicare & Medicaid Services (CMS) will conduct a computer matching program with the State of Washington Department of Social and Health Services (DSHS), to study claims, billing, and eligibility information to detect suspected instances of Medicare and Medicaid fraud and abuse (F&A) in the State of Washington. CMS and DSHS will provide Computer Services Corporation, a CMS contractor (hereinafter referred to as the “Custodian”), with Medicare and Medicaid records pertaining to eligibility, claims, and billing which the Custodian will match in order to merge the information into a single database. Utilizing fraud detection software, the information will then be used to identify patterns of aberrant practices requiring further investigation. The following are examples of the type of aberrant practices that may constitute F&A by practitioners, providers, and suppliers in the State of Washington expected to be identified in this matching program: (1) Billing for provision of more than 24 hours of services in one day; (2) providing treatment and services in ways more statistically significant than similar practitioner groups; and (3) up-coding and billing for services more expensive than those actually performed.
This CMP will enhance the ability of CMS and DSHS to detect F&A by matching claims data, eligibility, and practitioner, provider, and supplier enrollment records of Medicare beneficiaries, practitioners, providers, and suppliers in the State of Washington against records of Washington Medicaid beneficiaries, practitioners, providers, and suppliers in the State of Washington.
The data for CMS are maintained in the following Systems of Records:
National Claims History (NCH), System No. 09-70-0005 was most recently published in the
Carrier Medicare Claims Record, System No. 09-70-0501 was published in the
Enrollment Database, System No. 09-70-0502 was published in the
Unique Physician/Provider Identification Number, System No. 09-70-0525, was most recently published in the
Medicare Supplier Identification File, System No. 09-70-0530 was most recently published in the
Medicare Beneficiary Database, System No. 09-70-0536 was published in the
Intermediary Medicare Claims Record, System No. 09-70-0503 was published in the
The data for DSHS are maintained in the Washington Medicaid Management Information System (MMIS). In 2001, DSHS procured the development and operation of a Decision Support System by DSHS' contractor HWT, Inc. The MMIS provides an electronic data feed to the HWT-DSS on a weekly basis. The DSS will be used to extract data for purposes of this computer matching agreement. The following HWT-DSS tables will be utilized:
The CMP shall become effective no sooner than 40 days after the report of the Matching Program is sent to OMB and Congress, or 30 days after publication in the
In compliance with the requirements of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Administration for Children and Families is soliciting public comment on the specific aspects of the information collection described above. Copies of the proposed collection of information can be obtained and comments may be forwarded by writing to the Administration for Children and Families, Office of Administration, Office of Information Services, 370 L'Enfant Promenade, SW., Washington, DE 20447, Attn: ACF Reports Clearance Officer. E-mail address:
The Department specifically requests comments on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted within 60 days of this publication.
Head Start is a national program that provides comprehensive developmental services for preschool children, ages three through five, and under the Early Head Start program for infants, toddlers, and pregnant women. Since the inception of Head Start in 1965, over 22 million children and their families have been served. In 2004, nearly 900,000 Head Start and Early Head Start children and their families and 6,227 pregnant women received services based on the requirements of The Head Start Program Performance Standards and Other Regulations.
The Head Start Act as amended in 1998, Sec. 648(e) (42 U.S.C. 9843), Technical Assistance and Training, requires that the Secretary shall provide, either directly or through grants or other arrangements, funds from programs authorized under this subchapter to support an organization to administer a centralized child development and national assessment program leading to recognized credentials for personnel working in early childhood development and child care programs.
In 2004, 47,000 classrooms were staffed with more than 56,208 infant, toddler, and preschool teachers, and
In 1970, the Head Start Bureau announced its commitment to improve the quality of child care by focusing on staff competence. In 1971, the Bureau convened a task force of leaders in the fields of child development and early childhood education to elicit their suggestions and their support in establishing professional recognition for competent child development personnel. The task force envisioned a nationally supported effort to:
Based on the recommendations of the task force, competencies were identified and standardized assessment procedures, by which to assess candidates, were developed. In 1975, the first credential was awarded by The Child Development Associate (CDA) National Credentialing Program.
In the 1980s, CDA training standards were developed and a process was established for approving training institutions to provide early childhood training and to prepare the candidate for successful CDA assessment: The CDA Professional Preparation Program (CDA P3). To support postsecondary institutions offering the CDA P3, a training curriculum was developed entitled “Essentials for Child Development Associates.” This curriculum serves as the core content of the CDA P3 training.
The number of candidates credentialed each year has steadily grown from approximately 2,000 to more than 13,000. As of March 2005, 183,567 CDA credentials had been awarded to home visitors, family child care providers, teachers of infants and toddlers, and teachers of preschool age children. This included staff working in a variety of settings—Head Start, Early Head Start, Even Start, State Pre-K, Title 1, faith-based preschools, and in the various military sectors. The initial CDA credential is valid for three years and may be renewed for the same setting and age-level endorsement for five-year periods thereafter, based on evidence of professional growth.
The candidate's cost of the CDA application and assessment process is maintained at $325, because many of the candidates have limited income and a large number of them are former or current Head Start parents. The actual cost of the CDA credentialing process exceeds the candidate's cost of $325 and is covered by Federal funds awarded to the agency or organization selected to administer the Head Start CDA National Credentialing Program. In 1992, both the House and Senate Appropriations Committees directed the Department of Health and Human Services to continue to allocate Head Start funds to administer the CDA National Credentialing Program and to maintain the cost of the credential at $325.
The CDA credential is widely recognized and respected. Forty-eight states, the District of Columbia, and Puerto Rico recognize the CDA credential within their licensing regulations for child care centers. This enables staff to move from state-to-state with recognition of their CDA credential and qualifications.
Another indication of the CDA's credibility is that the credential is earned by thousands of persons each year who are employed under a variety of auspices beyond Head Start and Early Head Start. This includes military-sponsored programs, church-based, private-for-profit, State funded preschools, and programs funded by the Department of Education.
In addition, since 1998, Sec. 648A of the Head Start Act has required that not later than September 30, 2003, at least 50 percent of all Head Start teachers nationwide in center-based programs have an associate, baccalaureate, or advanced degree in early childhood education; or an associate, baccalaureate, or advanced degree in a field related to early childhood education, with experience in teaching preschool children. Alternatively, for each Head Start classroom in center-based programs that do not have a teacher with these qualifications, the Act states that one way of meeting this national degree requirement is to assign a teacher in each such classroom who has a CDA credential appropriate to the age of children being served in center-based programs. The two remaining credentialing alternatives are either a State-awarded certificate for preschool teachers that meets or exceeds the requirements for a child development associate credential, or a degree in a field related to early childhood education with experience in teaching preschool children and a State-awarded certificate to teach in a preschool program.
As of September 2005, 65 percent [36,477] of Head Start and Early Head Start teachers hold a qualifying degree as compared to 37 percent in 1998. In addition, 26 percent [14,681] hold a CDA or equivalent State-issued certificate. Of this number, 46.5 percent [6,837] are enrolled in early childhood education degree programs. Also, 1,585 teachers who do not have a CDA are enrolled in degree programs. Although good overall progress has been made, there still are a number of individual programs without qualified teachers.
Other factors that impact the necessity for credentialed infant, toddler, and preschool teachers include welfare reform and military deployment of parents. Welfare reform requires low-income mothers to engage in work-training and employment. This necessitates that they locate safe child care services for their young children. In military families, a more recent demand is due to one or both parents being deployed on active military duty.
The CDA National Credentialing Program created through this announcement will credential qualified caregivers who work with children, birth to age five, in a variety of public and private agency settings, and in a variety of roles, including as center-based teachers of infants and toddlers or preschool age children; as home visitors; or as family child care providers.
The CDA National Credentialing Program will work closely with Head Start grantees and delegate agencies to support the provision of qualified staff as local programs work to provide high quality and effective services to children and families; address the emerging priorities of assessing and fostering progress towards specific child outcomes; and working with increasing numbers of English language learners. To serve Head Start agencies effectively, the CDA National Credentialing Program will establish ongoing communication and cooperation with various community colleges and universities, including the Historically Black Colleges and Universities,
The need for qualified, credentialed staff is an urgent matter. Although steady progress has been made to ensure that Early Head Start and Head Start children have qualified teachers, the challenge continues. Grantees and delegate agencies are serving nearly one million children, families, and pregnant women, annually, while experiencing an annual turnover of nearly 15 percent among teachers; and 10 percent among assistant teachers, home visitors, and family child care providers. A unique challenge is to assess and credential qualified candidates within a 30-day period for Migrant and Seasonal, and American Indian and Native Alaskan programs due primarily to shortened seasons for the Migrant programs and to the geographic isolation of American Indian communities. The Head Start program continues to maintain a commitment to preserving opportunities for Head Start and Early Head Start parents and community members to gain employment in entry level positions, to develop professionally, and to advance up the career ladder, including to jobs as teachers. Supporting teacher assistants (52,541 in year 2004) to earn the CDA not only opens a pathway to their professional development, it also ensures that children and families have a more knowledgeable and skilled classroom team. Many of the 7,000 Head Start and Early Head Start home visitors and family day care providers are likely to be candidates for the CDA.
The Head Start Act (as amended October 27, 1998) is in the process of being reauthorized by Congress. It is expected that the need and support for the CDA National Credentialing Program will be maintained within the reauthorized Act. The Head Start Bureau's estimate of the number of candidates to be credentialed annually includes staff from the various sectors of child care that are also likely to apply for CDA assessment and credentialing.
To Administer the Child Development Associate (CDA) National Credentialing Program.
The CDA National Credentialing Program created through this announcement will credential qualified caregivers who work with children from birth to age five, in a variety of public and private agency settings, and in a variety of roles, including as center-based teachers of infants and toddlers or preschool age children, as home visitors, or as family child care providers.
Supporting the CDA National Credentialing Program through a cooperative agreement will ensure cooperation and coordination in the provision of credential awards to qualified candidates nationally. The close involvement of the Head Start Bureau in the implementation of this cooperative agreement will also help the CDA Program to be sensitive and responsive to the challenges meeting candidates working in a variety of program settings located in communities with varying levels of educational and training resources.
• State controlled institutions of higher education.
• Non-profits having a 501(c)(3) status with the IRS, other than institutions of higher education.
• Non-profits that do not have a 501(c)(3) status with the IRS, other than institutions of higher education.
• Private institutions of higher education.
• For-profit organization other than small businesses.
• Small businesses.
• Others (See Additional Information on Eligibility below.)
On applications developed jointly by more than one agency or organization, the application must identify only one organization as the lead organization and the official applicant.
Please see Section IV for required documentation supporting eligibility or funding restrictions if any are applicable.
None.
All applicants must have a Dun & Bradstreet number. On June 27, 2003 the Office of Management and Budget published in the
Please ensure that your organization has a DUNS number. You may acquire a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711 or you may request a number on-line at
Non-profit organizations applying for funding are required to submit proof of their non-profit status. Proof of non-profit status is any one of the following:
• A reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code.
• A copy of a currently valid IRS tax exemption certificate.
• A statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earning accrue to any private shareholders or individuals.
• A certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status.
• Any of the items in the subparagraphs immediately above for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate.
When applying electronically we strongly suggest you attach your proof of non-profit status with your electronic application.
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms,” “Survey for Private, Non-Profit Grant Applicants,” titled, “Survey on Ensuring Equal Opportunity for Applicants,” at:
Any application that fails to satisfy the deadline requirements referenced in Section IV.3 will be considered non-responsive and will not be considered for funding under this announcement.
The Child Development Associate National Credentialing Program, The Dixon Group, ACYF Operations Center, 118 Q Street, NE., Washington, DC 20002, Phone: 1-800-351-2293, e-mail:
Standard instructions for application content can be found in Section V.1. Applicants are advised to follow the format outlined in Section V.1. in order to address Head Start specific requirements of this expansion announcement. Additional application submission requirements are provided below.
You may submit your application to us in either electronic or paper format.
To submit an application electronically, please use the
Please note the following if you plan to submit your application electronically via Grants.gov:
• Electronic submission is voluntary, but strongly encouraged.
• When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation. We strongly recommend that you do not wait until the application deadline date to begin the application process through Grants.gov.
• We recommend you visit Grants.gov at least 30 days prior to filing your application to fully understand the process and requirements. We encourage applicants who submit electronically to submit well before the closing date and time so that if difficulties are encountered an applicant can still send in a hard copy overnight. If you encounter difficulties, please contact the Grants.gov Help Desk at 1-800-518-4726 to report the problem and obtain assistance with the system.
• To use Grants.gov, you, as the applicant, must have a DUNS Number and register in the Central Contractor Registry (CCR). You should allow a minimum of five days to complete the CCR registration.
• You will not receive additional point value because you submit a grant application in electronic format, nor will we penalize you if you submit an application in paper format.
• You may submit all documents electronically, including all information typically included on the SF 424 and all necessary assurances and certifications.
• Your application must comply with any page limitation requirements described in this program announcement.
• After you electronically submit your application, you will receive an automatic acknowledgement from Grants.gov that contains a Grants.gov tracking number. The Administration for Children and Families will retrieve your application from Grants.gov.
• We may request that you provide original signatures on forms at a later date.
• You may access the electronic application for this program on
• You must search for the downloadable application package by the CFDA number.
Applicants that are submitting their application in paper format should submit an original and two copies of the complete application. The original and each of the two copies must include all required forms, certifications, assurances, and appendices, be signed by an authorized representative, have original signatures, and be submitted unbound.
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms,” “Survey for Private, Non-Profit Grant Applicants,” titled, “Survey on Ensuring Equal Opportunity for Applicants,” at:
The project description should include all the information requirements described in the specific evaluation criteria outlined in the program announcement under Section V Application Review Information. In addition to the project description, the applicant needs to complete all the standard forms required for making applications for awards under this announcement.
Applicants seeking financial assistance under this announcement must file the Standard Form (SF) 424, Application for Federal Assistance; SF-424A, Budget Information—Non-Construction Programs; SF-424B, Assurances—Non-Construction Programs. The forms may be reproduced for use in submitting applications. Applicants must sign and return the standard forms with their application.
Applicants must furnish prior to award an executed copy of the Standard Form LLL, Certification Regarding Lobbying, when applying for an award in excess of $100,000. Applicants who have used non-Federal funds for lobbying activities in connection with receiving assistance under this announcement shall complete a disclosure form, if applicable, with their applications (approved by the Office of Management and Budget under control number 0348-0046). Applicants must sign and return the certification with their application.
Applicants must also understand they will be held accountable for the smoking prohibition included within Pub. L. 103-227, Title XII Environmental Tobacco Smoke (also known as the PRO-KIDS Act of 1994). A copy of the
Applicants must make the appropriate certification of their compliance with all Federal statutes relating to nondiscrimination. By signing and submitting the applications, applicants are providing the certification and need
Those organizations required to provide proof of non-profit status, please refer to Section III.3.
Please see Section V.1 for instructions on preparing the full project description.
Due Date for Applications: September 23, 2005.
The closing time and date for receipt of applications is referenced above. Applications received after 4:30 p.m. eastern time on the closing date will be classified as late.
Applications hand carried by applicants, applicant couriers, other representatives of the applicant, or by overnight/express mail couriers shall be considered as meeting an announced deadline if they are received on or before the deadline date, between the hours of 8 a.m. and 4:30 p.m., eastern time, at the address referenced in Section IV.6., between Monday and Friday (excluding Federal holidays).
ACF cannot accommodate transmission of applications by facsimile. Therefore, applications transmitted to ACF by fax will not be accepted regardless of date or time of submission and time of receipt.
Any application received after 4:30 p.m. eastern time on the deadline date will not be considered for competition.
Applicants using express/overnight mail services should allow two working days prior to the deadline date for receipt of applications. Applicants are cautioned that express/overnight mail services do not always deliver as agreed.
Receipt acknowledgement for application packages will be provided to applicants who submit their package via mail, courier services, or by hand delivery. Applicants will receive an electronic acknowledgement for applications that are submitted via
You may use the checklist below as a guide when preparing your application package.
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms,” “Survey for Private, Non-Profit Grant Applicants,” titled, “Survey on Ensuring Equal Opportunity for Applicants,” at:
This program is covered under Executive Order 12372, “Intergovernmental Review of Federal Programs,” and 45 CFR part 100, “Intergovernmental Review of Department of Health and Human Services Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs.
As of October 1, 2004, the following jurisdictions have elected to participate in the Executive Order process: Arkansas, California, Delaware, District of Columbia, Florida, Georgia, Illinois, Iowa, Kentucky, Maine, Maryland, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, New York, North Dakota, Rhode Island, South Carolina, Texas, Utah, West Virginia, Wisconsin, American Samoa, Guam, North Mariana Islands, Puerto Rico, and Virgin Islands. As these jurisdictions have elected to participate in the Executive Order process, they have established SPOCs. Applicants from participating jurisdictions should contact their SPOC, as soon as possible, to alert them of prospective applications
Under 45 CFR 100.8(a)(2), a SPOC has 60 days from the application deadline to comment on proposed new or competing continuation awards. SPOCs are encouraged to eliminate the submission of routine endorsements as official recommendations. Additionally, SPOCs are requested to clearly differentiate between mere advisory comments and those official State process recommendations which may trigger the “accommodate or explain” rule.
When comments are submitted directly to ACF, they should be addressed to the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Grants Management, Division of Discretionary Grants, 370 L'Enfant Promenade, SW., 4th floor, Washington, DC 20447.
Although the remaining jurisdictions have chosen not to participate in the process, entities that meet the eligibility requirements of the program are still eligible to apply for a grant even if a State, Territory, Commonwealth, etc. does not have a SPOC. Therefore, applicants from these jurisdictions, or for projects administered by federally-recognized Indian tribes, need take no action in regard to E.O. 12372.
The official list, including addresses, of the jurisdictions that have elected to participate in E.O. 12372 can be found on the following URL:
Grant awards will not allow reimbursement of pre-award costs.
Construction and the purchase of real property are not allowable activities or expenditures under this grant award.
Public reporting burden for this collection of information is estimated to average 40 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed and reviewing the collection information.
The project description is approved under OMB control number 0970-0139 which expires 4/30/2007.
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 following are instructions and guidelines on how to prepare the “project summary/abstract” and “full project description” sections of the application. Under the evaluation criteria section, note that each criterion is preceded by the generic evaluation requirement under the ACF Uniform Project Description (UPD).
The project description provides a major means by which an application is evaluated and ranked to compete with other applications for available assistance. The project description should be concise and complete and should address the activity for which Federal funds are being requested. Supporting documents should be included where they can present information clearly and succinctly. In preparing your project description, information responsive to each of the requested evaluation criteria must be provided. Awarding offices use this and other information in making their funding recommendations. It is important, therefore, that this information be included in the application in a manner that is clear and complete.
ACF is particularly interested in specific project descriptions that focus on outcomes and convey strategies for achieving intended performance. Project descriptions are evaluated on the basis of substance and measurable outcomes, not length. Extensive exhibits are not required. Cross-referencing should be used rather than repetition. Supporting information concerning activities that will not be directly funded by the grant or information that does not directly pertain to an integral part of the grant funded activity should be placed in an appendix.
Pages should be numbered and a table of contents should be included for easy reference.
Applicants required to submit a full project description shall prepare the project description statement in accordance with the following instructions while being aware of the specified evaluation criteria. The text options give a broad overview of what your project description should include while the evaluation criteria identifies the measures that will be used to evaluate applications.
Provide a summary of the project description (a page or less) with reference to the funding request.
Clearly identify the physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution. The need for assistance must be demonstrated and the principal and subordinate objectives of the project must be clearly stated; supporting documentation, such as letters of support and testimonials from concerned interests other than the applicant, may be included. Any relevant data based on planning studies should be included or referred to in the endnotes/footnotes. Incorporate demographic data and participant/beneficiary information, as needed. In developing the project description, the applicant may volunteer or be requested to provide information on the total range of projects currently being conducted and supported (or to be initiated), some of which may be outside the scope of the program announcement.
Identify the results and benefits to be derived.
For example, describe the extent to which the applicant's recommendations and possible strategies for enhancing the current CDA National Credentialing Program system, the number of CDA candidates to be credentialed annually and the extent to which the assessment and credentialing fee is affordable to potential candidates.
Outline a plan of action that describes the scope and detail of how the proposed work will be accomplished. Account for all functions or activities identified in the application. Cite factors that might accelerate or decelerate the work and state your reason for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in such terms as the number of people to be served and the number of activities accomplished.
When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates.
If any data is to be collected, maintained, and/or disseminated, clearance may be required from the U.S. Office of Management and Budget (OMB). This clearance pertains to any “collection of information that is conducted or sponsored by ACF.”
List organizations, cooperating entities, consultants, or other key individuals who will work on the project along with a short description of the nature of their effort or contribution.
Describe the precise location of the project and boundaries of the area to be served by the proposed project. Maps or other graphic aids may be attached.
Provide a budget with line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. Also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocability of the proposed costs.
The following evaluation criteria appear in weighted descending order. The corresponding score values indicate the relative importance that ACF places on each evaluation criterion; however, applicants need not develop their applications precisely according to the order presented. Application components may be organized such that a reviewer will be able to follow a seamless and logical flow of information (
In considering how applicants will carry out the responsibilities addressed under this announcement, competing applications for financial assistance will be reviewed and evaluated against the following criteria:
The extent to which the applicant identifies qualified staff with the necessary educational and experiential backgrounds. The extent to which the application documents the background of the proposed project director and other proposed project staff (
• Documentation that the applicant organization is capable of implementing and maintaining a centralized, National Child Development Associate Credentialing Program for: (1) Teachers of preschool-age children, (2) teachers of infants and toddlers in center-based programs, (3) home visitors, and (4) family child care providers.
• Description of how the applicant will work with ACYF in implementing the cooperative agreement to carry out the legislative requirements for qualified staff.
• Description of how the applicant will work with ACYF to maintain the candidate cost for the assessment and credential award at $325; $15 for the applicant package and $50 for credential renewal.
• Description of how the applicant will identify staff and activities to establish and maintain a working relationship with State Licensing Offices, Head Start State Collaboration Offices, Head Start Technical Assistance Network, and colleges and universities to increase the recognition of the CDA Credential.
• Description of how the applicant will structure and utilize a nationally representative group, which will meet annually, and lists the types of professional and paraprofessional representation they would seek in order to be most knowledgeable about relevant Head Start, Early Head Start, other public and private, for-profit and non-profit agencies whose staff seek CDA credentialing.
• Description of how the applicant will develop, establish, and maintain a process to identify each State-awarded certificate(s) for preschool teachers and infant and toddler teachers; and a description of how the applicant will determine if it is equivalent to the CDA credential and thus meets the Head Start Teacher Qualifications Mandate of 1998.
The extent to which the application clearly identifies the physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution. The extent to which the need for assistance is demonstrated; and the principal and subordinate objectives of the project are clearly stated. (
The extent to which the application provides a line-item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative
The extent to which the application provides a narrative budget justification that describes how the categorical costs are derived and discusses the necessity, reasonableness, and allocation of the proposed costs.
The extent to which the application identifies the results and benefits to be derived. For example, the extent to which the application describes recommendations and possible strategies for enhancing the current CDA National Credentialing Program system, the number of CDA candidates to be credentialed annually, and a description of procedures to ensure that candidates from American Indian and Migrant programs will receive accelerated processing of their applications, candidate assessment, and credential award, if successful. The extent to which the assessment and credentialing fee is affordable to potential candidates.
No grant award will be made under this announcement on the basis of an incomplete application.
A panel of four non-federal reviewers will be convened in Washington, DC, to read and score each application based on the published criteria. The panel's scores and recommendations will be forwarded to the ACYF Commissioner who will make the ultimate selection.
Since ACF will be using non-federal reviewers in the process, applicants have the option of omitting from the application copies (not the original) specific salary rates or amounts for individuals specified in the application budget and Social Security Numbers, if otherwise required for individuals. The copies may include summary salary information.
Applications that are approved but unfunded may be held over for funding in the next funding cycle, pending the availability of funds, for a period not to exceed one year.
The successful applicants will be notified through the issuance of a Financial Assistance Award document which sets forth the amount of funds granted, the terms and conditions of the grant, the effective date of the grant, the budget period for which initial support will be given, the non-federal share to be provided (if applicable), and the total project period for which support is contemplated. The Financial Assistance Award will be signed by the Grants Officer and transmitted via postal mail.
Organizations whose applications will not be funded will be notified in writing.
Grantees are subject to the requirements in 45 CFR part 74 (non-governmental) or 45 CFR part 92 (governmental).
Direct Federal grants, sub-award funds, or contracts under this ACF program shall not be used to support inherently religious activities such as religious instruction, worship, or proselytization. Therefore, organizations must take steps to separate, in time or location, their inherently religious activities from the services funded under this Program. Regulations pertaining to the Equal Treatment For Faith-Based Organizations, which includes the prohibition against Federal funding of inherently religious activities, can be found at either 45 CFR 87.1 or the HHS Web site at:
Grantees will be required to submit program progress and financial reports (SF-269) found at
Jean Simpson, Administration on Children, Youth and Families, Head Start Bureau, 330 C Street, SW., Washington, DC 20447, Phone: (202) 205-8418, e-mail:
Delores Dickerson, Grants Officer, Administration on Children and Families, 330 C Street, SW., Room 2218, Washington, DC 20447, Phone: (202) 260-7622, e-mail:
Please reference Section IV.3 for details about acknowledgement of received applications.
Head Start is a national child development program that began in 1965. Early Head Start, which began in 1995, serves infants, toddlers and pregnant women. The Head Start Program Performance Standards
From the program's inception in 1965, Head Start has worked with parents to increase the social competence, including school readiness and later life success, of children from low-income families. The Program Performance Standards require that the curriculum address children's cognitive development, including language development and literacy. In addition to the requirements within Education and Early Childhood Development, there are sections that focus on the involvement of parents both in the development of their children and in the governance of local programs. In this respect, Head Start supports parents in being the first and most important teachers of their children. The Head Start Program also encourages parents' efforts to attain family self-sufficiency. Because adult illiteracy limits the economic self-sufficiency of families, Head Start focuses not only on children's emergent literacy, but also on family literacy, which includes adult education and skill development.
Since 1991, $9 million is awarded annually to Head Start grantees as part of their base funding to ensure that each local program, either directly or through partnerships, supports parents' efforts to address their adult literacy needs. This includes classes through which parents may acquire speaking and writing skills in English; and earning the GED or a high school diploma, which are generally a threshold to successful employment.
In 1999, the Head Start Bureau entered into a five-year cooperative agreement with the National Center for Family Literacy (NCFL). The work of NCFL effectively supported local programs through cluster trainings and on-site technical assistance. Also, supporting the goals of the President's Early Childhood Initiative, Good Start, Grow Smart, the National Center for Family Literacy and the Head Start Bureau have engaged parents in 2
The plans and services proposed by applicants under this announcement must include, at a minimum, balanced attention to the four components of family literacy as defined in the Head Start Act.
As defined in the 1998 reauthorization of the Head Start Act, the term “family literacy services” means services that are of sufficient intensity in terms of hours, and of sufficient duration, to make sustainable changes in a family, and that integrate all of the following activities:
(A) Interactive literacy activities between parents and their children.
(B) Training for parents regarding how to be the primary teacher for their children and full partners in the education of their children.
(C) Parent literacy training that leads to economic self-sufficiency.
(D) An age-appropriate education to prepare children for success in school and life experiences.
Help Head Start grantees and delegate agencies nationwide improve the quality and positive outcomes of family literacy.
The Head Start Act, as amended in 1998, in Sections 640(a)(2)(C) and 648(c)(4) (42 U.S.C. 9843) requires the Secretary to provide technical assistance and training to Head Start agencies through an entity that has experience in the development and operation of successful family literacy services in order to improve the quality of family literacy services provided to enrolled families.
The proposed Family Literacy Program (FLP) plans and services must include, at a minimum, balanced attention to the four components of family literacy identified in the Head Start Act for all families, including English Language Learners. The FLP will provide research-supported training and technical assistance to Head Start and Early Head Start managers, staff, and parents on planning and delivery of high quality family literacy services that are of sufficient intensity and duration, and reflect sufficient coordination to ensure positive child and family outcomes. Applicants are encouraged to propose innovative strategies that are inclusive of diverse populations and include such approaches as mentoring, effective use of technology, and distance learning.
Applicants for the FLP must submit a five-year plan and strategies to enhance local program provision of high quality family literacy services. The plans and strategies must support local program compliance with the Head Start Program Performance Standards, other Head Start policies and regulations, and the provisions of the Head Start Reauthorization Act of 1998 (to be amended with any new Head Start Legislation).
Federal involvement in the Head Start Family Literacy Program will include substantial roles for the Head Start Bureau, which includes the American Indian and Native Alaskan Programs Branch, the Migrant and Seasonal Programs Branch, and the ACF Regional Offices.
Supporting the Head Start Family Literacy Program through a cooperative agreement will ensure that goals and objectives will be fully met and that the work will be in accord with the Head Start Program Performance Standards and other regulations, the Head Start Child Outcomes Framework, and the Head Start Act.
The close involvement of the Head Start Bureau in the implementation of this cooperative agreement will ensure that family literacy services will be sensitive and responsive to the challenges that Head Start families and staff encounter. It will ensure uniformity of content and quality of family literacy services to the families who are served in a variety of program settings, which are located in communities with varying levels of educational and training resources related to the language development and early literacy of young children and their families.
The Head Start Bureau will provide the time and expertise of the Federal Project Officer (FPO) to:
• Assist the Head Start Family Literacy Program staff in ensuring that the four components of family literacy will be available to all Head Start and Early Head Start families, including English language learners. The four components include:
• Identify research-supported training and technical assistance applicable to the population served.
• Assist in the development of a training template and schedule for the provision of training and technical assistance to Head Start and Early Head Start managers, staff, and parents regarding planning and delivering high quality family literacy services at the local program level.
• Work in close accord with the Family Literacy Program to provide leadership and support to grantees and delegate agencies in order to ensure that high quality family literacy services are of sufficient intensity and duration, and reflect sufficient coordination to ensure positive child and family outcomes.
• Participate in national meetings of the Head Start Technical Assistance Network as convened by ACYF, as a means of supporting and assisting the Family Literacy Program staff in their collaboration with this important group of technical assistance providers.
• Join the staff of the Head Start Literacy Program in putting on workshop presentations at national meetings as approved by the Head Start Bureau.
• Facilitate and support the Head Start Family Literacy Program's communications and coordination with the Federal Regional Offices (I-X), the Migrant and Seasonal Programs Branch, and the American Indian and Native Alaskan Programs Branch.
• Meet with the Head Start Family Literacy Program staff bi-monthly to assess progress regarding the scope of work of the cooperative agreement, and to provide guidance, direction, and information regarding possible changes in national Head Start policy or initiatives.
Early Head Start and Head Start grantees and delegate agencies will direct all inquiries regarding family literacy to the Head Start Family Literacy Program.
• State controlled institutions of higher education.
• Non-profits having a 501(c)(3) status with the IRS, other than institutions of higher education.
• Non-profits that do not have a 501(c)(3) status with the IRS, other than institutions of higher education.
• Private institutions of higher education.
• For-profit organization other than small businesses.
• Small businesses.
• Others (See Additional Information on Eligibility below.)
On all applications developed jointly by more than one agency or organization, the application must identify only one organization as the lead organization and the official applicant. The other organizations may be included as partners, participants, sub-grantees or sub-contractors.
All applicants must have a Dun & Bradstreet number.On June 27, 2003 the Office of Management and Budget published in the
Please ensure that your organization has a DUNS number.You may acquire a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711 or you may request a number on-line at
Non-profit organizations applying for funding are required to submit proof of their non-profit status.
Proof of non-profit status is any one of the following:
• A reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code.
• A copy of a currently valid IRS tax exemption certificate.
• A statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earning accrue to any private shareholders or individuals.
• A certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status.
• Any of the items in the subparagraphs immediately above for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate.
When applying electronically we strongly suggest you attach your proof of non-profit status with your electronic application.
Any application that fails to satisfy the deadline requirements referenced in Section IV.3 will be considered non-responsive and will not be considered for funding under this announcement.
The Head Start Family Literacy Project, The Dixon Group, ACYF Operations Center, 118 Q Street, NE., Washington, DC 20002, Phone: 1-800-351-2293; E-mail:
Standard instructions for application content can be found in Section V. Application Review Information, 1.
You may submit your application to us in either electronic or paper format. To submit an application electronically, please use the
Please note the following if you plan to submit your application electronically via Grants.gov:
• Electronic submission is voluntary, but strongly encouraged.
• When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation. We strongly recommend that you do not wait until the application deadline date to begin the application process through Grants.gov.
• We recommend you visit Grants.gov at least 30 days prior to filing your application to fully understand the process and requirements. We encourage applicants who submit electronically to submit well before the closing date and time so that if difficulties are encountered an applicant can still send in a hard copy overnight. If you encounter difficulties, please contact the Grants.gov Help Desk at 1-800-518-4726 to report the problem and obtain assistance with the system.
• To use Grants.gov, you, as the applicant, must have a DUNS Number and register in the Central Contractor Registry (CCR).You should allow a minimum of five days to complete the CCR registration.
• You will not receive additional point value because you submit a grant application in electronic format, nor will we penalize you if you submit an application in paper format.
• You may submit all documents electronically, including all information typically included on the SF 424 and all necessary assurances and certifications.
• Your application must comply with any page limitation requirements described in this program announcement.
• After you electronically submit your application, you will receive an automatic acknowledgement from Grants.gov that contains a Grants.gov tracking number. The Administration for Children and Families will retrieve your application from Grants.gov.
• We may request that you provide original signatures on forms at a later date.
• You may access the electronic application for this program on
• You must search for the downloadable application package by the CFDA number.
Applicants that are submitting their application in paper format should submit an original and two copies of the complete application. The original and each of the two copies must include all required forms, certifications, assurances, and appendices, be signed by an authorized representative, have original signatures, and be submitted unbound.
Applicants seeking financial assistance under this announcement must file the Standard Form (SF) 424, Application for Federal Assistance; SF-424A, Budget Information—Non-Construction Programs; SF-424B, Assurances—Non-Construction Programs. The forms may be reproduced for use in submitting applications. Applicants must sign and return the standard forms with their application.
Applicants must furnish prior to award an executed copy of the Standard Form LLL, Certification Regarding Lobbying, when applying for an award in excess of $100,000. Applicants who have used non-Federal funds for lobbying activities in connection with receiving assistance under this announcement shall complete a disclosure form, if applicable, with their applications (approved by the Office of Management and Budget under control number 0348-0046). Applicants must sign and return the certification with their application.
Applicants must also understand they will be held accountable for the smoking prohibition included within Pub. L. 103-227, Title XII Environmental Tobacco Smoke (also known as the PRO-KIDS Act of 1994). A copy of the
Applicants must make the appropriate certification of their compliance with all Federal statutes relating to nondiscrimination. By signing and submitting the applications, applicants are providing the certification and need not mail back the certification form. Complete the standard forms and the associated certifications and assurances based on the instructions on the forms. The forms and certifications may be found at:
Please see Section V.1 for instructions on preparing the full project description.
Due Date for Applications: September 8, 2005.
The closing time and date for receipt of applications is referenced above. Applications received after 4:30 p.m. eastern time on the closing date will be classified as late.
Applications hand carried by applicants, applicant couriers, other representatives of the applicant, or by overnight/express mail couriers shall be considered as meeting an announced deadline if they are received on or before the deadline date, between the hours of 8 a.m. and 4:30 p.m., eastern time, at the address referenced in Section IV.6., between Monday and Friday (excluding Federal holidays).
ACF cannot accommodate transmission of applications by facsimile. Therefore, applications transmitted to ACF by fax will not be accepted regardless of date or time of submission and time of receipt.
Applicants using express/overnight mail services should allow two working days prior to the deadline date for
Receipt acknowledgement for application packages will be provided to applicants who submit their package via mail, courier services, or by hand delivery. Applicants will receive an electronic acknowledgement for applications that are submitted via
This program is covered under Executive Order 12372, “Intergovernmental Review of Federal Programs,” and 45 CFR Part 100, “Intergovernmental Review of Department of Health and Human Services Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs.
As of October 1, 2004, the following jurisdictions have elected to participate in the Executive Order process: Arkansas, California, Delaware, District of Columbia, Florida, Georgia, Illinois, Iowa, Kentucky, Maine, Maryland, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, New York, North Dakota, Rhode Island, South Carolina, Texas, Utah, West Virginia, Wisconsin, American Samoa, Guam, North Mariana Islands, Puerto Rico, and Virgin Islands. As these jurisdictions have elected to participate in the Executive Order process, they have established SPOCs. Applicants from participating jurisdictions should contact their SPOC, as soon as possible, to alert them of prospective applications and receive instructions. Applicants must submit all required materials, if any, to the SPOC and indicate the date of this submittal (or the date of contact if no submittal is required) on the Standard Form 424, item 16a.
Under 45 CFR 100.8(a)(2), a SPOC has 60 days from the application deadline to comment on proposed new or competing continuation awards. SPOCs are encouraged to eliminate the submission of routine endorsements as official recommendations. Additionally, SPOCs are requested to clearly differentiate between mere advisory comments and those official State process recommendations which may trigger the “accommodate or explain” rule.
When comments are submitted directly to ACF, they should be addressed to the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Grants Management, Division of Discretionary Grants, 370 L'Enfant Promenade SW., 4th floor, Washington, DC 20447.
Although the remaining jurisdictions have chosen not to participate in the process, entities that meet the eligibility requirements of the program are still eligible to apply for a grant even if a State, Territory, Commonwealth, etc. does not have a SPOC. Therefore, applicants from these jurisdictions, or for projects administered by federally-recognized Indian Tribes, need take no action in regard to E.O. 12372.
The official list, including addresses, of the jurisdictions that have elected to participate in E.O. 12372 can be found on the following URL:
Grant awards will not allow reimbursement of pre-award costs.
Construction and/or purchase of real property are not allowable expenditures under this agreement.
Public reporting burden for this collection of information is estimated to average 40 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed and reviewing the collection information.
The project description is approved under OMB control number 0970-0139 which expires 4/30/2007.
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 following are instructions and guidelines on how to prepare the “project summary/abstract” and “full project description” sections of the application. Under the evaluation criteria section, note that each criterion is preceded by the generic evaluation requirement under the ACF Uniform Project Description (UPD).
The project description provides a major means by which an application is evaluated and ranked to compete with other applications for available assistance. The project description should be concise and complete and should address the activity for which Federal funds are being requested. Supporting documents should be included where they can present information clearly and succinctly. In preparing your project description, information responsive to each of the requested evaluation criteria must be provided. Awarding offices use this and other information in making their funding recommendations. It is important, therefore, that this information be included in the application in a manner that is clear and complete.
ACF is particularly interested in specific project descriptions that focus on outcomes and convey strategies for achieving intended performance. Project descriptions are evaluated on the basis of substance and measurable outcomes, not length. Extensive exhibits are not required. Cross-referencing should be used rather than repetition. Supporting information concerning activities that will not be directly funded by the grant or information that does not directly pertain to an integral part of the grant funded activity should be placed in an appendix.
Pages should be numbered and a table of contents should be included for easy reference.
Applicants required to submit a full project description shall prepare the project description statement in accordance with the following instructions while being aware of the specified evaluation criteria. The text options give a broad overview of what your project description should include while the evaluation criteria identifies the measures that will be used to evaluate applications.
Provide a summary of the project description (a page or less) with reference to the funding request.
Clearly identify the physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution. The need for assistance must be demonstrated and the principal and subordinate objectives of the project must be clearly stated; supporting documentation, such as letters of support and testimonials from concerned interests other than the applicant, may be included. Any relevant data based on planning studies should be included or referred to in the endnotes/footnotes. Incorporate demographic data and participant/beneficiary information, as needed. In developing the project description, the applicant may volunteer or be requested to provide information on the total range of projects currently being conducted and supported (or to be initiated), some of which may be outside the scope of the program announcement.
Identify the results and benefits to be derived.
Outline a plan of action that describes the scope and detail of how the proposed work will be accomplished. Account for all functions or activities identified in the application. Cite factors that might accelerate or decelerate the work and state your reason for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in such terms as the number of people to be served and the number of activities accomplished.
When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates.
If any data is to be collected, maintained, and/or disseminated, clearance may be required from the U.S. Office of Management and Budget (OMB). This clearance pertains to any “collection of information that is conducted or sponsored by ACF.”
List organizations, cooperating entities, consultants, or other key individuals who will work on the project along with a short description of the nature of their effort or contribution.
Provide information on the applicant organization(s) and cooperating partners, such as organizational charts, financial statements, audit reports or statements from CPAs/Licensed Public Accountants, Employer Identification Numbers, names of bond carriers, contact persons and telephone numbers, child care licenses and other documentation of professional accreditation, information on compliance with Federal/State/local government standards, documentation of experience in the program area, and other pertinent information. If the applicant is a non-profit organization, submit proof of non-profit status in its application.
The non-profit agency can accomplish this by providing: (a) A reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code; (b) a copy of a currently valid IRS tax exemption certificate; (c) a statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals; (d) a certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status, (e) any of the items immediately above for a State or national parent organization and a statement signed by the parent organization that the applicant
Provide statements from community, public and commercial leaders that support the project proposed for funding. All submissions should be included in the application OR by application deadline.
Provide a budget with line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. Also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocability of the proposed costs.
In considering how applicants will carry out the responsibilities addressed under this announcement, competing applications for financial assistance will be reviewed and evaluated against the following criteria:
Applications will be reviewed and evaluated to the extent that they:
Describe the conceptual framework or model that will guide the design and implementation of training and technical assistance (T/TA) to strengthen family literacy services and the internal capacities and partnerships of Head Start and Early Head Start grantees over the potential five year project period. Demonstrate a clear understanding of the definition of family literacy and propose strategies for strengthening all four of its component elements. Demonstrate knowledge of the current Head Start TA Network and electronic learning center.
Outline an initial plan of action which describes the scope and detail of how the proposed work will be accomplished. Describe any unusual features of the project, such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide a rationale for the proposed model and describe how it will lead to improvements in the skills and effectiveness of Head Start staff and the implementation of appropriate family literacy strategies in different programs and community settings.
Propose an initial action plan for T/TA services and strategies for the first year of the project, and a discussion of how subsequent services will be adapted and improved based on initial experiences. Discuss optimal approaches including identifying and utilizing exemplary Head Start family literacy programs and other successful family literacy models as sources of training and technical assistance, uses of technology and distance learning, development of publications and media resources, and direct training of staff, managers, and parents.
Describe strategies for adapting T/TA services to programs which vary on dimensions such as, (a) Different levels of development in carrying out family literacy activities; (b) targeted needs in specific elements of family literacy, such as improving the quality of children's literacy experiences; enhancing the involvement of parents in the literacy experiences of their children and enhancing opportunities for parents' participation in ESL, GED, or self-sufficiency/work experiences; (c) serving American Indians, Alaska Natives, and migrant children and parents, and families whose home language is not English; (d) providing services through center-based, home-based, and combination program options or through partnership arrangements with family child care and child care centers; (e) Early Head Start grantees and programs serving teen parents; and (f) serving large numbers of parents who are employed, are in employment training, or in other educational settings.
Provide a proposed timeline for the implementation of the project, including planning and start-up, phased implementation and training, and a proposed strategy for making services available to all Head Start and Early Head Start programs over the 5 year period of the project.
Describe how the Family Literacy Project (FLP) will disseminate information about its services; and how initial programs and trainees will be recruited and selected to participate in FLP services. Discuss any proposed procedures for assessing program and staff needs for training and technical assistance.
Describe how the FLP proposes to work with the existing Head Start T/TA network, Head Start State Collaboration Offices, ACF Regional Offices, and the Head Start Bureau to implement this project.
Describe how the FLP will complement other program improvement initiatives and systems of Head Start, including program monitoring, local agency plans, and other training and technical assistance resources. Discuss opportunities for FLP training to link teachers with college degrees in early childhood education, including the potential for Head Start staff to earn academic credit, linked to A.A. or B.A. degrees for FLP training.
Describe any proposed efforts to link FLP planning and services with other family literacy resources at the federal, state, or local level, such as libraries, museums, Even Start, Basic Education, GED, or higher education.
Applications will be reviewed and evaluated to the extent that they:
Provide a biographical sketch for each key project person, and a job description for each vacant key position. A biographical sketch will also be required for new key staff, as they are hired.
Describe the proposed organizational structure that will support the project objectives, including any proposed subcontractors or partnership arrangements, and how the proposed structure will support balanced, comprehensive, high quality family literacy services.
Indicate a proposed staffing strategy including key staff positions, major functions and responsibilities. Describe the role and responsibility of any experts and/or consultants that may be used as the FLP is designed and implemented.
Demonstrate competency and experience of the organization in developing and enhancing successful family literacy services for programs serving infants, toddlers and preschoolers, pregnant women and their families, and providing effective training and technical assistance to such programs.
Describe past and current initiatives that demonstrate organizational capacity to adapt and improve training and technical assistance efforts based on evaluation results and participant feedback.
Describes any past or ongoing partnerships or collaborations involving the organization and how they (or this experience) will be used to support the Head Start family literacy effort.
Describe the capability of the organization to provide training and technical assistance in all four of the legislatively-defined elements of family literacy and in integrating these elements within local programs.
Identify a cadre of research experts and trainers, to be utilized either as staff or consultants, who will be instrumental in the design and implementation of the FLP. This cadre of experts should have expertise in the areas of children's language and literacy development, adult literacy, and language development for English language learners.
Describe the capability of the organization to write and edit training and other material, as well as support distance and web-based learning of learners at varying educational levels.
Include an Appendix to the narrative consisting of support letters that document the demonstrated competence of the organization and proposed subcontractors or partners regarding successful partnership and service relationships with Head Start and Early Head Start programs, family literacy providers, and the Head Start technical assistance system.
Applications will be reviewed and evaluated to the extent that they:
Provide a budget with line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. Also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocation of the proposed costs.
Applications will be reviewed and evaluated to the extent that they:
Identify the specific results or benefits that could be expected for the Head Start and Early Head Start grantees, for staff, for enrolled children, their families, and communities.
Identify both qualitative and quantitative data the FLP will collect to measure progress towards the stated results or benefits. Identify how the program will determine the extent to which it has achieved its stated goals and objectives.
Provide a plan for distribution of reports and other project outputs to the Head Start community, the academic community, and to the public. Applicants must provide a description of the kind, volume and timing of distribution.
Applications will be reviewed and evaluated to the extent that they:
Set the context for family literacy services in the Head Start and Early Head Start programs nationwide. Include demographic information on the population(s) to be served, in terms of programs, families, and communities, as well as the pertinent research on the relationship of family literacy to future school success of children and the well-being of their families.
State the goals and objectives for the program. Indicate how these goals and objectives are related to the overall purposes, policies and standards governing Head Start, Early Head Start, and other family literacy programs.
Discuss the changing needs for family literacy services by low-income families with young children, including families where the home language is not English. Discuss the implications of this information for future efforts by Head Start, and identify the ways this project will address these areas.
Describe the strengths of Head Start/Early Head Start family literacy efforts (including exemplary models in local community programs) and areas for program improvement in each of the four legislatively mandated areas. Identify and describe current patterns of partnerships among Head Start, Even Start, and other family literacy and early childhood agencies and resources including, for example, child care, libraries and museums, and mentoring programs.
Discuss priority needs for training and technical assistance to improve the quality, intensity, duration and coordination of services; child and family outcomes; internal agency capacities; and partnership efforts to improve Head Start family literacy services.
No grant award will be made under this announcement on the basis of an incomplete application.
A panel of four non-Federal reviewers will be convened in Washington, DC, to read and score each application based on the published criteria. The panel's scores and recommendations will be forwarded to the ACYF Commissioner who will make the ultimate selection.
Since ACF will be using non-Federal reviewers in the process, applicants have the option of omitting from the application copies (not the original) specific salary rates or amounts for individuals specified in the application budget and Social Security Numbers, if otherwise required for individuals. The copies may include summary salary information.
Applications that are approved but unfunded may be held over for funding in the next funding cycle, pending the availability of funds, for a period not to exceed one year.
The successful applicants will be notified through the issuance of a Financial Assistance Award document which sets forth the amount of funds granted, the terms and conditions of the grant, the effective date of the grant, the budget period for which initial support will be given, the non-Federal share to be provided (if applicable), and the total project period for which support is contemplated. The Financial Assistance Award will be signed by the Grants Officer and transmitted via postal mail.
Organizations whose applications will not be funded will be notified in writing.
Grantees are subject to the requirements in 45 CFR part 74 (non-governmental) or 45 CFR part 92 (governmental).
Direct Federal grants, sub-award funds, or contracts under this ACF program shall not be used to support inherently religious activities such as religious instruction, worship, or proselytization. Therefore, organizations must take steps to separate, in time or location, their inherently religious activities from the services funded under this Program. Regulations pertaining to the Equal Treatment For Faith-Based Organizations,which includes the prohibition against Federal funding of inherently religious activities, can be found at either 45 CFR 87.1 or the HHS Web site at:
Grantees will be required to submit program progress and financial reports (SF-269 found at
Beginning with FY 2006, the Administration for Children and Families (ACF) will no longer publish grant announcements in the
Please reference Section IV.3 for details about acknowledgement of received applications.
President's Committee for People With Intellectual Disabilities (PCPID), HHS.
Notice of meeting.
Thursday, September 15, 2005, from 9 a.m. to 5 p.m. and Friday, September 16, 2005, from 8:30 a.m. to 11:30 a.m. The full committee meeting of the President's Committee for People with Intellectual Disabilities will be open to the public.
The meeting will be held at the Aerospace Center Office Building, Aerospace Auditorium, 6th Floor East, 901 D Street, SW., Washington, DC 20447. Individuals with disabilities who need accommodations in order to attend and participate in the meeting (
Sally Atwater, Executive Director, President's Committee for People with Intellectual Disabilities, Aerospace Center Office Building, Suite 701, 901 D Street, SW., Washington, DC 20447, Telephone (202) 619-0634, Fax (202) 205-9519, e-mail
The PCPID acts in an advisory capacity to the President and the Secretary of Health and Human Services on a broad range of topics relating to programs, services and supports for persons with intellectual disabilities. The Committee, by Executive Order, is responsible for evaluating the adequacy of current practices in programs, services and supports for persons with intellectual disabilities, and for reviewing legislative proposals that impact the quality of life experienced by citizens with intellectual disabilities and their families.
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.
Fax written comments on the collection of information by August 24, 2005.
OMB is still experiencing significant delays in the regular mail, including first class and express mail, and messenger deliveries are not being accepted. To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: Fumie Yokota, Desk Officer for FDA, FAX: 202-395-6974.
Karen L. Nelson, Office of Management Programs (HFA-250), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-1482.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Under section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 351(a)(2)(B)), a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, current good manufacturing practices (CGMPs) to ensure that such drug meets the requirements of the act as to safety, and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess.
FDA has the authority under section 701(a) of the act (21 U.S.C. 371(a)) to issue regulations for the efficient enforcement of the act regarding CGMP procedures for manufacturing, processing, and holding drugs and drug products. The CGMP regulations help ensure that drug products meet the statutory requirements for safety and have their purported or represented identity, strength, quality, and purity characteristics. The information collection requirements in the CGMP regulations provide FDA with the necessary information to perform its duty to protect public health and safety. CGMP requirements establish accountability in the manufacturing and processing of drug products, provide for meaningful FDA inspections, and enable manufacturers to improve the quality of drug products over time. The CGMP recordkeeping requirements also serve preventive and remedial purposes, and provide crucial information if it is necessary to recall a drug product.
The general requirements for recordkeeping under part 211 (21 CFR part 211) are set forth in § 211.180. Any production, control, or distribution record associated with a batch and required to be maintained in compliance with part 211 must be retained for at least 1 year after the expiration date of the batch and, for certain over-the-counter (OTC) drugs, 3 years after distribution of the batch (§ 211.180(a)). Records for all components, drug product containers, closures, and labeling are required to be maintained for at least 1 year after the expiration date and 3 years for certain OTC products (§ 211.180(b)).
All part 211 records must be readily available for authorized inspections during the retention period (§ 211.180(c)), and such records may be retained either as original records or as true copies (§ 211.180(d)). In addition, 21 CFR 11.2(a) provides that “[f]or records required to be maintained but not submitted to the agency, persons may use electronic records in lieu of paper records or electronic signatures in lieu of traditional signatures, in whole or in part, provided that the requirements of this part are met.” To the extent this electronic option is used, the burden of maintaining paper records should be substantially reduced, as should any review of such records.
In order to facilitate improvements and corrective actions, records must be maintained so that data can be used for evaluating, at least annually, the quality standards of each drug product to determine the need for changes in drug product specifications or manufacturing or control procedures (§ 211.180(e)). Written procedures for these evaluations are to be established and include provisions for a review of a representative number of batches and, where applicable, records associated with the batch; provisions for a review of complaints, recalls, returned or salvaged drug products; and investigations conducted under § 211.192 for each drug product.
The specific recordkeeping requirements provided in table 1 of this document are as follows:
• Section 211.34—Consultants advising on the manufacture, processing, packing, or holding of drug products must have sufficient education, training, and experience to advise on the subject for which they are retained. Records must be maintained stating the name, address, and qualifications of any consultants and the type of service they provide.
• Section 211.67(c)—Records must be kept of maintenance, cleaning, sanitizing, and inspection as specified in §§ 211.180 and 211.182.
• Section 211.68—Appropriate controls must be exercised over computer or related systems to assure that changes in master production and control records or other records are instituted only by authorized personnel.
• Section 211.68(a)—Records must be maintained of calibration checks, inspections, and computer or related system programs for automatic, mechanical, and electronic equipment.
• Section 211.68(b)—All appropriate controls must be exercised over all computers or related systems and control data systems to assure that changes in master production and controls records or other records are instituted only by authorized persons.
• Section 211.72—Filters for liquid filtration used in the manufacture, processing, or packing of injectable drug products intended for human use must not release fibers into such products.
• Section 211.80(d)—Each container or grouping of containers for components or drug product containers or closures must be identified with a distinctive code for each lot in each shipment received. This code must be used in recording the disposition of each lot. Each lot must be appropriately identified as to its status.
• Section 211.100(b)—Written production and process control procedures must be followed in the execution of the various production and process control functions and must be documented at the time of performance. Any deviation from the written procedures must be recorded and justified.
• Section 211.105(b)—Major equipment must be identified by a distinctive identification number or code that must be recorded in the batch production record to show the specific equipment used in the manufacture of each batch of a drug product. In cases where only one of a particular type of equipment exists in a manufacturing facility, the name of the equipment may be used in lieu of a distinctive identification number or code.
• Section 211.122(c) —Records must be maintained for each shipment received of each different labeling and packaging material indicating receipt, examination, or testing.
• Section 211.130(e)—Inspection of packaging and labeling facilities must be made immediately before use to assure that all drug products have been removed from previous operations. Inspection must also be made to assure that packaging and labeling materials not suitable for subsequent operations have been removed. Results of inspection must be documented in the batch production records.
• Section 211.132(c)—Certain retail packages of OTC drug products must bear a statement that is prominently placed so consumers are alerted to the specific tamper-evident feature of the package. The labeling statement is required to be so placed that it will be unaffected if the tamper-resistant feature of the package is breached or missing. If the tamper-evident feature chosen is one that uses an identifying characteristic, that characteristic is required to be referred to in the labeling statement.
• Section 211.132(d)—A request for an exemption from packaging and labeling requirements by a manufacturer or packer is required to be submitted in the form of a citizen petition under 21 CFR 10.30.
• Section 211.137—Requirements regarding product expiration dating and compliance with 21 CFR 201.17 are set forth.
• Section 211.160(a)—The establishment of any specifications, standards, sampling plans, test procedures, or other laboratory control mechanisms, including any change in such specifications, standards, sampling plans, test procedures, or other laboratory control mechanisms, must be drafted by the appropriate organizational unit and reviewed and approved by the quality control unit. These requirements must be followed and documented at the time of performance. Any deviation from the written specifications, standards, sampling plans, test procedures, or
• Section 211.165(e)—The accuracy, sensitivity, specificity, and reproducibility of test methods employed by a firm must be established and documented. Such validation and documentation may be accomplished in accordance with § 211.194(a)(2).
• Section 211.166(c)—Homeopathic drug product requirements are set forth.
• Section 211.173—Animals used in testing components, in-process materials, or drug products for compliance with established specifications must be maintained and controlled in a manner that assures their suitability for their intended use. They must be identified, and adequate records must be maintained showing the history of their use.
• Section 211.180(e)—Written records required by part 211 must be maintained so that data can be used for evaluating, at least annually, the quality standards of each drug product to determine the need for changes in drug product specifications or manufacturing or control procedures. Written procedures must be established and followed for such evaluations and must include provisions for a representative number of batches, whether approved or unapproved or rejected, and a review of complaints, recalls, returned or salvaged drug products, and investigations conducted under § 211.192 for each drug product.
• Section 211.180(f)—Procedures must be established to assure that the responsible officials of the firm, if they are not personally involved in or immediately aware of such actions, are notified in writing of any investigations conducted under § 211.198, § 211.204, or § 211.208, any recalls, reports of inspectional observations issued, or any regulatory actions relating to good manufacturing practices brought by FDA.
• Section 211.182—Specifies requirements for equipment cleaning records and the use log.
• Section 211.184—Specifies requirements for component, drug product container, closure, and labeling records.
• Section 211.186—Specifies master production and control records requirements.
• Section 211.188—Specifies batch production and control records requirements.
• Section 211.192—Specifies the information that must be maintained on the investigation of discrepancies found in the review of all drug product production and control records by the quality control staff.
• Section 211.194—Explains and describes laboratory records that must be retained.
• Section 211.196—Specifies the information that must be included in records on the distribution of the drug.
• Section 211.198—Specifies and describes the handling of all complaint files received by the applicant.
• Section 211.204—Specifies that records be maintained of returned and salvaged drug products and describes the procedures involved.
• Written procedures, referred to here as standard operating procedures (SOPs), are required for many part 211 records. The current SOP requirements were initially provided in a final rule published in the
• Section 211.22(d)—Responsibilities and procedures of the quality control unit;
• Section 211.56(b)—Sanitation procedures;
• Section 211.56(c)—Use of suitable rodenticides, insecticides, fungicides, fumigating agents, and cleaning and sanitizing agents;
• Section 211.67(b)—Cleaning and maintenance of equipment;
• Section 211.68(a)—Proper performance of automatic, mechanical, and electronic equipment;
• Section 211.80(a)—Receipt, identification, storage, handling, sampling, testing, and approval or rejection of components and drug product containers or closures;
• Section 211.94(d)—Standards or specifications, methods of testing, and methods of cleaning, sterilizing, and processing to remove pyrogenic properties for drug product containers and closures;
• Section 211.100(a)—Production and process control;
• Section 211.110(a)—Sampling and testing of in-process materials and drug products;
• Section 211.113(a)—Prevention of objectionable microorganisms in drug products not required to be sterile;
• Section 211.113(b)—Prevention of microbiological contamination of drug products purporting to be sterile, including validation of any sterilization process;
• Section 211.115(a)—System for reprocessing batches that do not conform to standards or specifications, to insure that reprocessed batches conform with all established standards, specifications, and characteristics;
• Section 211.122(a)—Receipt, identification, storage, handling, sampling, examination, and/or testing of labeling and packaging materials;
• Section 211.125(f)—Control procedures for the issuance of labeling;
• Section 211.130—Packaging and label operations, prevention of mixup and cross contamination, identification and handling of filed drug product containers that are set aside and held in unlabeled condition, and identification of the drug product with a lot or control number that permits determination of the history of the manufacture and control of the batch;
• Section 211.142—Warehousing;
• Section 211.150—Distribution of drug products;
• Section 211.160—Laboratory controls;
• Section 211.165(c)—Testing and release for distribution;
• Section 211.166(a)—Stability testing;
• Section 211.167—Special testing requirements;
• Section 211.180(f)—Notification of responsible officials of investigations, recalls, reports of inspectional observations, and any regulatory actions relating to good manufacturing practice;
• Section 211.198(a)—Written and oral complaint procedures, including quality control unit review of any complaint involving specifications failures, and serious and unexpected adverse drug experiences;
• Section 211.204—Holding, testing, and reprocessing of returned drug products; and
• Section 211.208—Drug product salvaging.
Although most of the CGMP provisions covered in this document were created many years ago, there will be some existing firms expanding into new manufacturing areas and startup firms that will need to create SOPs. As provided in table 1 of this document, FDA is assuming that approximately 100 firms will have to create up to 25 SOPs for a total of 2,500 records, and the agency estimates that it will take 20 hours per recordkeeper to create 25 new SOPs, for a total of 50,000 hours.
The burden estimates for the recordkeeping requirements in table 1 of this document are based on the following factors: (1) FDA's institutional experience regarding creation and review of such procedures and similar recordkeeping requirements; and (2) data provided to FDA to prepare an economic analysis of the potential economic impact of the May 3, 1996,
The May 3, 1996, proposed rule revising part 211 CGMP requirements would require additional SOPs. Cost estimates for those additional SOPs were included in the proposed rule, but are not included here. Any comments on those estimates will be evaluated in any final rule based on that proposal.
In the
FDA estimates the burden of this collection of information as follows:
Office of the Secretary, DHS.
Notice of Federal Advisory Committee Meeting.
The Homeland Security Advisory Council (HSAC) will hold a teleconference for the purposes of receiving a report and recommendations from a HSAC Task Force, and holding member deliberations. The HSAC will receive a final report from the HSAC Private Sector Information Sharing Task Force, Chaired by Mayor Patrick McCrory, Mayor of Charlotte, North Carolina. The Task Force will report on the topic of information sharing with the Private Sector. Following the Task Force report, the HSAC will hold deliberations and discussions among HSAC members.
This meeting will be held via teleconference on Wednesday, August 10, 2005, and will begin at 3:05 p.m. e.d.t.
If you desire to submit comments, they must be submitted by August 5, 2005. Comments must be identified by DHS-2005-0053 and may be submitted by
• EPA Federal Partner EDOCKET Web Site:
• Federal eRulemaking Portal:
• E-mail:
• Fax: (202) 772-9718.
• Mail: Katie Knapp, Homeland Security Advisory Council, Department of Homeland Security, Washington, DC 20528.
For additional information concerning the meeting, please contact Mike Miron or Katie Knapp of the HSAC Executive Staff Member via email at
Office of the Assistant Secretary—Water and Science, Interior.
Notice of Availability of a Final Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) for the execution of a lease of power privilege contract and the construction, operation, and maintenance of a non-federal hydroelectric generation facility on Jordanelle Dam, Wasatch County, Utah, pursuant to the lease.
Pursuant to Section 102(2)(C) of the National Environmental Policy Act (NEPA) of 1969, as amended; Public Law 102-575, Central Utah Project Completion Act (CUPCA), as amended; a July 2, 1999,
Additional information on matters related to this
The Central Utah Project's Bonneville Unit, located in northern Utah, was authorized for construction, including hydroelectric power, by the Colorado River Storage Project (CRSP) Act of April 11, 1956 (ch. 203, 70 Stat. 105) (CRSPA). The construction and operation of a hydroelectric generating facility below Jordanelle Dam was contemplated in the 1979 Municipal and Industrial System (M&I) Final Environmental Impact Statement (EIS). The 1987 Final Supplement to the M&I Final EIS deferred construction of a powerplant at Jordanelle awaiting non-federal participation. The potential to produce hydropower was incorporated in the construction of Jordanelle Dam. The Final EA and FONSI updates the 1987 Final Supplement to the M&I Final EIS regarding construction of a powerplant at Jordanelle Dam. The operation of Jordanelle Dam and Reservoir will remain the same as described in the 1987 Final Supplement to the Final EIS and the 2004 Final EIS for the Utah Lake System.
The Central Utah Project Completion Act (CUPCA), comprised of Titles II-VI of the Act of October 30, 1992 (106 Stat. 4600, Public Law 102-575) authorized the Secretary to request appropriations for the construction of other features of the Bonneville Unit. Section 208 of the CUPCA provides that power generation facilities associated with the CUP be developed and operated in accordance with the CRSPA, which explicitly embodies all Reclamation law except as otherwise provided in the CRSPA. In accordance with a
Fish and Wildlife Service, Interior.
Notice.
Results Home Buyer Inc. (Applicant) requests an incidental take permit (ITP) pursuant to section 10(a)(1)(B) of the Endangered Species Act of 1973 (U.S.C. 1531
The Applicant's Habitat Conservation Plan (HCP) describes the mitigation and minimization measures proposed to address the effects of the project to the scrub-jay. These measures are outlined in the
Written comments on the ITP application, accompanying HCP, and Screening Form should be sent to the Service's Regional Office (see
Persons wishing to review the application, HCP, and Screening Form may obtain a copy by writing the Service's Southeast Regional Office at the address below. Please reference permit number TE098966-0 in such requests. Documents will also be available for public inspection by appointment during normal business hours at the Southeast Regional Office, U.S. Fish and Wildlife Service, 1875 Century Boulevard, Suite 200, Atlanta, Georgia 30345 (Attn: Endangered Species Permits), or the South Florida Ecological Services Office, U.S. Fish and Wildlife Service, 1339 20th Street, Vero Beach, Florida, 32960-3559 (Attn: Field Supervisor).
Mr. David Dell, Regional HCP Coordinator, Southeast Regional Office (see
If you wish to comment, you may submit comments by any one of several methods. Please reference permit number TE098966-0 in such comments. You may mail comments to the Service's Southeast Regional Office (see
The Florida scrub-jay is geographically isolated from other species of scrub-jays found in Mexico and the western United States. The scrub-jay is found exclusively in peninsular Florida and is restricted to xeric uplands (well-drained, sandy soil habitats supporting a growth of oak-dominated scrub). Increasing urban and agricultural development has resulted in habitat loss and fragmentation, which has adversely affected the distribution and numbers of scrub-jays. The total estimated population is between 7,000 and 11,000 individuals.
The decline in the number and distribution of scrub-jays in west-central Florida has been exacerbated by tremendous urban growth in the past 50 years. Historical commercial and residential development has occurred on the dry soils which previously supported scrub-jay habitat. Based on existing soils data, much of the historic and current scrub-jay habitat of coastal west-central Florida occurs proximal to the current shoreline and larger river basins. Much of this area of Florida was settled early because few wetlands restricted urban and agricultural development. Due to the effects of urban and agricultural development over the past 100 years, much of the remaining scrub-jay habitat is now relatively small and isolated. What remains is largely degraded, due to interruption of the natural fire regime that is needed to maintain xeric uplands in conditions suitable for scrub-jays.
A 2004 survey reported that the project area was being utilized by a family of scrub-jays. The scrub-jays using the site and adjacent properties are part of a larger complex of scrub-jays located in a matrix of urban and natural settings in southern Sarasota County. Scrub-jays in urban areas are particularly vulnerable and typically do not successfully produce young that survive to adulthood. Persistent urban growth in this area will likely result in further reductions in the amount of suitable habitat for scrub-jays. Increasing urban pressures are also likely to result in the continued degradation of scrub-jay habitat as fire exclusion slowly results in vegetative overgrowth. Thus, over the long term, scrub-jays are unlikely to persist in urban settings, and conservation efforts for this species should target acquisition and management of large parcels of land outside the direct influence of urbanization.
Construction of the project's infrastructure and facilities will result in harm to scrub-jays, incidental to the carrying out of these otherwise lawful activities. Habitat alteration associated with the proposed residential construction will reduce the availability of foraging, sheltering, and possible nesting habitat for one family of scrub-jays. The Applicant proposes to conduct clearing activities outside of the nesting season. The Applicant proposes to replace any scrub oaks and wax myrtles that might be removed during land clearing. Wherever possible, native vegetation will be used in landscaping.
The Applicant proposes to mitigate the take of scrub-jays through contribution of $15,300 to the Sarasota County Scrub-jay Mitigation Plan Fund administered by Sarasota County. Funds in this account are earmarked for use in the conservation and recovery of scrub-jays and may include habitat acquisition, restoration, and management. The $15,300 is maximum extent of mitigation practicable for the Applicant.
The Service has determined that the HCP is a low-effect plan that is categorically excluded from further NEPA analysis, and does not require the preparation of an EA or EIS. This preliminary information may be revised based on our review of any public comment we receive in response to this notice. Low-effect HCPs are those involving: (1) minor or negligible effects on federally listed or candidate species and their habitats, and (2) minor or negligible effects on other environmental values or resources. The Applicant's HCP qualifies for the following reasons:
1. Approval of the HCP would result in minor or negligible effects on the Florida scrub-jay population as a whole. The Service does not anticipate significant direct or cumulative effects to the Florida scrub-jay population as a result of the project.
2. Approval of the HCP would not have adverse effects on known unique geographic, historic, or cultural sites, or involve unique or unknown environmental risks.
3. Approval of the HCP would not result in any significant adverse effects on public health or safety.
4. The project does not require compliance with Executive Order 11988 (Floodplain Management), Executive Order 11990 (Protection of Wetlands), or the Fish and Wildlife Coordination Act, nor does it threaten to violate a Federal, State, local, or tribal law or requirement imposed for the protection of the environment.
5. Approval of the Plan would not establish a precedent for future actions or represent a decision in principle about future actions with potentially significant environmental effects.
The Service has determined that approval of the Plan qualifies as a categorical exclusion under NEPA, as provided by the Department of the Interior Manual (516 DM 2, Appendix 1, and 516 DM 6, Appendix 1). Therefore, no further NEPA documentation will be prepared.
The Service will evaluate the HCP and comments submitted thereon to determine whether the application meets the requirements of section 10(a) of the Act. If it is determined that those requirements are met, the ITP will be issued for incidental take of the Florida scrub-jay. The Service will also evaluate whether issuance of the section 10(a)(1)(B) ITP complies with section 7 of the Act by conducting an intra-Service section 7 consultation. The results of this consultation, in combination with the above findings, will be used in the final analysis to determine whether or not to issue the ITP.
Nominations for the following properties being considered for listing or related actions in the National Register were received by the National Park Service before June 25, 2005. Pursuant to § 60.13 of 36 CFR part 60 written comments concerning the significance of these properties under the National Register criteria for evaluation may be forwarded by United States Postal Service, to the National Register of Historic Places, National Park Service, 1849 C St. NW., 2280, Washington, DC 20240; by all other carriers, National Register of Historic Places, National Park Service, 1201 Eye St. NW., 8th floor, Washington DC 20005; or by fax, 202-371-6447. Written or faxed comments should be submitted by August 9, 2005.
900-906 E. Main St., Louisville, 05000789
58-60 N. Champlain St., Burlington, 05000805
Nominations for the following properties being considered for listing or related actions in the National Register were received by the National Park Service before July 2, 2005. Pursuant to § 60.13 of 36 CFR part 60 written comments concerning the significance of these properties under the National Register criteria for evaluation may be forwarded by United States Postal Service, to the National Register of Historic Places, National Park Service, 1849 C St. NW., 2280, Washington, DC 20240; by all other carriers, National Register of Historic Places, National Park Service,1201 Eye St. NW., 8th floor, Washington DC 20005; or by fax, 202-371-6447. Written or faxed comments should be submitted by August 9, 2005.
A request for a MOVE has been made for the following resource:
Bureau of Reclamation, Interior.
Notice of meetings.
In accordance with the Federal Advisory Committee Act, the California Bay-Delta Public Advisory Committee (Committee) will meet on August 10, September 7, October 12, and November 9, 2005. These meetings will focus on the State's intense effort to fulfill the Governor's mandate for an independent fiscal and management review of the CALFED Bay-Delta Program by the end of 2005. Discussions will include a refocus of CALFED on resolving conflicts in the Delta, priority setting, and development of an action plan to finance CALFED over the next 10 years.
The next four Committee meetings will be held on Wednesday, August 10, 2005; Wednesday, September 7, 2005; Wednesday, October 12, 2005; and Wednesday, November 9, 2005 from 9 a.m. to 4 p.m. If reasonable accommodation is needed due to a disability, please contact Pauline Nevins at (916) 445-5511 or TDD (800) 735-2929 at least 1 week prior to the meeting.
These meetings will be held at the John E. Moss Federal Building located at 650 Capitol Mall, 5th Floor, Sacramento, California.
Keith Coolidge, California Bay-Delta Authority, at 916-445-0092, or Diane Buzzard, U.S. Bureau of Reclamation, at 916-978-5022.
The Committee was established to provide advice and recommendations to the Secretary of the Interior on implementation of the CALFED Bay-Delta Program. The Committee makes recommendations on annual priorities, integration of the eleven Program elements, and overall balancing of the four Program objectives of ecosystem restoration, water quality, levee system integrity, and water supply reliability. The Program is a consortium of State and Federal agencies with the mission to develop and implement a long-term comprehensive plan that will restore ecological health and improve water management for beneficial uses of the San Francisco/Sacramento and San Joaquin Bay Delta.
Committee agendas and meeting materials will be available prior to all meetings on the California Bay-Delta Authority Web site at
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to review certain portions of a final initial determination (“ID”) of the presiding administrative law judge (“ALJ”) finding a violation of section 337 of the Tariff Act of 1930, as amended, in the above-captioned investigation.
Clara Kuehn, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone (202) 205-3012. Copies of the public version of the ALJ's ID and all other nonconfidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone 202-205-2000.
General information concerning the Commission may also be obtained by accessing its Internet server (
The Commission instituted this investigation on April 14, 2004, based on a complaint filed on behalf of Zoran Corporation and Oak Technology, Inc. both of Sunnyvale, CA (collectively “complainants”). 69 FR 19876. The complaint, as supplemented, alleged violations of section 337 of the Tariff Act of 1930 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain optical disk controller chips and chipsets and products containing same, including DVD players and PC optical storage devices, by reason of infringement of claims 1-12 of U.S. Patent No. 6,466,736 (the '736 patent), claims 1-3 of U.S. Patent No. 6,584,527, and claims 1-35 of U.S. Patent No. 6,546,440 (the '440 patent). Id.
The notice of investigation identified 12 respondents. 69 FR 19876. On June 7, 2004, the ALJ issued an ID (Order No. 5) terminating the investigation as to two respondents on the basis of a consent order and settlement agreement. On June 22, 2004, the ALJ issued an ID (Order No. 7) granting complainants' motion to amend the complaint and notice of investigation to add nine additional respondents. Those IDs were not reviewed by the Commission.
On December 22, 2004, the ALJ issued an ID (Order No. 33) granting complainants' motion to terminate the investigation in part with respect to claims 2-6, 8-10, and 11 of the '736 patent and claims 2-4, 6, 9, 11, 12, 15-18, 20, 22-34, and 35 of the '440 patent. On January 28, 2005, the ALJ issued an ID (Order No. 37) granting complainants' motion to terminate the investigation in part with respect to claim 12 of the '736 patent. Neither ID was reviewed by the Commission. The claims remaining in issue are claims 1 and 7 of the '736 patent; claims 1, 5, 7, 8, 10, 13, 14, 19, and 21 of the '440 patent; and claims 1, 2, and 3 of the '527 patent.
An eight-day evidentiary hearing was held on February 7-12, and 14-15, 2005.
On May 16, 2005, the ALJ issued his final ID, findings of fact and conclusions of law, and recommended determination on remedy and bonding. The ALJ concluded that there was a violation of section 337 based on his findings that (a) The accused products infringe claim 3 of the '527 patent, (b) the '527 patent is not unenforceable, (c) claim 3 is not invalid, and (d) complainants have satisfied the domestic industry requirement with respect to the '527 patent. Although the ALJ found that the other asserted claims of the '527 patent (claims 1 and 2) are not invalid, he found that the accused products do not infringe those claims. The ALJ found no violation with respect to the other patents in issue. He found that the accused products do not infringe any asserted claim of the '440 or '736 patents and that complainants have not satisfied the domestic industry requirement with respect to those patents. He also found that the asserted claims of the '440 and '736 patents are not invalid and that those patents are not unenforceable.
On May 27, 2005, complainants and respondents each petitioned for review of portions of the final ID. On June 6, 2005, complainants, respondents, and the IA filed responses to the petitions for review.
Having examined the record in this investigation, including the ID, the petitions for review, and the responses thereto, the Commission has determined (1) to review the ID's findings of fact and conclusions of law with respect to the '527 and '440 patents and (2) not to review the ID's findings of fact and conclusions of law with respect to the '736 patent. Thus, the Commission finds no violation of section 337 with respect to the '736 patent. The Commission has further determined to review and modify the ID to clarify that respondents accused only of infringing asserted claims of the '736 patent (viz., respondents Audiovox Corporation; Initial Technology, Inc.; Mintek Digital, Inc.; Shinco International AV Co., Ltd.; Changzhou Shinco Digital Technology Co., Ltd.; Jiangsu Shinco Electronic Group Co., Ltd.; Terapin Technology Pte., Ltd. [formerly known as Teraoptix d/b/a Terapin Technology] of Singapore; and Terapin Technology U.S. [formerly also known as Teraoptix]) are not in violation of Section 337.
In connection with its review, the Commission is particularly interested in responses to the following questions, with all answers supported by citations to legal authority and the evidentiary record:
1. Have respondents waived the argument that the '527 and '440 patents are invalid under 35 U.S.C. 102(f) for nonjoinder of unidentified “Western Digital engineers” as co-inventors by failing to present it to the ALJ? (See respondents' petition for review at 51.) Identify with citations to previous briefing where this specific argument
2. May a patent be held invalid for nonjoinder of an unidentified co-inventor under 35 U.S.C. 102(f)? If so, did respondents present to the ALJ the required clear and convincing evidence to support a prima facie case? In addition to supporting your answer with citations to the evidentiary record and legal authority, address
3. The following questions relate to claim construction. In your answers, identify any finding of fact or conclusion of law with respect to infringement, the technical prong of the domestic industry requirement, unenforceability, or invalidity in the ID rendered clearly erroneous or legally erroneous under your proposed claim interpretation. Provide supporting citations to the record.
(a) What is the impact, if any, of the July 12, 2005, en banc decision of the U.S. Court of Appeals for the Federal Circuit in
(b) Did respondents waive their argument that the host interface limitations of the asserted claims should be construed to require support for eight ATA command block registers plus a separate multi-byte command buffer at the same time by failing to raise this argument before the ALJ? Identify where this specific argument was presented to the ALJ with citations to previous briefing.
(c) Assume that the description of the digital signal processor interface in the summary of the invention section of the ‘527 patent (
(d) How should the terms “controller” and “directly” be construed?
4. Have respondents waived their argument that the ALJ erred in failing to make a determination concerning the date of actual reduction to practice of the HISIDE product by failing to raise that argument before him? (See respondents' petition for review at 112-13: “There is no initial determination of the date of reduction to practice for any claim of the ‘440 and ‘527 patents and there is no initial determination of the date of actual reduction to practice of [Western Digital's] HISIDE product that Respondents showed anticipates the claims of the ‘440 and ‘527 patent [sic].”) Identify with citations to previous briefing where this specific argument and any supporting evidence was presented to the ALJ.
5. Did the ALJ err in omitting the MT1189 from the list of MediaTek OSC chips accused of infringing the asserted claims of the ‘440 and ‘527 patents (ID at 110) or err in including the MT1528, MT1558, or MT1668 in that list? Why or why not? Identify with specificity evidence in the record that would support a finding that the MT1189, MT1528, MT1558, or MT1668 infringe any asserted claim of the ‘527 or ‘440 patents.
6. Should the asserted claims of the ‘440 and ‘527 patents be accorded the conception date found by the Commission in the 409 investigation for the claims of the ‘715 patent? Why or why not? In your answer, address any relevant admission(s) by respondents. (See ID at 129 n.45.)
In connection with the final disposition of this investigation, the Commission may issue (1) an order that could result in the exclusion of the subject articles from entry into the United States, and/or (2) cease and desist orders that could result in respondents being required to cease and desist from engaging in unfair acts in the importation and sale of such articles. Accordingly, the Commission is interested in receiving written submissions that address the form of remedy, if any, that should be ordered. If a party seeks exclusion of an article from entry into the United States for purposes other than entry for consumption, the party should so indicate and provide information establishing that activities involving other types of entry either are adversely affecting it or are likely to do so. For background information, see the Commission Opinion,
If the Commission contemplates some form of remedy, it must consider the effects of that remedy upon the public interest. The factors the Commission will consider include the effect that an exclusion order and/or cease and desist orders would have on (1) the public health and welfare, (2) competitive conditions in the U.S. economy, (3) U.S. production of articles that are like or directly competitive with those that are subject to investigation, and (4) U.S. consumers. The Commission is therefore interested in receiving written submissions that address the aforementioned public interest factors in the context of this investigation.
If the Commission orders some form of remedy, the President has 60 days to approve or disapprove the Commission's action. During this period, the subject articles would be entitled to enter the United States under a bond, in an amount to be determined by the Commission and prescribed by the Secretary of the Treasury. The Commission is therefore interested in receiving submissions concerning the amount of the bond that should be imposed.
Persons filing written submissions must file with the Office of the Secretary the original and 12 true copies thereof on or before the deadlines stated above. Any person desiring to submit a document (or portion thereof) to the Commission in confidence must request confidential treatment unless the information has already been granted such treatment during the proceedings. All such requests should be directed to the Secretary of the Commission and
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in § 210.42-.46 of the Commission's Rules of Practice and Procedure (19 CFR 210.42-.46).
By order of the Commission.
Employment and Training Administration, Labor.
Notice.
The Employment and Training Administration is issuing this notice to announce the receipt of a “Certification of Non-Relocation and Market and Capacity Information Report” (Form 4279-2) for the following:
All interested parties may submit comments in writing no later than August 8, 2005. Copies of adverse comments received will be forwarded to the applicant noted above.
Address all comments concerning this notice to Anthony D. Dais, U.S. Department of Labor, Employment and Training Administration, 200 Constitution Avenue, NW., Room C-4514, Washington, DC 20210; or transmit via fax 202-693-3015 (this is not a toll-free number).
Anthony D. Dais, at telephone number (202) 693-2784 (this is not a toll-free number).
Section 188 of the Consolidated Farm and Rural Development Act of 1972, as established under 29 CFR Part 75, authorizes the United States Department of Agriculture (USDA) to make or guarantee loans or grants to finance industrial and business activities in rural areas. The Secretary of Labor must review the application for financial assistance for the purpose of certifying to the Secretary of Agriculture that the assistance is not calculated, or likely, to result in: (a) A transfer of any employment or business activity from one area to another by the loan applicant's business operation; or, (b) An increase in the production of goods, materials, services, or facilities in an area where there is not sufficient demand to employ the efficient capacity of existing competitive enterprises unless the financial assistance will not have an adverse impact on existing competitive enterprises in the area. The Employment and Training Administration (ETA) within the Department of Labor is responsible for the review and certification process. Comments should address the two bases for certification and, if possible, provide data to assist in the analysis of these issues.
The National Endowment for the Humanities.
Notice of meetings.
Pursuant to the provisions of the Federal Advisory Committee Act (Pub. L. 92-463, as amended), notice is hereby given that the following meetings of the Humanities Panel will be held at the Old Post Office, 1100 Pennsylvania Avenue, NW., Washington, DC 20506.
Michael McDonald, Acting Advisory Committee Management Officer, National Endowment for the Humanities, Washington, DC 20506; telephone (202) 606-8322. Hearing-impaired individuals are advised that information on this matter may be obtained by contacting the Endowment's TDD terminal on (202) 606-8282.
The proposed meetings are for the purpose of panel review, discussion, evaluation and recommendation on applications for financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including discussion of information given in confidence to the agency by the grant applicants. Because the proposed meetings will consider information that is likely to disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential and/or information of a personal nature the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, pursuant to authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee meetings, dated July 19, 1993, I have determined that these meetings will be closed to the public pursuant to subsections (c)(4), and (6) of section 552b of Title 5, United States Code.
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The U.S. Nuclear Regulatory Commission (NRC or the Commission) is considering issuance of an order under Section 50.80 of Title 10 of the Code of Federal Regulations (10 CFR) approving the indirect transfer of Facility Operating License Nos. NPF-76 and NPF-80 for South Texas Project (STP), Units 1 and 2, respectively, to the extent held by Texas Genco, LP (Texas Genco).
The June 28, 2005, application requests the consent of the NRC to the proposed indirect transfer of control of the STP, Units 1 and 2, licenses to the extent held by Texas Genco. Texas Genco is a 44 percent owner and non-operating licensee of STP, Units 1 and 2. According to the application, filed by STP Nuclear Operating Company (STPNOC) on behalf of Texas Genco, Texas Genco is indirectly owned by Texas Genco Holdings, Inc., which in turn is wholly owned by Texas Genco LLC. Texas Genco LLC is owned by investment funds affiliated with The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. L.P., and Texas Pacific Group (the Investment Funds) and certain members of the management team (Management owners).
As stated in the application, the ultimate owners of Texas Genco are proposing a corporate restructuring such
Following certain transactions described in the application, and following the initial public offering, Texas Genco Inc., will become the sole managing member of Texas Genco Holdings LLC, and Texas Genco Holdings LLC will become the sole owner of Texas Genco LLC and the indirect owner of licensee Texas Genco, which shall at all times continue to be a licensed owner of STP. According to the application, the Investment Funds and Management owners would control Texas Genco Inc., through their ownership of a majority of the voting power in Texas Genco Inc., and continue to ultimately control Texas Genco.
Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. The Commission will approve an application for the transfer of a license, if the Commission determines that the proposed transferee is qualified to hold the license, and that the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
The filing of requests for hearing and petitions for leave to intervene, and written comments with regard to the license transfer application, are discussed below.
Within 20 days from the date of publication of this notice, any person whose interest may be affected by the Commission's action on the application may request a hearing and, if not the applicant, may petition for leave to intervene in a hearing proceeding on the Commission's action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commission's rules of practice set forth in Subpart C, “Rules of General Applicability: Hearing Requests, Petitions to Intervene, Availability of Documents, Selection of Specific Hearing Procedures, Presiding Officer Powers, and General Hearing Management for NRC Adjudicatory Hearings,” of 10 CFR Part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.309. Untimely requests and petitions may be denied, as provided in 10 CFR 2.309(c)(1), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.309(c)(1)(i)-(viii).
Requests for a hearing and petitions for leave to intervene should be served upon Mr. John E. Matthews, Morgan, Lewis, & Bockius, LLP, 1111 Pennsylvania Avenue, NW., Washington, DC 20004, attorney for STPNOC; Nicholas S. Reynolds, Winston & Strawn LLP, 1700 K Street, NW., Washington, DC 20006-3817, attorney for Texas Genco; the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 (e-mail address for filings regarding license transfer cases only:
The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the
As an alternative to requests for hearing and petitions to intervene, within 30 days from the date of publication of this notice, persons may submit written comments regarding the license transfer application, as provided in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of this
For the Nuclear Regulatory Commission.
U.S. Nuclear Regulatory Commission.
Notice of availability.
David Nelson, Project Manager, Materials Decommissioning Section, Decommissioning Directorate, Division of Waste Management and Environmental Protection, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Mail Stop T7E18, Washington, DC 20555. Telephone: (301) 415-6626; fax number: (301) 415-5397; e-mail:
The U.S. Nuclear Regulatory Commission (NRC) is considering the issuance of a license amendment to the Dow Chemical Company's (TDCC) Material License, No. STB-527. The amendment would allow an alternate method for conducting surveys, would add two plans to the license, and would expand the scope of onsite decommissioning activities.
NRC has prepared an Environmental Assessment (EA) in support of this amendment in accordance with the
TDCC is the current holder of NRC radioactive source materials license STB-527 (NRC Docket 040-00017). The license authorizes TDCC, to possess and use licensed materials (materials contaminated with source material) during activities leading to their removal from the Bay City, MI site. License STB-527 continues in effect until the Commission notifies the licensee in writing that the license is terminated. The source material (radiological contamination) consists of thorium and its daughter products. The license authorizes the removal and transport of contaminated materials from the site in accordance with an approved decommissioning plan (DP). The DP for TDCC Bay City, MI site was approved in License Amendment No. 7 dated July 21, 1997 (See ADAMS ML050750212). The NRC is considering a license amendment (License Amendment No. 11) to approve the following:
1. An alternate method (AAR Method as described in Revision 2 to the Supplement to the DP) for conducting final status radiological surveys at its Bay City, MI site, (See ADAMS ML051040383), and
2. The addition of four structures and two small pieces of land adjacent to the property to the scope of decommissioning activities (See ADAMS ML051040383), and
3. The incorporation of the Groundwater Monitoring Plan (GMP) for TDCC Bay City site into the license (See ADAMS ML051040383), and
4. The incorporation of Revision 3 of TDCC Thorad Project Radiological Health and Safety Plan into the license (See ADAMS ML051290296).
The objective of decommissioning at TDCC's Bay City, MI site is to remediate radiological constituents, to the extent required, to allow the NRC to release the property for unrestricted use and terminate TDCC's license for the site (STB-527).
The proposed action is to allow TDCC to more accurately determine the spatial distribution of the radiological contamination in the subsurface soil using an alternate surveying method (AAR Method) to that described in the Final Survey Plan. The amendment would also incorporate a formal GMP and Revision 3 of the Radiological Health and Safety Plan into the license and add four structures and two small plots of land to the scope of decommissioning activities.
Through the proposed action, the licensee believes the alternate survey method would more accurately characterize the radiological contamination in the subsurface soil. By more accurately characterizing the subsurface soil, the licensee believes that the volume of soil excavated would be reduced thus reducing the cost of decommissioning. The original DP did not address the four structures and two small plots of land in the scope of decommissioning activities. In order to release the whole site for unrestricted use, the four structures and two plots of land need to be formally addressed in the DP. The license has routinely collected ground water samples on-site without an approved GMP and the amendment would formally incorporate the GMP into the license. Revision 3 of the Radiological Health and Safety Plan addresses administrative issues that have arisen since its last revision.
The “no-action” alternative would be to require TDCC to continue to conduct surveys using the method described in License Amendment No. 7. This could result in the licensee unnecessarily excavating soil that exceeded the approved release criteria.
The inclusion of the GMP into the license is not required. However, inclusion does formally commit the licensee to all of the provisions of the GMP and may prevent misunderstandings between the NRC and TDCC regarding its implementation.
To release the entire site for unrestricted use, all buildings and plots of land must be surveyed and remediated to the levels required in License Amendment No. 7. The staff compares survey results to the release criteria before concluding that the site is suitable for license termination and can be released for unrestricted use. If the buildings and plots of land are not addressed in the DP and, therefore, not released for unrestricted use, TDCC would be required to maintain control of them in the license. This would place an unnecessary regulatory burden on TDCC.
An earlier and more extensive EA was prepared for License Amendment No. 7 (See ADAMS ML050750212). The amendment approved TDCC's unrestricted release criteria and final survey plan for the Bay City, MI site (See ADAMS ML050750212). The NRC staff determined that decommissioning of the site using the proposed release criteria and the final survey plan could be accomplished to demonstrate compliance with the NRC public and occupational dose limits, and effluent release limits. In addition, the staff concluded that the approval of the decommissioning activities at TDCC Bay City, MI site in accordance with the commitments in NRC license STB-527 Amendment No. 7, and employing the unrestricted release criteria and the final survey plan, would not result in a significant adverse impact on the environment. For more details on the facility description, operating history, radiological status, evaluation of decontamination, evaluation of decontamination of outdoor areas, radiation protection programs, and environmental impacts, refer to the EA prepared for License Amendment No. 7 (See ADAMS ML050750212).
Radiological and non-radiological impacts are discussed in detail in the EA prepared for the decommissioning of the site in License Amendment No. 7. Since the release criteria remains the same for soils and surfaces, changing the survey methodology and adding four buildings and two small plots of land to the scope of decommissioning activities will not cause an increase the level of radiological and non-radiological impacts. Compliance with the soil and surfaces release criteria ensures that the dose limit for the site will not be exceeded. Adding the GMP to the DP and revising the Health and Safety Plan are administrative issues that have no environmental impact.
NRC staff has consulted with Michigan Department of Environmental Quality (MDEQ), the U.S. Fish and Wildlife Service, and the Michigan State Historic Preservation Office in the preparation of this EA. The NRC staff has determined that Section 7 consultation is not required because listed/habitat are not present in the proposed action area, therefore the proposed action will not affect listed species or critical habitat. The NRC staff has determined that the proposed action is not a type of activity that has potential to cause effects on historic
Based upon the analysis in this EA and the EA prepared for License Amendment No. 7; the NRC staff has concluded that there will be no significant environmental impacts from the proposed action and has determined not to prepare an environmental impact statement for the proposed action.
Documents related to this action, including the application for amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at
These documents may also be viewed electronically on the public computers located at the NRC's PDR, O 1 F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee.
For the Nuclear Regulatory Commission.
Weeks of July 25, August 1, 8, 15, 22, 29, 2005.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and closed.
There are no meetings scheduled for the week of August 1, 2005.
There are no meetings scheduled for the week of August 8, 2005.
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of August 22, 2005.
There are no meetings scheduled for the week of August 29, 2005.
*The schedule for Commission meetings is subject to change on short notice. To verify the status of meetings call (recording)—(301) 415-1292. Contact person for more information: David Gamberoni, (301) 415-1651.
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (
This notice is distributed by mail to several hundred subscribers: If you no longer wish to receive it, or would like to be added to the distribution, please contact the Office of the Secretary, Washington, DC 20555 (301-415-1969). In addition, distribution of this meeting notice over the Internet system is available. If you are interested in receiving this Commission meeting
Nuclear Regulatory Commission.
Notice of issuance.
The U.S. Nuclear Regulatory Commission (NRC) has issued Bulletin (BL) 2005-02 to all holders of operating licenses for nuclear power reactors, except those who have permanently ceased operation and have certified that fuel has been removed from the reactor vessel. The U.S. Nuclear Regulatory Commission (NRC) is issuing this bulletin to:
1. Notify addressees about NRC staff's need for information associated with emergency preparedness (EP) for security-based events at a nuclear power plant;
2. Request addressees provide information to the NRC within 30 days of this bulletin regarding actions taken or planned to be taken in the areas discussed below:
a. Security-based emergency classification levels and emergency action levels (EALs), emergency response organization augmentation for security-based events, and a security-based EP drill and exercise program,
b. Accelerated NRC notifications and onsite protective measures;
3. If actions regarding the topics covered in this bulletin have not been taken, the addressees are requested to provide a schedule detailing expected completion dates for all pending activities; and
4. Require addressees to provide a written response to the NRC in accordance with 10 CFR 50.54(f).
This
The bulletin was issued on July 18, 2005.
Not applicable.
Michael Norris at 301-415-4098 or by e-mail
NRC Bulletin 2005-02 may be examined, and/or copied for a fee, at the NRC's Public Document Room at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site,
If you do not have access to ADAMS or if you have problems in accessing the documents in ADAMS, contact the NRC Public Document Room (PDR) reference staff at 1-800-397-4209 or 301-415-4737 or by e-mail to
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of opportunity for public comment.
The U.S. Nuclear Regulatory Commission (NRC) is proposing to issue a generic letter (GL) to:
(1) Request that addressees evaluate their facilities to confirm compliance with the existing applicable regulatory requirements in light of the information provided in this generic letter and, if appropriate, take additional actions. Specifically, although Hemyc and MT fire barriers in nuclear power plants (NPPs) may be relied on to protect electrical and instrumentation cables and equipment that provide safe shutdown capability during a fire, recent NRC testing has revealed that both materials failed to provide the protective function intended for compliance with existing regulations, for the configurations tested using the acceptance criteria in Generic Letter (GL) 86-10, Supplement 1, “Fire Endurance Test Acceptance Criteria for Fire Barrier Systems Used To Separate Redundant Safe Shutdown Trains Within the Same Fire Area.”
(2) Require that addressees submit a written response to the NRC in accordance with NRC regulations in Title 10 of the Code of Federal Regulations, Section 50.54(f) (10 CFR 50.54(f)).
This
Comment period expires September 23, 2005. Comments submitted after this date will be considered if it is practical to do so, but assurance of consideration cannot be given except for comments received on or before this date.
Submit written comments to the Chief, Rules and Directives Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Mail Stop T6-D59, Washington, DC 20555-0001, and cite the publication date and page number of this
Angie Lavretta at (301) 415-3285 or by e-mail
All holders of operating licenses for light-water nuclear power reactors, except those who have ceased operations and have certified that fuel has been permanently removed from the reactor vessel.
The U.S. Nuclear Regulatory Commission (NRC) is issuing this generic letter to:
(3) Request that addressees evaluate their facilities to confirm compliance with the existing applicable regulatory requirements in light of the information provided in this generic letter and, if
(4) Require that addressees submit a written response to the NRC in accordance with NRC regulations in Title 10 of the Code of Federal Regulations, Section 50.54(f) (10 CFR 50.54(f)).
NRC's concern with the performance of fire barriers at nuclear power plants began with the failure of Thermo-Lag to pass performance tests in October 1989 at Southwest Research Institute. The tests were done for the Gulf States Utilities Company after visually observing degradation of Thermo-Lag at River Bend Station. In June and August 1992, two sets of full-scale fire endurance tests on Thermo-Lag were conducted at Omega Point Laboratories in San Antonio, Texas, by Texas Utilities Electric Company for Comanche Peak Steam Electric Station, with similar results. In July 1992, the NRC sponsored a series of small-scale fire endurance tests at the National Institute of Standards and Technology. The results again indicated that 1-hour-and 3-hour-rated Thermo-Lag barrier material failed to consistently provide its intended protective function.
On August 6, 1991, the NRC issued Information Notice (IN) 91-47, “Failure of Thermo-Lag Fire Barrier Material To Pass Fire Endurance Test,” the first in a series of INs issued between 1991 and 1995 on performance test failures and installation deficiencies related to Thermo-Lag 330 fire barrier systems.
Because of questions about the ability of 1-hour- and 3-hour-rated Thermo-Lag fire barrier material to perform its specified function and because of the widespread use of Thermo-Lag in the nuclear industry, the NRC issued the following generic communications to inform licensees of the Thermo-Lag test results and to request that licensees implement appropriate compensatory measures and develop plans to resolve any noncompliances with 10 CFR 50.48:
• Bulletin 92-01, “Failure of Thermo-Lag 330 Fire Barrier System To Maintain Cabling in Wide Cable Trays and Small Conduits Free From Fire Damage,” June 24, 1992.
• Bulletin 92-01, Supplement 1, “Failure of Thermo-Lag 330 Fire Barrier System To Perform its Specified Fire Endurance Function,” August 28, 1992.
• GL 92-08, “Thermo-Lag 330-1 Fire Barriers,” December 17, 1992.
• Supplement 1 to GL 86-10, “Fire Endurance Test Acceptance Criteria for Fire Barrier Systems Used To Separate Redundant Safe Shutdown Trains Within the Same Fire Area,” March 25, 1994. GL 92-08 specifically asked licensees to review any existing fire barrier configurations credited for 10 CFR 50.48 compliance in light of the concerns with Thermo-Lag 330-1 fire barriers.
In response, the licensees reviewed their fire protection safe shutdown plans to determine if corrective actions were needed. Some licensees had made conservative commitments and installed Thermo-Lag in locations where it was not needed to satisfy NRC requirements, therefore no corrective actions were required. Where fire barrier materials were required, licensees took one or a combination of the following corrective actions:
• Rerouted cables through other fire areas so that redundant safe shutdown trains were not located in the same fire area.
• Replaced Thermo-Lag, or the affected material, with an alternative rated fire barrier material.
• Upgraded the installed fire barriers to a rated configuration.
• Concluded that certain Thermo-Lag barriers were no longer required.
Subsequently, deficiencies were also identified in other fire barrier materials. In 1993, for example, Kaowool installed as a 1-hour-rated fire barrier was found to be unable to pass circuit integrity tests. In response, the NRC reassessed previous staff reviews of Kaowool fire barriers and informed the industry and the Commission of the potential failure of Kaowool to perform as intended and suggested additional testing of Kaowool (SECY-99-204; ADAMS Accession No. ML992810028). To resolve the issue, the industry took voluntary corrective actions. In August 1993, the Nuclear Energy Institute (NEI) formed a Fire Barrier Review Ad Hoc Advisory Committee to address the adequacy of fire barrier materials other than Thermo-Lag. The Committee performed reviews of the original testing of the fire barrier, Hemyc (performed in the early 1980s in Spain), and concluded that Hemyc was differently constructed than Thermo-Lag 330-1, and therefore was not subject to the same failure modes as Thermo-Lag 330-1. In May 1994, this review was documented in the NEI report, “Documentation of the Adequacy of Fire Barrier Materials in Raceway Applications Vis-à-vis Failure Characteristics Inherent to the Thermo-Lag 330-1.”
However, beginning in late 1999, three plant-specific findings by the staff raised concerns about the performance of Hemyc and MT fire barriers.
• In November 1999, during an inspection at Shearon Harris Nuclear Power Plant (IR 50-400/99-13; ADAMS Accession No. ML003685341), the inspection team noted that the acceptance of the Hemyc and MT fire barrier materials used was based on American Nuclear Insurers (ANI) Bulletin No. 5 test acceptance criteria, even though the ANI test methodology clearly stated that the tests were done for insurance purposes only and were not intended to be considered the equivalent of fire barrier endurance tests for fire barrier ratings.
• In October and November 2000, during an inspection at McGuire 1 and 2 (IR 50-369/00-09, 50-370/00-09; ADAMS Accession No. ML003778709), the inspection team noted that the licensee was unable to provide documentation demonstrating protection by Hemyc fire barrier material used to separate safe shutdown functions for two trains within a single fire area.
• In September 2000, during an inspection at Waterford 3 (IR 50-382/00-07; ADAMS Accession No. ML003773900), the inspectors noted that the Hemyc materials were installed in configurations which typically would not be bounded by the existing tests.
In June 2001, the NRC initiated confirmatory fire tests in response to Task Interface Agreement 99-028 (ADAMS Accession No. ML003736721), after concluding that existing testing was likely insufficient to qualify Hemyc or MT as rated fire barriers. The NRC tests were based on ASTM E119 Standard time-temperature conditions and the current NRC guidance in GL 86-10, Supplement 1, for typical Hemyc and MT installations used in U.S. NPPs. The test results indicated that Hemyc and MT fire barriers did not pass the GL 86-10, Supplement 1, criteria to achieve a 1-hour fire rating for Hemyc or a 3-hour fire rating for MT, for the configuration tested. On April 1, 2005, the NRC issued IN 2005-07, “Results of Hemyc Electrical Raceway Fire Barrier System Full Scale Fire Testing.” This IN describes the results of the NRC-sponsored confirmatory testing of
On April 29, 2005, the staff held a public meeting with licensees and interested members of the public to discuss the Hemyc and MT test results and the staff's intentions to take prompt additional regulatory action to ensure that appropriate measures are under way for compliance with 10 CFR 50.48 requirements at affected plants. This generic letter is the follow-on to IN 05-07.
The NRC has established a Web page to keep the public informed of the status of the Hemyc/MT fire barrier issue at
This page provides links to information on related fire protection issues, along with documentation of NRC interactions with industry (including generic communications, industry submittals, meeting notices, presentation materials, and meeting summaries). The NRC will continue to update this Web page as new information becomes available.
Hemyc and MT, manufactured by Promatec, Inc, were installed at NPPs to protect circuits and instrumentation cables in order to meet regulatory requirements and in accordance with plant-specific commitments. The NRC conducted confirmatory testing of both materials at the Omega Point Laboratories in San Antonio, Texas. The test results indicated that when tested to GL 86-10, Supplement 1, criteria, neither the Hemyc nor the MT fire barrier system would provide its rated fire barrier protection.
The staff noted at least three failure modes in the limited test program. Two failure modes resulted from shrinkage of outer material (Refrasil), causing the barrier to open and exposing the interior surfaces or layers to the fire. The third failure mode resulted from failure to adequately protect steel members intruding into the barrier. The standard used by some utilities required protection of 3 inches of intruding steel for the Hemyc 1-hour fire barrier and 18 inches of intruding steel for the MT 3-hour fire barrier. The test results indicated that additional protection of intruding steel was required to achieve a 1-hour or 3-hour fire rating. Based on these test results, the NRC is concerned that the Hemyc and MT fire barriers may not provide the level of fire endurance intended by licensees and that licensees that use Hemyc or MT may not be complying with NRC regulations. Section 50.48 of 10 CFR part 50 requires that each operating NPP have a fire protection plan that satisfies General Design Criterion (GDC) 3, “Fire Protection,” of 10 CFR part 50, Appendix A, “General Design Criteria for Nuclear Power Plants.” The NRC Regulation in 10 CFR 50.48 states that each operating nuclear power plant (licensed before or after issuance of GDC 3) must have a fire protection plan that satisfies Criterion 3 of Appendix A. GDC 3 requires that structures, systems, and components important to safety be designed and located to minimize, in a manner consistent with other requirements, the probability and effect of fires and explosions. Fire protection features required to satisfy 10 CFR 50.48 include features to limit fire damage to structures, systems or components important to safety so that the capability to shut down the plant safely is ensured. One means of complying with this requirement is to separate one safe shutdown train from its redundant train with rated fire barriers. The duration of fire resistance required of the barriers, usually 1 hour or 3 hours, depends on the other fire protection features provided in the fire area. The NRC issued guidance on acceptable methods of satisfying the regulatory requirements of GDC 3 in the branch technical positions (BTPs) and generic letters identified below in the Applicable Regulatory Guidance section of this generic letter. GL 92-08 specifically included the staff's expectation that licensees would review existing fire barrier configurations credited for 10 CFR part 50, appendix R, compliance, based on earlier concerns with Thermo-Lag. Licensees of plants licensed to operate before January 1, 1979, must comply with their fire protection requirements as specified in 10 CFR 50, appendix R, and licensees of plants licensed to operate after January 1, 1979, must comply with the approved fire protection program incorporated into their operating license. The staff expects licensees to reevaluate their fire protection programs in light of information provided in IN 05-07 and this generic letter and to implement appropriate compensatory measures and develop plans to resolve any noncompliances within a reasonable timeframe.
For guidance in addressing any degraded or nonconforming Hemyc and MT fire barrier configurations, licensees should consult the guidance in Revision 1 to GL 91-18, “Information to Licensees Regarding NRC Inspection Manual Section on Resolution of Degraded and Nonconforming Conditions,” dated October 8, 1997. Licensees are encouraged to review Regulatory Issue Summary 2005-07, “Compensatory Measures To Satisfy the Fire Protection Program Requirements,” in determining the appropriate compensatory measures to meet fire protection program requirements for the degraded or nonconforming fire barrier installations. All licensees should consider the impact of fire barrier degradation on the operability of affected equipment and assess the impact on plant safety.
NRC regulations do not require fire detectors and automatic fire suppression systems when 3-hour fire barriers are used. NRC regulations do require fire detectors and automatic fire suppression systems when 1-hour-rated fire barriers are used; however, the staff has approved plant-specific requests for exceptions (
If a nonconforming condition is identified, then licensees can use at least two methods, individually or in combination, to restore compliance. One way is to make plant modifications such as replacing the Hemyc or MT fire barriers with an appropriately rated fire barrier material, upgrading the Hemyc or MT to a rated barrier, or rerouting cables or instrumentation lines through another fire area. Another way to address the issue is to perform a technical evaluation that considers defense-in-depth and safety margins as follows:
• Plants licensed to operate before January 1, 1979, that do not plan to perform a plant modification must request an exemption from 10 CFR part 50, appendix R, that demonstrates that the configuration as installed meets the requirements of 10 CFR 50.12, “Specific Exemptions.” If the plant proposes to use a risk-informed approach to justify an exception in accordance with 10 CFR 50.12, then this approach should follow the guidance of Regulatory Guide (RG) 1.174, “An Approach for Using Probabilistic Risk Assessment in Risk-Informed Decisions on Plant-Specific Changes to the Licensing Basis.”
• Plants licensed to operate after January 1, 1979, that do not plan to perform a plant modification must meet the fire protection requirements in the operating license condition. The standard license condition allows a licensee to make changes to the approved fire protection program without prior staff approval “if those changes would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire.” GL 86-10, “Implementation of Fire Protection Requirements,” provides guidance on performing and documenting these changes.
Plants licensed after January 1, 1979, that adopt a risk-informed approach, must submit a license amendment in accordance with 10 CFR 50.90. The exception to 10 CFR 50.90, provided in the standard license condition and in 10 CFR 50.48(f)(3), does not apply because the risk assessment approaches used by plants deviate from the approved deterministic approaches used in their licensing bases. Furthermore, the licensees' risk assessment tools have not been reviewed or inspected against quality standards found acceptable to the NRC staff. Consequently, the staff is not confident that a risk-informed approach “would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire,” at this time. Because this approach fails to meet the exception criteria for an exception to 10 CFR 50.90, a license amendment is required for the change to the license condition, in accordance with 10 CFR 50.90.
NRC regulations in 10 CFR 50.48 and 10 CFR part 50, appendix A, GDC 3, require each operating nuclear power plant (licensed before or after issuance of GDC 3) to have a fire protection plan providing post-fire safe shutdown. That is, a means must be provided to limit fire damage to structures, systems or components important to safety so that the capability to shut down the plant safely is ensured. The regulation in 10 CFR 50.90 requires a licensee who desires to amend their license, to submit an amendment request to the NRC. All NPPs licensed to operate before January 1, 1979, are required to comply with 10 CFR part 50, appendix R, paragraph III.G, “Fire Protection of Safe Shutdown Capability.” All NPPs licensed to operate after January 1, 1979, are required to comply with 10 CFR 50.48(a), which requires that each operating nuclear power plant have a fire protection plan that satisfies GDC 3. The fire protection plan is incorporated into the operating license for each post-1979 plant as a license condition. This license condition specifically cites the staff SER on the licensee's fire protection plan, to demonstrate that the license condition has been met (although licensees may modify their fire protection plan as long as there is no adverse effect on safe shutdown).
The NRC issued guidance on acceptable methods of satisfying the regulatory requirements of GDC 3 in Auxiliary and Power Conversion Systems Branch (APCSB) BTP 9.5-1, “Guidelines for Fire Protection for Nuclear Power Plants,” May 1, 1976; Appendix A to APCSB BTP 9.5-1, February 24, 1977; and Chemical Engineering Branch (CMEB) BTP 9.5-1, “Fire Protection for Nuclear Power Plants,” July 1981. In response to licensees’ questions, the staff provided additional guidance on fire barriers in GL 86-10. The staff issued additional guidance as Supplement 1 to GL 86-10.
In the BTPs and in GL 86-10, the staff states that the fire resistance ratings of fire barriers should be established in accordance with National Fire Protection Association (NFPA) Standard 251, “Standard Methods of Fire Tests of Building Construction and Materials,”
Within 60 days of the date of this letter, all addressees are requested to determine whether or not Hemyc or MT fire barrier material is installed and relied on for separation and/or safe shutdown purposes to satisfy applicable regulatory requirements.
Addressees who credit Hemyc or MT for compliance should provide information regarding the extent of the installation; whether the material is degraded or nonconforming; and any compensatory actions in place to provide equivalent protection and maintain the safe shutdown function of affected areas of the plant in light of the recent findings of potential degradation of Hemyc and MT. Licensees should provide evaluations to support conclusions that they are in compliance with regulatory requirements for the Hemyc and MT applications. Licensees that can not justify their continued reliance on Hemyc or MT shall provide a description of corrective actions taken or planned and a schedule for milestones including when full compliance will be achieved. In addition, licensees should identify and discuss all applications that are considered degraded but operable, including a basis for this conclusion.
Compensatory and corrective actions shall be implemented in accordance with existing regulations commensurate with the safety significance of the degraded or nonconforming condition. The NRC expects that all licensees shall fully restore compliance with 10 CFR 50.48, and submit the required documentation to the NRC, by December 1, 2007.
All addressees are requested to provide the following information:
1. Within 60 days of the date of this generic letter, provide a statement on whether Hemyc or MT fire barrier material is used at their NPPs and whether it is relied on for separation and/or safe shutdown purposes in accordance with the licensing basis, including whether Hemyc or MT is credited in other analyses (
2. Within 60 days of the date of this generic letter, addressees who have installed Hemyc or MT fire barrier materials should discuss the following in detail:
a. The extent of the installation (
b. Whether the Hemyc and/or MT installed in their plants continues to comply with 10 CFR 50.48, in light of recent findings,
c. The compensatory measures that have been implemented to provide equivalent protection and maintain the safe shutdown function of affected areas of the plant in light of the recent findings of potential degradation Hemyc and MT, including evaluations to support the addresses' conclusions and a discussion of the impact on plant risk,
d. A general description of, and implementation schedule for, all corrective actions to restore the fire protection program to compliance with the licensing basis, including a description of any licensing actions or exemption requests needed to support changes to the plant licensing basis.
3. No later than December 1, 2007, addressees that have degraded or nonconforming Hemyc and/or MT and rely on it for separation and/or safe shutdown purposes should provide the following information upon implementing corrective actions:
a. Confirmation that the fire protection program is in compliance with the regulatory requirements listed in the Applicable Regulatory Requirements section of this generic letter once all corrective actions for regulatory compliance have been completed and the licensing basis has been updated to reflect the actions taken.
b. A summary of the evaluation used to determine the susceptibility of the fire protection program to the adverse effects of potentially degraded Hemyc or MT fire barriers. (The submittal may reference a guidance document,
c. A description of the existing programmatic controls that will ensure that other fire barrier types will be assessed for potential degradation and resultant adverse effects. Addressees may reference their responses to GL 92-08 to the extent that the responses address this specific issue.
In accordance with 10 CFR 50.54(f), in order to determine whether a facility license should be modified, suspended, or revoked, or whether other action should be taken, an addressee is required to respond as described below.
Within 30 days of the date of this generic letter, an addressee is required to submit a written response if it is unable to provide the information or it cannot meet the requested completion date. The addressee must address in its response any alternative course of action that it proposes to take, including the basis for the acceptability of the proposed alternative course of action.
The required written response should be addressed to the U.S. Nuclear Regulatory Commission, Attn: Document Control Desk, 11555 Rockville Pike, Rockville, Maryland 20852, under oath or affirmation under the provisions of Section 182a of the Atomic Energy Act of 1954, as amended, and 10 CFR 50.54(f). In addition, a copy of the response should be submitted to the appropriate regional administrator.
The recent confirmatory testing of the Hemyc and MT fire barriers revealed that similar barriers installed at NPPs may not perform their intended protective function during a fire.
The NRC staff will review the responses to this generic letter and will notify affected addressees if concerns are identified regarding compliance with NRC regulations. The staff may also conduct inspections to determine addressees' effectiveness in addressing the generic letter.
1. Regulatory Issue Summary 05-07, “Compensatory Measures To Satisfy the Fire Protection Program Requirements,” April 19, 2005.
2. Information Notice 05-07, “Results of Hemyc Electrical Raceway Fire Barrier System Full Scale Fire Testing,” April 1, 2005.
3. Information Notice 99-17, “Problems Associated with Post-Fire Safe-Shutdown Circuit Analysis,” June 3, 1999.
4. Information Notice 95-52, Supplement 1, “Fire Endurance Test Results for Electrical Raceway Fire Barrier Systems Constructed from 3M Company Interam Fire Barrier Materials,” March 17, 1998.
5. Information Notice 95-49, Supplement 1, “Seismic Adequacy of Thermo-Lag Panels,” December 10, 1997.
6. Generic Letter 91-18, “Information to Licensees Regarding NRC Inspection Manual Section on Resolution of Degraded and Nonconforming Conditions,” Revision 1, October 8, 1997.
7. Information Notice 97-70, “Potential Problems With Fire Barrier Penetration Seals,” September 19, 1997.
8. Information Notice 97-59, “Fire Endurance Test Results of Versawrap Fire Barriers,” August 1, 1997.
9. Information Notice 94-86, Supplement 1, “Legal Actions Against Thermal Science, Inc., Manufacturer of Thermo-Lag,” November 15, 1995.
10. Information Notice 95-52, “Fire Endurance Test Results for Electrical Raceway Fire Barrier Systems Constructed from 3M Company Interam Fire Barrier Materials,” November 14, 1995.
11. Information Notice 95-49, “Seismic Adequacy of Thermo-Lag Panels,” October 27, 1995.
12. Information Notice 95-32, “Thermo-Lag 330-1 Flame Spread Test Results,” August 10, 1995.
13. Information Notice 95-27, “NRC Review of Nuclear Energy Institute, Thermo-Lag 330-1 Combustibility Evaluation Methodology Plant Screening Guide,” May 31, 1995.
14. Information Notice 94-86, “Legal Actions Against Thermal Science, Inc., Manufacturer of Thermo-Lag,” December 22, 1994.
15. Information Notice 94-34, “Thermo-Lag 330-660 Flexi-Blanket Ampacity Derating Concerns,” May 13, 1994.
16. Information Notice 94-28, “Potential Problems With Fire Barrier Penetration Seals,” April 5, 1994.
17. Generic Letter 86-10, Supplement 1, “Fire Endurance Test Acceptance Criteria for Fire Barrier Systems Used To Separate Redundant Safe Shutdown Trains within the Same Fire Area,” March 25, 1994.
18. Information Notice 94-22, “Fire Endurance and Ampacity Derating Test Results for 3-Hour Fire-Rated Thermo-Lag 330-1 Fire Barriers,” March 16, 1994.
19. Information Notice 93-41, “One Hour Fire Endurance Test Results for Thermal Ceramics Kaowool, 3M Company FS-195 and 3M Company Interam E-50 Fire Barrier Systems,” May 28, 1993.
20. Information Notice 93-40, “Fire Endurance Test Results for Thermal Ceramics FP-60 Fire Barrier Material,” May 26, 1993.
21. Generic Letter 92-08, “Thermo-Lag 330-1 Fire Barriers,” December 17, 1992.
22. Information Notice 92-82, “Results of Thermo-Lag 330-1 Combustibility Testing,” December 15, 1992.
23. Bulletin 92-01, Supplement 1, “Failure of Thermo-Lag 330 Fire Barrier System To Perform its Specified Fired Endurance Function,” August 28, 1992.
24. Information Notice 92-55, “Current Fire Endurance Test Results for Thermo-Lag Fire Barrier Material,” July 27, 1992.
25. Bulletin 92-01, “Failure of Thermo-Lag 330 Fire Barrier System To Maintain Cabling in Wide Cable Trays and Small Conduits Free from Fire Damage,” June 24, 1992.
26. Information Notice 92-46, “Thermo-Lag Fire Barrier Material Special Review Team Final Report Findings, Current Fire Endurance Tests, and Ampacity Calculation Error,” June 23, 1992.
27. Information Notice 91-79, “Deficiencies in the Procedures for Installing Thermo-Lag Fire Barrier Materials,” December 6, 1991.
28. Information Notice 91-47, “Failure of Thermo-Lag Fire Barrier Material To Pass Fire Endurance Test,” August 6, 1991.
29. Information Notice 88-56, “Potential Problems With Silicone Foam Fire Barrier Penetration Seals,” August 4, 1988.
30. Generic Letter 88-12, “Removal of Fire Protection Requirements from Technical Specifications,” August 2, 1988.
31. Generic Letter 86-10, “Implementation of Fire Protection Requirements,” April 26, 1986.
32. Generic Letter 83-33, “NRC Position on Certain Requirements of Appendix R to 10 CFR Part 50,” October 19, 1983.
33. Generic Letter 81-12, “Fire Protection Rule (45 FR 76602, November 19, 1980),” February 20, 1981.
Under the provisions of Section 182a of the Atomic Energy Act of 1954, as amended, 10 CFR 50.109(a)(4)(I) and 10 CFR 50.54(f), this generic letter asks addressees to evaluate their facilities to confirm compliance with the existing applicable regulatory requirements as discussed in this generic letter. Specifically, although Hemyc and MT fire barriers in NPPs may be relied on to protect electrical and instrumentation cables and equipment that provide safe shutdown capability during a fire, recent NRC testing has revealed that both materials failed to provide the protective function intended for compliance with existing regulations.
For plants licensed to operate before January 1, 1979, licensees are required to comply with 10 CFR part 50, appendix R, which requires protection of safe shutdown capabilities. One means of complying with this requirement is to separate one safe shutdown train from its redundant train using rated fire barriers, as cited in Appendix R, paragraph III.G.2(a). Recent test results indicated that Hemyc and MT fire barriers did not pass the GL 86-10, Supplement 1, criteria to achieve a 1-hour fire rating for Hemyc or a 3-hour fire rating for MT. Therefore, for any such plant that relies on Hemyc and/or MT for compliance, compliance with Appendix R is in question and the information requested by this generic letter is a compliance exception to the rule in accordance with 10 CFR 50.109(a)(4)(I).
For plants licensed to operate after January 1, 1979, licensees are required to comply with 10 CFR 50.48(a), which requires that each operating nuclear power plant have a fire protection plan that satisfies GDC 3. The fire protection plan is incorporated into the operating license for each post-1979 plant as a license condition and may rely on fire barriers such as Hemyc and MT to provide the required protection. The license condition specifically cites the staff SER on the licensee's fire protection plan, to demonstrate that the license condition has been met (although licensees may modify their fire protection plan as long as there is no adverse effect). However, recent test results indicated that Hemyc and MT fire barriers did not pass the GL 86-10, Supplement 1, criteria to achieve a 1-hour fire rating for Hemyc or a 3-hour fire rating for MT. Therefore, for any such plant where the staff-approved fire protection plan relies on Hemyc and/or MT for compliance with their license condition, compliance with the license condition is in question and the information requested by this generic letter is a compliance exception to the rule in accordance with 10 CFR 50.109(a)(4)(I).
A notice of opportunity for public comment on this generic letter was published in the
In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this generic letter is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB).
This generic letter contains information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The burden to the public for these mandatory information collections is estimated to average 300 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collection. The U.S. Nuclear Regulatory Commission is seeking public comment on the potential impact of the information collections contained in the generic letter and on the following issues:
1. Is the proposed information collection necessary for the proper performance of the functions of the NRC, including whether the information will have practical utility?
2. Is the estimate of burden accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information collected?
4. How can the burden of the information collection be minimized, including the use of automated collection techniques?
Send comments on any aspect of these information collections, including suggestions for reducing the burden, to the Records and FOIA/Privacy Services Branch (T-F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail to
The NRC may not conduct or sponsor, and a person is not required to respond to, an information collection unless the requesting document displays a currently valid OMB control number.
Please direct any questions about this matter to the Technical Contacts or the Lead Project Manager listed below, or to the appropriate Office of Nuclear Reactor Regulation (NRR) project manager.
NRC generic communications may be found on the NRC public Web site,
Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site,
For the Nuclear Regulatory Commission.
Office of Personnel Management.
Notice of Medically Underserved Areas for 2006.
The Office of Personnel Management (OPM) has completed its annual determination of the States that qualify as Medically Underserved Areas under the Federal Employees Health Benefits (FEHB) Program for calendar year 2006. This is necessary to comply with a provision of the FEHB law that mandates special consideration for enrollees of certain FEHB plans who receive covered health services in States with critical shortages of primary care physicians. Accordingly, for calendar year 2006, OPM's calculations show that the following states are Medically Underserved Areas under the FEHB Program: Alabama, Alaska, Arizona, Idaho, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, South Carolina, South Dakota, West Virginia, and Wyoming. For the 2006 contract year Arizona and West Virginia are being added to the list and Texas is being removed.
Effective Date: January 1, 2006.
Ingrid Burford, (202) 606-0004.
FEHB law (5 U.S.C. 8902(m)(2)) mandates special consideration for enrollees of certain FEHB plans who receive covered health services in States with critical shortages of primary care physicians. The FEHB law also requires that a State be designated as a Medically Underserved Area if 25 percent or more of the population lives in an area designated by the Department of Health and Human Services (HHS) as a primary medical care manpower shortage area. Such States are designated as Medically Underserved Areas for purposes of the FEHB Program, and the law requires non-HMO FEHB plans to reimburse beneficiaries, subject to their contract terms, for covered services obtained from any licensed provider in these States.
FEHB regulations (5 CFR 890.701) require OPM to make an annual determination of the States that qualify as Medically Underserved Areas for the next calendar year by comparing the latest HHS State-by-State population counts on primary medical care manpower shortage areas with U.S. Census figures on State resident populations.
Postal Rate Commission.
Notice and order on new baseline negotiated service agreement case.
This document establishes a docket for consideration of the Postal Service's request for approval of a baseline negotiated service agreement with Bookspan. It identifies key elements of the proposed agreement, which involves Standard Mail letter rates; its relationship to the Capital One Services, Inc. negotiated service agreement; and addresses preliminary procedural matters.
Key dates are:
1. August 8, 2005: Deadline for filing notices of intervention.
2. August 8-10, 2005: Authorized alternative dates for settlement conference.
3. August 11, 2005: Prehearing conference (10 a.m.).
Submit comments electronically via the Commission's Filing Online system at
Stephen L. Sharfman, general counsel, at 202-789-6818.
Capital One Services, Inc. Negotiated Service Agreement, 67 FR 61355 (September 30, 2002).
Negotiated Service Agreement Final Rule, 69 FR 7574 (February 18, 2004).
On July 14, 2005, the United States Postal Service filed a request seeking a recommended decision from the Postal Rate Commission approving a Negotiated Service Agreement (NSA) with Bookspan.
In support of the direct case, the Postal Service has filed Direct Testimony of Michael K. Plunkett on Behalf of the United States Postal Service, July 14, 2005 (USPS-T-1), and Direct Testimony of Michelle K. Yorgey on Behalf of the United States Postal Service, July 14, 2005 (USPS-T-2). Bookspan has separately filed Direct Testimony of Robert J. Posch, Jr. on Behalf of Bookspan, July 14, 2005 (Bookspan-T-1), and Direct Testimony of Matthias Epp on Behalf of Bookspan, July 14, 2005 (Bookspan-T-2). The Postal Service has reviewed the Bookspan testimony and, in accordance with rule 192(b) [39 CFR 3001.192(b)], states that such testimony may be relied upon in presentation of the Postal Service's direct case.
The Postal Service has submitted a contemporaneous filing which requests the establishment of settlement procedures.
The Postal Service's Request, the accompanying testimonies of witnesses Plunkett (USPS-T-1), Yorgey (USPS-T-2), Posch (Bookspan-T-1), and Epp (Bookspan-T-2), and other related material are available for inspection at the Commission's docket section during regular business hours. They also can be accessed electronically, via the Internet, on the Commission's Web site (
The Postal Service proposes to enter into a new baseline three-year NSA with Bookspan. Unlike the Capital One baseline NSA, the Bookspan NSA is based solely upon a declining block rate volume discount available to qualifying Standard Mail letter pieces.
The declining block rate volume discount feature provides Bookspan with a per-piece discount for Standard Mail letter volumes that exceed specified volume thresholds. Discounts are payable only after certain specified minimum volume commitments have been reached. During the first year of the agreement, discounts may be earned for annual volumes above 87 million pieces once a volume commitment of 94 million has been reached. During the second year of the agreement, discounts may be earned for annual volumes above 85 million pieces once a volume commitment of 95 million has been reached. During the third year of the agreement, discounts may be earned for annual volumes above 94 million pieces once a volume commitment of 105 million has been reached. Discounts, under a declining block rage structure, range from 2 to 3 cents in the first two years of the agreement, and from 1 to 3 cents in the third year of the agreement.
The minimum commitment levels for the second and third years of the agreement are subject to adjustment based on the actual volumes mailed in the previous years. If at the end of the first or second years, the actual volume is 12% or more above the prior year's commitment, the following year's commitment will be revised to be the average of the prior year's actual volume and the following year's original commitment. If at the end of the first or second years, the actual volume is 5% or more below the prior year's commitment, the following year's commitment will be revised to be the average of the prior year's actual volume and the prior year's original commitment. In any event, the volume commitments will never be less than 90 million pieces.
This agreement provides for several other risk mitigation features to protect the Service's financial interests. If Bookspan sends more than 150 million qualifying pieces in any one year, the agreement automatically terminates. Either party may also unconditionally cancel the agreement with 30 days' written notice. Additionally, the agreement contains a mechanism to adjust the volume blocks to the extent that Bookspan merges or acquires an entity with an annual Standard Mail letter volume exceeding 5 million pieces, or merges or acquires multiple entities with a combined annual Standard Mail letter volume exceeding 10 million pieces.
The Postal Service estimates it will benefit by $7.4 million over the life of the NSA. This is based on estimates of $3.3 million in increased contribution due to additional volume for new Standard letter mail, $5.1 million in increased contribution due to a net contribution gain from converting Standard Mail solicitation flats to letters, and lost revenue from total incremental discounts of $0.96 million.
1. The Commission establishes Docket No. MC2005-3 to consider the Postal Service Request referred to in the body of this order.
2. The Commission will sit en banc in this proceeding.
3. Postal Service counsel is appointed to serve as settlement coordinator in this proceeding. The Commission will make its hearing room available for a settlement conference on either August 8, 9, or 10, 2005, or at such times deemed necessary by the settlement coordinator.
4. Shelley S. Dreifuss, director of the Commission's Office of the Consumer Advocate, is designated to represent the interests of the general public.
5. The deadline for filing notices of intervention is August 5, 2005.
6. A prehearing conference will be held August 11, 2005, at 10 a.m. in the Commission's hearing room.
7. The Secretary shall arrange for publication of this notice and order in the
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The MSRB has filed with the SEC a proposed rule change consisting of amendments to Rule G-32 (on delivery of official statements to new issue customers), Rule G-36 (on delivery of official statements and advance refunding documents to the Board) and Rule G-11 (on new issue municipal securities during the underwriting period). The proposed rule change is intended to improve the efficiency of official statement dissemination in the municipal securities marketplace and the timeliness of official statement deliveries to customers. The text of the proposed rule change is available on the MSRB's Web site (
In its filing with the Commission, the MSRB 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 MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The proposed rule change is designed to improve the efficiency and timeliness of dissemination of official statements to underwriters and other brokers, dealers, and municipal securities dealers (“dealers”), which in turn should also improve the efficiency and timeliness of dealer-to-customer dissemination of official statements. The proposed amendments are described more fully below.
The proposed amendments establish new clause (i)(C) of Rule G-32(c), which requires the managing or sole underwriter for new issues of municipal securities to provide a printable electronic version of the official statement (if an electronic version has been prepared and the issuer does not object to its distribution) to any dealer that requests an electronic version and provides an e-mail address or other delivery instructions acceptable to the managing or sole underwriter. This obligation is in addition to the managing or sole underwriter's obligation to send paper copies of the official statement in the required quantities (
The proposed rule change does not specify a particular file format for the electronic version of the official statement, other than that the electronic version be printable. Portable document format (PDF) files (and, in the future, any other file formats that it may hereafter accept for purposes of official statement submissions to the MSRB's web-based Electronic OS/ARD Submission System (the “e-OS System”) established under Rule G-36) are acceptable formats for purposes of the proposed rule change, so long as such files are printable. In addition, other file formats that are printable using commercially available software then in common usage in the municipal securities industry, or with software that is bundled with such files, also would be acceptable so long as the dealer that makes the delivery promptly delivers a substitute paper version of the official statement if the recipient of the electronic file so requests and a paper version has not previously been sent to such recipient.
The electronic version of the official statement must include every item of information included in the paper version. For example, if a dealer were to consent to receiving solely an electronic version of the official statement pursuant to clause (c)(i)(C) of Rule G-32 but portions of the official statement are not available in electronic form, a managing or sole underwriter could not discharge its obligation to deliver paper versions of the official statement under clause (c)(i)(A) by sending the portions
The proposed rule change also does not limit the manner of delivery of the electronic file. For example, the rule language permits the requesting dealer under clause (c)(i)(C) or an underwriter under clause (c)(ii) to provide an e-mail address or instructions for other forms of electronic delivery. An underwriter or dealer financial advisor should be able to meet this electronic delivery obligation in a number of different ways, including by posting the electronic version at an accessible Web site. At a minimum, any such form of passive delivery of the electronic version of the official statement must provide the recipient with timely notice that the official statement has been posted (
Revised Rule G-32(c)(ii) applies to any dealer that acts as the issuer's financial advisor and prepares the official statement for the issuer. If an electronic version of the official statement has been prepared and the issuer does not object to its distribution, the dealer financial advisor is required to make available to the managing or sole underwriter (in addition to a printed version of the official statement) a printable electronic version of the official statement, upon request by the underwriter for such an electronic version and if the underwriter provides an e-mail address or other delivery instructions acceptable to the dealer financial advisor. However, if the managing or sole underwriter consents, the dealer financial advisor is permitted to provide such underwriter solely with the electronic official statement in lieu of paper copies otherwise required under the rule.
The proposed rule change deletes the definition of “underwriting period” in Rule G-32(d)(ii) and replaces it with the new term “new issue disclosure period.” The new issue disclosure period is defined as the period commencing with the first submission to an underwriter of an order for the purchase of new issue municipal securities or the purchase of such securities from the issuer, whichever first occurs, and ending 25 days after the final delivery by the issuer of the securities to or through the underwriting syndicate or sole underwriter. The definition of “new issue municipal securities” in Rule G-32(d)(i) is revised to mean municipal securities (other than commercial paper) that are sold by a dealer during the issue's new issue disclosure period.
The proposed rule change makes related changes to Rules G-36 and G-11. Clause (a)(iv) is added to Rule G-36 to include a reference to the definition of new issue disclosure period in Rule G-32(d)(ii), and section (d) of Rule G-36 is revised to provide that amendments to official statements made by the issuer during the new issue disclosure period must be sent to the MSRB by the underwriter within the required timeframe. The definition of underwriting period is removed from section (a) of Rule G-11 and the title of the rule is revised to more accurately reflect the subject of the rule.
The proposed rule change adds a definition of “underwriter” in new clause (a)(v) of Rule G-36, consisting of a cross-reference to the definition of that term provided in Rule 15c2-12 adopted by the SEC under the Act. The new language merely clarifies which definition applies to this term but does not change its meaning, since by virtue of Rule D-1,
The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(C) of the Act,
The MSRB believes that the proposed rule change increases the efficiency of official statement dissemination in the marketplace and the timeliness of official statement deliveries to customers.
The MSRB does not believe that the proposed rule change will result in any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The MSRB published notices for comment on the draft amendments on May 12, 2004 (the “May 2004 Notice”)
In response to the May 2004 Notice, the Board received comment letters from Jed Bandes (“Bandes”),
The original draft amendments published in the May 2004 Notice would have required managing or sole underwriters to provide copies of both the paper and electronic version of the official statement to any dealers purchasing new issue municipal securities that request copies of the official statement. The original draft amendments also would have required dealers acting as financial advisors that prepare official statements to provide to the underwriters both paper and electronic versions of the official statement. These obligations to provide electronic versions would arise only if an electronic version had been prepared and the issuer did not object to its distribution. These obligations would not have been conditioned on a request having been made to receive the official statement in electronic form.
BMA also stated that it is already the accepted practice for dealer financial advisors to provide electronic versions of official statements to the underwriters and that the MSRB should not impose a regulatory requirement to this effect. It further stated that such a requirement would create a new burden of “necessary recordkeeping for compliance purposes” without furthering the goals of the draft amendments.
In addition, the MSRB notes that the e-Document Notice generally permits a dealer to fulfill a regulatory delivery obligation electronically if the dealer provides adequate notice of delivery, the electronic means provides access to information comparable to the paper version, and the dealer has reason to believe that electronic delivery will be effective. As noted in the e-Document Notice, this three-part requirement is not the only method by which legal delivery by electronic means can be accomplished. In particular, where MSRB rules provide different requirements for undertaking electronic communications, the e-Document Notice concluded that compliance with those rule-based requirements would satisfy the rule requirement even if the three-part test of the e-Document Notice is not fully met.
The MSRB believed that modifying the original draft amendments to require delivery to dealers of electronic official statements only if the dealer explicitly requests an electronic version would be an appropriate first step toward the ultimate goal of having electronic versions generally available and routinely used for more rapid dissemination of disclosure in the marketplace. The proposed rule change requires a requesting dealer to provide an e-mail address to which the electronic version could be sent or other instructions acceptable to the managing or sole underwriter for electronic delivery. Similarly, the MSRB believed that modifying the original draft amendments to require dealer financial advisors to provide to the underwriters electronic official statements only if the managing or sole underwriter explicitly requests an electronic version and provides an e-mail address or instructions acceptable to the dealer financial advisor for electronic delivery would be appropriate. Neither provision requires the dealer to create an electronic version for purposes of meeting these requirements if the issuer has not produced an electronic version.
Although the proposed rule change would permit the underwriter to forego
The MSRB notes that the e-Document Notice was based on an interpretive release published by the SEC in 1996.
Under current Rule G-32, the underwriting period for a new issue generally ends when the underwriting syndicate (or the sole underwriter) has sold out the issue, but no earlier than the issuer's delivery of the issue to the underwriters. The duties imposed on dealers by current Rule G-32 (including but not limited to the obligation to deliver official statements to new issue customers) only extend to municipal securities sold during the underwriting period. However, the duration the underwriting period may not be definitively known by most market participants since underwriters currently do not always inform the marketplace of when the issue has been sold out. The original draft amendments to Rule G-32 published in the May 2004 Notice would have included a new clause (i)(D) requiring the managing or sole underwriter of a new issue of municipal securities to inform promptly, upon request, any dealer purchasing such securities during the underwriting period and during the 60 days following the end of the underwriting period whether the underwriting period has ended. In the May 2004 Notice, the MSRB also sought comment on whether the original draft amendments should instead amend the definition of underwriting period to establish a fixed time period (
In conjunction with this change, the proposed rule change would discontinue the use of the term “underwriting period” under MSRB rules and replace it with the term “new issue disclosure period.” This change would more clearly reflect the actual usage of the term under MSRB rules and would help to eliminate certain ambiguities regarding the use of the term underwriting period within the municipal securities industry.
In virtually all cases, the newly defined “new issue disclosure period” would extend the period during which official statements are required to be delivered to customers beyond the period currently required under the existing definition of underwriting period. The amendment also would have an impact on the application of Rule G-36(d) in that the period during which stickers or amendments to official statements must be submitted by
The original draft amendments to Rule G-36 published in the May 2004 Notice would have provided alternative timeframes for complying with the official statement submission requirements for primary offerings subject to SEC Rule 15c2-12, based on when the issues close. Thus, an underwriter would have been permitted to comply with Rule G-36 by sending the official statement to the MSRB by no later than five business days prior to the bond closing (or three business days prior to closing if submitted electronically through the e-OS System). Even if an underwriter were to fail to meet the proposed new timeframes, it would still comply with Rule G-36 if it met the original timeframe of ten business days after the sale date, but no later than one business day after receipt from the issuer, as provided under Rule G-36(b)(i). The original draft amendments were designed to promote the availability of official statements in the marketplace in advance of bond closing and to encourage the use of electronic means for disseminating official statements in a more timely and efficient manner while at the same time reducing the incidence of technical rule violations that did not raise investor protection concerns.
Bandes stated it was against the rule, while BMA stated that, although it “applauds the MSRB's efforts to promote the availability of official statements in the marketplace,” it suggested that the MSRB not amend Rule G-36 at this time. BMA stated that it is “concerned that these alternative timeframes will serve to frustrate good faith efforts to comply with Rule G-36” and believed that they would “cause unnecessary confusion amongst dealers.” BMA further noted that “time periods between sale and issue dates appear to have been decreasing. It is not uncommon to have an issue date be the very day after the sale date, particularly for variable rate issues. Therefore the use of this proposed alternative timeframe is likely to be low.”
Within 35 days of the date of publication of this notice in the
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule change should be disapproved.
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 e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-MSRB-2005-13. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The proposed rule change seeks to amend NYSE Rule 80A (“Index Arbitrage Trading Restrictions”) to calculate limitations on index arbitrage trading as provided in the rule based on the NYSE Composite Index (“NYA”), replacing the current usage of the Dow Jones Industrial Average (“DJIA”). The text of the proposed rule change is available on the NYSE's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for 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.
NYSE Rule 80A provides for limitations on index arbitrage trading in any component stock of the S&P 500 Stock Price Index (“S&P 500”) on any day that the DJIA
NYSE Rule 80A affects index arbitrage orders entered in any component stock of the S&P 500 traded on the NYSE on any day that the DJIA experiences a price movement of 2% or more. If the market advances by 2% or more, all index arbitrage orders to buy must be stabilizing (buy minus); similarly, if the market declines by 2% or more, all index arbitrage orders to sell must be stabilizing (sell plus). The stabilizing requirements are removed if the DJIA moves back to or within 1% of its closing value.
The Exchange believes that the NYA is a better reflection of market activity with respect to the S&P 500 as there is a higher correlation between the NYA and the S&P 500 than there is between the DJIA and the S&P 500. In this regard, the stocks in the NYA include 86% of the total market capitalization of the companies in the S&P 500. The DJIA represents only 34%. The Exchange also believes that the NYA will continue to provide an appropriate measure of market volatility. A review of the NYSE Rule 80A collars during 2003 shows that the 2% DJIA collar was triggered 28 times. During this same period, using the NYA at 2% as the measure would have resulted in the collar being triggered 18 times. In 2004, the NYSE Rule 80A collars were not triggered at all, while the collar would have been triggered once using the NYA at 2%.
The NYSE believes the basis under the Act for this proposed rule change is the requirement under Section 6(b)(5)
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.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Within 35 days of the date of publication of this notice in the
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
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 e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-45. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
On June 7, 2005, the Pacific Exchange, Inc. (“PCX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Complex options orders involve multiple options transactions that are executed simultaneously as part of a single strategy. The PCX currently routes complex orders to the Electronic Order Capture System (“EOC”), which is a function of the Floor Broker Hand Held System. Orders on the trading floor are announced by a Floor Broker to the trading crowd and trade in open outcry. As an enhancement to the PCX Plus system, the Exchange intends to develop a CTE, which will facilitate more automated handling of complex orders. Additionally, the Exchange proposes to adopt a separate complex order rule applicable solely to the PCX Plus system.
Complex Orders on PCX Plus will route either to the EOC or the CTE, as determined by the Exchange.
When a complex order routes to the EOC, the Floor Broker will announce the order to the trading crowd, which may trade with the order at its limit price or offer price improvement. If the trading crowd chooses not to trade with the order, the order will reside on the EOC or be entered into the CTE, at the Floor Broker's discretion. Any complex order represented by a Floor Broker will be subject to PCX Rule 6.46(a).
When an order is routed directly into the CTE, the order may trade in one of three ways. First, if individual orders or quotes in the Exchange's consolidated book “line-up” against the legs of the complex order, an automatic execution occurs, provided the complex order can be executed in full (or in a permissible ratio) by the orders in the consolidated book. Second, if a subsequent incoming complex order is marketable against a resting complex order in the CTE, it will automatically execute against the resting complex order in the CTE. Third, OTP Holders and OTP Firms will have the ability to view orders in the CTE and submit orders to trade against those orders.
A complex order in the CTE will be allocated to market participants in accordance with the allocation procedures described in PCX Rule 6.76(b). In addition, PCX Rule 6.76(c), which deals with crossing orders on PCX Plus, will apply to orders in the CTE.
Complex orders resting in the CTE may be executed without consideration to the prices of the same complex orders that might be available on other exchanges.
PCX Rule 6.75(e) and PCX Rule 6.75, Commentary .04 generally allow a member holding a complex order to trade ahead of the book on one leg of the order, provided that the other leg of the order betters the corresponding bid (offer) in the consolidated order book. These rules will continue to apply to the trading of complex orders.
The Commission has carefully reviewed the proposed rule change and finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
A complex order sent to the PCX currently routes to and resides on the EOC until it trades in open outcry. Thus, a complex order currently cannot be executed on the PCX without manual intervention by a Floor Broker.
The CTE will allow complex orders to trade electronically, without the intervention of a Floor Broker. OTP Holders and OTP Firms will use an electronic interface to the PCX to view complex orders resting in the CTE. As described more fully above, a complex order routed to the CTE may execute automatically against orders in the Exchange's consolidated book or against an order resting in the CTE. In addition, OTP Holders and OTP Firms may trade against orders resting in the CTE. Accordingly, the Commission believes that the CTE should increase the transparency of complex orders and could facilitate the execution of complex orders.
Under the proposal, the Exchange will determine which options classes will route directly to the CTE and those that will route to the EOC. The Commission notes that PCX Rule 6.76(c) applies to complex orders on PCX Plus.
In addition, the complex order priority provisions in PCX Rule 6.75(e) and PCX Rule 6.75, Commentary .04, will continue to apply to complex orders. Accordingly, complex orders will be able to trade ahead of orders in the consolidated book only under the conditions specified in PCX Rule 6.75(e) and PCX Rule 6.75, Commentary .04. The Commission also notes that complex orders from public customers will have priority over complex orders from non-public customers.
The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Phlx proposes to amend its schedule of fees to adopt a license fee of $0.10 for options traded on the following products:
Currently, the Exchange imposes a cap of $60,000 per member organization
The Exchange also imposes a license fee of $0.10 per contract side for equity option “firm” transactions on options on Nasdaq-100 Index Tracking Stock
The Exchange proposes to adopt a $0.10 license fee per contract side for the S&P products and WHC for equity option and index option firm transactions, which will be imposed after the $60,000 cap is reached in the same way as the current licensed product fees are assessed. Thus, when a member organization exceeds the $60,000 cap, the member organization will be charged $60,000 plus any applicable license fees for trades of licensed products, including the S&P products and WHC, over those trades that were counted in reaching the $60,000 cap.
In addition, the Exchange proposes to make a technical change to its Summary of Index Option and FXI Options Charges (“Options Charge Schedule”) to make a footnote, which relates to the $60,000 cap and appears in other applicable sections of the Exchange's fee schedule, more consistent.
The text of the proposed rule change is available on the Phlx's Internet Web site (
In its filing with the Commission, the Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposal. 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 purpose of assessing the S&P products and WHC license fee of $0.10 per contract side after reaching the $60,000 cap as described in this proposal is to help defray licensing costs associated with the trading of these products, while still capping member organizations' fees enough to attract volume from other exchanges. The cap operates this way in order to offer an incentive for additional volume without leaving the Exchange with significant out-of-pocket costs.
The purpose of making minor technical changes to the Exchange's Options Charge Schedule is to make a footnote, which relates to the $60,000
The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act
The Phlx believes that the proposed rule change would impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange did not solicit or receive any written comments with respect to the proposal.
The foregoing proposed rule change, as amended, has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-Phlx-2005-40. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Carol B. Epstein, Attorney-Adviser, Office of the Legal Adviser, Department of State, (telephone: (202) 453-8048). The address is Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001.
Notice is hereby given of the following determinations: Pursuant to
For further information, including a list of the exhibit objects, contact Carol B. Epstein, Attorney-Adviser, Office of the Legal Adviser, Department of State, (telephone: 202/453-8048). The address is Department of State, SA-44, 301 4th Street, S.W., Room 700, Washington, DC 20547-0001.
70 FR 41472 (July 19, 2005).
9 a.m. (e.d.t.), Friday, July 22, 2005.
TVA Knoxville West Tower Auditorium, 400 West Summit Hill Drive, Knoxville, Tennessee.
The TVA Board of Directors has approved the addition of the following items to the previously announced agenda:
C4. Contract with Cameco, Inc., for purchase of uranium concentrates and uranium conversion.
C5. Contract with ConverDyn for purchase of uranium conversion services.
Please call TVA Medical relations at (865) 632-6000, Knoxville, Tennessee. Information is also available through TVA's Washington Office at (202) 898-2999.
Federal Aviation Administration (FAA), DOT.
Notice of intent to rule on application.
The FAA proposes to rule and invites public comment on the application to impose and use the revenue from a PFC at John F. Kennedy International Airport (JFK), Newark International Airport (EWR), and LaGuardia Airport (LGA) under the provisions of the 49 U.S.C. 40117 and part 158 of the Federal Aviation Regulations (14 CFR part 158).
Comments must be received on or before August 24, 2005.
Comments on this application may be mailed or delivered in triplicate to the FAA at the following address: Federal Aviation Administration, Airports Division, Planning and Programming Branch, AEA-610; 1 Aviation Plaza, Jamaica, New York 11430.
In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Paul Blanco, Chief Financial Officer of the Port Authority of New York and New Jersey at the following address: 225 Park Avenue South, 9th Floor; New York, New York 10003.
Air carriers and foreign air carriers may submit copies of written comments previously provided to the Port Authority of New York and New Jersey under section 158.23 part 158.
Eastern Region, Airports Division, Planning and Programming Branch, Eleanor Schifflin, Passenger Facility Charge Team Lead at the above FAA address (office phone (718) 553-3354). The application may be reviewed in person at this same location.
The FAA proposes to rule and invites public comment on the application to impose and use the revenue from a PFC at John F. Kennedy International Airport (JFK), Newark International Airport (EWR), and LaGuardia Airport (LGA) under the provisions of the 49 U.S.C. 40117 and part 158 of the Federal Aviation Regulations (14 CFR part 158).
On July 19, 2005, the FAA determined that the application to impose and use the revenue from a PFC submitted by Port Authority of New York and New Jersey was substantially complete within the requirements of section 158.25 of part 158. The FAA will approve or disapprove the application, in whole or in part, no later than November 4, 2005.
The following is a brief overview of the application.
Any person may inspect the application in person at the FAA office listed above under
In addition, any person may, upon request, inspect the application, notice and other documents germane to the application in person at the Port Authority of New York and New Jersey.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemption; request for comments.
This notice publishes the FMCSA decision to renew the exemptions from the vision requirement in the Federal Motor Carrier Safety Regulations for 27 individuals. The FMCSA has statutory authority to exempt individuals from vision standards if the exemptions granted will not compromise safety. The agency has concluded that granting these exemptions will provide a level of safety that will be equivalent to, or greater than, the level of safety maintained without the exemptions for these commercial motor vehicle (CMV) drivers.
This decision is effective August 15, 2005. Comments from interested persons should be submitted by August 24, 2005.
You may submit comments identified by DOT DMS Docket Numbers FMCSA-2000-7363, FMCSA-2003-14504, and FMCSA-2003-15268 by any of the following methods:
• Web Site:
• Fax: 1-202-493-2251.
• Mail: Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001.
• Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.
Dr. Mary D. Gunnels, Office of Bus and Truck Standards and Operations, (202) 366-4001, FMCSA, Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590-0001. Office hours are from 8 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays.
Under 49 U.S.C. 31315 and 31136(e), the FMCSA may renew an exemption from the vision requirements in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce, for a two-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 procedures for requesting an exemption (including renewals) are set out in 49 CFR part 381. This notice addresses 27 individuals who have requested renewal of their exemptions in a timely manner. The FMCSA has evaluated these 27 applications for renewal on their merits and decided to extend each exemption for a renewable two-year period. They are:
Morris R. Beebe II, William V. Beekler, Jerry W. Branning, Leslie W. Good, Bruce E. Hemmer, Steven P. Holden, Warren J. Nyland, Dennis M. Prevas, Terry B. Pritchett, James. A. Busbin, Jr., Domenic J. Carassai, John F. Dougherty, Fred W. Duran, William R. Evridge, Kenneth J. Fisk, Russell R. Inlow, Christopher G. Jarvela, Joseph V. Johns, Darrell D. Kropf, Brad L. Mathna, Vincent P. Miller, Greg L. Riles, Steven R. Smith, Calvin D. Tomlinson, Mona J. Van Krieken, John W. Williams, Paul S. Yocum.
These exemptions are extended subject to the following conditions: (1) That each individual have a physical examination every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the standard in 49 CFR 391.41(b)(10), and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provide a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification
(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 before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31315 and 31136(e).
Under 49 U.S.C. 31315(b)(1), an exemption may be granted for no longer than two years from its approval date and may be renewed upon application for additional two-year periods. In accordance with 49 U.S.C. 31315 and 31136(e), each of the 27 applicants has satisfied the entry conditions for obtaining an exemption from the vision requirements (65 FR 45817; 65 FR 77066; 68 FR 10300; 68 FR 19598; 68 FR 33570; 68 FR 37197; 68 FR 48989). Each of these 27 applicants has requested timely renewal of the exemption and has submitted evidence showing that the vision in the better eye continues to meet the standard specified at 49 CFR 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past two years indicates each applicant continues to meet the vision exemption standards. These factors provide an adequate basis for predicting each driver's ability to continue to drive safely in interstate commerce. Therefore, the FMCSA concludes that extending the exemption for each renewal applicant for a period of two years is likely to achieve a level of safety equal to that existing without the exemption.
The FMCSA will review comments received at any time concerning a particular driver's safety record and determine if the continuation of the exemption is consistent with the requirements at 49 U.S.C. 31315 and 31136(e). However, the FMCSA requests that interested parties with specific data concerning the safety records of these drivers submit comments by August 24, 2005.
In the past the FMCSA has received comments from Advocates for Highway and Auto Safety (Advocates) expressing continued opposition to the FMCSA's procedures for renewing exemptions from the vision requirement in 49 CFR 391.41(b)(10). Specifically, Advocates objects to the agency's extension of the exemptions without any opportunity for public comment prior to the decision to renew, and reliance on a summary statement of evidence to make its decision to extend the exemption of each driver.
The issues raised by Advocates were addressed at length in 69 FR 51346 (August 18, 2004). The FMCSA continues to find its exemption process appropriate to the statutory and regulatory requirements.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation.
Notice; availability of research report.
This notice announces the availability of a research report on child restraint labels. The research was conducted in July of 2003. This notice also announces that NHTSA does not plan to conduct further rulemaking on child restraint labels at this time.
Mary Versailles of the NHTSA Office of International Policy, Fuel Economy and Consumer Programs, National Highway Traffic Safety Administration, 400 Seventh St., SW., Washington, DC 20590. Phone: 202-366-2057.
The Transportation Recall Enhancement, Accountability, and Documentation Act (TREAD; November 1, 2000, Pub.L. 106-414, 114 Stat. 1800) mandated that NHTSA consider whether to prescribe clearer and simpler labels and instructions for child restraint systems. On November 2, 2001 (66 FR 55623), NHTSA published a notice of proposed rulemaking (NPRM) proposing changes to the format, location, and content of some of the existing labeling requirements of the Federal motor vehicle safety standard for child restraint systems (49 CFR 571.213). Specifically, NHTSA proposed (1) A requirement that some information be molded into or heat embossed to the shell of the child restraint to improve durability, (2) changes to existing location requirements for some labels, (3) a uniform font specified for all labels on all child restraints, (4) a requirement that most labels be white with black text, and (5) color-coding of installation information to distinguish forward-facing from rear-facing information. In addition, with regard to content, NHTSA proposed (6) a reworded warning statement, (7) a requirement that all mandated statements related to use be arranged below that statement in a bulleted form, (8) rewording of some of these statements to simplify their language, and (9) a new diagram showing the child restraint with a new child restraint anchorage system (see 49 CFR 571.225). With regard to written instructions, NHTSA proposed (10) conforming changes with those proposed for labels and (11) a new requirement for information to assist owners in determining the meaning of the term “snugly” used on child restraint labels. Last, NHTSA proposed (12) a new labeling requirement for harness slots.
On October 1, 2002 (67 FR 61523), NHTSA published a final rule
Subsequent to the November 2, 2001 notice of proposed rulemaking for that final rule, Transport Canada had conducted research on child restraint labels. After a review of the Transport Canada study, NHTSA had concerns about the proposals concerning font, color-coding and harness slot labeling. Therefore, the preamble to the October 2002 final rule indicated that NHTSA would conduct further research before
In July of 2003, NHTSA conducted further research on child restraint labels. NHTSA followed similar procedures as that used by Transport Canada in their research. The research report is available in docket NHTSA-2001-10916. After reviewing this research, NHTSA has decided that it will not conduct further rulemaking at this time.
The major issue that the research examined was color-coding. In the November 2001 NPRM, NHTSA proposed to require forward-facing instructions to be outlined in red and rearward-facing instructions to be outlined in blue. These colors were chosen to harmonize with a European requirement. The Transport Canada study found a large number of child restraints incorrectly installed forward-facing, rather than rearward-facing, for the infant dummy for all label configurations. Transport Canada theorized that one source of the confusion was the red color-coding attracting attention towards the forward-facing instructions and away from the rearward-facing instructions. Therefore, Transport Canada recommended color-coding with red for rearward-facing and blue for forward-facing. This color combination was used in our 2003 research and did not show a significant improvement in correct installations.
In the October 2002 final rule, NHTSA also indicated it would conduct further passive analysis research at the next stage of the rulemaking. On further consideration, NHTSA has decided that it will not conduct this or any other follow-on research at this time. NHTSA has not received any comments or petitions expressing concern with the labels since the effective date in October 2003. Therefore, given the limited resources of the agency, NHTSA does not feel further research is warranted at this time. NHTSA will concentrate its efforts in areas with greater potential payoffs.
10 a.m., July 27, 2005.
The Board's Hearing Room, Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423.
The Board will meet to discuss among themselves the following agenda items. Although the conference is open for public observation, no public participation is permitted.
Docket No. 38302S,
STB Finance Docket No. 32760 (Sub-No. 44),
STB Docket No. 42087, Groome & Associates, Inc. and Lee K. Groome v. Greenville County Economic Development Corporation.
STB Finance Docket No. 34487, Greenville County Economic Development Corporation—Petition for Declaratory Order.
STB Finance Docket No. 34337,
STB Finance Docket No. 34649,
STB Docket No. AB-55 (Sub-No. 568X),
A. Dennis Watson, Office of Congressional and Public Services, Telephone: (202) 565-1596 FIRS: 1-800-877-8339.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.
Written comments should be received on or before September 23, 2005 to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to R. Joseph Durbala, (202) 622-3634, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 1096, Annual Summary and Transmittal of U.S. Information Returns.
Written comments should be received on or before September 23, 2005 to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to R. Joseph Durbala, (202) 622-3634, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 2120, Multiple Support Declaration.
Written comments should be received on or before September 23, 2005, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to R. Joseph Durbala, (202) 622-3634, at Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224,
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning an existing final regulation, IA-83-90 (TD 8383), Disclosure of Tax Return Information for Purposes of Quality or Peer Reviews, Disclosure of Tax Return Information Due to Incapacity or Death of Tax Return Preparer (§ 301.7216-2(o)).
Written comments should be received on or before September 23, 2005, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the information collection should be directed to R. Joseph Durbala, (202) 622-3634, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning an existing final regulation, REG-106010-98 (TD 8901), Qualified Lessee Construction Allowances for Short-Term Leases (§ 1.110-1).
Written comments should be received on or before September 23, 2005, to be assured of consideration.
Direct all written comments to Glenn Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Allan Hopkins, at (202) 622-6665, or at Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet, at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning an existing final regulation, CO-45-91 (TD 8529), Limitations on Corporate Net Operating Loss Carryforwards. (§ 1.382-9).
Written comments should be received on or before September 23, 2005, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulation should be directed to R. Joseph Durbala, (202) 622-3634, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 941-M, Employer's Monthly Federal Tax Return.
Written comments should be received on or before September 23, 2005 to be assured of consideration.
Direct all written comments to Glenn Kirkland, Internal Revenue Service, Room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to R. Joseph Durbala, (202) 622-3634, Internal Revenue Service, Room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning an existing notice of proposed rulemaking, INTL-941-86, and temporary regulation, INTL-655-87 (TD 8178), Passive Foreign Investment Companies (§§ 1.1294-1T and 1.1297-3T).
Written comments should be received on or before September 23, 2005, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to R. Joseph Durbala, (202) 622-3634, at Internal Revenue Service, room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice.
An open meeting of the Area 2 Taxpayer Advocacy Panel will be conducted (via teleconference).
The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Tuesday, August 16, 2005, from 1:30 p.m. to 3 p.m. e.t.
Inez E. De Jesus at 1-888-912-1227, or (954) 423-7977.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Area 2 Taxpayer Advocacy Panel will be held Tuesday, August 16, 2005 from 1:30 p.m. to 3 p.m. e.t. via a telephone conference call. If you would like to have the TAP consider a written statement, please call 1-888-912-1227 or (954) 423-7977, or write Inez E. De Jesus, TAP Office, 1000 South Pine Island Rd., Suite 340, Plantation, FL 33324. Due to limited conference lines, notification of intent to participate in the telephone conference call meeting must be made with Inez E. De Jesus. Ms. De Jesus can be reached at 1-888-912-1227 or (954) 423-7977, or post comments to the Web site:
The agenda will include the following: Various IRS issues.
Internal Revenue Service (IRS), Treasury.
Notice.
An open meeting of the Area 4 Taxpayer Advocacy Panel will be conducted (via teleconference). The Taxpayer Advocacy Panel is soliciting public comment, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Tuesday, August 23, 2005, at 11 a.m., eastern time.
Mary Ann Delzer at 1-888-912-1227, or (414) 297-1604.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Area 4 Taxpayer Advocacy Panel will be held Tuesday, August 23, 2005, at 11 a.m., eastern time via a telephone conference call. You can submit written comments to the panel by faxing the comments to (414) 297-1623, or by mail to Taxpayer Advocacy Panel, Stop 1006MIL, 310 West Wisconsin Avenue, Milwaukee, WI 53203-2221, or you can contact us at
The agenda will include the following: Various IRS issues.
Millennium Challenge Corporation.
Notice.
In accordance with section 610(b)(2) of the Millennium Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium Challenge Corporation is publishing a detailed summary and text of the Millennium Challenge Compact between the United States of America, acting through the Millennium Challenge Corporation, and the Government of the Republic of Cape Verde. Representatives of the United States Government and the Republic of Cape Verde executed the Compact documents on July 4, 2005.
Since gaining its independence from Portugal in 1975, Cape Verde has achieved an annual growth rate of approximately 6%. In addition, a major asset of Cape Verde is its strong record in terms of democratic governance, stability, transparency, and lack of corruption. Cape Verde, however, relies heavily on large inflows of foreign assistance and remittances, which together represent roughly 25% of GDP. Recognizing that reliance on such flows is not sustainable, Cape Verde has created a long-term development strategy predicated on moving from aid-dependency to self-sustaining, private-sector led economic growth, focused around services. Meanwhile, Cape Verde continues to have high levels of poverty and unemployment, which are partly attributable to a lack of obvious economic growth opportunities and a scarcity of resources, particularly water. Only 10% of the land is arable and roughly 83% of rainfall is lost through evaporation and runoff. Agricultural productivity is low and approximately 85% of the country's food is imported—70% in the form of food aid.
Cape Verde conducted a comprehensive consultative process that identified key impediments to economic growth: severe water scarcity, lack of adequate infrastructure, weak institutional support for the private sector, and an insufficiently trained work force. To address these impediments, Cape Verde requested MCC support to:
• Increase agricultural productivity on the islands of Santo Antão, Fogo, and São Nicolau by (i) improving water management, (ii) improving agribusiness development services, and (iii) increasing access to credit and capacity of financial institutions;
• Integrate internal markets and reduce transportation costs by: (i) improving road infrastructure on the islands of Santiago and Santo Antão, and (ii) upgrading the Port of Praia; and
• Develop the private sector by improving the investment climate and reforming the financial sector.
This MCC-funded program in Cape Verde (the “Cape Verde MCA Program”) comprises a solid investment in a country that has relatively limited opportunities. The expected impact of the three projects in the program is an increase in annual income to $10 million in Year 5 and over $22 million in Year 10. This corresponds to approximately 1.2% and 2.2% of annual GDP respectively, assuming a real GDP growth rate of 4% per annum.
The product of a strong consultative process, the MCA Program will complement the efforts of various multinational and bilateral donors working in Cape Verde. This program conforms with MCC's goal to be a major donor and have a large economic impact in Cape Verde.
The proposed program is summarized in the table below:
Cape Verde forms part of the semi-desert Sahelian ecology, with its erratic, low rainfall and degraded soils. MCC will fund investments that increase the capture, storage and distribution of rainfall water, thus enabling poor farmers to irrigate their fields and increase agricultural productivity. Increases in irrigated land and reliability of water supply will facilitate a shift from low-value, rain-fed agriculture to higher value-added crops that are grown more intensively (
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Improved watershed management will reduce or in some cases reverse erosion, thus preserving the value of land and water. Increased economic vitality in rural areas will create opportunities and reduce migration to urban centers. Continued growth in the tourism industry should provide a strong demand pull for the agricultural production by the project.
Cape Verde consists of ten separate islands, which inhibits the development of a common national market, increases the costs of production, and hinders the flow of resources between the more prosperous islands and the more rural, poorer islands. Economic activities such as tourism, manufacturing, and agricultural production are severely constrained by inadequate roads, ports, and inter-island transportation services. The following projects will be supported:
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Improvements to the Port of Praia, which handles half of the island nation's cargo and facilitates the movement of people to and from the population center of Cape Verde, are intended to maximize the existing operational capacity and productivity, given the existing constraints, followed by longer-term investments to create new infrastructure and facilities to alleviate the Port's inherent berth, space, and geometry problems. The prime objective of the road investments is to ensure a continuous network linking the population with social services, employment opportunities, local markets, and ports and airports.
The primary goal of Cape Verde's long-term economic transformation strategy is to become less dependent on remittances and donor aid by developing a competitive, private-sector driven economy through a focus on priority sectors such as tourism, financial services, transportation services, and fisheries. Successfully implementing the economic transformation strategy will require cross-cutting investments to strengthen human capital; promote financial sector reform; upgrade capacity within the private sector and the policy-making apparatus; and improve infrastructure. In addition, financial institution competition is weak and depositors have few options to hold savings. Accordingly, this project includes the following:
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A monitoring and evaluation plan (“M&E Plan”) is being developed for the Cape Verde MCA Program to measure progress toward achieving the program objectives. A series of indicators will be used to track implementation, improve program management, and evaluate the impact of the Program on increasing economic growth and reducing poverty. Indicators will be disaggregated by gender, income level and age, to the extent practicable.
The key indicators and expected results for each Project are listed below:
MCA-Cape Verde will be an independent entity, responsible for management and oversight of the implementation of the program, the legal form of the entity to be agreed upon by the MCC and GOCV. It will be overseen by a Steering Committee composed of (i) voting representatives from government, the private sector, and non-governmental organizations (“NGOs”) that will make key strategic decisions, provide oversight to management, and monitor progress and (ii) non-voting observers including a MCC representative and representatives from the private sector or NGOs. A Stakeholders' Committee comprised of representatives from central and municipal government as well as the private sector and civil society will provide feedback and recommendations to the Steering Committee in an advisory capacity.
The Government of Cape Verde has very strong financial management and procurement practices and will take the lead on these issues. Procurement and contract management will be carried out under the broad oversight and authority of the Steering Committee, through a Procurement Review Commission using World Bank guidelines. Cape Verde's Ministry of Finance and Planning will serve as the fiscal agent and as an independent control mechanism, and will be the sole signatory to the permitted bank account. While the Ministry of Finance and Planning will not charge a fee for services rendered, MCC will help build its institutional capacity by covering the cost of additional equipment and software necessary to provide these fiscal agent services as well as to improve program management and the reporting capacity for the monitoring and evaluation of the program. This support will help improve the government's existing financial management system.
As another element of capacity building, MCC will work with Cape Verde to establish a transparent e-procurement system for all levels of government. Extending this system government-wide will allow suppliers, government officials, and the public to have access to the rules governing procurement; insight into the procurement transactions themselves; and a transparent record of competition and results of solicitations. In addition, the Government of Cape Verde has undertaken a process to enact and implement unified procurement legislation that will consolidate existing procurement rules into a single transparent system. Funding for technical assistance to support this effort will help draft appropriate legislation and regulations as well as to train individuals involved in the procurement system at all levels of government. The combination of unified procurement procedures and the establishment of completely electronic procurement transactions and documentation will result in one of the most transparent and efficient procurement systems in the developing world.
Cape Verde has a strong history of consultation, and the ideas in the MCC proposal build on previous priority-setting efforts and development strategies that have been evolving since 1996, including the “Grand Options” Plan, the National Development Strategy, the Economic Transformation Strategy, the Agricultural Development Strategy, and the Growth and Poverty Reduction Strategy Paper. An extensive series of consultations was held regarding the MCC proposal, which has led to widespread support in the relevant communities including the opposition political party's support. Cape Verde was the first MCC-eligible country to post its Proposal on the Internet
A summary of the estimated economic rates of return is included in the table below:
These ERRs were arrived at through the following methodologies. The Watershed Management and Agriculture Support Project considers the increase in income that results from the
The Government of Cape Verde has exhibited a high degree of commitment to and ownership of this program, culminating in the fact that the MCA-Cape Verde Steering Committee's will have four cabinet members and the Chief Advisor to the Prime Minister. As part of the program, the Government of Cape Verde is taking such concrete steps as establishing a Road Maintenance Fund to ensure sustainable maintenance financing; committing to privatize the operations of the country's ports by the first half of 2006; and funding $500,000 for the design/evaluation phase of the Partnership to Mobilize Investment project.
The Ministry of Agriculture, Environment and Fisheries, the National Water Institute, and municipalities will receive technical assistance to build their capacity to improve soil and water management, through appropriate water pricing. The Government of Cape Verde has committed to establishing a water fee policy that reflects the economic cost (
Services will be demand-driven and designed to meet specific needs of the targeted beneficiaries in the watersheds. As farmers in the watershed areas increase their commercial activities, their ability to pay for services will increase. This will enable the Ministry of Agriculture, Environment and Fisheries to maintain the training and extension services provided to agricultural producers. The Ministry will implement a “fee for services” policy, charging fees for training, quality inspections and certifications. Through the life of the Compact, farmers who adopt drip irrigation will receive both the training and credit necessary for successful adoption and sustained use of the new technology.
The Private Sector Development Project is oriented toward local capacity building. Technical assistance by its nature is provided to enhance institutional sustainability of the recipient institutions. MCC's support for the Partnership to Mobilize Investment project is designed to complement the Government of Cape Verde's efforts to strengthen economic policy-making capabilities of Cape Verdean officials. In the case of the Financial Sector Reform project, the technical support directed to the microfinance institutions will assist them to reduce their reliance on donor funds for growth, while allowing them to offer new financial products. Technical support provided to the Ministry of Finance and Planning to help develop the primary market for Government securities will lay the groundwork for developing new financial institutions and products.
Overall, this project is expected to be environmentally beneficial. The development of watershed management plans to include re-forestation, soil stabilization, livestock management, and water management will improve the overall quality of the environment and reduce runoff and soil erosion. Possible negative impacts could come from unsustainable water usage leading to depletion of reservoirs due to inadequate water pricing. Conditions to disbursements will be designed to ensure sustainable management of the watersheds.
This project is assessed a “Category B” with potentially adverse environmental impacts that are site-specific and largely mitigable. The improvements are all planned on existing alignments and do not directly affect protected areas or identified sensitive natural habitats. An Environmental Impact Study was completed for the World Bank, for which MCC contracted the U.S. Army Corps of Engineers to perform a technical review. In accordance with World Bank guidelines, contractors will be required to carry out an HIV/AIDS Awareness Program developed by the Cape Verde Committee to Fight HIV/AIDS. The Compact will also require adherence to road-specific environmental management plans.
The environmental impacts of most of the short-term upgrade activities should be mainly positive; the development and implementation of an Environmental Management and
While it is not possible in advance to assess the potential environmental impacts of possible follow-on investments under this project, the Compact requires that projects funded will have to adhere to MCC environmental guidelines, which require screening and appropriate analysis in advance of any funding decision.
Donor coordination has been particularly strong in Cape Verde, and includes parallel financing and policy reform harmonization. MCC is working on projects that leverage off many donors, particularly the World Bank, IFC, and other U.S. Government agencies. While all of the projects benefit from the expertise of other donors, some particular highlights include:
• The proposed MCC investment in transportation infrastructure benefits from the project-preparation activities funded by the World Bank. MCC was able to leverage off the World Bank's institutional-sustainability and capacity strengthening efforts for the road sector and its support for the privatization of port operations.
• The Partnership to Mobilize Investment project will use the expertise of the IFC to identify specific obstacles to investment at the sectoral level. This project will leverage existing support from the U.S. Trade and Development Agency in transportation services, and may also involve investment by other multilateral and bilateral donors. It is also designed to help investors to take advantage of opportunities under AGOA.
• The Financial Sector Reform project complements the efforts of the World Bank to strengthen the capacity of the Bank of Cape Verde to improve bank supervision, including for microfinance institutions.
The Cape Verde MCA Program will:
• Increase access to water and agribusiness development services for 70,000 people in farm households on the islands of Santo Antão, Fogo, and São Nicolau.
• Institute an appropriate water fee policy, a major breakthrough that no other donor has been able to achieve.
• Reduce transportation costs and improve access to markets, schools, and health facilities to over 60,000 people on the islands of Santiago and Santo Antão.
• Increase efficiency of container handling by 130% in the Port of Praia.
• Improve business climate nation-wide and increase investment in priority sectors.
• Establish a completely electronic procurement transaction and documentation system, resulting in one of the most transparent and efficient procurement systems in the developing world.
The Cape Verde MCA Program will assist Cape Verde in achieving its overall development goal of transforming its economy from one of aid-dependency to one of competitive, private sector-led growth.
This
The Parties have identified the following objectives (each, an “Objective” and together, the “Objectives”) of this Compact, each of which is (i) key to advancing the goal of economic growth and poverty reduction in Cape Verde (the “Compact Goal”) and (ii) described in more detail in the Annexes attached hereto:
(a) Increase agricultural production in the intervention zones (the “Watershed Management and Agricultural Support Objective”);
(b) Increase integration of the internal market and reduce transportation costs (the “Infrastructure Objective”); and
(c) Develop the private sector (the “Private Sector Development Objective”).
The Government expects to achieve, and shall use its best efforts to ensure the achievement of, these Objectives during the Compact Term.
The Annexes attached hereto describe the specific projects and the policy reforms and other activities related thereto (each, a “Project”) that the Government will carry out, or cause to be carried out, in furtherance of this Compact to achieve the Objectives and the Compact Goal.
This Compact shall enter into force on the date of the last letter in an exchange of letters between the Principal Representatives of each Party confirming that all conditions set forth in Section 4.1 have been satisfied by the Government and MCC (the “Entry into Force”). This Compact shall remain in force for five (5) years from the Entry into Force, unless earlier terminated in accordance with Section 5.4 (the “Compact Term”).
(a)
(i) Subject to Sections 2.1(a)(ii), 2.2(b) and 5.4(b), the allocation of the MCC Funding within the Program and among and within the Projects shall be as generally described in
(ii) If at any time MCC determines that a condition precedent to an MCC Disbursement has not been satisfied, MCC may, upon written notice to the Government, reduce the total amount of MCC Funding by an amount equal to the amount estimated in the applicable Detailed Financial Plan for the Program or Project activity for which such condition precedent has not been met. Upon the expiration or termination of this Compact, (A) any amounts of MCC Funding not disbursed by MCC to the Government shall be automatically released from any obligation in connection with this Compact and (B) any amounts of MCC Funding disbursed by MCC to the Government as provided in Section 2.1(b)(i), but not re-disbursed as provided in Section 2.1(b)(ii) or otherwise incurred as permitted pursuant to Section 5.4(e) prior to the expiration or termination of this Compact, shall be returned to MCC in accordance with Section 2.5(a)(ii).
(b)
(i)
(ii)
(c)
(d)
(e)
(a) The Government shall provide or cause to be provided such Government funds and other resources, and shall take or cause to be taken such actions, including obtaining all necessary approvals and consents, as are specified in this Compact or in any Supplemental Agreement to which the Government is a party or as are otherwise necessary and appropriate to effectively carry out the Government Responsibilities or other responsibilities or obligations of the Government under or in furtherance of this Compact during the Compact Term and through the completion of any post-Compact Term activities, audits or other responsibilities.
(b) If at any time during the Compact Term, the Government materially reallocates or reduces the allocation in its national budget or any other Cape Verdean governmental authority at a departmental, municipal, regional or other jurisdictional level materially reallocates or reduces the respective budget allocation of the normal and expected resources that the Government or such other governmental authority, as applicable, would have otherwise received or budgeted, from external or domestic sources, for the activities contemplated herein, the Government shall notify MCC in writing within fifteen (15) days of such reallocation or reduction, such notification to contain information regarding the amount of the reallocation or reduction, the affected activities, and an explanation for the reallocation or reduction. In the event that MCC independently determines, upon review of the executed national annual budget that such a material reallocation or reduction of resources has occurred, MCC shall notify the Government and, following such notification, the Government shall provide a written explanation for such reallocation or reduction and MCC may (i) reduce, in its sole discretion, the total amount of MCC Funding or any MCC Disbursement by an amount equal to the amount estimated in the applicable Detailed Financial Plan for the activity for which funds were reduced or reallocated or (ii) otherwise suspend or terminate MCC Funding in accordance with Section 5.4(b).
(c) The Government shall use its best efforts to ensure that all MCC Funding is fully reflected and accounted for in the annual budget of the Republic of Cape Verde on a multi-year basis.
(a)
(b)
(i) Providing financial incentives to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;
(ii) Supporting investment promotion missions or other travel to the United States with the intention of inducing United States firms to relocate a substantial number of United States jobs or a substantial amount of production outside the United States;
(iii) Conducting feasibility studies, research services, studies, travel to or from the United States, or providing insurance or technical and management assistance, with the intention of inducing United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;
(iv) Advertising in the United States to encourage United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;
(v) Training workers for firms that intend to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;
(vi) Supporting a United States office of an organization that offers incentives for United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States; or
(vii) Providing general budget support for an organization that engages in any activity prohibited above.
(c)
(d)
(e)
(i)
(1) To the extent attributable to MCC Funding, income taxes and other taxes on profit or businesses imposed on organizations or entities, other than nationals of the Republic of Cape Verde, receiving MCC Funding, including taxes on the acquisition, ownership, rental, disposition or other use of real or personal property, taxes on investment or deposit requirements and currency controls in the Republic of Cape Verde, or any other tax, duty, charge or fee of
(2) Customs duties, tariffs, import and export taxes, or other levies on the importation, use and re-exportation of goods, services, or the personal belongings and effects, including personally-owned automobiles, for Program use or the personal use of individuals who are neither citizens nor permanent residents of the Republic of Cape Verde and who are present in the Republic of Cape Verde for purposes of carrying out the Program or their family members, including all charges based on the value of such imported goods;
(3) Taxes on the income or personal property of all individuals who are neither citizens nor permanent residents of the Republic of Cape Verde, including income and social security taxes of all types and all taxes on the personal property owned by such individuals, to the extent such income or property are attributable to MCC Funding; and
(4) Taxes or duties levied on the purchase of goods or services funded by MCC Funding, including sales taxes, tourism taxes, value-added taxes (VAT), or other similar charges.
(ii) This Section 2.3(e) shall apply, but is not limited to (A) Any transaction, service, activity, contract, grant or other implementing agreement funded in whole or in part by MCC Funding; (B) any supplies, equipment, materials, property or other goods (referred to herein collectively as “goods”) or funds introduced into, acquired in, used or disposed of in, or imported into or exported from, the Republic of Cape Verde by MCC, or by any person or entity (including contractors and grantees) as part of, or in conjunction with, MCC Funding or the Program; (C) any contractor, grantee, or other organization carrying out activities funded in whole or in part by MCC Funding; and (D) any employee of such organizations (the uses set forth in clauses (A) through (D) are collectively referred to herein as “Exempt Uses”).
(iii) If a Tax has been levied and paid contrary to the requirements of this Section 2.3(e), whether inadvertently, due to the impracticality of implementation of this provision with respect to certain types or amounts of taxes, or otherwise, the Government shall refund promptly to MCC to an account designated by MCC the amount of such Tax in the currency of the Republic of Cape Verde, within thirty (30) days (or such other period as may be agreed in writing by the Parties) after the Government is notified of such levy and tax payment;
(iv) The Parties shall memorialize in a mutually acceptable Implementation Letter or Supplemental Agreement or other suitable document the mechanisms for implementing this Section 2.3(e), including (A) a formula for determining refunds for Taxes paid, the amount of which is not susceptible to precise determination, (B) a mechanism for ensuring the tax-free importation, use, and re-exportation of goods, services, or the personal belongings of individuals (including all Providers) described in paragraph (i)(2) of this Section 2.3(e), and (C) any other appropriate Government action to facilitate the administration of this Section 2.3(e).
(f)
(g)
(h)
(i)
(j)
(a) The Government shall include, or ensure the inclusion of, all of the requirements set forth in Section 2.3 in all Supplemental Agreements to which MCC is not a party and shall use its best efforts to ensure that no such Supplemental Agreement is implemented in violation of the prohibitions set forth in Section 2.3.
(b) The Government shall ensure notification of all of the requirements set forth in Section 2.3 to any Provider and all relevant officers, directors, employees, agents, representatives, Affiliates, contractors, sub-contractors, grantees and sub-grantees of the Government or any Provider. The term “Provider” shall mean (i) MCA-Cape Verde and any Government Affiliate or Permitted Designee involved in any activities in furtherance of this Compact or (ii) any third party who receives at least USD $50,000 in the aggregate of MCC Funding (other than employees of MCA-Cape Verde) during the Compact Term or such other amount as the Parties may agree in writing, whether directly from MCC, indirectly through Re-Disbursements, or otherwise.
(c) In the event the Government or any Provider requires clarification from MCC as to whether an activity contemplated to be undertaken in furtherance of this Compact violates or may violate any provision of Section 2.3, the Government shall notify, or ensure that such Provider notifies, MCC in writing and provide in such notification a detailed description of the activity in question. In such event, the Government shall not proceed, and shall use its best efforts to ensure that no relevant Provider proceeds, with such activity, and the Government shall ensure that no Re-Disbursements shall be made for such activity, until MCC advises the Government or such Provider in writing that the activity is permissible.
(a) Notwithstanding the availability to MCC, or exercise by MCC of, any other remedies, including under international law, this Compact, or any Supplemental Agreement:
(i) If any amount of MCC Funding or Accrued Interest, or any Program Asset, is used for any purpose prohibited under this Article II or otherwise in violation of any of the terms and conditions of this Compact, any guidance in any Implementation Letter, or any Supplemental Agreement between the Parties, MCC may, upon written notice, require the Government to repay promptly to MCC to an account designated by MCC or to others as MCC may direct the amount of such misused MCC Funding or Accrued Interest, or the cash equivalent of the value of any misused Program Asset, in United States Dollars, plus any interest that accrued or would have accrued thereon, within fifteen (15) days after the Government is notified, whether by MCC or otherwise, of such prohibited use;
(ii) If all or any portion of this Compact is terminated or suspended and upon the expiration of this Compact, the Government shall, subject to the requirements of Sections 5.4(e) and 5.4(f), refund, or ensure the refund, to MCC the amount of any MCC Funding, plus any Accrued Interest, promptly, but in no event later than thirty (30) days after the Government receives MCC's request for such refund; provided, that if this Compact is terminated or suspended in part, MCC may request a refund for only the amount of MCC Funding, plus any Accrued Interest, then allocated to the terminated or suspended portion;
(b) Notwithstanding any other provision in this Compact or any other agreement to the contrary, MCC's right under this Section 2.5 for a refund shall continue during the Compact Term and for a period of (i) five (5) years thereafter or (ii) one (1) year after MCC receives actual knowledge of such violation, whichever is later.
(c) If MCC determines that any activity or failure to act violates, or may violate, any Section in this Article II, MCC may refuse any further MCC Disbursements for or conditioned upon such activity, and may take any action to prevent any Re-Disbursement related to such activity.
This Compact shall be implemented by the Parties in accordance with this Article III and as further specified in the Annexes and in relevant Supplemental Agreements.
(a) The Government shall have principal responsibility for oversight and management of the implementation of the Program (i) in accordance with the terms and conditions specified in this Compact and relevant Supplemental Agreements, (ii) in accordance with all applicable laws then in effect in Cape Verde, and (iii) in a timely and cost-effective manner and in conformity with sound technical, financial and management practices (collectively, the “Government Responsibilities”). Unless otherwise expressly provided, any reference to the Government Responsibilities or any other responsibilities or obligations of the Government herein shall be deemed to apply to any Government Affiliate and any of their respective directors, officers, employees, contractors, sub-contractors, grantees, sub-grantees, agents or representatives.
(b) The Government shall ensure that no person or entity shall participate in the selection, award, administration, or oversight of a contract, grant or other benefit or transaction funded in whole or in part (directly or indirectly) by MCC Funding, in which (i) the entity, the person, members of the person's immediate family or household or his or her business partners, or organizations controlled by or substantially involving such person or entity, has or have a direct or indirect financial or other interest or (ii) the person or entity is negotiating or has any arrangement concerning prospective employment, unless such person or entity has first disclosed in writing to the Government the conflict of interest and, following such disclosure, the Parties agree in writing to proceed notwithstanding such conflict. The Government shall ensure that no person or entity involved in the selection, award, administration, oversight or implementation of any contract, grant or other benefit or transaction funded in whole or in part (directly or indirectly) by MCC Funding shall solicit or accept from or offer to a third party or seek or be promised directly or indirectly for itself or for another person or entity any gift, gratuity, favor or benefit, other than items of
(c) The Government shall not designate any person or entity, including any Government Affiliate, to implement, in whole or in part, this Compact or any Supplemental Agreement between the Parties (including any Government Responsibilities or any other responsibilities or obligations of the Government under this Compact or any Supplemental Agreement between the Parties) or to exercise any rights of the Government under this Compact or any Supplemental Agreement between the Parties, except as expressly provided herein or with the prior written consent of MCC;
(d) The Government shall, upon a request from MCC, execute, or ensure the execution of, an assignment to MCC of any cause of action which may accrue to the benefit of the Government, a Government Affiliate or any Permitted Designee, including MCA-Cape Verde, in connection with or arising out of any activities funded in whole or in part (directly or indirectly) by MCC Funding.
(e) The Government shall ensure that (i) no decision of MCA-Cape Verde is modified, supplemented, unduly influenced or rescinded by any governmental authority, except by a non-appealable judicial decision, and (ii) the authority of MCA-Cape Verde shall not be expanded, restricted, or otherwise modified, except in accordance with this Compact, the Governance Agreement, the Governing Documents or any other Supplemental Agreement between the Parties.
(f) The Government shall ensure that all persons and individuals that enter into agreements to provide goods, services or works under the Program or in furtherance of this Compact shall do so in accordance with the Procurement Guidelines and shall obtain all necessary immigration, business and other permits, licenses, consents and approvals to enable them and their personnel to fully perform under such agreements.
The Government shall proceed, and cause others to proceed, in a timely manner to deliver to MCC all reports, documents or other deliveries required to be delivered by the Government under this Compact or any Supplemental Agreement between the Parties, in form and substance as set forth in this Compact or in any such Supplemental Agreement.
The Government hereby provides the following assurances to MCC that as of the date this Compact is signed:
(a) The information contained in the Proposal and any agreement, report, statement, communication, document or otherwise delivered or otherwise communicated to MCC by or on behalf of the Government on or after the date of the submission of the Proposal (i) are true, accurate and complete in all material respects and (ii) do not omit any fact known to the Government that if disclosed would (A) alter in any material respect the information delivered, (B) likely have a material adverse effect on the Government's ability to effectively implement, or ensure the effective implementation of, the Program or any Project or to otherwise carry out its responsibilities or obligations under or in furtherance of this Compact, or (C) have likely adversely affected MCC's determination to enter into this Compact or any Supplemental Agreement between the Parties.
(b) Unless otherwise disclosed in writing to MCC, the MCC Funding made available hereunder is in addition to the normal and expected resources that the Government usually receives or budgets for the activities contemplated herein from external or domestic sources.
(c) This Compact does not conflict and will not conflict with any international agreement or obligation to which the Government is a party or by which it is bound.
(d) No payments have been (i) received by any official of the Government or any other government body in connection with the procurement of goods or services to be undertaken or funded in whole or in part (directly or indirectly) by MCC Funding, except fees, taxes, or similar payments legally established in the Republic of Cape Verde (subject to Section 2.3(e)) and consistent with the applicable requirement of Cape Verdean law or (ii) made to any third party, in connection with or in furtherance of this Compact, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. 78a
(a) MCC may, from time to time, issue one or more letters to furnish additional information or guidance to assist the Government in the implementation of this Compact (each, an “Implementation Letter”). The Government shall apply such guidance in implementing this Compact.
(b) The details of any funding, implementing and other arrangements in furtherance of this Compact may be memorialized in one or more agreements between (A) the Government (or any Government Affiliate or Permitted Designee) and MCC, (B) MCC and/or the Government (or any Government Affiliate or Permitted Designee) and any third party, including any of the Providers or Permitted Designee or (C) any third parties where neither MCC nor the Government is a party, before, on or after the Entry into Force (each, a “Supplemental Agreement”). The Government shall deliver, or cause to be delivered, to MCC within five (5) days of its execution a copy of any Supplemental Agreement to which MCC is not a party.
(a) The Government shall ensure that the procurement of all goods, services and works by the Government or any Provider in furtherance of this Compact shall be consistent with the procurement guidelines (the “Procurement Guidelines”) reflected in a Supplemental Agreement between the Parties (the “Procurement Agreement”), which Procurement Guidelines shall include the following requirements:
(i) Open, fair and competitive procedures are used in a transparent manner to solicit, award and administer contracts, grants, and other agreements and to procure goods, services and works;
(ii) Solicitations for goods, services, and works shall be based upon a clear and accurate description of the goods, services or works to be acquired;
(iii) Contracts shall be awarded only to qualified and capable contractors that have the capability and willingness to perform the contracts in accordance with the terms and conditions of the applicable contracts and on a cost effective and timely basis; and
(iv) No more than a commercially reasonable price, as determined, for example, by a comparison of price quotations and market prices, shall be
(b) The Government shall maintain, and shall use its best efforts to ensure that all Providers maintain, records regarding the receipt and use of goods and services acquired in furtherance of this Compact, the nature and extent of solicitations of prospective suppliers of goods and services acquired in furtherance of this Compact, and the basis of award of contracts, grants and other agreements in furtherance of this Compact, for a period of ten years, or such other period as the Parties may otherwise agree in writing.
(c) The Government shall use its best efforts to ensure that information, including solicitations, regarding procurement, grant and other agreement actions funded (or to be funded) in whole or in part (directly or indirectly) by MCC Funding shall be made publicly available in the manner outlined in the Procurement Guidelines or in any other manner agreed upon by the Parties in writing.
(d) No goods, services or works may be funded in whole or in part (directly or indirectly) by MCC Funding which are procured pursuant to orders or contracts firmly placed or entered into prior to the Entry into Force, except as the Parties may otherwise agree in writing.
(e) The Government shall ensure that MCA-Cape Verde and any other Permitted Designee follows, and uses its best efforts to ensure that all Providers follow, the Procurement Guidelines in procuring (including soliciting) goods, services and works and in awarding and administering contracts, grants and other agreements in furtherance of this Compact, and shall furnish MCC evidence of the adoption of the Procurement Guidelines by MCA-Cape Verde no later than the time specified in the Disbursement Agreement.
(f) The Government shall include, or ensure the inclusion of, the requirements of this Section 3.6 into all Supplemental Agreements between the Government, any Government Affiliate or Permitted Designee or any of their respective directors, officers, employees, Affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives or agents, on the one hand, and a Provider, on the other hand.
In addition to the specific policy and legal reform commitments identified in
(a)
(b)
(c)
(d)
(i) Government Audits. The Government shall, on at least an annual basis and as the Parties may otherwise agree in writing, conduct, or cause to be conducted, financial audits of all MCC Disbursements and Re-Disbursements during the year since the Entry into Force or since the prior anniversary of the Entry into Force in accordance with the following terms, except as the Parties may otherwise agree in writing. As requested by MCC in writing, the Government shall use, or cause to be used, an auditor named on the approved list of auditors in accordance with the “Guidelines for Financial Audits Contracted by Foreign Recipients” (“Audit Guidelines”) issued by the Inspector General of the United States Agency for International Development (the “Inspector General”), and as approved by MCC, to conduct such annual audits. Such audits shall be performed in accordance with such Guidelines and be subject to quality assurance oversight by the Inspector General in accordance with such Guidelines. An audit shall be completed and delivered to MCC no later than 90
(ii) Audits of U.S. Entities. The Government shall ensure that Supplemental Agreements between the Government or any Provider, on the one hand, and a United States non-profit organization, on the other hand, state that the United States organization is subject to the applicable audit requirements contained in OMB Circular A-133, notwithstanding any other provision of this Compact to the contrary. The Government shall ensure that Supplemental Agreements between the Government or any Provider, on the one hand, and a United States for-profit Covered Provider, on the other hand, state that the United States organization is subject to audit by the cognizant United States Government agency, unless the Government and MCC agree otherwise in writing.
(iii) Audit Plan. The Government shall submit, or cause to be submitted, to MCC no later than 20 days prior to the date of its adoption a plan, in accordance with the Audit Guidelines, for the audit of the expenditures of any Covered Providers, which audit plan, in the form and substance as approved by MCC, the Government shall adopt, or cause to be adopted, no later than sixty (60) days prior to the end of the first period to be audited (such plan, the “Audit Plan”).
(iv) Covered Provider. A “Covered Provider” is (A) a non-United States Provider that receives (other than pursuant to a direct contract or agreement with MCC) USD $300,000 or more of MCC Funding in any MCA-Cape Verde fiscal year or any other non-United States person or entity that receives, directly or indirectly, USD $300,000 or more of MCC Funding from any Provider in such fiscal year or (B) any United States Provider that receives (other than pursuant to a direct contract or agreement with MCC) USD $500,000 or more of MCC Funding in any MCA-Cape Verde fiscal year or any other United States person or entity that receives, directly or indirectly, USD $500,000 or more of MCC Funding from any Provider in such fiscal year.
(v) Corrective Actions. The Government shall use its best efforts to ensure that Covered Providers take, where necessary, appropriate and timely corrective actions in response to audits, consider whether a Covered Provider's audit necessitates adjustment of its own records, and require each such Covered Provider to permit independent auditors to have access to its records and financial statements as necessary.
(vi) Audit Reports. The Government shall furnish, or use its best efforts to cause to be furnished, to MCC an audit report in a form satisfactory to MCC for each audit required by this Section 3.8, other than audits arranged for by MCC, no later than 90 days after the end of the period under audit, or such other time as may be agreed by the Parties from time to time.
(vii) Other Providers. For Providers who receive MCC Funding under this Compact pursuant to direct contracts or agreements with MCC, MCC shall include appropriate audit requirements in such contracts or agreements and shall, on behalf of the Government, unless otherwise agreed by the Parties, conduct the follow-up activities with regard to the audit reports furnished pursuant to such requirements.
(viii) Audit by MCC. MCC retains the right to perform, or cause to be performed, the audits required under this Section 3.8 by utilizing MCC Funding or other resources available to MCC for this purpose, and to audit, conduct a financial review, or otherwise ensure accountability of any Provider or any other third party receiving MCC Funding, regardless of the requirements of this Section 3.8.
(e)
(i) Paragraphs (a), (b), (c), (d)(ii), (d)(iii), (d)(v), (d)(vi), and (d)(viii) of this Section 3.8 into all Supplemental Agreements between the Government, any Government Affiliate, any Permitted Designee or any of their respective directors, officers, employees, Affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives or agents (each, a “Government Party”), on the one hand, and a Covered Provider that is not a U.S. non-profit organization, on the other hand;
(ii) Paragraphs (a), (b), (c), (d)(ii), and (d)(viii) of this Section 3.8 into all Supplemental Agreements between a Government Party and a Provider that does not meet the definition of a Covered Provider; and
(iii) Paragraphs (a), (b), (c), (d)(ii), (d)(v) and (d)(viii) of this Section 3.8 into all Supplemental Agreements between a Government Party and a Covered Provider that is a U.S. non-profit organization.
(f)
(g)
The Government shall, to MCC's satisfaction, insure or cause to be insured all Program Assets and shall obtain or cause to be obtained such other appropriate insurance and other protections to cover against risks or liabilities associated with the operations of the Program, including by requiring Providers to obtain adequate insurance and post adequate performance bonds or other guarantees. MCA-Cape Verde shall be named as the insured party on any such insurance and the beneficiary of any other such guarantee, including performance bonds. MCC shall be named as additional insured on any such insurance or other guarantee, to the extent permissible under applicable laws. The Government shall ensure that any proceeds from claims paid under such insurance or any other form of guarantee shall be used to replace or repair any loss of Program Assets or to pursue the procurement of the covered goods, services, works, or otherwise; provided, however, at MCC's election, such proceeds shall be deposited in a Permitted Account as designated by MCA-Cape Verde and acceptable to MCC or as otherwise directed by MCC. To the extent MCA-Cape Verde is held liable under any indemnification or other similar provision of any agreement between MCA-Cape Verde, on the one hand, and any other Provider or other third party, on the other hand, the Government shall pay in full on behalf of MCA-Cape Verde any such obligation;
The Government shall proceed in a timely manner to seek any required ratification of this Compact or similar domestic requirement, which process the Government shall initiate promptly
The Government shall undertake not to enter into any agreement in conflict with this Compact or any Supplemental Agreement during the Compact Term.
The Government shall provide, or cause to be provided, to MCC at least on each anniversary of the Entry into Force of this Compact (or such other anniversary agreed by the Parties in writing) and otherwise within thirty (30) days of any written request by MCC, or as otherwise agreed in writing by the Parties, the following information:
(a) The name of each entity to which MCC Funding has been provided;
(b) The amount of MCC Funding provided to such entity;
(c) A description of the Program and each Project funded in furtherance of this Compact, including:
(i) A statement of whether the Program or any Project was solicited or unsolicited; and
(ii) A detailed description of the objectives and measures for results of the Program or Project;
(d) The progress made by Cape Verde toward achieving the Compact Goal and Objectives;
(e) A description of the extent to which MCC Funding has been effective in helping Cape Verde to achieve the Compact Goal and Objectives;
(f) A description of the coordination of MCC Funding with other United States foreign assistance and other related trade policies;
(g) A description of the coordination of MCC Funding with assistance provided by other donor countries;
(h) Any report, document or filing that the Government, any Government Affiliate or any Permitted Designee submits to any government body in connection with this Compact;
(i) Any report or document required to be delivered to MCC under the Environmental Guidelines, any Audit Plan, or any component of the Implementation Plan; and
(j) Any other report, document or information requested by MCC or required by this Compact or any Supplemental Agreement between the Parties.
As conditions precedent to the Entry into Force, the Parties shall satisfy the conditions set forth in this Section 4.1.
(a) The Government (or a mutually acceptable Government Affiliate) and MCC shall execute a Disbursement Agreement, which agreement shall be in full force and effect as of the Entry into Force.
(b) The Government (or a mutually acceptable Government Affiliate) and MCC shall execute one or more term sheets that set forth the material and principal terms and conditions of each of the Supplemental Agreements identified in
(c) The Government (or mutually acceptable Government Affiliate) and MCC shall execute a Procurement Agreement, which agreement shall be in full force and effect as of the Entry into Force.
(d) The Government shall deliver a certificate signed and dated by the Principal Representative of the Government that:
(i) Certifies the Government has completed all of its domestic requirements for this Compact to be fully enforceable under Cape Verdean law;
(ii) Attaches thereto, and certifies that such attachments are, true, correct and complete copies of all decrees, legislation, regulations or other governmental documents relating to its domestic requirements for this Compact to enter into force, which MCC may post on its Web site or otherwise make publicly available; and
(iii) Attaches a written statement as to the incumbency and specimen signature of the Principal Representative and each Additional Representative of the Government executing any document under this Compact, such written statement to be signed by a duly authorized official of the Government other than the Principal Representative or any such Additional Representative.
(e) MCC shall deliver a certificate signed and dated by the Principal Representative of MCC that:
(i) Certifies that MCC has completed its domestic requirements for this Compact to enter into force; and
(ii) Attaches a written statement as to the incumbency and specimen signature of the Principal Representative and each Additional Representative of MCC executing any document under this Compact such written statement to be signed by a duly authorized official of the Government other than the Principal Representative or any such Additional Representative.
Prior to, and as condition precedent to, any MCC Disbursement or Re-Disbursement, the Government shall satisfy, or ensure the satisfaction of, all applicable conditions precedent in the Disbursement Agreement.
Unless otherwise expressly stated in this Compact or otherwise agreed in writing by the Parties, any notice, certificate, request, report, document or other communication required, permitted, or submitted by either Party to the other under this Compact shall be: (a) in writing; (b) in English; and (c) deemed duly given: (i) upon personal delivery to the Party to be notified; (ii) when sent by confirmed facsimile or electronic mail, if sent during normal business hours of the recipient Party, if not, then on the next business day; or (iii) two (2) business days after deposit with an internationally recognized overnight courier, specifying next day delivery, with written verification of receipt to the Party to be notified at the address indicated below, or at such other address as such Party may designate:
To MCC:
Millennium Challenge Corporation, Attention: Vice President for Country Relations, (with a copy to the Vice President and General Counsel), 875 Fifteenth Street, NW., Washington, DC 20005, United States of America. Facsimile: (202) 521-3700. Phone: (202) 521-3600. E-mail:
To the Government:
Ministry of Finance and Planning, Attention: Minister of Finance and Planning, Avenida Amilcar Cabral, CP30, Praia, Republic of Cape Verde. Facsimile: (238) 261-3897. Phone: (238) 260-7644. E-mail:
Notwithstanding the foregoing, any audit report delivered pursuant to Section 3.8, if delivered by facsimile or electronic mail, shall be followed by an original in overnight express mail. This Section 5.1 shall not apply to the exchange of letters contemplated in Section 1.3 or any amendments under Section 5.3.
Unless otherwise agreed in writing by the Parties, for all purposes relevant to this Compact, the Government shall be represented by the individual holding the position of, or acting as, Minister of Finance and Planning of the Republic of Cape Verde, and MCC shall be represented by the individual holding the position of, or acting as, Vice President for Country Relations (each, a “Principal Representative”), each of whom, by written notice to the other Party, may designate one or more additional representatives (each, an “Additional Representative”) for all purposes other than signing amendments to this Compact. The names of the Principal Representative and any Additional Representative of each of the Parties shall be provided, with specimen signatures, to the other Party, and the Parties may accept as duly authorized any instrument signed by such representatives relating to the implementation of this Compact, until receipt of written notice of revocation of their authority. A Party may change its Principal Representative to a new representative of equivalent or higher rank upon written notice to the other Party, which notice shall include the specimen signature of the new Principal Representative.
The Parties may amend this Compact only by a written agreement signed by the Principal Representatives of the Parties.
(a) Subject to Section 2.5 and paragraphs (e) through (h) of this Section 5.4, either Party may terminate this Compact in its entirety by giving the other Party thirty (30) days' written notice.
(b) Notwithstanding any other provision of this Compact, including Section 2.1, or any Supplemental Agreement between the Parties, MCC may suspend or terminate this Compact or MCC Funding, in whole or in part, and any obligation or sub-obligation related thereto, upon giving the Government written notice, if MCC determines, in its sole discretion, that:
(i) Any use or proposed use of MCC Funding or Program Assets or continued implementation of the Compact would be in violation of applicable law or U.S. Government policy, whether now or hereafter in effect;
(ii) The Government, any Provider, or any other third party receiving MCC Funding or using Program Assets is engaged in activities that are contrary to the national security interests of the United States;
(iii) The Government or any Permitted Designee has committed an act or omission or an event has occurred that would render the Republic of Cape Verde ineligible to receive United States economic assistance under Part I of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2151
(iv) The Government or any Permitted Designee has engaged in a pattern of actions or omissions inconsistent with the MCA Eligibility Criteria, or there has occurred a significant decline in the performance of the Republic of Cape Verde on one or more of the eligibility indicators contained therein;
(v) The Government or any Provider has materially breached one or more of its assurances or any covenants, obligations or responsibilities under this Compact or any Supplemental Agreement;
(vi) An audit, review, report or any other document or other evidence reveals that actual expenditures for the Program or any Project or Project Activity were greater than the projected expenditure for such activities identified in the applicable Detailed Financial Plan or are projected to be greater than projected expenditures for such activities;
(vii) If the Government (A) materially reallocates or reduces the allocation in its national budget or any other Government budget of the normal and expected resources that the Government would have otherwise received or budgeted, from external or domestic sources, for the activities contemplated herein, (B) fails to contribute or provide the amount, level, type and quality of resources required to effectively carry out the Government Responsibilities or any other responsibilities or obligations of the Government under or in furtherance of this Compact, or (C) fails to pay any of its obligations as required under this Compact or any Supplemental Agreement, including such obligations which shall be paid solely out of national funds;
(viii) If the Government, any Provider, or any other third party receiving MCC Funding or using Program Assets, or any of their respective directors, officers, employees, Affiliates, contractors, sub-contractors, grantee, sub-grantee, representatives or agents, is found to have been convicted of a narcotics offense or to have been engaged in drug trafficking;
(ix) Any MCC Funding or Program Assets are applied, directly or indirectly, to the provision of resources and support to, individuals and organizations associated with terrorism, sex trafficking or prostitution;
(x) An event or condition of any character has occurred that: (A) Materially and adversely affects, or is likely to materially and adversely affect, the ability of the Government or any other party to effectively implement, or ensure the effective implementation of, the Program or any Project or to otherwise carry out its responsibilities or obligations under or in furtherance of this Compact or any Supplemental Agreement or to perform its obligations under or in furtherance of this Compact or any Supplemental Agreement or to exercise its rights thereunder; (B) makes it improbable that the Objectives will be achieved during the Compact Term; (C) materially and adversely affects the Program Assets or any Permitted Account or (D) constitutes misconduct injurious to MCC, or constitutes a fraud or a felony, by the Government, any Government Affiliate, Permitted Designee or Provider, or any officer, director, employee, agent, representative, Affiliate, contractor, grantee, subcontractor or sub-grantee of any of the foregoing;
(xi) The Government or any Permitted Designee or Provider has taken any action or omission or engaged in any activity in violation of, or inconsistent with, the requirements of this Compact or any Supplemental Agreement to which the Government or any Permitted Designee or Provider is a party; or
(xii) There has occurred a failure to meet a condition precedent or series of conditions precedent to or any other requirements or conditions in connection with MCC Disbursement as set out in and in accordance with any Supplemental Agreement between the Parties.
(c) MCC may reinstate any suspended or terminated MCC Funding under this Compact or any Supplemental Agreement if MCC determines, in its sole discretion, that the Government or other relevant party has demonstrated a commitment to correcting each condition for which MCC Funding was suspended or terminated.
(d) The authority to suspend or terminate this Compact or any MCC Funding under this Section 5.4 includes the authority to suspend or terminate any obligations or sub-obligations relating to MCC Funding under any Supplemental Agreement without any liability to MCC whatsoever.
(e) All MCC Funding shall terminate upon expiration or termination of the Compact Term;
(f) Except for payments which the Parties are committed to make under noncancellable commitments entered into with third parties before such suspension or termination, the suspension or termination of this Compact or any Supplemental Agreement, in whole or in part, shall suspend, for the period of the suspension, or terminate, or ensure the suspension or termination of, as applicable, any obligation or sub-obligation of the Parties to provide financial or other resources under this Compact or any Supplemental Agreement, or to the suspended or terminated portion of this Compact or such Supplemental Agreement, as applicable. In the event of such suspension or termination, the Government shall use its best efforts to suspend or terminate, or ensure the suspension or termination of, as applicable, all such noncancellable commitments related to the suspended or terminated MCC Funding. Any portion of this Compact or any such Supplemental Agreement that is not suspended or terminated shall remain in full force and effect.
(g) Upon the full or partial suspension or termination of this Compact or any MCC Funding, MCC may, at its expense, direct that title to Program Assets be transferred to MCC if such Program Assets are in a deliverable state;
(h) Prior to the expiration of this Compact or upon termination of this Compact, the Parties shall consult in good faith with a view to reaching an agreement in writing on (i) the post-Compact Term treatment of MCA-Cape Verde, (ii) the process for ensuring the refunds of MCC Disbursements that have not yet been released from a Permitted Account through a valid Re-Disbursement or otherwise committed in accordance with Section 5.4(e), or (iii) any other matter related to the winding up of the Program and this Compact.
MCC is an agency of the Government of the United States of America and its personnel assigned to the Republic of Cape Verde will be notified pursuant to the Vienna Convention on Diplomatic Relations as members of the mission of the Embassy of the United States of America. The Government shall ensure that any personnel of MCC so notified, including individuals detailed to or contracted by MCC, and the members of the families of such personnel, while such personnel are performing duties in the Republic of Cape Verde, shall enjoy the privileges and immunities that are enjoyed by a member of the United States Foreign Service, or the family of a member of the United States Foreign Service so notified, as appropriate, of comparable rank and salary of such personnel, if such personnel or the members of the families of such personnel are not a national of, or permanently resident in, the Republic of Cape Verde.
Any annex, schedule, exhibit, table, appendix or other attachment expressly attached hereto (collectively, the “Attachments”) is incorporated herein by reference and shall constitute an integral part of this Compact.
(a) Conflicts or inconsistencies between any parts of this Compact shall be resolved by applying the following descending order of precedence:
(i) Articles I through V.
(ii) Any Attachments.
(b) In the event of any conflict or inconsistency between this Compact and any Supplemental Agreement between the Parties, the terms of this Compact shall prevail. In the event of any conflict or inconsistency between any Supplemental Agreement between the Parties and any other Supplemental Agreement, the terms of the Supplemental Agreement between the Parties shall prevail. In the event of any conflict or inconsistency between Supplemental Agreements between any parties, the terms of a more recently executed Supplemental Agreement between such parties shall take precedence over a previously executed Supplemental Agreement between such parties. In the event of any inconsistency between a Supplemental Agreement between the Parties and any component of the Implementation Plan, the terms of the relevant Supplemental Agreement shall prevail.
The Government shall indemnify and hold MCC and any MCC officer, director, employee, Affiliate, contractor, agent or representative (each of MCC and any such persons, an “MCC Indemnified Party”) harmless from and against, and shall compensate, reimburse and pay such MCC Indemnified Party for, any liability or other damages which (i) are directly or indirectly suffered or incurred by such MCC Indemnified Party, or to which any MCC Indemnified Party may otherwise become subject, regardless of whether or not such damages relate to any third-party claim, and (ii) arise from or as a result of the negligence or willful misconduct of the Government, any Government Affiliate, MCA-Cape Verde or any Permitted Designee, directly or indirectly connected with, any activities (including acts or omissions) undertaken in furtherance of this Compact; provided, however, the Government shall apply national funds to satisfy its obligations under this Section 5.8 and no MCC Funding, Accrued Interest, or Program Asset may be applied by the Government in satisfaction of its obligations under this Section 5.8.
The Section and Subsection headings used in this Compact are included for convenience only and are not to be considered in construing or interpreting this Compact.
(a) Any reference to the term “including” in this Compact shall be deemed to mean “including without limitation” except as expressly provided otherwise.
(b) Any reference to activities undertaken “in furtherance of this Compact” or similar language shall include activities undertaken by the Government, any Government Affiliate, any Permitted Designee, any Provider or any other third party receiving MCC Funding involved in carrying out the purposes of this Compact or any Supplemental Agreement, including their respective directors, officers, employees, Affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives or agents, whether pursuant to the terms of this Compact, any Supplemental Agreement or otherwise.
(c) References to “day” or “days” shall be calendar days unless provided otherwise.
(d) The term “U.S. Government” shall mean any branch, agency, bureau,
(e) The term “Affiliate” of a party is a person or entity that controls, is controlled by, or is under the same control as the party in question, whether by ownership or by voting, financial or other power or means of influence.
(f) The term “Government Affiliate” is an Affiliate, ministry, bureau, department, agency, government corporation or any other entity chartered or established by the Government.
(g) References to any Affiliate or Government Affiliate herein shall include any of their respective directors, officers, employees, affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives, and agents.
(h) Any references to “Supplemental Agreement between the Parties” shall mean any agreement between MCC on the one hand, and the Government or any Government Affiliate or Permitted Designee on the other hand.
Other than a signature to this Compact or an amendment to this Compact pursuant to Section 5.3, a signature delivered by facsimile or electronic mail in accordance with Section 5.1 shall be deemed an original signature, and the Parties hereby waive any objection to such signature or to the validity of the underlying document, certificate, notice, instrument or agreement on the basis of the signature's legal effect, validity or enforceability solely because it is in facsimile or electronic form. Such signature shall be accepted by the receiving Party as an original signature and shall be binding on the Party delivering such signature.
MCC may designate any Affiliate, agent, or representative to implement, in whole or in part, its obligations, and exercise any of its rights, under this Compact or any Supplemental Agreement between the Parties.
Section 5.13 Survival. Any Government Responsibilities, covenants, or obligations or other responsibilities to be performed by the Government after the Compact Term shall survive the termination or expiration of this Compact and expire in accordance with their respective terms. Notwithstanding the termination or expiration of this Compact, the following provisions shall remain in force: Sections 2.2, 2.3, 2.5, 3.2, 3.3, 3.4, 3.5, 3.8, 3.9 (for one year), 3.12, 5.1, 5.2, 5.4(d), 5.4(e) (for sixty days), 5.4(f), 5.4(g), 5.4(h), 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11, 5.12, this Section 5.13, 5.14, and 5.15.
Either Party may, at any time, request consultations relating to the interpretation or implementation of this Compact or any Supplemental Agreement between the Parties. Such consultations shall begin at the earliest possible date. The request for consultations shall designate a representative for the requesting Party with the authority to enter consultations and the other Party shall endeavor to designate a representative of equal or comparable rank. If such representatives are unable to resolve the matter within 20 days from the commencement of the consultations then each Party shall forward the consultation to the Principal Representative or such other representative of comparable or higher rank. The consultations shall last no longer than 45 days from date of commencement. If the matter is not resolved within such time period, either Party may terminate this Compact pursuant to Section 5.4(a). The Parties shall enter any such consultations guided by the principle of achieving the Compact Goal in a timely and cost-effective manner.
MCC is a United States government corporation acting on behalf of the United States Government in the implementation of this Compact. As such, MCC has no liability under this Compact, is immune from any action or proceeding arising under or relating to this Compact and the Government hereby waives and releases all claims related to any such liability. In matters arising under or relating to this Compact, MCC is not subject to the jurisdiction of the courts or other body of Cape Verde.
This Compact is prepared in English and in the event of any ambiguity or conflict between this official English version and any other version translated into any language for the convenience of the Parties, this official English version shall prevail.
The Parties shall give appropriate publicity to this Compact as a program to which the United States, through MCC, has contributed, including by posting this Compact, and any amendments thereto, on the MCC Web site and the MCA-Cape Verde Web site, identifying Program activity sites, and marking Program Assets; provided, any announcement, press release or statement regarding MCC or the fact that MCC is funding the Program or any other publicity materials referencing MCC, including the publicity described in this Section 5.17, shall be subject to prior approval by MCC and shall be consistent with any instructions provided by MCC from time to time in relevant Implementation Letters. Upon the termination or expiration of this Compact, MCC may request the removal of, and the Government shall, upon such request, remove, or cause the removal of, any such markings and any references to MCC in any publicity materials or on the MCA-Cape Verde Web site.
The following compendium of capitalized terms that are used herein is provided for the convenience of the reader. To the extent that there is a conflict or inconsistency between the definitions in this
Accrued Interest is any interest or other earnings on MCC Funding that accrues or are earned.
Act means the Millennium Challenge Act of 2003, as amended.
Additional Representative is a representative as may be designated by a Principal Representative, by written notice, for all purposes other than signing amendments to this Compact.
Affiliate means the affiliate of a party, which is a person or entity that controls, is controlled by, or is under the same control as the party in question, whether by ownership or by voting, financial or other power or means of influence. References to Affiliate herein shall include any of their respective directors,
AGOA means the Africa Growth and Opportunity Act.
Agribusiness Development Activity is the Project Activity related to agribusiness development services under the Watershed Project described in Section 2(b) of Section 1 of
Area(s) means wherever the targeted geographic areas of Cape Verde where certain activities of the Program will be undertaken.
ASA means the Airport and Aviation Security Company.
Attachments are any annex, schedule, exhibit, table, appendix or other attachment expressly attached to this Compact.
Audit Guidelines means the “Guidelines for Financial Audits Contracted by Foreign Recipients” issued by the Inspector General of the United States Agency for International Development.
Audit Plan means a plan, in accordance with the Audit Guidelines, for the audit of the expenditures of any Covered Providers, which audit plan, in the form and substance as approved by MCC, the Government shall adopt, or cause to be adopted, no later than sixty (60) days prior to the end of the first period to be audited.
Auditor means the auditor(s) as defined in, and engaged pursuant to, Section 3(h) of
Auditor/Reviewer Agreement is an agreement between MCA-Cape Verde and each Auditor or Reviewer, in form and substance satisfactory to MCC, that sets forth the roles and responsibilities of the Auditor or Reviewer with respect to the audit, review or evaluation, including access rights, required form and content of the applicable content of the applicable audit, review or evaluation and other terms and conditions such as payment of the Auditor or Reviewer.
Bank(s) means the National Bank and any bank holding an account referenced in Section 4(d)(iii) of
Bank Agreement means an agreement between MCA-Cape Verde and a Bank, satisfactory to MCC, that sets forth the signatory authority, access rights, anti-money laundering and anti-terrorist financing provisions, and other terms related to the Permitted Account.
Beneficiaries means the intended beneficiaries identified in accordance with
CGAP means the Consultative Group for Assistance to the Poorest.
Chair means the Chair of the Steering Committee.
Civil Members means the representatives for the positions identified in Sections 3(d)(ii)(2)(A)(vi)-(ix) of
Compact means the Millennium Challenge Compact made between the United States of America, acting through the Millennium Challenge Corporation, and the Government of the Republic of Cape Verde.
Compact Goal means advancing economic growth and poverty reduction in Cape Verde.
Compact Goal Indicators are the Indicators that will measure the aggregation of estimated benefits of the three Projects, which is indicative of the overall impact from all of the Project Activities, as set out in the table at Section 2(a) of
Compact Records shall have the meaning set forth in Section 3.8(b).
Compact Reports are any documents or reports delivered to MCC in satisfaction of the Government's reporting requirements under this Compact or any Supplemental Agreement between the Parties.
Compact Term means the term for which this Compact shall remain in force, which shall be the five (5) year period from the Entry into Force, unless earlier terminated in accordance with Section 5.4.
Covered Provider means (i) a non-United States Provider that receives (other than pursuant to a direct contract or agreement with MCC) USD $300,000 or more of MCC Funding in any MCA-Cape Verde fiscal year or any other non-United States person or entity that receives, directly or indirectly, USD $300,000 or more of MCC Funding from any Provider in such fiscal year or (ii) any United States Provider that receives (other than pursuant to a direct contract or agreement with MCC) USD $500,000 or more of MCC Funding in any MCA-Cape Verde fiscal year or any other United States person or entity that receives, directly or indirectly, USD $500,000 or more of MCC Funding from any Provider in such fiscal year.
Credit Activity is the Project Activity related to access to credit under the Watershed Project described in Section 2(c) of Schedule 1 of
Designated Rights and Responsibilities shall have the meaning set forth in Section 3.2(c).
Detailed Financial Plan means the financial plans that specify respectively the annual and quarterly detailed budget and projected cash requirements for the Program (including monitoring and evaluation and administrative costs) and each Project, projected both on a commitment and cash requirement basis.
Disbursement Agreement is a Supplemental Agreement that MCC, the Government (or a mutually acceptable Government Affiliate and MCA-CV shall enter into that (i) further specifies the terms and conditions of any MCC Disbursements and Re-Disbursements, (ii) is in a form and substance mutually satisfactory to the Parties, and (iii) is signed by the Principal Representative of each Party (or in the case of the Government, the principal representative of the applicable Government Affiliate) and of MCA-Cape Verde.
EIA means environmental impact assessment.
EIB means the European Investment Bank.
Emergency Management Plan means the Emergency Management Plan and Responses for Health and Safety (2004).
EMMP means an environmental management and monitoring plan.
EMP means the Environmental Management Plans.
ENAPOR means the current state entity that administers and operates the Port.
Entry into Force means the entry into force of this Compact which shall be on the date of the last letter in an exchange of letters between the Principal Representatives of each Party confirming that all conditions set forth in Section 4.1 have been satisfied by the Government and MCC.
Environmental Guidelines means the environmental guidelines delivered by MCC to the Government or posted by MCC on its website or otherwise publicly made available, as such guidelines may be amended from time to time.
ERR means economic rate of return.
ETS means Cape Verde's Economic Transformation Strategy which provides a long-term vision of building a globally competitive, services-oriented economy.
EU means the European Union.
Evaluation Component means the component of the M&E Plan that specifies a methodology, process and timeline for the evaluation of planned, ongoing, or completed Project Activities to determine their efficiency, effectiveness, impact and sustainability.
Exempt Uses means (i) any transaction, service, activity, contract, grant or other implementing agreement funded in whole or in part by MCC Funding; (ii) any supplies, equipment, materials, property or other goods (referred to herein collectively as “goods”) or funds introduced into,
Final Evaluation shall have the meaning set forth in Section 3(a) of
Financial Plan means collectively, the Multi-Year Financial Plan and each Detailed Financial Plan, each amendment, supplement or other change thereto.
Financial Plan Annex means
Financial Sector Reform Activity is the Project Activity related to financial sector reform under the Private Sector Development Project described in Section 2(b) of Schedule 3 of
Fiscal Accountability Plan shall have the meaning set forth in Section 4(c) of
Fiscal Agent shall have the mean set forth in Section 3(g) of
Fiscal Agent Agreement is an agreement between MCA-Cape Verde and each Fiscal Agent, in form and substance satisfactory to MCC, that sets forth the roles and responsibilities of the Fiscal Agent and other appropriate terms and conditions, such as payment of the Fiscal Agent. goods' refers to any supplies, equipment, materials, property or other goods.
Governance Agreement means the governance agreement entered into by the Government and MCA-Cape Verde, and at MCC's option, MCC, in a form and substance satisfactory to MCC.
Governing Document means any decree, legislation, regulation, contractual arrangement or other charter document establishing or governing MCA-Cape Verde.
Government means the Government of the Republic of Cape Verde.
Government Affiliate is an Affiliate, ministry, bureau, department, agency, government, corporation or any other entity chartered or established by the Government. References to Government Affiliate shall include any of their respective directors, officers, employees, affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives, and agents.
Government Members are the government members identified in Section 3(d)(ii)(A)(i)-(v) of
Government Party means the Government, any Government Affiliate, any Permitted Designee or any of their respective directors, officers, employees, Affiliates, contractors, sub-contractors, grantees, sub-grantees, representatives or agents.
Government Responsibilities shall have the meaning set forth in Section 3.2(a).
GPRSP means the Growth and Poverty Reduction Strategy Paper published in 2004 by the Government.
Grand Options Plan means the program of economic development embarked upon by the Government in 2001.
IFC means the International Finance Corporation.
Implementation Letter is a letter that may be issued by MCC from time to time to furnish additional information or guidance to assist the Government in the implementation of this Compact.
Implementation Plan is a detailed plan for the implementation of the Program and each Project, which will be memorialized in one or more documents and shall consist of: (i) A Multi-Year Financial Plan; (ii) Detailed Financial Plans; (iii) Fiscal Accountability Plan; (iv) Procurement Plan; (v) Program and Project Work Plans; and (vi) M&E Plan.
Implementing Entity means a Government Affiliate, nongovernmental organization or other public- or private-sector entity or persons to which MCA-Cape Verde may provide MCC funding, directly or indirectly, through an Outside Project Manager, to implement and carry out the Projects or any other activities to be carried out in furtherance of this Compact.
Implementing Entity Agreement is an agreement between MCA-Cape Verde (or the appropriate Outside Project Manager) and an Implementing Entity, in form and substance satisfactory to MCC, that sets forth the roles and responsibilities of such Implementing Entity and other appropriate terms and conditions, such as payment of the Implementing Entity.
Indicator Baseline means the value of an Indicator for a Project Activity and Objective prior to it being affected by the Program.
Indicators means the quantitative, objective and reliable data that the M&E Plan will use to measure the results of the Program.
Infrastructure Objective means increase integration of the internal market and reduce transportation costs.
Infrastructure Project is the infrastructure project, and the Project described in Schedule 2 of
Inspector General means the Inspector General of the United States Agency for International Development.
Investment Guidelines shall have the meaning set forth in Section 2(a)(iii) of Schedule 3 of
ITP means the Infrastructure and Transport Program.
Lien means any lien, attachment, enforcement of judgment, pledge, or encumbrance of any kind.
Local Account is an interest-bearing local currency of Cape Verde bank account at the National Bank to which the Fiscal Agent may authorize transfer from any U.S. Dollar Permitted Account for the purpose of making Re-Disbursements payable in local currency.
M&E means Monitoring and Evaluation.
M&E Annex means
M&E Plan means the plan to measure and evaluate progress toward achievement of the Compact Goal and Objectives of this Compact.
Management Unit means the management team of MCA-Cape Verde to have overall management responsibility for the implementation of this Compact and further described in Section 3(d)(iii) of
Managing Director means the Managing Director of MCA-Cape Verde.
Material Agreement shall have the meaning set forth in Section 3(c)(i)(5) of
Material Re-Disbursement means any Re-Disbursement that requires MCC approval under applicable law, Procurement Agreement, the Governance Agreement, any Governing Document, or any Supplemental Agreement.
Material Terms of Reference means any terms of reference for the procurement of goods, services or works that requires MCC approval under applicable law, the Procurement Agreement, the Governance Agreement, any Governing Document, or any Supplemental Agreement.
MCA means the 2004 Millennium Challenge Account.
MCA-Cape Verde means the legal entity, in a form mutually agreeable to the Parties, which shall be a Permitted Designee and shall be responsible for the oversight and management of the implementation of this Compact on behalf of the Government.
MCA-Cape Verde Website means the website operated by MCA-Cape Verde.
MCA Eligibility Criteria means the MCA selection criteria and methodology published by MCC pursuant to Section 607 of the Act from time to time.
MCC means the Millennium Challenge Corporation.
MCC Disbursement means the disbursement of MCC Funding by MCC to a Permitted Account or through such other mechanism agreed by the Parties as defined in and in accordance with Section 2.1(b)(i).
MCC Disbursement Request means the applicable request that the Government and MCA-Cape Verde will jointly submit for an MCC Disbursement as may be specified in the Disbursement Agreement.
MCC Funding means an amount not to exceed One Hundred Ten Million Seventy-Eight Thousand and Four Hundred Eighty-Eight United States Dollars (USD $110,078,488).
MCC Indemnified Party means MCC and any MCC officer, director, employee, Affiliate, contractor, agent or representative.
MCC Representative is a representative designated by MCC to serve as an Observer on the Steering Committee.
MCC Working Group means the working group selected from the participants at a national consultation convened in Praia in May 2004, as described in Section 1(b) of
MEAF means the Ministry of Environment, Agriculture and Fisheries.
MEGC means the Ministry for Economy, Growth and Competitiveness.
MFIs means micro-finance institutions.
MIT means the Ministry of Infrastructure and Transport.
Monitoring Component means the component of the M&E Plan that specifies how progress toward the Objectives and Project Activity Outcomes will be monitored.
Multi-Year Financial Plan means the multi-year financial plan for the Program and for each Project, which is summarized in
Multi-Year Financial Plan Summary means a multi-year Financial plan summary attached to this Compact as Exhibit A of
National Bank means the Bank of Cape Verde.
Objective(s) are the following objectives of this Compact that have been identified by the Parties, each of which is (i) key to advancing the Compact Goal and (ii) described in more detail in the Annexes attached hereto: (a) the Watershed Management and Agricultural Support Objective, (b) the Infrastructure Objective and (c) the Private Sector Development Objective.
Objective Indicator means the Indicator for each Objective that will measure the final results of the Projects in order to monitor their success in meeting each of the Objectives. A table of Objective Indicator definitions is set forth at Section 2(b)(i) of
Observers means the non-voting observers of the Steering Committee.
Officers shall have the meaning set forth in 3(d)(iii)(3) of
Outside Project Manager means the qualified persons or entities engaged by the Management Unit, on behalf of MCA-Cape Verde, to serve as outside project managers in accordance with Section 3(d)(iii)(5) of
Partnership to Mobilize Investment Activity is a Project Activity related to the partnership to mobilize investment under the Private Sector Development Project described in Section 2(a) of Schedule 3 of
Parties means the United States, acting through MCC, and the Government.
Party means (i) the United States, acting through MCC or (ii) the Government.
PCO means the Program Coordination Office attached directly to the Office of the Minister, Ministry of Infrastructure and Transport.
PEP means IFC's Private Enterprise Partnership for Africa program.
Permitted Account(s) shall have the meaning set forth in Section 4(d) of
Permitted Designee shall have the meaning set forth in Section 3.2(c).
PIU means the Government's project implementation unit for the World Bank's Growth and Competitiveness Project.
Pledge means any pledge of any MCC Funding or any Program Assets, or any guarantee directly or indirectly of any indebtedness.
Port means the Porto de Praia.
Port Activity is the Project Activity related to the upgrade and expansion of the Port of Praia under the Infrastructure Project described in Section 2(a) of Schedule 2 of
Principal Representative means (i) for the Government, the individual holding the position of, or acting as, Minister of Finance and Planning of the Republic of Cape Verde, and (ii) for MCC, the individual holding the position of, or acting as, the Vice President for Country Relations.
Prioritized Activities are the prioritized IFC and unsolicited interventions or activities designed and/or evaluated in Phase II of the Partnership to Mobilize Investment Activity under Section 2(a)(iii) of Schedule 3 of
Private Sector Development Objective is an Objective of this Compact and means to develop the private sector.
Private Sector Development Project is a private sector development project, and the Project described in Schedule 3 of
Procurement Agreement is a Supplemental Agreement between the Parties, which includes the Procurement Guidelines, and governs the procurement of all goods, services and works by the Government or any Provider in furtherance of this Compact.
Procurement Guidelines shall have the meaning set forth in Section 3.6(a).
Procurement Plan means a procurement plan adopted by MCA-Cape Verde, which plan shall forecast the upcoming six month procurement activities and be updated every six months.
Procurement Review Commission means the procurement review commission that reports to MCA-Cape Verde on procurements related to the Program and provides oversight of the operational procurement activities of MCA-Cape Verde (further described in Section 3(i) of
Procurement Review Commission Agreement means the agreement between MCA-Cape Verde and Ministry of Finance and Planning, in form and substance satisfactory to MCC, that sets forth the roles and responsibilities of the Procurement Review Commission with respect to the conduct, monitoring and review of procurements and other appropriate terms and conditions, such as payment of the Procurement Review Commission.
Program means a program, to be implemented under this Compact, using MCC Funding to advance Cape Verde's progress towards economic growth and poverty reduction.
Program Annex means
Program Assets means (i) MCC Funding, (ii) Accrued Interest, or (iii) any assets, goods, or property (real, tangible, or intangible) purchased or financed in whole or in part by MCC Funding.
Project(s) are the specific projects and the policy reforms, and other activities related thereto that the Government will carry out, or cause to be carried out in furtherance of this Compact to achieve the Objectives and the Compact Goal.
Project Activity means the activities that will be undertaken in furtherance of each Project.
Project Activity Outcome means outcomes of each Project Activity.
Project Activity Outcome Indicator means the Indicator for each of the Project Activities that will measure the intermediate results achieved under each of the Project Activities in order to provide an early measure of the likely impact of the Project Activities. A table of Project Activity Outcome Indicator definitions is set forth at Section 2(b)(ii) of
Project Manager means the following Officers in the Management Unit: (i) Watershed Management and Agricultural Support Manager, (ii) Infrastructure Manager, and (iii) the Private Sector Development Manager.
Proposal is the proposal for use of MCA assistance submitted to MCC by the Government on August 10, 2004.
Provider means (i) MCA-Cape Verde and any other Government Affiliate or Permitted Designee involved in any activities in furtherance of this Compact or (ii) any third party who receives at least USD $50,000 in the aggregate of MCC Funding (other than employees of MCA-Cape Verde) during this Compact Term or such other amount as the Parties may agree in writing, whether directly from MCC, indirectly through Re-Disbursements, or otherwise.
Re-Disbursement is the release of MCC Funding from a Permitted Account.
Regional Stakeholders' Committees means all then existing regional stakeholders' committees, comprised of non-governmental organizations, municipalities, farmers associations, and enterprises in the private sector.
Review Committee is a review committee that will be formed during Phase III of the Partnership to Mobilize Investment Activity as described in Section 2(a)(iii) of Schedule 3 of
Reviewer shall have the meaning set forth in Section 3(h) of
Road Maintenance Fund means the road maintenance fund to be created and function in accordance with the Transport Sector Letter, as described in Section 6(b)(i) of Schedule 2 of
Roads and Bridges Activity means the Project Activity related to roads and bridges under the Infrastructure Project described in Section 2(b) of Schedule 2 of
Selected Activity shall have the meaning set forth in Section 2(a)(iii) of Schedule 3 of
SIGOF means the Government's existing government financial management system.
Special Account means a single, completely separate U.S. Dollar interest-bearing account at the Bank of Cape Verde to receive MCC Disbursements.
Stakeholders' Committee means a continued stakeholders' committee, such as the Stakeholders' Group, or a similar committee established in accordance with Section 3(e)(i) of
Stakeholders' Group is a nationally representative committee established in October, 2004 to provide additional direction, feedback and oversight for the proposed MCA program.
Steering Committee means an independent steering committee to oversee MCA-Cape Verde's responsibilities and obligations under this Compact (including any Designated Rights and Responsibilities) and further described in Section 3(d)(ii) of
STPC means the Strategic Transformation and Policy Center.
Strategic Programme is the Priority Strategic Programme for Infrastructure and Land Use Management that the Government formulated in 2003.
Supplemental Agreement is an agreement between (i) the Government (or any Government Affiliate or Permitted Designee) and MCC, (ii) MCC and/or the Government (or any Government Affiliate or Permitted Designee) and any third party, including any of the Providers or Permitted Designees, or (iii) any third parties where neither MCC nor the Government is a party, before, on or after the Entry into Force, which agreement memorializes details any funding, implementing and other arrangements in furtherance of this Compact.
Supplemental Agreement between the Parties means any agreement between MCC on the one hand, and the Government or any Government Affiliate or Permitted Designee on the other hand.
Supplemental Agreement Term Sheets means one or more term sheets that the Government (or mutually acceptable Government Affiliate) and MCC shall execute that set forth the material and principal terms and conditions of each of the Supplemental Agreements identified in
Target means one or more expected results that specify the expected value and the expected time by which that result will be achieved.
Tax(es) shall have the meaning set forth in Section 2.3(e)(i).
Transport Sector Letter means the Government's Letter of Transport Sector Policy.
U.S. Government shall mean any branch, agency, bureau, government corporation, government chartered entity or other body of the Federal government of the United States.
United States Dollars (USD) means the currency of the United States of America.
Water Management Activity is the Project Activity related to water management and soil conservation under the Watershed Project described in Section 2(a) of Schedule 1 of
Watershed Areas are the three rural intervention watershed areas: (i) Ribeira Paul on the island on Santo Antão; (ii) Mosteiros on the island of Fogo; and (iii) Ribeira Fajã on the island of São Nicolau.
Watershed Management and Agricultural Support Objective is an Objective of this Compact and means to increase agricultural production in the intervention zones.
Watershed Project is the watershed management and agricultural support project, and the Project described in Schedule 1 of
Work Plans means work plans for the overall administration of the Program and for each Project.
World Bank Road Sector Support Project is a project where several donors, notably the World Bank, Portugal and the EU, are financing selected priority investments, with the World Bank playing a leading role in supporting institutional reforms in road sector management and maintenance.
This Annex I to the Compact (the “Program Annex”) generally describes the Program that MCC Funding will support in Cape Verde during the
Except as specifically provided herein, the Parties may amend this Program Annex only by written agreement signed by the Principal Representative of each Party. Each capitalized term in this Program Annex shall have the same meaning given such term elsewhere in this Compact. Unless otherwise expressly stated, each Section reference herein is to the relevant Section of the main body of the Compact.
Since gaining its independence from Portugal in 1975, Cape Verde has achieved an annual growth rate of approximately six percent. This growth has resulted in impressive socio-economic gains in such areas as literacy rates, educational attainment, life expectancy, and per-capita income (which has increased from USD $200 to USD $1,485). Despite these achievements, Cape Verde continues to have high levels of poverty and unemployment. Further, income disparities are increasing between men and women and between urban and rural populations, as illustrated by the fact that approximately 40% of the rural population lives in poverty. The persistence of poverty can be partly attributed to the fact that Cape Verde is challenged by a relative lack of obvious economic growth opportunities and a scarcity of resources, particularly water. Only 10% of the land is arable and a short rainy period, marked by torrential downpours, results in roughly 83% of rainfall being lost through evaporation and runoff. Agricultural productivity is low; therefore, approximately 85% of the country's food is imported (70% of which is in the form of food aid). In addition, Cape Verde suffers from adverse cost competitiveness owing to geographic discontinuity and a small population (450,000 people spread over nine inhabited islands), which result in redundant capital costs, high factor costs of production, and a lack of economies of scale.
Cape Verde's strong record of democratic governance, stability, transparency, and lack of corruption has allowed the country to maintain large inflows of foreign assistance and remittances from
Cape Verde's post-independence history can be divided into three periods. The first was characterized by an interventionist state that played a dominant role in the productive sectors; the second, by economic and political liberalization, marked by pluralism and multi-party democracy; while the third represents an ongoing attempt to develop a sustainable economy, based on a competitive private sector. The third phase began in 2001, when the Government—in consultations with the civil society and the private sector—embarked on a program of economic development (the “Grand Options Plan”). The outcome of a six-month exercise, the Grand Options Plan is based on the principles of good governance, private sector-led growth, human capital strengthening, and infrastructure development, and was designed to provide an overall guiding framework for the more specific national development planning efforts in Cape Verde.
An important achievement in the evolution of Cape Verde's economic development strategy occurred in 2004, when the Government published a Growth and Poverty Reduction Strategy Paper (“GPRSP”). The GPRSP is consistent with the principles articulated in the Grand Options Plan, further defines public investment priorities, and is based on the following five strategic pillars:
• Promote good governance that reinforces effectiveness and guarantees fairness;
• Promote competitiveness to favor economic growth and employment creation;
• Develop and upgrade human capital;
• Develop infrastructure, promote land use planning and protect the environment; and
• Improve effectiveness and sustainability of the social protection system.
Described as “fully participatory” by the IMF/World Bank Joint Staff Assessment, the GPRSP is a comprehensive policy for social development that is being supported by the World Bank with a Poverty Reduction Support Credit.
Another milestone was Cape Verde's increased focus on private sector development through the preparation of an Economic Transformation Strategy (“ETS”), which provides a long-term vision of building a globally competitive, services-oriented economy. The key elements of the ETS include:
• Developing a high value-added tourism/ecotourism sector;
• Building upon Cape Verde's geographic location to become a gateway for cargo and passenger transportation and air traffic-control services;
• Developing its information technology and services industries to provide financial and back-office services to the Lusophone and African markets; and
• Processing and marketing of fish and seafood for export.
In the short term, the ETS seeks to expand upon effective programs to enhance the capacity of the poor to invest in drip irrigation and other productive activities that have successfully raised agricultural outputs and rural incomes.
The successful implementation of the ETS will require investments to strengthen human capital; upgrade capacity within the private sector and the policy-making apparatus; and improve infrastructure. To support the transformation, the Government also embarked on several policy reforms (legal framework, finance, and social security) to deepen market-economy reforms, ensure continued macro-economic stability, and enhance micro-economic competitiveness.
The Program represents the culmination of a process that began in 2001, with the Grand Options Plan. It addresses three key areas: watershed management and agricultural support, infrastructure improvement, and private sector development. The Program is consistent with the ETS, and adheres to the second, third and fourth pillars of the GPRSP. For example, the second pillar of the GPRSP includes increasing the country's competitiveness by fostering private sector development, particularly oriented to small and medium-size enterprises; sustainable growth of agriculture; and developing the financial sector, including micro-credit financing mechanisms. With respect to the watershed management and agricultural support area, the Program will focus on short-to medium-term initiatives to expand economic opportunities in rural areas. To improve infrastructure, the Program will focus on development and planning for a modern infrastructure to reduce the cost of inputs and improve the integration of internal markets. To promote private sector development, the Program is designed to establish the foundation for transforming Cape Verde's economy by focusing on mobilizing investment in the priority sectors and further developing the financial sector.
Cape Verde's Proposal was the result of a timely, meaningful and participatory consultative process for the Proposal that included several steps. A series of consultations were held with organizations and individuals with experience or links to Cape Verde in the United States to receive feedback on the initial program design. In Cape Verde, individual consultations were held with each cabinet minister, non-governmental organizations, and the various private sector associations to brief them about MCC and proposed plans for use of MCA funds and to obtain their views on initial program design ideas.
On May 28-30, 2004, a national consultation was launched with a forum convened in Praia that included representatives from civil society, the government and municipalities, the private sector, chambers of commerce, non-governmental organizations, academia, and others. The May 2004 forum determined a process for the formal preparation of the MCA proposal and selected from the participants a working group (the “MCC Working Group”). At the May 2004 forum, five teams were created with broad stakeholder representation to focus on such areas as: growth and competitiveness; human resources; social empowerment; infrastructure; and institutions. These five teams shaped the initial draft proposal. At a final plenary session of the May 2004 forum, the participants debated and approved the initial draft proposal.
Following the outcome of the national forum, the MCC Working Group prepared recommendations and sectoral reports. A drafting task force, composed of representatives of the public administration, association of municipal governments, private sector and non-governmental organizations, prepared a further draft proposal based on the recommendations of the forum. This further draft proposal became the basis for a second round of consultations. The second round consisted of a series of sectoral consultations with private sector and civil society. Selective consultations were also held with Cape Verdean communities in the United States to obtain comments. Donors such as the World Bank, International Monetary Fund and United Nations Development Program also provided additional input. The resulting Proposal was then presented to MCC and posted on the Internet at
In October, 2004, a nationally representative committee (the “Stakeholders' Group”) was established to provide additional direction, feedback and oversight for the proposed MCA program. Members represent various sectors of society including government, private sector, municipalities, non-governmental organizations, community associations and political parties. The Stakeholders' Group, which is chaired by the “Plataforma das ONG,” an umbrella association of non-governmental organizations in Cape Verde, had the responsibility of reviewing the proposed MCA program and the Proposal. It is anticipated that this Stakeholders' Group may have a continuing role during the implementation of the Program as described below. Finally, the opposition political party has publicly endorsed the Proposal.
The objectives, indicators, specific outcomes and targets of the Program were reviewed and refined by proposed Program implementing agents from the Ministry of Environment, Agriculture and Fisheries (“MEAF”), Ministry of Infrastructure and Transport (“MIT”), Ministry of Finance and Planning, as well as the National Institute of Statistics during a three-day M&E workshop held in São Jorge from April 23-25, 2005. They were subsequently presented to a conference in São Jorge on April 29, 2005, and agreed upon by the key Program stakeholders, including municipalities from various islands, non-governmental organizations, civil society and private sector, in a continued effort to deepen the consultative process. Many of these views are being taken into account in the development of the M&E Plan. Once finalized, the M&E Plan will be posted on the website operated by MCA-Cape Verde (the “MCA-Cape Verde Website”) and shared with Program stakeholders.
Following MCC's review of the Proposal and discussions and negotiations of the Parties, the Parties have identified certain mutually acceptable components of the Proposal and other components developed through the discussions of the Parties that together shall constitute the Program. The Program is fully consistent with, and directly supports, the Grand Options Plan, the GPRSP, and the ETS as noted above.
(a)
(b)
(c)
(d)
(e)
The implementation framework and the plan for ensuring adequate governance, oversight, management, monitoring, evaluation and fiscal accountability for the use of MCC Funding is summarized below and in the Schedules attached to this Program Annex, or as may otherwise be agreed in writing by the Parties.
(a)
(b)
(i) The Government shall promptly take all necessary and appropriate actions to carry out the Government Responsibilities and other obligations or responsibilities of the Government under and in furtherance of this Compact, including undertaking or pursuing such legal, legislative or regulatory actions or procedural changes and contractual arrangements as may be necessary or appropriate to achieve the Objectives, to successfully implement the Program, to designate any rights or responsibilities to any Permitted Designee, and to establish a legal entity, in a form mutually agreeable to the Parties, the form, structure and other features of such legal entity to be determined and agreed upon by the Parties on or before the time specified in the Disbursement Agreement (“MCA-Cape Verde”), which shall be a
(ii) The Government shall ensure that MCA-Cape Verde is duly authorized and organized, sufficiently staffed and empowered to fully carry out the Designated Rights and Responsibilities. Without limiting the generality of the preceding sentence, MCA-Cape Verde shall be organized, and have such roles and responsibilities, as described in Section 3(d) of this Program Annex and as provided in the Governance Agreement and any Governing Documents;
(iii) Various ministries, bureaus and agencies of the Government may serve as Implementing Entities. In addition, within the MEAF, MIT, and Ministry of Economic Growth and Competitiveness, the Office of Studies and Planning will be responsible for the management of the Projects, consolidation of reports, and development of budgets.
(c)
(i) Notwithstanding Section 3.1 of this Compact or any provision in this Program Annex to the contrary, and except as may be otherwise agreed upon by the Parties from time to time, MCC must approve in writing each of the following transactions, activities, agreements and documents prior to the execution or carrying out of such transaction, activity, agreement or document and prior to MCC Disbursements or Re-Disbursements in connection therewith:
(1) MCC Disbursements;
(2) Each Detailed Financial Plan, and any amendments thereto;
(3) The Multi-Year Financial Plan and any amendments and annual supplements thereto;
(4) Any Audit Plan;
(5) Agreements (i) between the Government and MCA-Cape Verde, (ii) between the Government, a Government Affiliate, MCA-Cape Verde or any other Permitted Designee on the one hand, and any Provider or Affiliate of a Provider, on the other hand, (A) which require such MCC approval under applicable law, the Procurement Agreement, the Governance Agreement, any other Governing Document, or any other Supplemental Agreement or (iii) in which the Government, a Government Affiliate, MCA-Cape Verde or any other Permitted Designee appoints, hires, or engages any of the following in furtherance of this Compact:
(A) Auditor;
(B) Reviewer;
(C) Fiscal Agent;
(D) Procurement Review Commission;
(E) Each Bank;
(F) Outside Project Manager;
(G) Implementing Entity; and
(H) Steering Committee member, Observer, Officer, and other key employee of MCA-Cape Verde (including any compensation for such person).
(Any agreement described in clause (i) through (iii) of this Section 3(c)(i)(5) and any amendments and supplements thereto, each, a “Material Agreement”);
(6) Any modification, termination or suspension of a Material Agreement, or any action that would have the effect of such a modification, termination or suspension of a Material Agreement;
(7) Any agreement that is (A) not at arm's length or (B) with a party related to the Government or MCA-Cape Verde or any of their respective Affiliates;
(8) Any Re-Disbursement (each, a “Material Re-Disbursement”) that requires such MCC approval under applicable law, the Procurement Agreement, the Governance Agreement, any Governing Document, or any Supplemental Agreement;
(9) Any terms of reference (each, a “Material Terms of Reference”) for the procurement of goods, services or works that requires such MCC approval under applicable law, the Procurement Agreement, the Governance Agreement, any Governing Document, or any Supplemental Agreement;
(10) The Implementation Plan, including each component plan thereto, and any material amendments and supplements to the Implementation Plan or any component thereto;
(11) Any pledge of any MCC Funding or any Program Assets or any guarantee directly or indirectly of any indebtedness (each, a “Pledge”);
(12) Any decree, legislation, regulation, contractual arrangement or other charter document establishing or governing MCA-Cape Verde (“Governing Document”);
(13) Any disposition (in whole or in part), liquidation, dissolution, winding up, reorganization or other change of (A) MCA-Cape Verde, including any revocation or modification of or supplement to any Governing Document related thereto, or (B) any subsidiary or Affiliate of MCA-Cape Verde;
(14) Any change in character or location of any Permitted Account;
(15) Formation or acquisition of any subsidiary (direct or indirect) or other Affiliate of MCA-Cape Verde;
(16) Any (A) Change of a Steering Committee member, Observer, Officer or other key employee or contractor of MCA-Cape Verde, or change in the composition of the Steering Committee of MCA-Cape Verde, including approval of the nominee for Chair, (B) filling of any vacant seat of the Chair, Steering Committee member, or an Observer or vacant position of an Officer, key employee or contractor of MCA-Cape Verde, (C) filling of the seats designated as representatives nominated by the Stakeholders' Committee, if any, to the Steering Committee, (D) filling any vacant seat on the Stakeholders' Committee; and (E) approval of the nominee for chair of the Procurement Review Commission;
(17) The management information system to be developed and maintained by the Management Unit of MCA-Cape Verde, and any material modifications to such system;
(18) Any decision to amend, supplement, replace, terminate, or otherwise change any of the foregoing; and
(19) Any other activity, agreement, document or transaction requiring the approval of MCC in this Compact, applicable law, the Governance Agreement, any Governing Document, the Procurement Agreement, the Disbursement Agreement, or any other Supplemental Agreement between the Parties.
The Chair of the Steering Committee (the “Chair”) and/or the Managing Director of MCA-Cape Verde (the “Managing Director”) or other designated Officer, as provided in the Governance Agreement, shall certify any documents or reports delivered to MCC in satisfaction of the Government's reporting requirements under this Compact or any Supplemental Agreement between the Parties (the “Compact Reports”).
(ii) MCC shall have the authority to exercise its approval rights set forth in this Section 3(c) in its sole discretion and independent of any participation or position taken by the MCC Representative at a meeting of the Steering Committee. MCC retains the right to revoke its approval of any matter, agreement, or action if MCC concludes, in its sole discretion, that its approval was issued on the basis of incomplete, inaccurate or misleading information furnished by the Government, MCA-Cape Verde, or any Government Affiliate or Permitted Designee. Notwithstanding any provision in this Compact or any Supplemental Agreement to the contrary, the exercise by MCC of its approval rights under this Compact or any Supplemental Agreement shall not (1) diminish or otherwise affect the Government Responsibilities or any other obligations or responsibilities of the Government under this Compact or any Supplemental Agreement, (2) transfer any such obligations or responsibilities of the Government, or (3) otherwise subject MCC to any liability.
(d)
(i)
(1) The Government shall ensure that MCA-Cape Verde shall not assign, delegate or contract any of the Designated Rights and Responsibilities without the prior written consent of the Government and MCC. MCA-Cape Verde shall not establish any Affiliates or subsidiaries (direct or indirect) without the prior written consent of the Government and MCC.
(2) Unless otherwise agreed by the Parties in writing, MCA-Cape Verde shall consist of (a) an independent steering committee (the “Steering Committee”) to oversee MCA-Cape Verde's responsibilities and obligations under the this Compact (including any Designated Rights and Responsibilities) and (b) a management team (“Management Unit”) to have overall management responsibility for the implementation of this Compact.
(ii)
(1) Formation. The Government shall ensure that the Steering Committee shall be formed, constituted, governed and operated in accordance with the terms and conditions set forth in the Governance Agreement, any applicable Governing Document, and any other relevant Supplemental Agreement.
(2) Composition. Unless otherwise agreed by the Parties in writing, the Steering Committee shall consist of at least nine and no more than eleven voting members, one of whom shall be appointed the Chair as provided in applicable law, the Governance Agreement or any Governing Document and subject to MCC approval, and the non-voting observers identified below.
(A) The Steering Committee shall initially be composed of nine voting members as follows, provided that the Government members identified in subsections (i)-(v) below (the “Government Members”) may be replaced by another government official of comparable rank from a ministry or other government body relevant to the Program activities, subject to approval by the Government and MCC (such replacement to be referred to thereafter as a Government Member):
(i) Minister of Finance and Planning;
(ii) Minister of Infrastructure and Transport;
(iii) Minister of Economy, Growth, and Competitiveness;
(iv) Minister of Environment, Agriculture and Fisheries;
(v) Chief Advisor to the Prime Minister;
(vi) The President of the National Municipalities Association;
(vii) The President of the Chamber of Commerce of Sotavento;
(viii) The President of the Chamber of Commerce and Agriculture of Barlavento; and
(ix) The President of the Non-Governmental Organization Association.
(B) The non-voting observers (each, an “Observer”) shall be:
(i) A Representative designated by MCC (the “MCC Representative”); and
(ii) Representatives-elect for positions identified in Sections 3(d)(ii)(2)(A)(vi)-(ix) of this Program Annex (such above identified positions, the “Civil Members”), and representatives-elect for any additional voting members in the event the Steering Committee size expands to eleven, who will be non-voting observers during the one-year period prior to the beginning of their respective terms.
(C) Each Government Member position shall be filled by the individual then holding the office identified and such individuals shall serve in their capacity as the applicable Government official and not in their personal capacity; in the event that such member is unable to participate in a meeting of the Steering Committee such member's principal deputy may participate in the member's stead.
(D) Each Civil Member position shall be filled by the individual then holding the office identified and such individuals shall serve in their capacity as the applicable officer from the specified organization and not in their personal capacity.
(E) The voting members identified in Section 3(d)(ii)(A) by majority vote may expand the Steering Committee to a total of eleven members; in the event that such action is taken, the additional two voting seats of the Steering Committee shall be filled by individuals nominated by the Stakeholders' Committee, subject to the approval of the Government and MCC. Such individuals may be, but are not required to be, members of the Stakeholders' Committee. Each such member serving in such additional seat shall be deemed a Civil Member. The term of such additional voting members shall be two years and any vacancy to be filled by nomination of the Stakeholders' Committee.
(F) Subject to the Governance Agreement, the Parties contemplate that the Minister of Finance and Planning shall initially fill the seat of Chair.
(G) Each Observer shall have rights to attend all meetings of the Steering Committee, participate in the discussions of the Steering Committee, and receive all information and documents provided to the Steering Committee, together with any other rights of access to records, employees or facilities as would be granted to a member of the Steering Committee under the Governance Agreement and any Governing Document.
(3) Role and Responsibilities.
(A) The Steering Committee shall oversee the Management Unit, the overall implementation of the Program, and the performance of the Designated Rights and Responsibilities.
(B) Certain actions may be taken and certain agreements, documents or instruments executed and delivered, as the case may be, by MCA-Cape Verde only upon the approval and authorization of the Steering Committee provided under applicable law or as set forth in the Governance Agreement or any Governing Document, including each MCC Disbursement Request, selection or termination of certain Providers, any component of the
(C) The Chair shall certify the approval by the Steering Committee of all Compact Reports or any other documents or reports from time to time delivered to MCC by MCA-Cape Verde (whether or not such documents or reports are required to be delivered to MCC), and that such documents or reports are true, accurate and complete.
(D) Without limiting the generality of the Designated Rights and Responsibilities that the Government may designate to MCA-Cape Verde, and subject to MCC's contractual rights of approval as set forth in Section 3(c) of this Program Annex or elsewhere in this Compact or any relevant Supplemental Agreement, the Steering Committee shall have the exclusive authority as between the Steering Committee and the Management Unit for all actions defined for the Steering Committee in the Governance Agreement or any Governing Document and which are expressly designated therein as responsibilities that cannot be delegated further.
(4) Indemnification of Non-Government Steering Committee Representatives; MCC Representative. The Government shall ensure, at the Government's sole cost and expense, that appropriate insurance is obtained and appropriate indemnifications and other protections are provided, acceptable to MCC and to the fullest extent permitted under the laws of the Republic of Cape Verde, to ensure that as Civil Members and Observers shall not be held personally liable for the actions or omissions of the Steering Committee. Pursuant to Section 5.5 and Section 5.8 of this Compact, the Government and MCA-Cape Verde shall hold harmless the MCC Representative for any liability or action arising out of the MCC Representative's role as a non-voting observer on the Steering Committee. The Government hereby waives and releases all claims related to any such liability and acknowledges that the MCC Representative has no fiduciary duty to MCA-Cape Verde. In matters arising under or relating to the Compact, the MCC Representative is not subject to the jurisdiction of the courts or any other body of Cape Verde. MCA-Cape Verde shall provide a written waiver and acknowledgement that no fiduciary duty to MCA-Cape Verde is owed by the MCC Representative.
(iii)
(1) Appointment of the Managing Director. The Managing Director of MCA-Cape Verde shall be selected by the Steering Committee and hired after an open and competitive recruitment and selection process, which appointment shall be subject to MCC approval.
(2) Appointment of Other Officers. Unless otherwise specified in the Governance Agreement or any Governing Documents, the other Officers of MCA-Cape Verde shall be selected and hired by the Managing Director after an open and competitive recruitment and selection process, which appointment shall be subject to the approval of the Steering Committee and MCC.
(3) Composition. The Government shall ensure that the Management Unit shall be composed of qualified experts from the public or private sectors, including such offices and staff as may be necessary to carry out effectively its responsibilities, each with such powers and responsibilities as set forth in the Governance Agreement, any Governing Document, and from time to time in any Supplemental Agreement between the Parties, including without limitation the following: (i) Managing Director; (ii) Administration and Finance Director; (iii) Senior Economist; (iv) Monitoring and Evaluation Analyst; (v) a Watershed Management and Agricultural Support Manager, an Infrastructure Manager, and a Private Sector Development Manager (each a, “Project Manager”); (vi) an Environmental and Social Assessment Manager; and (vii) a Procurement Manager (the persons holding the positions in sub-clauses (i) through (vii) and such other offices as may be created and designated in accordance with the Governance Agreement and any other Supplemental Agreement between the Parties, shall be collectively referred to as “Officers”). In addition, MCA-Cape Verde will have a procurement specialist, a communications specialist, and an administrative and financial assistant. The Parties contemplate that for purposes of the initial period of operations, and in no event longer than six months, MCA-Cape Verde may appoint an acting Managing Director, subject to the approval of MCC;
(4) Role and Responsibilities.
(A) The Management Unit shall assist the Steering Committee in overseeing the implementation of the Program and shall have principal responsibility (subject to the direction and oversight of the Steering Committee and subject to MCC's contractual rights of approval as set forth in Section 3(c) of this Program Annex or elsewhere in this Compact or any relevant Supplemental Agreement) for the overall management of the implementation of the Program.
(B) Without limiting the foregoing general responsibilities or the generality of Designated Rights and Responsibilities that the Government may designate MCA-Cape Verde, the Management Unit shall develop the components of the Implementation Plan, oversee the implementation of the Projects, manage and coordinate monitoring and evaluation, maintain internal accounting records, conduct and oversee certain procurements, and such other responsibilities as set out in the Governance Agreement or delegated to the Management Unit by the Steering Committee from time to time.
(C) Appropriate Officers shall have the authority to contract on behalf of MCA-Cape Verde under any procurement under the Program.
(D) The Management Unit shall have the obligation and right to approve certain actions and documents or agreements, including certain Re-Disbursements, MCC Disbursement Requests, Compact Reports, certain human resources decisions, and certain procurement actions, as provided in the Governance Agreement.
(5) Additional Resources. The Management Unit, on behalf of MCA-Cape Verde, shall have the authority to engage qualified persons or entities to serve as outside project managers (each, an “Outside Project Manager”) in the event that it is advisable to do so for the proper and efficient day-to-day management of a Project;
(e)
(i)
(1) The “Regional Stakeholders' Committees” shall mean all then existing regional stakeholders' committees, comprised of non-governmental organizations, municipalities, farmers associations, and enterprises in the private sector. As of the date hereof, there are three Regional Stakeholders' Committees; however, it is contemplated that there may be additional Regional Stakeholders' Committees formed during the Compact Term. The representative referred to in clause (B) above shall be nominated by a vote of all then existing Regional Stakeholders' Committees.
(2) Each member position identified in Sections 3(e)(i) of this Program Annex shall be filled by the individual then holding the office identified and such individuals shall serve in their capacity as the applicable Government official and not in their personal capacity; in the event that such member is unable to participate in a meeting of the Stakeholders' Committee such member's principal deputy may participate in the member's stead.
(3) In the event of a vacancy in positions identified in Sections 3(e)(i) (C)-(E) such vacancy to be filled by nomination of the organization or group for whom such seat is designated.
(ii)
(iii)
(iv)
(v)
(f)
(g)
(h)
(i)
(j) The Procurement Review Commission shall be chaired by a representative of the General Inspector of Finance nominated by the Head of the General Inspector of Finance, subject to MCC approval, and composed of representatives of the Ministries of Environment and Agriculture, Ministry of Infrastructure and Transport, and the Direcção Geral do Patrimo
(a)
(i)
(ii)
(iii)
(iv)
(b)
(c)
(d)
(i) A single, completely separate U.S. Dollar interest-bearing account (the “Special Account”) at the Bank of Cape Verde (“National Bank”) to receive MCC Disbursements;
(ii) If necessary, an interest-bearing local currency of Cape Verde account (the “Local Account”) at the National Bank to which the Fiscal Agent may authorize transfer from any U.S. Dollar Permitted Account for the purpose of making Re-Disbursements payable in local currency; and
(iii) Such other interest-bearing accounts to receive MCC Disbursements in such banks as the Parties mutually agree upon in writing.
No other funds shall be commingled in a Permitted Account other than MCC Funding and Accrued Interest thereon. All MCC Funding held in an interest-bearing Permitted Account shall earn interest at a rate of no less than such amount as the Parties may agree in the respective Bank Agreement or otherwise. MCC shall have the right, among other things, to view any Permitted Account statements and activity directly on-line, where feasible,
(e)
The Program will use certain Government systems in administration and implementation. To enhance those systems, the following Projects will be undertaken as part of the Program and funded with MCC Funding:
(a) To enhance transparency and efficiency of Government systems, MCC Funding will support an expansion of systems upgrade in the context of a procurement policy reform, including the establishment and implementation of unified procurement legislation and regulations. Through an electronic procurement system, suppliers, government officials, and the public will have access to the rules governing procurement, insight into the procurement transactions themselves and a transparent record of competition and results of solicitations. As part of the Program administration functions, this institutional capacity building activity will seek to expand the e-procurement system throughout the Government. First, it will establish and implement a public e-procurement system for use in procurements undertaken in support of this Compact. Second, it will expand the use of that e-procurement system to all other units of the Government. Finally, the adoption and implementation of unified procurement legislation and regulations shall be a condition to certain MCC Disbursements and Re-Disbursements related to this activity as shall be set forth in the Disbursement Agreement.
(b) To develop a Program results reporting and program management system in connection with the M&E Plan, MCC Funding will be used to fund the augmentation of the existing government financial management system (“SIGOF”). This M&E activity will develop improvements to SIGOF to capture Program performance and results data, along with financial information, from Program implementing government ministries. This electronic reporting mechanism will facilitate program management, provision of fiscal agent services, and the generation of progress reports required under the M&E Plan. This upgrade will be used for the Program and indirectly may build capacity and be a benefit to the government systems outside the Program.
Transparency and accountability to MCC and to the beneficiaries are important aspects of the Program and Projects. Without limiting the generality of the foregoing, in an effort to achieve the goals of transparency and accountability, the Government shall ensure that MCA-Cape Verde:
(a) Establishes an e-mail suggestion box as well as a means for other written comments that interested persons may use to communicate ideas, suggestions or feedback to MCA-Cape Verde.
(b) Considers as a factor in its decision-making the recommendations of the Stakeholders' Committee, particularly in MCA-Cape Verde's deliberations over pending key Management Unit decisions and key Steering Committee decisions as shall be specified in the Governance Agreement and relevant Governing Document.
(c) Develops and maintains the MCA-Cape Verde Website in a timely, accurate and appropriately comprehensive manner, such MCA-Cape Verde Website to include postings of information and documents in English and Portuguese.
(d) Posts on the MCA-Cape Verde Website and otherwise makes publicly available the following documents or information, including by posting on the MCA-Cape Verde Website, with links to and from the official website of the Government (
(i) All minutes of the meetings of the Stakeholders' Committee and the meetings of the Steering Committee;
(ii) The M&E Plan, as amended from time to time, along with periodic reports on Program performance;
(iii) Such financial information as may be required by this Compact or as may otherwise be agreed from time to time by the Parties;
(iv) All Compact Reports;
(v) All audit reports by an Auditor and any periodic reports or evaluations by a Reviewer;
(vi) A copy of the Disbursement Agreement, as amended from time to time;
(vii) A copy of any documents related to the formation, organization and governance of MCA-Cape Verde including any Governing Documents, together with any amendments thereto and the Governance Agreement and any amendments thereto;
(viii) A copy of the Procurement Agreement (including Procurement Guidelines), as amended from time to time and the any procurement policies or procedures and standard documents;
(ix) A copy of each Procurement Plan and all bid requests and awarded contracts.
This Schedule 1 describes and summarizes the key elements of the watershed management and agriculture support project (“Watershed Project”) that the Parties intend to implement in furtherance of the Watershed Management and Agricultural Support Objective. Additional details regarding the implementation of the Watershed Project will be included in the Implementation Plan and in relevant Supplemental Agreements.
The islands of Cape Verde are extremely arid in climate, widely dispersed and characterized by geographic isolation, fragile ecosystems and a scarcity of natural resources. The lack of water is the dominant factor limiting productivity and economic growth in agriculture and the rural economy. It is currently estimated that more than 80 percent of rainfall is “lost” to evaporation and surface water runoff into the Atlantic Ocean. Agricultural producers in Cape Verde face numerous additional obstacles to increasing their agricultural productivity: limited arable land; limited availability of inputs (fertilizer and credit); poor physical infrastructure (roads, ports and inter-island transportation); low quality of production (no standards and high post harvest-losses); limited information on markets and prices; limited private
The Watershed Project reflects the Government's commitment to poverty reduction and improved natural resource management as articulated in the Grand Options Plan and the GPRSP. The GPRSP identified the enhancement of the following as key to rural economic growth and the development of the agricultural sector: Water and agrarian resources, agricultural products, and technical and financial capacities of farmers and entrepreneurs. Further, the MCA consultative process identified increasing agricultural productivity as a high priority. The Project Activities in the Watershed Project complement the country's strategic goal of developing the tourism sector, which, in turn, is expected to create demand for increased production of domestic horticulture products. It is expected that the Watershed Project will also lead to an increase in food security. The Watershed Project is consistent with the approaches set out in GPRSP for achieving the goal of sustainable rural economic growth,
The Watershed Project is designed to increase agricultural productivity in three rural intervention watershed areas: Ribeira Paul on the island on Santo Antão; Mosteiros on the island of Fogo; and Ribeira Fajã on the island of São Nicolau (the “Watershed Areas”). The Watershed Project includes the following three Project Activities:
•
•
•
The M&E Pan (described in
Estimated amounts of MCC Funding for each Project Activity for this Watershed Project are identified in
The following summarizes the Watershed Project Activities:
MCC Funding will be used to increase agricultural productivity by supporting the conversion of farm land from traditional dry land production to higher-value horticultural production, by improving natural resource management, including sustainable use of soil and water resources, and by building capacity to support the development and implementation of community-based watershed management plans. The Water Management Activity is designed to slow surface runoff through the construction of walls, terrace, dikes and check dams and the capture of water in reservoirs. This will increase the re-charge of water into underground aquifers. The Water Management Activity will improve on-farm water use by promoting the adoption of drip irrigation technology. With an improved supply of water for a longer period of time, farmers will be able to switch from producing low-value grains and beans to higher-value horticultural products, thereby increasing their incomes. Specifically, MCC Funding will be used for the following activities in the Watershed Areas:
(i) Technical assistance to national, municipal and local governments to develop community-based watershed management plans, including:
(1) An overall water resource inventory in the Watershed Areas, including a measurement of the water table levels;
(2) The establishment of a water user fee system and a system for the collection of such fees and the building of the capacity of municipalities to establish such a fee and collection system;
(3) A public awareness campaign that engages and informs local communities on the benefits of sustainable management planning; and
(4) The design, implementation and management of water infrastructure in the Watershed Areas.
(ii) Construction of physical infrastructure (reservoirs, terraces, dikes, contour walls, check dams, vegetative barriers and other structures) to capture surface water and replenish water tables, including:
(1) Acquisition of cement and other building materials and equipment to construct reservoirs and dikes;
(2) Cultivation and distribution of plantings for vegetative barriers for use on public lands; and
(3) Construction of cement “mirrors” on selected surfaces to capture rainwater and channel it to culverts to feed reservoirs.
The Ministry of Environment, Agriculture and Fisheries will work with local communities on the design and implementation of these activities with a focus on sustainable, cost-effective, environmentally appropriate water management, including management of surface water and water table replenishment. In the first year of the Water Management Activity, the Parties shall review and agree upon the appropriate roles of local communities, local municipalities, local associations or other entities for the responsibility of proper management, maintenance, and sustainability of the watersheds in each of the Watershed Areas, guided by the principle of sustainability. Water users will be responsible for the maintenance
(iii) Provision of water to the farm gate, including the construction of a series of dikes, culverts and tubes of diminishing sizes from the reservoirs to the individual plots of land. Farmers will be responsible for obtaining and installing irrigation equipment on their own farms.
Training of farmers in the technical and managerial aspects of new technology will be critical to the adoption of drip irrigation and is the focus of the Agribusiness Development Activity. Building capacity of the Ministry of the Environment, Agriculture, and Fisheries is key to this training effort. In addition, this Project Activity will increase productive capacity and marketing of agricultural products by farmers and small agribusinesses. With improved access to water, farmers will diversify production towards higher-valued horticultural crops. Due to a variety of factors (including poor infrastructure, low quality standards, and poor or non-existing packaging), existing marketing systems are weak.
MCC Funding will be used for the following:
(i) (1) Creation of demonstration farm plots to illustrate the use and management of drip irrigation to local farmers and (2) equipping of existing extension training and outreach centers operated by local representatives of the Ministry of Environment, Agriculture and Fisheries for farmers in the Watershed Areas;
(ii) Training of, and outreach to, farmers by extension workers through the extension centers referred to in the previous paragraph, including courses in (1) Drip irrigation and environmentally sustainable agricultural practices (
(iii) Training of Ministry of Environment, Agriculture and Fisheries employees and extension workers to increase technical capacity in areas such as water management, fruit development, rural engineering, agricultural economics, project planning and management, and animal genetics and nutrition;
(iv) Establishment of a research center in Santo Antão to support the institutional research capacity of the Ministry of Environment, Agriculture and Fisheries (in particular the National Institute of Agriculture Research and Development) with a focus on applied research in water management, new varieties of fruits and vegetables and integrated pest management;
(v) Development and distribution by the Ministry of the Environment, Agriculture and Fisheries of seedlings and saplings of new and improved varieties of fruit and vegetables;
(vi) Establishment and operation of quality control centers for fruit and vegetable production to develop and enforce quality standards and separate products by quality;
(vii) Construction and operation of low-technology packing sheds in each of the Watershed Areas to improve the quality and marketing conditions of horticultural products and to allow farmers collectively to market their produce. These centers are to be managed by the local delegation of the Ministry of Environment, Agriculture and Fisheries; however, management plans will be developed to allow the transfer of operations and management to the private sector during the Compact Term;
(viii) Establishment and operation of an inspection and certification center on Santo Antão and the provision of technical assistance to the Ministry of the Environment, Agriculture, and Fisheries in developing and applying phyto-sanitary standards (including a plant inspection and certification system); and
(ix) Technical assistance for the development of sustainability plans by the Ministry of Environment, Agriculture and Fisheries, which plans will also identify ways to increase private sector participation in the delivery of services and in the entire agricultural value chain.
Few, if any, of the financial institutions in the Watershed Areas possess the resources to meet the anticipated demands for financing drip irrigation, working capital and agribusiness development. Through the Credit Activity, credit will be made available to enable farmers to finance drip irrigation, promote the conversion to horticultural products on newly irrigated land, and support post-harvest agribusinesses in the Watershed Areas.
MCC funding will support the following:
(i) Loans to farmers through local banks and micro-finance institutions (MFIs) for approximately 60% of the cost of new drip irrigation equipment and the cost of agricultural inputs (
These loans to farmers will be funded by zero-interest loans from MCA-Cape Verde to the local financial institutions. Loans to financial institutions can be converted to grants at the end of the Compact Term. By providing USD $350,000 in loans-to-grants, this sub-activity is expected to provide over USD $700,000 in financing for drip irrigation. Loans to financial institutions converted to grants at the end of the Compact Term will be used in turn by such financial institutions to expand and maintain the supply of credit in the Watershed Areas.
(ii) Loans to post-harvest and other agribusinesses in the Watershed Areas through local banks and MFIs.
These loans to agribusinesses will be funded by zero-interest loans from MCA-Cape Verde to the local financial institutions. Loans to financial institutions can be converted to grants at the end of the Compact Term. By providing USD $100,000 in loans-to-grants, this sub-activity is expected to provide over USD $200,000 in financing for post-harvest agriculture-related business and other small and medium-sized rural businesses in the Watershed Areas.
(iii) Technical assistance to micro-finance and local financial institutions participating in the loan programs described above to (1) manage the origination, monitoring and collection of these loans, (2) inform farmers and others of the existence of these loan programs, and (3) strengthen credit-analysis techniques.
Loans to financial institutions provided under this Credit Activity will convert to grants (loans-to-grants) at the end of the Compact Term if the financial institutions are able to demonstrate acceptable levels of diligence in making loans and success in collecting them. Financial institutions that will participate in the Credit Activity will be chosen on a competitive basis. Banks and micro-finance institutions will be selected by MCA-Cape Verde based on their geographic proximity to the Watershed Areas, the financial terms that they propose for each type of loan, their financial viability, and their ability to manage these loan portfolios. Funds will be disbursed to financial institutions in tranches in amounts sufficient to meet only their near-term loan demand.
The principal intended beneficiaries of the Watershed Project will be individual farmers and farm households in the Watershed Areas, approximately one-third of which are headed by women. Other beneficiaries will include actors along the supply chain, including owners and operators of small- and medium-sized farms, agribusiness, providers and users of transportation and distribution services, and farmers associations and cooperatives in the Watershed Areas. Farmers in the Watershed Areas will benefit from increased access to water—both in volume and for more months of the year—as well as through training and extension opportunities and the increased availability of credit. Other intended beneficiaries include small agribusinesses and cooperatives, which are owned and operated mainly by women. Outside the Watershed Areas, additional beneficiaries will be government and private sector participants in the capacity building activities (training and technical assistance).
(a)
A number of donors are involved in similar assistance programs (watershed management, drip irrigation, credit) in other areas of Cape Verde, including The Netherlands, Japan, Germany, the European Union, the World Bank and UN agencies.
For example, the Ministry of Environment, Agriculture and Fisheries receives approximately USD $60 million a year in assistance from a variety of donors (most European countries, Japan and specialized UN agencies) to support a range of projects throughout Cape Verde, including water and forest resource management, fisheries, crop improvements for bananas and coffee, food safety and inspection, and capacity building. Donor coordination within the Ministry of Environment, Agriculture and Fisheries is the responsibility of the Director General, who participated in the development and design of the Watershed Project from the beginning. His participation has ensured that the Watershed Project is consistent with the efforts undertaken by other donors.
(b)
(c)
(d)
(a)
(b)
(c)
The Parties have identified the following policy, legal and regulatory reforms and actions that the Government shall pursue in support, and to reach the full benefits, of the
(a) Establishment of a water fee system. This includes: (i) A fee paid by users that (A) covers operating, delivery, and maintenance costs and (B) reflects the scarcity of water resources in the country and (ii) a formula for an annual adjustment in the fee rate based on consistent measurement of changes in the water table, and otherwise acceptable to MCC. This water fee system will be implemented according to a schedule agreed upon by the Parties for each Watershed Area.
(b) Build municipal capacity and a regulatory system, including any necessary or advisable policy reforms or procedural changes, to implement the water fee system and collect the fees described in paragraph (a) above.
(c) Establishment of a fee for services system for agribusiness and development of a sustainability plan. The Ministry of Environment, Agriculture and Fisheries shall implement a “fee for services” policy, charging fees for training, quality inspections, and certifications and develop a sustainability plan (including a management plan for the transfer of ownership and management to the private sector of the packing sheds).
(d) Elimination of key regulatory and legal obstacles to movement of inspected and certified horticultural products, including taking all necessary regulatory or other actions to lift the embargo on exports of horticultural products from Santo Antão.
Under the Watershed Project, it is anticipated that there will be public solicitations of proposals for: (i) Technical assistance for the development of watershed management plans; and (ii) selection of the financial institutions to act as intermediaries in supplying credit. MCA-Cape Verde will develop, subject to MCC approval, a process for consideration of both solicited and unsolicited proposals. With respect to solicited proposals, the evaluation process will include, consistent as appropriate with the Procurement Guidelines, the issuance of a published request for proposals with specific identified evaluation criteria and peer reviewers.
This Schedule 2 generally describes and summarizes the key elements of an infrastructure project (the “Infrastructure Project”) that the Parties intend to implement in furtherance of the Infrastructure Objective. Additional details regarding the implementation of the Infrastructure Project will be included in the Implementation Plan and in relevant Supplemental Agreements.
In the context of the Grand Options planning exercise, the Government formulated in 2003 a Priority Strategic Programme for Infrastructure and Land Use Management (“Strategic Programme”). The underlying principle of the Strategic Programme is to divide responsibilities clearly between the public and private sectors in the areas of transport, water and basic sanitation, telecommunications, land management and energy. In line with these principles, the Government supports the private provision of services and public ownership and investment in public goods infrastructure. For example, road transport and maritime services are now, with few exceptions, provided by the private sector and the Government is committed to increase the presence of the private sector in the port and aviation sectors.
(a)
Being an archipelago, Cape Verde has port facilities on each of the country's islands, including two major ports located adjacent to Cape Verde's two largest cities: Porto de Praia (the “Port”) on the island of Santiago and Porto Grande on the island of São Vicente. These two ports handle most international cargo imported to or exported from Cape Verde, in addition to supporting domestic cargo flows to Cape Verde's smaller and less populated islands. The Port is the country's busiest port, accounting for approximately 50% of the total volume of port traffic. An assessment of Port operations has identified a number of facilities-design problems that constrain and complicate cargo handling activities. The lack of backup space and the inability to expand landward impedes the development of container operations. The layout of the terminal and the absence of an adequate breakwater greatly reduce the operational effectiveness of the quays, particularly during the Kalymna (sea swells) months. These built-in shortcomings are exacerbated by the rapid growth in cargo traffic. The result is that the Port suffers from inefficient cargo handling operations, severe terminal congestion, and inadequate services. These inadequacies serve as a constraint to economic development and the efficient movement of people and goods throughout Cape Verde.
(b)
Cape Verde's road network consists of 1,350 km spread among the nine inhabited islands. While progress has been made in expanding road network coverage, lack of investment has left the basic network incomplete and lack of proper maintenance has lead to deterioration of sections of the network. Based on the Strategic Programme and a Consultation Meeting with Development Partners in Praia April 2003, several donors, notably the World Bank, Portugal and the European Union (“EU”), are financing selected priority investments, with the World Bank playing a leading role in supporting institutional reforms in road sector management and maintenance (the “World Bank Road Sector Support Project”). Within this context, the Government identified eleven high priority road improvements on five islands aimed at: (i) Filling a gap in an incomplete island network through road upgrading on an existing earth track or the construction of small bridges; and (ii) rehabilitating key links that are in a deteriorated state. The World Bank Road Sector Support Project will partially fund these projects. The World Bank's sector management efforts will complement these improvements by addressing institutional reform and capacity building to ensure sustainable maintenance and delivery of road transport services.
The Government has identified the re-design and development of the Port and the upgrading of roads and bridges as critical steps in Cape Verde's development that is fully consistent with the infrastructure development pillar of the GPRSP.
The Infrastructure Project is designed to increase integration of the internal market and to reduce transportation costs. The Infrastructure Project includes the following two Project Activities:
•
•
The M&E Plan (described in
Estimated amounts of MCC Funding for each Project Activity within the Infrastructure Project are identified in
The following summarizes the Infrastructure Project Activities:
The Port will require a number of major long-term expansion investments to meet Cape Verde's long-term development needs. In order to accommodate the growing traffic demand while long-term expansion is being completed, changes and upgrades will be required in the existing Port facilities. The implementation requirements for the Port Activity will require appropriate compliance with applicable international port security standards.
To address both short-term and long-term upgrade needs at the Port, MCC Funding will be used to fund the following:
(i) Short-term upgrade of Port operations to remove non-essential container storage, packing and unpacking, and customs impoundment from the active port, improve quayside facilities to increase space available for active cargo operations and initiate certain preparatory activities related to the long-term expansion plan, including:
(1) Conducting the following studies and assessments as pre-requisites and conditions precedent to both the short-term upgrade activities described in this Section 2(a)(i) (other than this paragraph (1)) and long-term expansion activities of the Port described in Section 2(a)(ii): (A) cargo and passenger market studies, (B) geotechnical studies, (C) feasibility studies, (D) environmental impact assessment (“EIA”), and (E) engineering and design of the access road described in Section 2(a)(i)(4), the breakwater described in Section 2(a)(i)(5), and long-term expansion contemplated in Section 2(a)(ii); provided, however, these studies and assessments shall not be conditions precedent to the off terminal transport services center described in Section 2(a)(i)(2) and the quayside improvements described in Section 2(a)(i)(3), unless otherwise determined by the relevant authorities that such studies or assessments are pre-requisites;
(2) Development of an off-terminal transport services center on the plateau above the Port to include port services and logistics, container unpacking and warehouses/storage area, customs impoundment area, and associated facilities;
(3) Quayside improvements, including removal of the quayside warehouse and container activities and relocation to the new off-terminal transport services center, repaving Berth 2 backup area, and expansion of the cabotage terminal;
(4) Construction of second access route in and out of the operating Port through extension of a new access road from the Port to the industrial park to be located on the plateau above the Port;
(5) Construction and creation of an effective detached breakwater to reduce or eliminate the effects of the Kalymna (sea swells) to enable year-round operations, while minimizing deposition of sediments in the bay; and
(6) Development and implementation of an environmental management and monitoring plan (“EMMP”) for the Port.
(ii) Long-term Port expansion through the creation of new usable land areas and the development of specialized, high-efficiency terminals, including:
(1) Extension of Quay 1 to an operationally effective length (450 m) to handle multiple vessels concurrently; and
(2) Creation of space (over four hectares) for construction of a new two-berth specialized terminal container storage area through land reclamation behind Quay 1.
The Roads and Bridges Activity will focus on improving transportation networks on two islands, Santiago and Santo Antão. These improvements will link agricultural and fishing communities to the main traffic network and improve all-weather traffic access.
To enable basic access and improved mobility on these two islands, MCC Funding will support the following:
(i) Road rehabilitation on Santiago Island, including:
(1) Rehabilitation of Org'os-Pedra Badejo (10 km) from cobblestone to asphalt standard;
(2) Rehabilitation of Cruz Grand Calhetona (14 km) from cobblestone to paved asphalt standard;
(3) Rehabilitation and reconstruction of Volta Monte-Ribeira Prata (15 km) to improved cobblestone standard;
(4) Rehabilitation and reconstruction of Assomada-Rincão (16 km) to a mixed cobblestone/asphalt standard—asphalt standard for the first 7 km and cobblestone standard for the remaining 9 km; and
(5) Rehabilitation and reconstruction of Fonte Lima—João Bernardo (9 km) to improved cobblestone standard.
(ii) Bridge construction and related works on Santo Antão Island, including:
(1) Construction of two small bridges at Ribeira Grande (200 m) and Ribeira Torre (60 m) and construction of protection works along the river banks; and
(2) Construction of bridges at Vila das Pombas and Liaison Vila das Pombas—Eito replacing the present access within the riverbed to the adjacent side for a length of 1 km and construction of a small bridge to assure access into the town of Paul.
(a)
(b)
The intended beneficiaries of the Infrastructure Project will be identified more precisely, including where possible disaggregated by gender, age, location and income level, during the initial phases of the implementation of the Project.
(a)
(i)
(ii)
(1) MCC Funding will be a parallel source of funding to the existing World Bank Road Sector Support Project. MCC and the World Bank have coordinated on issues such as policy reforms and institutional sustainability measures. The MCC—World Bank coordination will continue during the implementation of the Roads and Bridges Activity since the Implementing Entity for this Project Activity will be the World Bank Project Implementation Unit. Other road projects supported by donors include: (i) EU co-financing with Luxembourg and Cape Verde of the construction of the Janela-Porto Novo road and (ii) Portuguese funding in the amount of Euros 30 million for a number of road projects on several islands. Donor coordination in the road sector will be assured by the Ministry of Infrastructure and Transport, through a Program Coordination Office (“PCO”), attached directly to the Minister's Office. The responsibility of the PCO will be to ensure overall management of this Project Activity and coordination of other related donor support for the overall transport sector program. Operational costs for the PCO will be supported by the World Bank.
(2) With respect to the bridge-related sub-activities in Santo Antão, an EU-funded project is constructing a road from Porto Novo along the west coast to Paul, and the construction of this bridge would guarantee continuity along the coast to Ribeira Grande.
(b)
(a)
(i) Improvements to the cargo handling operations and the physical layout of the Port will allow the Port to handle its current workload and projected traffic in a manner that will likely lead to improved financial performance. The introduction of private sector participation in operations is a critical element to the sustainability of the Port Activity. The Government has agreed to pursue privatization and commence the process to bring in private sector operators. MCC will monitor these reforms, which are being supported by the World Bank. Successful completion of this privatization will be a condition precedent to certain MCC Disbursements related to the Port Activity.
(ii) The implementation of an EMMP, to be undertaken pursuant to Section 2(a)(i)(6), is an important element to the environmental sustainability of the Port Activity. The Port has developed an Emergency Management Plan and Responses for Health and Safety (2004) (“Emergency Management Plan”), but an EMMP, which can also be critical to an Emergency Management Plan, is not yet in place. Successful implementation of the EMMP will be a condition precedent to the long-term expansion activities contemplated in Section 2(a)(ii).
(b)
(i) Maintainance. Keeping the Road Agency and Road Maintenance Fund on a solid footing will be critical to the sustainability of the Roads and Bridges Activity. MCC will monitor these reforms, supported by the World Bank. It is intended that the Government will undertake with the World Bank an early assessment of the efficiency of the institutional arrangements conducted pursuant to the World Bank Roads Sector Support Program. The satisfactory completion of this capacity building through the World Bank program and establishment and adequate funding of the Road Maintenance Fund will be conditions precedent to certain MCC Disbursements.
(ii) Environment and Social Sustainability. To ensure environmental and social sustainability of the Roads and Bridges Activity, the implementation of this Project Activity must be carried out in compliance with the road-specific Environmental Management Plans (“EMP”). In
The Parties have identified the following policy, legal and regulatory reforms and actions that the Government shall pursue in support, and to reach the full benefits, of the Infrastructure Development Project, the satisfactory implementation of which will be conditions precedent to certain MCC Disbursements as provided in the Disbursement Agreement:
(a)
(i) Reorganization of the current state entity that administers and operates the Port (“ENAPOR”) to create a port authority (including establishment of a legal entity, a public owned corporation) having responsibility for ownership and management of port infrastructure, provision of services in areas of port infrastructure, strategic and operational planning for the harbor, security maintenance and ports environmental protection and provision through concession, licenses, contracts, or leasing of participation of private sector operators in the operations of the ports;
(ii) Creation of a regulatory authority which will be responsible for the technical and economic regulation of the ports and maritime sectors and for establishment and supervision of standards of service in terms of price, quality, security, and competition and adoption of corresponding legislation to establish this agency;
(iii) Completion of the ongoing customs modernization program which includes simplification of the tax and fee structure, improved access control at customs facilities, information technology improvements, and improved organizational structure;
(iv) Further development of the Emergency Management Plan to include the establishment and implementation of an EMMP for the operation of the Port and full implementation of health and safety measures; and
(v) Satisfactory compliance by the Government with recommended environmental and social impact mitigation measures specified in the EIA conducted pursuant to Section 2(a)(i)(1).
(b)
(i) A road maintenance fund (“Road Maintenance Fund”) is created and functions in accordance with the Transport Sector Letter (
(ii) The Road Maintenance Fund establishes and manages annual road maintenance budgets, in accordance with the Transport Sector Letter;
(iii) Adoption of legislation to establish user fees (
(iv) The Government fully funds the Road Maintenance Fund through the collection of user fees (as described above) with a first year minimum annual revenue stream of CVE300,000,000, adjusted thereafter to meet the maintenance needs of the nation's road network;
(v) The Road Agency completes the National Road Plan;
(vi) The Road Agency implements annual road network maintenance plans within the planned execution period and within budget; and
(vii) Pilot performance-based road maintenance and management contracts are implemented by the Government.
This Schedule 3 generally describes and summarizes the key elements of a private sector development project (the “Private Sector Development Project”) that the Parties intend to implement in furtherance of the Private Sector Development Objective. Additional details regarding the implementation of the Private Sector Development Project will be included in the Implementation Plan and in the relevant Supplemental Agreements.
Cape Verde's strong record of democratic governance, stability, transparency, and lack of corruption has allowed the country to maintain large inflows of foreign assistance and remittances from e
Cape Verde's economic development strategy is focused on transition from an aid-dependency model of development to one of self-sustaining private-sector led growth. Cape Verde, through the ETS, has identified as potential engines of economic growth: tourism, financial services, transportation services, and fisheries (referred to herein as the “priority sectors”). The successful implementation of the ETS will require interventions to strengthen human capital, promote financial sector reform and increase access to financial services, support entrepreneurship development, encourage small and medium-sized enterprise linkages, and facilitate infrastructure development. The GPRSP complements the goals of the ETS and articulates, among other priorities, a focus on promoting the competitiveness of industry to facilitate growth and job creation, developing human capital and developing infrastructure (including promoting land use planning and protecting the environment). The Project Activities in this Private Sector Development Project are consistent with the overall orientation for Cape Verde's economic development, as articulated in the ETS and the GPRSP.
The Private Sector Development Project Activities will support Cape Verde's long-term economic transformation strategy of becoming less dependent on remittances and donor aid by developing a competitive, private-sector driven economy through a focus on the priority sectors. The Private Sector Development Project includes the following two Project Activities:
• Partnership to Mobilize Investment: To remove constraints to investment and stimulate the priority sectors of the economy by reducing early-stage project development risks that dissuade both domestic and international private investors; and
• Financial Sector Reform: To increase access to financial services and improve financial intermediation.
The M&E Plan (described in
Estimated amounts of MCC Funding for each Project Activity for the Private Sector Development Project are identified in
The following summarizes the Private Sector Development Project Activities:
The overall goal of this Project Activity is to increase private sector investment in the priority sectors as well as other sectors. In order to achieve this goal, the Government wishes to identify (i) those segments of the priority sectors where the country has a competitive advantage, (ii) the existing constraints (such as human resources, infrastructure, entrepreneurship and investment climate policy) to private sector investment in such segments, and (iii) the public or private interventions that must be undertaken in order to remove such constraints. In addition, the identified interventions may have to be prioritized given the limited government, donor and private sector resources available to address these issues.
Under this Project Activity, MCA-Cape Verde will collaborate with the International Finance Corporation (“IFC”) Private Enterprise Partnership for Africa (“PEP”) program, the Government's project implementation unit (“PIU”) for the World Bank's Growth and Competitiveness Project, and the Ministry for Economy, Growth and Competitiveness (“MEGC”) to identify those segments of the priority sectors where the country has a competitive advantage and the constraints to private investment in those segments and to identify, prioritize, design and implement the required interventions.
MCC Funding will support the activities set forth in paragraph (iv) below, provided, however, the four phases shall be carried out sequentially and the satisfactory completion of Phases I-III will be a condition precedent to Phase IV:
(i)
(ii)
(iii)
(1) Be consistent with the procedures outlined above for Phases I-III;
(2) Be consistent with the Environmental Guidelines;
(3) Be consistent with the limitations on the use and treatment of MCC Funding set forth in Section 2.3 of this Compact;
(4) Represent a transformational intervention;
(5) Meet an ERR of no less than ten percent (10%) (calculated based on a methodology approved by MCC);
(6) Have clearly identified target outcomes and indicators;
(7) Support the Objectives or Project Outcomes as described in
(8) Have detailed budgets and work plans consistent with requirements for the standards for the Detailed Financial Plan and Work Plan components of the Implementation Plan.
Any Selected Activity shall be presented to MCC for its approval prior to the implementation of any such Selected Activity in Phase IV, no less than 20 days prior to the intended commencement of implementation of the Selected Activity. MCA-Cape Verde shall deliver to MCC any documentation related to the Selected Activity that MCC may request.
(iv)
The evaluation process for any person or entity that will implement a Selected Activity under this Phase IV (whether or not such Selected Activity was identified and designed by the IFC) will include, consistent as appropriate with the Procurement Guidelines, the issuance of a published request for proposals with specific identified evaluation criteria and peer reviewers.
The Financial Sector Reform Activity consists of two sub-activities with the following objectives: (i) to increase access to credit by supporting the development of micro-finance institutions (“MFIs”) and (ii) to increase financial intermediation by expanding access to the primary market for government securities.
To achieve these objectives, MCC Funding will support:
(i)
The National Bank has drafted new enabling legislation to grant expanded deposit-taking powers to MFIs and to authorize the National Bank to begin to regulate MFIs and their activities as deposit-takers. It is expected that this legislation will be enacted in 2005 after allowing the affected institutions to comment on the proposed changes. To encourage financial sector development, this sub-activity will focus on transitioning MFIs to being both deposit-takers and regulated entities and enabling them to become more significant providers of credit, savings, and other financial services to both rural residents and the urban poor. Specifically, MCC Funding will support:
(1) Technical assistance to assist MFIs to take advantage of expanded deposit-taking powers and to ease the transition to a new regulatory environment (e.g., defining governance structure and institutional policies, design and pricing of liability products, asset-liability management and tracking, marketing, and regulatory reporting requirements, among others); and
(2) Provision of software to support the record-keeping associated with those deposit-taking powers.
(ii)
The Government currently limits access to its auction of domestic debt to banks, insurance companies, and a small number of government agencies such as EMPS (the pension system) and ASA (the aviation authority). These participants have extraordinary influence over the interest rate on these securities and banks have little incentive to redistribute them to other investors. This sub-activity will support financial sector competitiveness by enabling domestic, non-bank investors, including individuals and corporations, to access the primary market for government securities. It is expected that this activity will assist in creating a more transparent market. Specifically, MCC Funding will support:
(1) Technical assistance to the Ministry of Finance to assist with the development of new auction procedures and related matters such as the design of a registry of ownership and the role of financial intermediaries; and
(2) Provision of software to support the primary government securities market.
(a)
(b)
(a)
(i)
(1) The African Capacity Building Foundation awarded a grant to the Government to strengthen economic policy-making capabilities for public sector officials by supporting the establishment of the STPC. It is anticipated over time that the STPC will, among other things, provide greater leadership for the Partnership to Mobilize Investment Activity. As noted above, MCC will also leverage the expertise and funding of the IFC's PEP program as well as possible funding by other multilateral and bilateral donors. Through the Growth and Competitiveness Project, funding and other credits from the World Bank/IDA are available to the Government to support activities that complement the focus of the Partnership to Mobilize Investment Activity. The IFC PEP team will be working in partnership with the PIU and the Management Committee in order to prevent duplication in implementation.
(2) The U.S. Trade and Development Agency has provided funding for the Government to explore investment opportunities for both maritime and air-cargo transshipment. MCC will ensure that this analysis is provided to the IFC for its work during Phase I. Several donors are involved in education and human resource development in Cape Verde. When considering potential interventions in this sector, MCA-Cape Verde will ensure that other donors are consulted to complement and prevent duplication of efforts. The World Bank/IDA has made funding available through the Growth and Competitiveness Project as well as other credits to the Government to support activities that complement the focus of the Partnership to Mobilize Investment Activity. When considering potential interventions in priority sectors, MCA-Cape Verde will
(ii)
(b)
(i)
(ii)
(c)
The Partnership to Mobilize Investment Activity will develop significant governmental capacity to prioritize and implement business climate interventions after the Compact Term without donor technical assistance. This will occur through the transfer of considerable knowledge and expertise to the local staff of the various participants in this Project Activity. At the conclusion of the Growth and Competitiveness Project in February 2008, the MEGC shall hire as employees of MEGC sufficient relevant PIU staff to continue oversight of the Partnership to Mobilize Investment Activity. The Government shall provide necessary funding to MEGC prior to and during Phase IV of this Project Activity to ensure proper day-to-day operations and appropriate oversight and implementation of the Partnership to Mobilize Investment Activity. It is anticipated that the MEGC and STPC will carry on similar business climate improvement activities after the Compact Term.
The Financial Sector Reform Activity will be accomplished through technical assistance that is intended to transfer the requisite knowledge that will allow the MFIs to develop into self-sustaining deposit-taking institutions.
The Parties have identified the following policy, legal and regulatory reforms and actions (in addition to those being funded under the Private Sector Development Project) that the Government shall pursue in support, and to reach the full benefits, of the Private Sector Development Project, the satisfactory implementation of which will be conditions precedent to certain MCC Disbursements as provided in the Disbursement Agreement:
(a) If the success and implementation of a Selected Activity is dependent upon the implementation of policy or legal reforms or procedural changes that are not being funded by MCC, the Government shall take all necessary or advisable action to adopt or implement such reforms and changes in a timely and effective manner.
(b) The enactment of legislation to regulate MFIs and their deposit-taking powers.
(c) The modification of rules and procedures regarding the auction of Government of Cape Verde securities intended to enhance price discovery and broaden distribution.
With respect to the Partnership to Mobilize Investment Activity, unsolicited proposals for activities shall be considered in the manner described in Section 2(a)(iii) of this Schedule. There will be no solicitation for proposals for activities under this Project Activity.
This Annex II to the Compact (the “Financial Plan Annex”) summarizes the Multi-Year Financial Plan for the Program. Each capitalized term in this Financial Plan Annex shall have the same meaning given such term elsewhere in this Compact.
1. General. A multi-year financial plan summary (“Multi-Year Financial Plan Summary”) is attached hereto as
2. Implementation and Oversight. The Multi-Year Financial Plan and each Detailed Financial Plan shall be implemented by MCA-Cape Verde, consistent with the approval and oversight rights of MCC and the Government as provided in this Compact, the Governance Agreement and the Disbursement Agreement.
3. Estimated Contributions of the Parties. The Multi-Year Financial Plan Summary identifies the estimated
4. Modifications. The Parties recognize that the anticipated distribution of MCC Funding between and among the various Program activities and Project and Project Activities will likely require adjustment from time to time during the Compact Term. In order to preserve flexibility in the administration of the Program, the Parties may, upon agreement of the Parties in writing and without amending the Compact, change the designations and allocations of funds between Program administration and a Project, between one Project and another Project, between different activities within a Project, or between a Project identified as of the entry into force of this Compact and a new Project, without amending the Compact; provided, however, that such reallocation (i) is consistent with the Objectives, (ii) does not cause the amount of MCC Funding to exceed the aggregate amount specified in Section 2.1(a) of this Compact, and (iii) does not cause the Government's obligations or responsibilities or overall contribution of resources to be less than specified in Section 2.2(a) of this Compact, this
5. Conditions Precedent; Sequencing. MCC Funding will be disbursed in tranches. The obligation of MCC to approve MCC Disbursements and Material Re-Disbursements for the Program and each Project is subject to satisfactory progress in achieving the Objectives and on the fulfillment or waiver of any conditions precedent specified in the Disbursement Agreement for the relevant Program activity or Project or Project Activity. The sequencing of Project activities or Project Activities and other aspects of how the Parties intend the Projects to be implemented will be set forth in the Implementation Plan, including Work Plans for the applicable Project, and MCC Disbursements and Re-Disbursements will be disbursed consistent with that sequencing.
This Annex III to the Compact (the “M&E Annex”) generally describes the components of the M&E Plan for the Program. Each capitalized term in this Annex III shall have the same meaning given such term elsewhere in this Compact.
MCC and the Government (or a mutually acceptable Government Affiliate or Permitted Designee) shall formulate, agree to and the Government shall implement, or cause to be implemented, an M&E Plan that specifies (1) how progress toward the Objectives and Project Activity Outcomes will be monitored (the “Monitoring Component”), (2) a methodology, process and timeline for the evaluation of planned, ongoing, or completed Project Activities to determine their efficiency, effectiveness, impact and sustainability (the “Evaluation Component”), and (3) other components of the M&E Plan described below. Information regarding the Program's performance, including the M&E Plan, and any amendments or modifications thereto, as well as periodically generated reports, will be made publicly available on the MCA-Cape Verde Website and elsewhere.
To monitor progress toward the achievement of the Objectives and Project Activity Outcomes, the Monitoring Component of the M&E Plan shall identify (1) Program levels, (2) the Indicators, (3) the party or parties responsible, the timeline, and the instrument for collecting data and reporting on each Indicator to MCA-Cape Verde, and (4) the method by which the reported data will be validated.
(a)
(i)
(ii)
(b)
(i)
(ii)
(c)
(d)
The Program shall be evaluated on the extent to which the interventions contribute to the Compact Goal. The Evaluation Component shall contain a methodology, process and timeline for analyzing data in order to assess planned, ongoing, or completed Project Activities to determine their efficiency, effectiveness, impact and sustainability. This component should use state-of-the-art methods for addressing selection bias and should make provisions for collecting data from both treatment and control groups, where practicable. The Evaluation Component shall contain two types of reports: Final Evaluations and Ad Hoc Evaluations, and shall be finalized before any MCC Disbursement or Re-Disbursement for specific Program activities or Project Activities.
(a)
(b)
In addition to the Monitoring and Evaluation Components, the M&E Plan shall include the following components for the Program, Projects and Project Activities, including, where appropriate, roles and responsibilities of the relevant parties and Providers:
(a)
(b)
(a)
(b)
(c)
(d)
Centers for Medicare & Medicaid Services (CMS), HHS.
Proposed rule.
This proposed rule would revise the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system and to implement certain related provisions of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. In addition, the proposed rule describes proposed changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. This proposed rule would also change the requirement for physician oversight of mid-level practitioners in critical access hospitals (CAHs). These changes would be applicable to services furnished on or after January 1, 2006.
To be ensured consideration, comments must be received at one of the addresses provided in the
In commenting, please refer to file code CMS-1501-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of three ways (no duplicates, please):
1.
2.
3.
4.
Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
Comments submitted to OMB may also be e-mailed to the following address:
Rebecca Kane, (410) 786-0378, Outpatient prospective payment issues, and Suzanne Asplen, (410) 786-4558, Partial hospitalization and community mental health center issues.
This
To assist readers in referencing sections contained in this document, we are providing the following outline of contents:
When the Medicare statute was originally enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), enacted on August 5, 1997, added section 1833(t) to the Social Security Act (the Act) authorizing implementation of a PPS for hospital outpatient services. The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), enacted on November 29, 1999, made major changes that affected the hospital outpatient PPS (OPPS). The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554), enacted on December 21, 2000, made further changes in the OPPS. Section 1833(t) of the Act was also amended by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Pub. L. 108-173, enacted on December 8, 2003. (Discussion of provisions related specifically to the CY 2006 OPPS is included in sections V. and VII. of this proposed rule.) The OPPS was first implemented for services furnished on or after August 1, 2000. Implementing regulations for the OPPS are located at 42 CFR part 419.
Under the OPPS, we pay for hospital outpatient services on a rate-per-service basis that varies according to the ambulatory payment classification (APC) group to which the service is
The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the inpatient hospital wage index value for the locality in which the hospital or CMHC is located.
All services and items within an APC group are comparable clinically and with respect to resource use (section 1833(t)(2)(B) of the Act). In accordance with section 1833(t)(2) of the Act, subject to certain exceptions, services and items within an APC group cannot be considered comparable with respect to the use of resources if the highest median (or mean cost, if elected by the Secretary) for an item or service in the APC group is more than 2 times greater than the lowest median cost for an item or service within the same APC group (referred to as the “2 times rule”). In implementing this provision, we use the median cost of the item or service assigned to an APC group.
Special payments under the OPPS may be made for new technology items and services in one of two ways. Section 1833(t)(6) of the Act provides for temporary additional payments or “transitional pass-through payments” for certain drugs, biological agents, brachytherapy devices used for the treatment of cancer, and categories of medical devices for at least 2 but not more than 3 years. For new technology services that are not eligible for pass-through payments and for which we lack sufficient data to appropriately assign them to a clinical APC group, we have established special APC groups based on costs, which we refer to as “APC cost bands.” These cost bands allow us to price these new procedures more appropriately and consistently. Similar to pass-through payments, these special payments for new technology services are also temporary; that is, we retain a service within a new technology APC group until we acquire adequate data to assign it to a clinically appropriate APC group.
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excluded payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. Section 614 of Pub. L. 108-173 amended section 1833(t)(1)(B)(iv) of the Act to exclude OPPS payment for screening and diagnostic mammography services. The Secretary exercised the broad authority granted under the statute to exclude from the OPPS those services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); laboratory services paid under the clinical diagnostic laboratory fee schedule; services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD composite rate; and services and procedures that require an inpatient stay that are paid under the hospital inpatient prospective payment system (IPPS). We set forth the services that are excluded from payment under the OPPS in § 419.22 of the regulations.
Under § 419.20 of the regulations, we specify the types of hospitals and entities that are excluded from payment under the OPPS. These excluded entities include Maryland hospitals, but only for services that are paid under a cost containment waiver in accordance with section 1814(b)(3) of the Act; critical access hospitals (CAHs); hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico; and Indian Health Service hospitals.
On April 7, 2000, we published in the
On November 15, 2004, we published in the
Subsequent to publishing the November 15, 2004 final rule with comment period, we published a correction of final rule with comment period on December 30, 2004 (69 FR 78315). This document corrected technical errors that appeared in the November 15, 2004 final rule with
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of the BBRA of 1999, requires that we consult with an outside panel of experts to review the clinical integrity of the payment groups and weights under the OPPS. The Advisory Panel on Ambulatory Payment Classification (APC) Groups (the APC Panel), discussed under section I.D.2. of this preamble, fulfills this requirement. The Act further specifies that the APC Panel will act in an advisory capacity. This expert panel, which is to be composed of 15 representatives of providers subject to the OPPS (currently employed full-time, not consultants, in their respective areas of expertise), reviews and advises us about the clinical integrity of the APC groups and their weights. The APC Panel is not restricted to using our data and may use data collected or developed by organizations outside the Department in conducting its review.
On November 21, 2000, the Secretary originally signed the charter establishing the APC Panel. The APC Panel is technical in nature and is governed by the provisions of the Federal Advisory Committee Act (FACA), as amended (Pub. L. 92-463). Since its initial chartering, the Secretary has twice renewed the APC Panel's charter: On November 1, 2002, and on November 8, 2004. The renewed charter indicates that the APC Panel continues to be technical in nature; is governed by the provisions of the FACA with a Designated Federal Official (DEO) to oversee the day-to-day administration of the FACA requirements and to provide to the Committee Management Officer all committee reports for forwarding to the Library of Congress; may convene up to three meetings per year; and is chaired by a Federal official who also serves as a CMS medical officer.
Originally, in establishing the APC Panel, we solicited members in a notice published in the
The APC Panel first met on February 27, February 28, and March 1, 2001. Since that initial meeting, the APC Panel has held six subsequent meetings, with the last meeting taking place on February 23 and 24, 2005. (The APC Panel did not meet on February 25, 2004, as announced in the meeting notice published on December 30, 2004, (69 FR 78464).) Prior to each of these biennial meetings, we published a notice in the
During these meetings, the APC Panel established its operational structure that, in part, includes the use of three subcommittees to facilitate its required APC review process. Currently, the three subcommittees are the Data Subcommittee, the Observation Subcommittee, and the Packaging Subcommittee. The Data Subcommittee is responsible for studying the data issues confronting the APC Panel and for recommending viable options for resolving them. This subcommittee was initially established on April 23, 2001, as the Research Subcommittee and reestablished as the Data Subcommittee on April 13, 2004, and February 11, 2005. The Observation Subcommittee, which was established on June 24, 2003, and reestablished with new members on March 8, 2004, and February 11, 2005, reviews and makes recommendations to the APC Panel on all issues pertaining to observation services paid under the OPPS, such as coding and operational issues. The Packaging Subcommittee, which was established on March 8, 2004 and reestablished with new members on February 11, 2005, studies and makes recommendations on issues pertaining to services that are not separately payable under the OPPS but are bundled or packaged APC payments. Each of these subcommittees was established by a majority vote of the APC Panel during a scheduled APC Panel meeting. All subcommittee recommendations are discussed and voted upon by the full APC Panel.
For a detailed discussion of the APC Panel meetings, refer to the hospital OPPS final rules cited in section I.C. of this preamble. Full discussion of the recommendations resulting from the APC Panel's February 2005 meeting are included in the sections of this preamble that are specific to each recommendation.
On December 8, 2003, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Pub. L. 108-173, was enacted. Pub. L. 108-173 made changes to the Act relating to the Medicare OPPS. In the January 6, 2004 interim final rule with comment period and the November 15, 2004 final rule with comment period, we implemented provisions of Pub. L. 108-173 relating to the OPPS that were effective for CY 2004 and CY 2005, respectively. Provisions of Pub. L. 108-173 that were implemented in CY 2004 or CY 2005, and that are continuing in CY 2006, are discussed throughout this proposed rule. Moreover, in this proposed rule, we are proposing to implement the following provisions of Pub. L. 108-173 that affect the OPPS beginning in CY 2006:
Section 411 of Pub. L. 108-173 amended section 1833(t)(7)(D)(i) of the Act and extended the hold harmless provision for small rural hospitals having 100 or fewer beds through December 31, 2005. Section 411 of Pub. L. 108-173 further amended section 1833(t)(7) of the Act to provide that hold-harmless transitional corridor payments shall apply through December
Section 411(b) of Pub. L. 108-173 added a new paragraph (13) to section 1833(t) of the Act to authorize an “Adjustment for Rural Hospitals”. This provision requires us to conduct a study to determine if costs incurred by hospitals located in rural areas by APCs exceed those costs incurred by hospitals located in urban areas. This provision further requires us to provide for an appropriate adjustment by January 1, 2006, if we find that the costs incurred by hospitals located in rural areas exceed those costs incurred by hospitals located in urban areas.
Section 621(a)(1) of Pub. L. 108-173 added section 1833(t)(14) to the Act that specifies payments for certain “specified covered outpatient drugs” beginning in 2006. Specifically, section 1833(t)(14)(A)(iii)(I) of the Act states that such payment shall be equal to what we determine to be the average acquisition cost for the drug, taking into account hospital acquisition cost survey data furnished by the Government Accountability Office (GAO). Section 1833(t)(14)(A)(iii)(II) of the Act further notes that if hospital acquisition cost data are not available, payment for specified covered outpatient drugs shall equal the average price for the drug established under section 1842(o), section 1847(A), or section 1847(B) of the Act as calculated and adjusted by the Secretary as necessary. Both payment approaches are subject to adjustments under section 1833(t)(14)(E) of the Act as discussed below.
Section 621(a)(1) of Pub. L. 108-173 added section 1833(t)(14)(E) to the Act. Section 1833(t)(14)(E)(ii) of the Act authorizes us to make an adjustment to payments for “specified covered outpatient drugs” to take into account overhead and related expenses such as pharmacy services and handling costs, based on recommendations contained in a report prepared by the Medicare Payment Advisory Commission (MedPAC).
Section 621(a)(1) of Pub. L. 108-173 amended the Act by adding section 1833(t)(14)(H), which requires that additional expenditures resulting from adjustments in APC payment rates for specified covered outpatient drugs be taken into account beginning in CY 2006 and continuing in subsequent years, in establishing the OPPS conversion, weighting, and other adjustment factors.
CMS is committed to ensuring that Medicare beneficiaries will have timely access to new medical treatments and technologies that are well-evaluated and demonstrated to be effective. We launched the Council on Technology and Innovation (CTI) to provide the Agency with improved methods for developing practical information about the clinical benefits of new medical technologies to result in faster and more efficient coverage and payment of these medical technologies. The CTI supports CMS efforts to develop better evidence on the safety, effectiveness, and cost of new and approved technologies to help promote their more effective use.
We want to provide doctors and patients with better information about the benefits of new medical treatments and/or technologies, especially compared to other treatment options. We also want beneficiaries to have access to valuable new medical innovations as quickly and efficiently as possible. We note there are a number of payment mechanisms in the OPPS and the IPPS designed to achieve appropriate payment of promising new technologies. In the OPPS, qualifying new medical devices may be paid on a cost basis by means of transitional pass-through payments, in addition to the APC payments for the procedures which utilize the devices. In addition, qualifying new services may be assigned for payment to New Technology APCs or, if appropriate, to regular clinical APCs. In the IPPS, qualifying new technologies may receive add-on payments to the standard diagnosis-related group (DRG) payments. We also note that collaborative efforts are underway to facilitate coordination between the Food and Drug Administration (FDA) and CMS with regard to streamlining the CMS coverage process by which new technologies come to the marketplace.
To promote timely access to new medical treatments and technologies, in this proposed rule we are proposing enhancements to both the OPPS pass-through payment criteria for devices as discussed in section IV.D.2. of this preamble and the qualifying process for assignment of new services to New Technology APCs or regular clinical APCs discussed in section III.C.3. of this preamble. We are proposing to make device pass-through eligibility available to a broader range of qualifying devices. We are also proposing to change the application and review process for assignment of new services to New Technology APCs to promote thoughtful review of the coding, clinical use and efficacy of new services by the wider medical community, encouraging appropriate dissemination of new technologies. These enhancements are explained in this proposed rule.
In this proposed rule, we are setting forth proposed changes to the Medicare hospital OPPS for CY 2006. These changes would be effective for services furnished on or after January 1, 2006. The following is a summary of the major changes that we are proposing to make:
In section II. of this preamble, we set forth—
• The methodology used to recalibrate the proposed APC relative payment weights and the proposed recalibration of the relative payment weights for CY 2006.
• The proposed payment for partial hospitalization, including the proposed separate threshold for outlier payments for CMCHs.
• The proposed update to the conversion factor used to determine payment rates under the OPPS for CY 2006.
• The proposed retention of our current policy to apply the IPPS wage indices to wage adjust the APC median costs in determining the OPPS payment rate and the copayment standardized amount for CY 2006.
• The proposed update of statewide average default cost-to-charge ratios.
• Proposed changes relating to the expiring hold harmless payment provision.
• Proposed changes to payment for rural sole community hospitals for CY 2006.
• Proposed changes in the way we calculate hospital outpatient outlier payments for CY 2006.
• Calculation of the proposed national unadjusted Medicare OPPS payment.
• The proposed beneficiary copayment for OPPS services for CY 2006.
In section III. of this preamble, we discuss our proposal to establish a number of new APCs and to make changes to the assignment of HCPCS codes under a number of existing APCs based on our analyses of Medicare claims data and recommendations of the APC Panel. We also discuss in section III. of this preamble, the application of the 2 times rule and proposed exceptions to it; proposed changes for specific APCs; the proposed refinement of the New Technology cost bands; the proposed movement of procedures from the New Technology APCs; and the proposed additions of new procedure codes to the APC groups.
In section IV. of this preamble, we discuss proposed changes to the device-dependent APCs and to the pass-through payment for three categories of devices.
In section V. of this preamble, we discuss proposed changes for drugs, biologicals, radiopharmaceutical agents, and vaccines.
In section VI. of this preamble, we discuss the proposed methodology for estimating total pass-through spending and whether there should be a pro rata reduction for transitional pass-through drugs, biologicals, radiopharmacials, and categories of devices for CY 2006.
In section VII. of this preamble, we include a discussion of our proposal concerning coding and payment for the sources of brachytherapy.
In section VIII. of this preamble, we discuss our proposed coding and payment changes for drug administration services.
In section IX. of this preamble, we include a discussion of our proposal for developing the coding guidelines for evaluation and management services.
In section X. of this preamble, we discuss our proposed payment changes for blood and blood products.
In section XI. of this preamble, we discuss our proposed criteria and coding changes for separately payable observation services.
In section XII. of this preamble, we discuss the procedures that we are proposing to remove from the inpatient list and assign to APCs.
In section XIII. of this preamble, we discuss the proposed changes to the list of status indicators assigned to APCs and present our proposed comment indicators for the CY 2006 OPPS final rule.
In section XIV. of this preamble, we discuss proposed changes in payments for multiple diagnostic imaging procedures and in the interrupted procedures payment policies.
In section XV. of this preamble, we address recommendations made by MedPAC, the APC Panel, and the GAO regarding the OPPS for CY 2006.
In section XVI. of this preamble, we address physician oversight for services provided by nonphysician practitioners such as physician assistants, nurse practitioners, and clinical nurse specialists in critical access hospitals (CAHs).
Section 1833(t)(9)(A) of the Act requires that the Secretary review and revise the relative payment weights for APCs at least annually. In the April 7, 2000 OPPS final rule (65 FR 18482), we explained in detail how we calculated the relative payment weights that were implemented on August 1, 2000, for each APC group. Except for some reweighting due to a small number of APC changes, these relative payment weights continued to be in effect for CY 2001. This policy is discussed in the November 13, 2000 interim final rule (65 FR 67824 through 67827).
We are proposing to use the same basic methodology that we described in the April 7, 2000 final rule to recalibrate the APC relative payment weights for services furnished on or after January 1, 2006, and before January 1, 2007. That is, we would recalibrate the relative payment weights for each APC based on claims and cost report data for outpatient services. We are proposing to use the most recent available data to construct the database for calculating APC group weights. For the purpose of recalibrating APC relative payment weights for CY 2006, we used approximately 127 million final action claims for hospital OPD services furnished on or after January 1, 2004, and before January 1, 2005. Of the 127 million final action claims for services provided in hospital outpatient settings, 102 million claims were of the type of bill potentially appropriate for use in setting rates for OPPS services (but did not necessarily contain services payable under the OPPS). Of the 102 million claims, we were able to use 49 million whole claims to set the proposed OPPS APC relative weights for CY 2006 OPPS. From the 49 million whole claims, we created 81 million single records, of which 50 million were “pseudo” single claims (created from multiple procedure claims using the process we discuss in this section).
The proposed APC relative weights and payments in Addenda A and B to this proposed rule were calculated using claims from this period that had been processed before January 1, 2005. We selected claims for services paid under the OPPS and matched these claims to the most recent cost report filed by the individual hospitals represented in our claims data. We are proposing that the APC relative payment weights for CY 2006 under the OPPS would continue to be based on the median hospital costs for services in the APC groups. For the CY 2006 OPPS final rule, we are proposing to base APC median costs on
For CY 2006, we are proposing to continue to use single procedure claims to set the medians on which the APC relative payment weights would be based. As noted in the November 15, 2004 final rule with comment period, we have received many requests asking that we ensure that the data from claims that contain charges for multiple procedures are included in the data from which we calculate the relative payment weights (69 FR 65730 through 65731). Requesters believe that relying solely on single procedure claims to recalibrate APC relative payment weights fails to take into account data for many frequently performed procedures, particularly those commonly performed in combination with other procedures. They believe that, by depending upon single procedure claims, we base relative payment weights on the least-costly services, thereby introducing downward bias to the medians on which the weights are based.
We agree that, optimally, it is desirable to use the data from as many claims as possible to recalibrate the APC relative payment weights, including those with multiple procedures. We generally use single procedure claims to set the median costs for APCs because we are, so far, unable to ensure that packaged costs can be appropriately allocated across multiple procedures performed on the same date of service. However, by bypassing specified codes that we believe do not have significant packaged costs, we are able to use more data from multiple procedure claims. In many cases this enables us to create multiple “pseudo” single claims from claims that, as submitted, contained multiple separately paid procedures on the same claim. We have used the date of service on the claims and a list of codes to be bypassed to create “pseudo” single claims from multiple procedure claims the same as we did in recalibrating the CY 2005 APC relative payment weights. We refer to these newly created single procedure claims as “pseudo” singles because they were submitted by providers as multiple procedure claims.
For CY 2003, we created “pseudo” single claims by bypassing HCPCS codes 93005 (Electrocardiogram, tracing), 71010 (Chest x-ray), and 71020 (Chest x-ray) on a submitted claim. However, we did not use claims data for the bypassed codes in the creation of the median costs for the APCs to which these three codes were assigned because the level of packaging that would have remained on the claim after we selected the bypass code was not apparent and, therefore, it was difficult to determine if the medians for these codes would be correct.
For CY 2004, we created “pseudo” single claims by bypassing these three codes and also by bypassing an additional 269 HCPCS codes in APCs. We selected these codes based on a clinical review of the services and because it was presumed that these codes had only very limited packaging and could appropriately be bypassed for the purpose of creating “pseudo” single claims. The APCs to which these codes were assigned were varied and included mammography, cardiac rehabilitation, and Level I plain film x-rays. To derive more “pseudo” single claims, we also split the claims where there were dates of service for revenue code charges on that claim that could be matched to a single procedure code on the claim on the same date.
As in CY 2003, we did not include the claims data for the bypassed codes in the creation of the APCs to which the 269 codes were assigned because, again, we had not established that such an approach was appropriate and would aid in accurately estimating the median cost for that APC. For CY 2004, from about 16.3 million otherwise unusable claims, we used about 9.5 million multiple procedure claims to create about 27 million “pseudo” single claims. For CY 2005, we created 383 bypass codes and from approximately 24 million otherwise unusable claims, we used about 18 million multiple procedure claims to create about 52 million “pseudo” single claims.
For CY 2006, we are proposing to continue using date of service matching as a tool for creation of “pseudo” single claims and to continue the use of a bypass list to create “pseudo” single claims. The process we are proposing for CY 2006 OPPS results in our being able to use some part of 90 percent of the total claims that are eligible for use in OPPS ratesetting and modeling in developing this proposed rule. This process enabled us to use, for CY 2006, 81 million single bills for ratesetting: 50 million “pseudo” singles and 31 million “natural” single bills (bills that were submitted containing only one separately payable major HCPCS code).
We are proposing to bypass the 404 codes identified in Table 1 to create new single claims and to use the line-item costs associated with the bypass codes on these claims in the creation of the median costs for the APCs into which they are assigned. Of the codes on this list, 345 were used for bypass in CY 2005. We are proposing to continue the use of the codes on the CY 2005 OPPS bypass list and expand it by adding 46 codes that, using data presented to the APC Panel at its February 2005 meeting, meet the same empirical criteria as those used in CY 2005 to create the bypass list. Our examination of the data against the criteria for inclusion on the bypass list, as discussed below for the addition of new codes, shows that the empirically selected codes used for bypass for the CY 2005 OPPS generally continue to meet the criteria or come very close to meeting the criteria, and we have received no comments against bypassing them.
To facilitate comment, Table 1 indicates the list of codes we are proposing to bypass for creation of “pseudo” singles for CY 2006 OPPS and indicates those used in the CY 2005 OPPS for bypass and those proposed to be added for the CY 2006 OPPS. Bypass codes shown in Table 1 with an asterisk indicate the HCPCs codes we are proposing to add to the list for the CY 2006 OPPS. The criteria we are proposing to use to determine the additional codes to add to the CY 2005 OPPS bypass list in order to create the bypass list for CY 2006 OPPS are discussed below.
The following empirical criteria were developed by reviewing the frequency and magnitude of packaging in the single claims for payable codes other than drugs and biologicals. We assumed that the representation of packaging on the single claims for any given code is comparable to packaging for that code in the multiple claims:
• There were 100 or more single claims for the code. This number of single claims ensured that observed outcomes were sufficiently representative of packaging that might occur in the multiple claims.
• Five percent or fewer of the single claims for the code had packaged costs on that single claim for the code. This criterion results in limiting the amount of packaging being redistributed to the payable procedure remaining on the claim after the bypass code is removed and ensures that the costs associated with the bypass code represent the cost of the bypassed service.
• The median cost of packaging observed in the single claim was equal to or less than $50. This limits the amount of error in redistributed costs.
• The code is not a code for an unlisted service.
We also added to the bypass list three codes (CPT codes 51701, 51702, and 51703 for bladder catheterization) which do not meet these criteria. These
We examined the packaging on the single procedure claims in the CY 2004 data used for this proposed rule for these codes. We found that none of these codes met the empirical standards for the bypass list. However, we believe that when these services are performed on the same date as another separately paid procedure, any packaging that appears on the claim would appropriately be associated with the other procedures and not with these codes. Therefore, we believe that bypassing them does not adversely affect the medians for other procedures. Moreover, future separate payment for these codes does not harm the hospitals that furnish these services, in view of the historical absence of separate payment for them under the OPPS in the past. Hence, we propose to pay separately for these codes and to add them to the bypass list for the CY 2006 OPPS.
We specifically invite public comment on the “pseudo” single process, including the bypass list and the criteria.
In this section of the preamble, we discuss the use of claims to calculate the proposed OPPS payment rates for CY 2006. The hospital outpatient prospective payment page on the CMS Web site on which this proposed rule is posted provides an accounting of claims used in the development of the proposed rates:
We are proposing to use the following methodology to establish the relative weights to be used in calculating the proposed OPPS payment rates for CY 2006 shown in Addenda A and B to this proposed rule. This methodology is as follows:
We used outpatient claims for full CY 2004 to set the proposed relative weights for CY 2006. To begin the calculation of the relative weights for CY 2006, we pulled all claims for outpatient services furnished in CY 2004 from the national claims history file. This is not the population of claims paid under the OPPS, but all outpatient claims (including, for example, CAH claims, and hospital claims for clinical laboratory services for persons who are neither inpatients nor outpatients of the hospital).
We then excluded claims with condition codes 04, 20, 21, and 77. These are claims that providers submitted to Medicare knowing that no payment will be made. For example, providers submit claims with a condition code 21 to elicit an official denial notice from Medicare and document that a service is not covered. We then excluded claims for services furnished in Maryland, Guam, and the U.S. Virgin Islands because hospitals in those geographic areas are not paid under the OPPS.
We divided the remaining claims into the three groups shown below. Groups 2 and 3 comprise the 102 million claims that contain hospital bill types paid under the OPPS.
1. Claims that were not bill types 12X, 13X, 14X (hospital bill types), or 76X (CMHC bill types). Other bill types, such as ambulatory surgical centers (ASCs), bill type 83, are not paid under the OPPS and, therefore, these claims were not used to set OPPS payment.
2. Claims that were bill types 12X, 13X, or 14X (hospital bill types). These claims are hospital outpatient claims.
3. Claims that were bill type 76X (CMHC). (These claims are later combined with any claims in item 2 above with a condition code 41 to set the per diem partial hospitalization rate determined through a separate process.)
For the cost-to-charge ratio (CCR) calculation process, we used the same approach as that used in developing the final APC rates for CY 2005 (69 FR 65744). That is, we first limited the population of cost reports to only those for hospitals that filed outpatient claims in CY 2004 before determining whether the CCRs for such hospitals were valid. This initial limitation changed the distribution of CCRs used during the trimming process discussed below.
We then calculated the CCRs at a departmental level and overall for each hospital for which we had claims data. We did this using hospital-specific data from the Hospital Cost Report Information System (HCRIS). We used the most recent available cost report data, in most cases, cost reports for CY 2002 or CY 2003. We used the most recent cost report available whether submitted or settled. If the most recent available cost report was submitted but not settled, we looked at the last settled cost report to determine the ratio of submitted to settled cost, and we then adjusted the most recent available submitted but not settled cost report using that ratio. We propose to use the most recently submitted cost reports to calculate the CCRs to be used to calculate median costs for the OPPS CY 2006 final rule.
We then flagged CAHs, which are not paid under the OPPS, and hospitals with invalid CCRs. These included claims from hospitals without a CCR; those from hospitals paid an all-inclusive rate; those from hospitals with obviously erroneous CCRs (greater than 90 or less than .0001); and those from hospitals with CCRs that were identified as outliers (3 standard deviations from the geometric mean after removing error CCRs). In addition, we trimmed the CCRs at the departmental level by removing the CCRs for each cost center as outliers if they exceeded +/−3 standard deviations of the geometric mean. This is the same methodology that we used in developing the final CY 2005 CCRs. For CY 2006, we are proposing to trim at the departmental CCR level to eliminate aberrant CCRs that, if found in high volume hospitals, could skew the medians. We used a four-tiered hierarchy of cost center CCRs to match a cost center to a revenue code with the top tier being the most common cost center and the last tier being the default CCR. If a hospital's departmental CCR was deleted by trimming, we set the departmental CCR for that cost center to “missing,” so that another departmental CCR in the revenue center hierarchy could apply. If no other departmental CCR could apply to the revenue code on the claim, we used the hospital's overall CCR for the revenue code in question. The hierarchy of CCRs is available for inspection and comment at the CMS Web site:
We then converted the charges on the claim by applying the CCR that we believed was best suited to the revenue
Thus, we applied CCRs as described above to claims with bill types 12X, 13X, or 14X, excluding all claims from CAHs and hospitals in Maryland, Guam, and the U.S. Virgin Islands, and flagged hospitals with invalid CCRs. We excluded claims from all hospitals for which CCRs were flagged as invalid.
We identified claims with condition code 41 as partial hospitalization services of CMHCs and moved them to another file. These claims were combined with the 76X claims identified previously to calculate the proposed partial hospitalization per diem rate.
We then excluded claims without a HCPCS code. We also moved claims for observation services to another file. We moved to another file claims that contained nothing but flu and pneumococcal pneumonia (“PPV”) vaccine. Influenza and PPV vaccines are paid at reasonable cost and, therefore, these claims are not used to set OPPS rates. We note that the two above mentioned separate files containing partial hospitalization claims and the observation services claims are included in the files that are available for purchase as discussed above.
We next copied line-item costs for drugs, blood, and devices (the lines stay on the claim, but are copied off onto another file) to a separate file. No claims were deleted when we copied these lines onto another file. These line-items are used to calculate the per unit median for drugs, radiopharmaceuticals, and blood and blood products. The line-item costs were also used to calculate the per administration cost of drugs, radiopharmaceuticals, and biologicals (other than blood and blood products).
We then divided the remaining claims into five groups.
1.
2.
3.
4.
5.
We note that the claims listed in numbers 1, 2, and 4 above are included in the data files that can be purchased as described above.
We set aside the single minor claims and the non-OPPS claims (numbers 3 and 5 above) because we did not use either in calculating median cost. We then examined the multiple major and multiple minor claims (numbers 2 and 4 above) to determine if we could convert any of them to single major claims using the process described previously. We first grouped items on the claims by date of service. If each major procedure on the claim had a different date of service and if the line-items for packaged HCPCS and packaged revenue codes had dates of service, we split the claim into multiple “pseudo” single claims based on the date of service.
After those single claims were created, we used the list of “bypass codes” in Table 1 of this preamble to remove separately payable procedures that we determined contain limited costs or no packaged costs from a multiple procedure bill. A discussion of the creation of the list of bypass codes used for the creation of “pseudo” single claims is contained in section II.A.1.b. of this preamble.
When one of the two separately payable procedures on a multiple procedure claim was on the bypass code list, we split the claim into two single procedure claims records. The single procedure claim record that contained the bypass code did not retain packaged services. The single procedure claim record that contained the other separately payable procedure (but no bypass code) retained the packaged revenue code charges and the packaged HCPCS charges. This enables us to use a claim that would otherwise be a multiple procedure claim and could not be used.
We excluded those claims that we were not able to convert to singles even after applying both of the techniques for creation of “pseudo” singles. We then packaged the costs of packaged HCPCS codes (codes with status indicator “N” listed in Addendum B to this proposed rule) and packaged revenue codes into the cost of the single major procedure remaining on the claim. The list of packaged revenue codes is shown in Table 2 below.
After removing claims for hospitals with error CCRs, claims without HCPCS codes, claims for immunizations not covered under the OPPS, and claims for services not paid under the OPPS, 55 million claims were left. Of these 55 million claims, we were able to use some portion of 49 million whole claims (90 percent of the potentially usable claims) to create the 81 million single and “pseudo” single claims for use in the CY 2006 median payment ratesetting.
We also excluded (1) claims that had zero costs after summing all costs on the claim; (2) claims for which CMS lacked an appropriate provider wage index; and (3) claims containing token charges (charges of less than $1.01) or for which intermediary systems had allocated charges as if the charges were submitted on the claim. We are proposing to delete claims containing token charges. We do not believe that a charge of less than $1.01 would yield a cost that would be valid to set weights for a significant separately paid service. Moreover, effective for services furnished on or after July 1, 2004, the OCE assigns payment flag number 3 to claims on which hospitals submitted token charges for a service with status
For the remaining claims, we then wage adjusted 60 percent of the cost of the claim (which we have previously determined to be the labor-related portion), as has been our policy since the initial implementation of the OPPS, to adjust for geographic variation in labor-related costs. We made this adjustment by determining the wage index that applied to the hospital that furnished the service and dividing the cost for the separately paid HCPCS code furnished by the hospital by that wage index. As has been our policy since the inception of the OPPS, we are proposing to use the pre-reclassified wage indices for standardization because we believe that they better reflect the true costs of items and services in the area in which the hospital is located than the post-reclassification wage indices, and would result in the most accurate adjusted median costs.
We then excluded claims that were outside 3 standard deviations from the geometric mean cost for each HCPCS code. We used the remaining claims to calculate median costs for each separately payable HCPCS code; first, to determine the applicability of the “2 times” rule, and second, to determine APC medians based on the claims containing the HCPCS codes assigned to each APC. As stated previously, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median (or mean cost, if elected by the Secretary) for an item or service in the group is more than 2 times greater than the lowest median cost for an item or service within the same group (“the 2 times rule”). Finally, we reviewed the medians and reassigned HCPCS codes to different APCs as deemed appropriate. Section III.B. of this preamble includes a discussion of the HCPCS code assignment changes that resulted from examination of the medians and for other reasons. The APC medians were recalculated after we reassigned the affected HCPCS codes.
A detailed discussion of the medians for blood and blood products is included in section X. of this preamble. A discussion of the medians for APCs that require one or more devices when the service is performed is included in section IV.A. of this preamble. A discussion of the median for observation services is included in section XI. of this preamble and a discussion of the median for partial hospitalization is included below in section II.B. of this preamble.
Using the median APC costs discussed previously, we calculated the proposed relative payment weights for each APC for CY 2006 shown in Addenda A and B to this proposed rule. As in prior years, we scaled all the relative payment weights to APC 0601 (Mid Level Clinic Visit) because it is one of the most frequently performed services in the hospital outpatient setting. We assigned APC 0601 a relative payment weight of 1.00 and divided the median cost for each APC by the median cost for APC 0601 to derive the relative payment weight for each APC. Using CY 2004 data, the median cost for APC 0601 is $60.57 for CY 2006.
Section 1833(t)(9)(B) of the Act requires that APC reclassification and recalibration changes, wage index changes, and other adjustments be made in a manner that assures that aggregate payments under the OPPS for CY 2006 are neither greater than nor less than the aggregate payments that would have been made without the changes. To comply with this requirement concerning the APC changes, we compared aggregate payments using the CY 2005 relative weights to aggregate payments using the CY 2006 proposed relative weights. Based on this comparison, we are proposing to make an adjustment to the relative weights for purposes of budget neutrality. The unscaled relative payment weights were adjusted by .999207669 for budget neutrality. The proposed relative payment weights are listed in Addenda A and B to this proposed rule. The proposed relative payment weights incorporate the recalibration adjustments discussed in sections II.A.1. and 2.
Section 1833(t)(14)(H) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, states that “Additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting and other adjustment factors for 2004 and 2005 under paragraph (9) but shall be taken into account for subsequent years.” Section 1833(t)(14) of the Act provides the payment rates for certain “specified covered outpatient drugs.” Therefore, the incremental cost of those specified covered outpatient drugs (as discussed in section V. of this preamble) is included in the budget neutrality calculations.
Under section 1833(t)(16)(C) of the Act, as added by section 621(b)(1) of Pub. L. 108-173, payment for devices of brachytherapy consisting of a seed or seeds (or radioactive source) is to be made at charges adjusted to cost for services furnished on or after January 1, 2004, and before January 1, 2006. As we stated in our January 6, 2004 interim final rule, charges for the brachytherapy sources will not be used in determining outlier payments and payments for these items will be excluded from budget neutrality calculations. (We provide a discussion of brachytherapy payment issues at section VII. of this proposed rule.)
Payments for packaged services under the OPPS are bundled into the payments providers receive for separately payable services provided on the same day. Packaged services are identified by the status indicator “N.” Hospitals include charges for packaged services on their claims, and the costs associated with these packaged services are then bundled into the costs for separately payable procedures on the claims for purposes of median cost calculations. Hospitals may use CPT codes to report any packaged services that were performed, consistent with CPT coding guidelines.
As a result of requests from the public, a Packaging Subcommittee to the APC Panel was established to review all the procedural CPT codes with a status indicator of “N.”
Providers have often suggested that many packaged services could be provided alone, without any other separately payable services on the claim, and requested that these codes not be assigned status indicator “N.” The Packaging Subcommittee reviewed every code that was packaged in the CY 2004 OPPS. Based on comments we have received and their own expert judgment, the subcommittee identified a set of packaged codes that are often provided separately and subsequently reviewed utilization and median cost data for these codes. One of the main criteria utilized by the Packaging Subcommittee to determine whether a code should become unpackaged was how likely it was for the code to be billed without any other separately payable services on the claim. The Packaging Subcommittee also examined median costs from hospital claims for packaged services that were billed alone.
The Packaging Subcommittee identified areas for change for some packaged CPT codes that they believe could frequently be provided to patients as the sole service on a given date and that require significant hospital resources as determined from hospital claims data. During the February 2005 meeting, the APC Panel accepted the report of the Packaging Subcommittee and made the following recommendations:
(1) That packaged codes be reviewed by the Panel individually.
(2) That the Packaging Subcommittee continue to meet throughout the year to discuss problematic packaged codes.
(3) That CMS assign a modifier to CPT codes 36540 (Collect blood, venous device); 36600 (Withdrawal of arterial blood); and 51701 (Insertion of non-indwelling bladder catheter), for use when there are no other separately payable codes on the claim. The modifier would flag the outpatient code editor (OCE) to assign payment to the claim.
(4) That CMS maintain the current packaged status indicator for CPT code 76937 (Ultrasound guidance for vascular access).
(5) That CMS change the status indicators for CPT immunization administration codes 90471 and 90472 to allow separate payment and ensure consistency with other injection codes.
(6) That CMS gather more data on CPT code 94762 (Overnight pulse oximetry) to determine how often this code is billed without any other separately payable codes and whether it is performed more frequently alone in rural settings than other settings.
(7) No changes to the packaged status of CPT codes 77790 (radiation source handling) and 94760 and 94761 (both codes measure blood oxygen levels).
(8) That CMS provide education and consistent guidelines to providers and fiscal intermediaries on correct billing procedures for packaged codes in general and in particular for CPT codes 36540, 36600, and 51701 and the recommended modifier, if approved.
(9) That the Packaging Subcommittee review CPT codes 42550 (Injection for salivary x-ray) and 38792 (Sentinel node imaging).
(10) That CPT code 97602 (Nonselective wound care) be referred to the Physician Payment Group within CMS for evaluation of its bundled status as it relates to services provided under the OPPS and that the Physician Payment Group report its conclusions back to the APC Panel.
For CY 2006, we are proposing to maintain CPT codes 36540 (Collect blood venous device) and 36600 (Withdrawal of arterial blood) as packaged services and not adopt the APC Panel's recommendation to add a modifier. We note CPT code 36540 is also bundled under the Medicare Physician Fee Schedule (MPFS), and our data demonstrate that the service is generally billed with other separately payable services. We also have relatively few single claims for CPT code 36600, compared to the procedure's overall frequency. Both of these codes have relatively low resource utilization. As these procedures are almost always provided with other separately payable services, hospitals' payments for those other services include the costs of CPT codes 36540 and 36600.
For CY 2006, we are proposing to pay separately for CPT code 51701 (Insertion of non-indwelling bladder catheter), and to map it to APC 0340 (Minor Ancillary Procedures), with status indicator “X”, and a median cost of $38.52. The APC Panel recommended that we pay separately for this code only when there are no other separately payable services on the claim. However, we are proposing to pay separately for this code every time it is billed. We believe that it is more appropriate to make payment for each procedure rather than increase hospitals' administrative burden by requiring specific coding changes to indicate that there are no other separately payable procedures on the claim. Based on our review of the data, the cost for this procedure is not insignificant, and the volume of single and multiple claims is modest. When we reviewed related codes, including CPT code 51702 (Insertion of temporary indwelling bladder catheter, simple) and CPT code 51703 (Insertion of temporary indwelling bladder catheter, complicate), we noted that these codes also had substantial median costs and a moderate volume of single claims. Therefore, for CY 2006, we are also proposing to pay separately for CPT codes 51702 and 51703, mapping them to APC 0340 with a median cost of $38.52 and APC 0164 (Level I Urinary
For CY 2006, we are proposing to accept the APC Panel recommendation that CPT code 76937 (Ultrasound guidance for vascular access) remain packaged. We are concerned that there may be unnecessary overuse of this procedure if it is separately payable. In addition, we believe that the service would always be provided with another separately payable procedure, so its costs would be appropriately bundled with the definitive vascular access service. As stated in the CY 2005 final rule with comment period (69 FR 65697), CMS and the Packaging Subcommittee reviewed CY 2004 claims data for CPT code 76937 and determined that this code should remain packaged.
For CY 2006, see section VIII. of this preamble on drug administration regarding CPT codes 90471 and 90472.
For CY 2006, we are proposing to accept the APC Panel recommendations that CPT codes 77790 (Radiation handling), 94760 (Pulse oximetry for oxygen saturation, single determination), and 94761 (Pulse oximetry for oxygen saturation, multiple determinations) remain packaged. We believe that CPT code 77790 is integral to the provision of brachytherapy and should always be billed on the same day with brachytherapy sources and their loading, ensuring that the provider would receive appropriate payment for the radiation source handling and loading bundled with the payment for the brachytherapy service. The small number of single claims for this code in our data verifies that this code is rarely billed alone without other payable services on the claim, and those few single claims may be miscoded claims. Our data review of CPT codes 94760 and 94761 revealed that these codes have low resource utilization, and are most frequently provided with other services. Similar to CPT code 77790, there are many fewer single claims for CPT codes 94760 and 94761 than multiple procedure claims that include CPT codes 94760 and 94761. CPT codes 94760 and 94761 describe services that are very commonly performed in the hospital outpatient setting, and unpackaging these codes would likely significantly decrease the number of single claims available for use in calculating median costs for other services.
For CY 2006, we are proposing to accept the APC Panel recommendation to gather data and review CPT codes 94762, 42550, and 38792 with the Packaging Subcommittee. We will analyze single and multiple procedure claims' volumes and resource utilization data, and review these studies with the Packaging Subcommittee.
We referred CPT code 97602 (non-selective wound care) for MPFS evaluation of its bundled status as CPT code 97602 relates to services provided under the OPPS. CPT code 97602 is assigned status indicator “A” in this OPPS proposed rule, meaning that while it is no longer payable under the OPPS, it is payable under a fee schedule other than OPPS. Under the MPFS, the nonselective wound care services described by CPT code 97602 are “bundled” into the selective wound care debridement codes (CPT codes 97597 and 97598). Under the MPFS, a separate payment is never made for “bundled” services and, because of this designation, the provider does not receive separate payment for non-selective wound care described by CPT code 97602. While this code now falls under the MPFS rules, payment policy for this “bundled” service has not changed and separate payment is not made.
The APC Panel Packaging Subcommittee remains active, and additional issues and new data concerning the packaging status of codes will be shared for its consideration as information becomes available. We continue to encourage submission of common clinical scenarios involving currently packaged HCPCS codes to the Packaging Subcommittee for its ongoing review. Additional detailed suggestions for the Packaging Subcommittee should be submitted to
Partial hospitalization is an intensive outpatient program of psychiatric services provided to patients as an alternative to inpatient psychiatric care for beneficiaries who have an acute mental illness. A partial hospitalization program (PHP) may be provided by a hospital to its outpatients or by a Medicare-certified CMHC. Section 1833(t)(1)(B)(i) of the Act provides the Secretary with the authority to designate the hospital outpatient services to be covered under the OPPS. Section 419.21(c) of the Medicare regulations that implement this provision specifies that payments under the OPPS will be made for partial hospitalization services furnished by CMHCs. Section 1883(t)(2)(C) of the Act requires that we establish relative payment weights based on median (or mean, at the election of the Secretary) hospital costs determined by 1996 claims data and data from the most recent available cost reports. Payment to providers under the OPPS for PHPs represents the provider's overhead costs associated with the program. Because a day of care is the unit that defines the structure and scheduling of partial hospitalization services, we established a per diem payment methodology for the PHP APC, effective for services furnished on or after August 1, 2000. For a detailed discussion, refer to the April 7, 2000 OPPS final rule (65 FR 18452).
To calculate the proposed CY 2006 PHP per diem payment, we used the same methodology that was used to compute the CY 2005 PHP per diem payment. For CY 2005, the per diem amount was based on 12 months of hospital and CMHC PHP claims data (for services furnished from January 1, 2003 through December 31, 2003). We used data from all hospital bills reporting condition code 41, which identifies the claim as partial hospitalization, and all bills from CMHCs because CMHCs are Medicare providers only for the purpose of providing partial hospitalization services. We used CCRs from the most recently available hospital and CMHC cost reports to convert each provider's line-item charges as reported on bills, to estimate the provider's cost for a day of PHP services. Per diem costs were then computed by summing the line-item costs on each bill and dividing by the number of days on the bill.
In a Program Memorandum issued on January 17, 2003 (Transmittal A-03-004), we directed fiscal intermediaries to recalculate hospital and CMHC CCRs using the most recently settled cost reports by April 30, 2003. Following the initial update of CCRs, fiscal intermediaries were further instructed to continue to update a provider's CCR and enter revised CCRs into the outpatient provider specific file. Therefore, for CMHCs, we use CCRs from the outpatient provider specific file.
Historically, the median per diem cost for CMHCs has greatly exceeded the median per diem cost for hospital-based PHPs and has fluctuated significantly
In the CY 2003 update, the difference in median per diem cost for CMHCs and hospital-based PHPs was so great, $685 for CMHCs and $225 for hospital-based PHPs, that we applied an adjustment factor of .583 to CMHC costs to account for the difference between “as submitted” and “final settled” cost reports. By doing so, the CMHC median per diem cost was reduced to $384, resulting in a combined hospital-based and CMHC PHP median per diem cost of $273. As with all APCs in the OPPS, the median cost for each APC was scaled to be relative to the cost of a mid-level office visit and the conversion factor was applied. The resulting per diem rate for PHP for CY 2003 was $240.03.
In the CY 2004 OPPS update, the median per diem cost for CMHCs grew to $1038, while the median per diem cost for hospital-based PHPs was again $225. After applying the .583 adjustment factor to the median CMHC per diem cost, the median CMHC per diem cost was $605. As the CMHC median per diem cost exceeded the average per diem cost of inpatient psychiatric care, we proposed a per diem rate for CY 2004 based solely on hospital-based PHP data. The proposed PHP per diem for CY 2004, after scaling, was $208.95. However, by the time we published the OPPS final rule for CY 2004, we had received updated CCRs for CMHCs. Using the updated CCRs significantly lowered the CMHC median per diem cost to $440. As a result, we determined that the higher per diem cost for CMHCs was not due to the difference between “as submitted” and “final settled” cost reports, but were the result of excessive increases in charges which may have been done in order to receive higher outlier payments. Therefore, in calculating the PHP median per diem cost for CY 2004, we did not apply the .583 adjustment factor to CMHC costs to compute the PHP APC. Using the updated CCRs for CMHCs, the combined hospital-based and CMHC median per diem cost for PHP was $303. After scaling, we established the CY 2004 PHP APC of $286.82.
Then, in the CY 2005 OPPS update, the CMHC median per diem cost was $310 and the hospital-based PHP median per diem cost was $215. No adjustments were determined to be necessary and, after scaling, the combined median per diem cost of $289 was reduced to $281.33. We believed that the reduction in the CMHC median per diem cost indicated that the use of updated CCRs had accounted for the previous increase in CMHC charges, and represented a more accurate estimate of CMHC per diem costs for PHP.
For CY 2006, we analyzed 12 months of data for hospital and CMHC PHP claims for services furnished between January 1, 2004, and December 31, 2004. The data indicated that the median per diem cost for CMHCs had dropped to $143, while the median per diem cost for hospital-based PHPs was $209. It appears that CMHCs significantly reduced their charges in CY 2004. The average charge per day for CMHCs in CY 2003 was $1,184 and the average cost per day was $335. In CY 2004, the CMHC average charge per day dropped to $765 and the average cost per day was $167. We have determined that a combination of lower charges and slightly lower CCRs for CMHCs resulted in a significant decline in the CMHC median per diem cost.
Following the methodology used for the CY 2005 OPPS update, the combined hospital-based and CMHC median per diem cost would be $149, a decrease of 48 percent compared to the CY 2005 combined median per diem amount. We believe that after scaling this amount to the cost of a mid-level office visit, the resulting APC rate would be too low to cover the per diem cost for all PHPs.
We are considering an alternative update methodology for the PHP APC for CY 2006 that would mitigate this drastic reduction in payment for PHP. One alternative would be to base the PHP APC on hospital-based PHP data alone. The median per diem cost of hospital-based PHPs has remained in the $200-225 range over the last 5 years, while the median per diem cost for CMHC PHPs has fluctuated significantly from a high of $1,037 to a low of $143. Under this alternative, we would use $209, the median per diem cost for hospital-based PHPs during CY 2004 to establish the PHP APC for CY 2006. However, we believe using this amount would also result in an unacceptable drop in Medicare payments for all PHPs in CY 2006 compared to payments in CY 2005.
Another alternative we are considering is to apply a different trimming methodology to CMHC costs in an effort to eliminate the effect of data for those CMHCs that appeared to have excessively increased their charges in order to receive outlier payments. We compared CMHC per diem costs in CY 2003 to CMHC per diem costs in CY 2004 and determined the percentage change. Initially, we trimmed CMHCs claims where the CMHC's per diem costs changed by 50 percent or more from CY 2003 to CY 2004. After combining the remaining CMHC claims with the hospital-based PHP claims, we calculated a median per diem cost of $160.75. However, this approach did not eliminate the data for all of the CMHCs with unreasonable per diem costs. We then analyzed the resulting median per diem cost if we trimmed CMHC claims where the difference in CMHC per diem costs from 2003 to 2004 was 25 percent. This trimming approach resulted in a combined CMHC and hospital-based PHP median per diem cost of $176. We also trimmed the CMHC claims from the CY 2003 data to see how trimming aberrant data would affect the combined hospital/CMHC median per diem cost. We found that trimming the claims from the CMHCs with a 25 percent difference in per diem cost from CY 2003 to CY 2004 reduced the $289 median per diem cost to $218.
We believe it is important to eliminate aberrant data and we believe trimming certain CMHC data would provide an incentive for CMHCs to stabilize their charges so that we could use their data in future updates of the PHP APC. However, we believe that the trimming methods described above would also result in an unacceptably large decrease in payment. In addition, the trimming method we used was based on percentage change in cost per day, and may not have identified all the CMHCs that may have manipulated their charges in order to receive more outlier payments, for example, CMHCs with high charges and no reduction in charges compared to CY 2003.
Although we prefer to use both CMHC and hospital data to establish the PHP APC, we continue to be concerned about the volatility of the CMHC data. The analyses we have conducted seem to indicate that eliminating aberrant CMHC data results in a median per diem cost more in line with hospital data. We will continue to analyze the CMHC data in developing payment rates, however, if the data continues to
We are considering an approach that would lessen the PHP payment reduction for CY 2006, yet, ensure an adequate payment amount and continue to ensure access to the partial hospitalization benefit for Medicare beneficiaries. For CY 2006, we are proposing to apply a 15-percent reduction in the combined hospital-based and CMHC median per diem cost that was used to establish the CY 2005 PHP APC. That amount would then be scaled to be relative to the cost of a mid-level office visit to establish the PHP APC for CY 2006. We believe a reduction in the CY 2005 median per diem cost would strike an appropriate balance between using the best available data and providing adequate payment for a program that often spans 5-6 hours a day. We believe 15 percent is an appropriate reduction because it recognizes decreases in median per diem costs in both the hospital data and the CMHC data, and also reduces the risk of any adverse impact on access to these services that might result from a large single-year rate reduction. However, we would propose that the reduction in payments for PHP be a transitional measure, and will continue to monitor CMHC costs and charges for these services and work with CMHCs to improve their reporting so that payments can be calculated based on better empirical data, consistent with the approach we have used to calculate payments in other areas of the OPPS.
To apply the methodology, we would reduce $289 (the CY 2005 combined hospital-based and CMHC median per diem cost) by 15 percent, resulting in a combined median per diem cost of $245.65. After scaling, we are proposing the resulting APC amount for PHP of $240.51 for CY 2006, of which $48.10 is the beneficiary's coinsurance. We will continue to analyze the data to determine whether there is a more targeted approach that would allow use of the CMHC and hospital PHP claims data to establish the final PHP rate for CY 2006.
In the November 7, 2003 final rule with comment period (68 FR 63469), we indicated that, given the difference in PHP charges between hospitals and CMHCs, we did not believe it was appropriate to make outlier payments to CMHCs using the outlier percentage target amount and threshold established for hospitals. There was a significant difference in the amount of outlier payments made to hospitals and CMHCs for PHP. Further analysis indicated the use of OPPS outlier payments for CMHCs was contrary to the intent of the general OPPS outlier policy. Therefore, for CYs 2004 and 2005, we established a separate outlier threshold for CMHCs. We designated a portion of the estimated 2.0 percent outlier target amount specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS in each of those years, excluding outlier payments.
As stated in the November 15, 2004 final rule with comment period, CMHCs were projected to receive 0.6 percent of the estimated total OPPS payments in CY 2005 (69 FR 65848). The CY 2005 CMHC outlier threshold is met when the cost of furnishing services by a CMHC exceeds 3.5 times the PHP APC payment amount. The current outlier payment percentage is 50 percent of the amount of costs in excess of the threshold.
CMS and the Office of the Inspector General are continuing to monitor the excessive outlier payments to CMHCs. As previously stated in section II.B.2. above, we used CY 2004 claims data to calculate the proposed CY 2006 per diem payment. These data show the effect of the separate outlier threshold for CMHCs that was effective January 1, 2004. During CY 2004, the separate outlier threshold for CMHCs resulted in $1.8 million in outlier payments to CMHCs, within the 2.0 percent of total OPPS payments identified for CMHCs. In CY 2003, more than $30 million was paid to CMHCs in outlier payments. We believe this difference in outlier payments indicates that the separate outlier threshold for CMHCs has been successful in keeping outlier payments to CMHCs in line with the percentage of OPPS payments made to CMHCs.
As noted in section II.H. of this preamble, for CY 2006, we are proposing to set the target for hospital outpatient outlier payments at 1.0 percent of total OPPS payments. We are also proposing to allocate a portion of that 1.0 percent, 0.006 percent (or 0.006 percent of total OPPS payments), to CMHCs for PHP services. As discussed in section II.G. below, we are proposing a dollar threshold in addition to an APC multiplier threshold for hospital OPPS outlier payments. However, because PHP is the only APC for which CMHCs may receive payment under the OPPS, we would not expect to redirect outlier payments by imposing a dollar threshold. Therefore, we are not proposing a dollar threshold for CMHC outliers. We are proposing to set the outlier threshold for CMHCs for CY 2006 at 3.45 percent times the APC payment amount and the CY 2006 outlier payment percentage applicable to costs in excess of the threshold at 50 percent. As we did with the hospital outlier threshold, we used hospital charge inflation factor to inflate charges to CY 2006.
Section 1833(t)(3)(C)(ii) of the Act requires us to update the conversion factor used to determine payment rates under the OPPS on an annual basis. Section 1833(t)(3)(C)(iv) of the Act provides that, for CY 2006, the update is equal to the hospital inpatient market basket percentage increase applicable to hospital discharges under section 1886(b)(3)(B)(iii) of the Act.
The forecast of the hospital market basket increase for FY 2006 published in the IPPS proposed rule on May 4, 2005 is 3.2 percent (70 FR 23384). To set the OPPS proposed conversion factor for CY 2006, we increased the CY 2005 conversion factor of $56.983, as specified in the November 15, 2004 final rule with comment period (69 FR 65842), by 3.2 percent.
In accordance with section 1833(t)(9)(B) of the Act, we further adjusted the conversion factor for CY 2005 to ensure that the revisions we are making to our updates by means of the wage index are made on a budget-neutral basis. We calculated a proposed budget neutrality factor of 1.002015212 for wage index changes by comparing total payments from our simulation model using the FY 2006 IPPS proposed wage index values to those payments using the current (FY 2005) IPPS wage index values. In addition, to accommodate the proposed rural adjustment discussed in section II.G. of this preamble, we calculated a proposed budget neutrality factor of 0.99652023 by comparing payments with the rural adjustment to those without. For CY 2006, allowed pass-through payments are estimated to decrease to 0.05 percent of total OPPS payments, down from 0.1 percent in CY 2005. The proposed conversion factor is also adjusted by the difference in estimated pass-through payments of 0.05 percent. Finally, decreasing proposed payments for outliers to 1.0 percent of total payments returned 1.0 percent to the conversion factor.
The proposed market basket increase update factor of 3.2 percent for CY 2006, the required wage index budget neutrality adjustment of approximately 1.002015212, the return of 1.0 percent
Section 1833(t)(2)(D) of the Act requires the Secretary to determine a wage adjustment factor to adjust, for geographic wage differences, the portion of the OPPS payment rate and the copayment standardized amount attributable to labor and labor-related cost. This adjustment must be made in a budget neutral manner. As we have done in prior years, we are proposing to adopt the IPPS wage indices and extend these wage indices to TEFRA hospitals that participate in the OPPS but not the IPPS.
As discussed in section II.A. of this preamble, we standardize 60 percent of estimated costs (labor-related costs) for geographic area wage variation using the IPPS wage indices that are calculated prior to adjustments for reclassification to remove the effects of differences in area wage levels in determining the OPPS payment rate and the copayment standardized amount.
As published in the original OPPS April 7, 2000 final rule (65 FR 18545), OPPS has consistently adopted the final IPPS wage indices as the wage indices for adjusting the OPPS standard payment amounts for labor market differences. As initially explained in the September 8, 1998 OPPS proposed rule, we believed and continue to believe that using the IPPS wage index as the source of an adjustment factor for OPPS is reasonable and logical, given the inseparable, subordinate status of the hospital outpatient within the hospital overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually. In this proposed rule, we are proposing to use the proposed FY 2006 hospital IPPS wage index published in the
We note that the FY 2006 IPPS wage indices continue to reflect a number of changes implemented in FY 2005 as a result of the new OMB standards for defining geographic statistical areas, the implementation of an occupational mix adjustment as part of the wage index, and new wage adjustments provided for under Pub. L. 108-173. The following is a brief summary of the proposed changes in the FY 2005 IPPS wage indices, continued for FY 2006, and any adjustments that we are proposing applying to the OPPS for CY 2006. We refer the reader to the FY 2006 IPPS proposed rule (70 FR 23367 through 23384, May 4, 2005) for a detailed discussion of the changes to the wage indices.)
1. The proposed continued use of the new Core Based Statistical Areas (CBSAs) issued by the Office of Management and Budget (OMB) as revised standards for designating geographical statistical areas based on the 2000 Census data, to define labor market areas for hospitals for purposes of the IPPS wage index. The OMB revised standards were published in the
2. We again proposed to apply the proposed occupational mix adjustment for FY 2006 IPPS to 10-percent of the average hourly wage and leave 90 percent of the average hourly wage unadjusted for occupational mix. As noted in the FY 2006 IPPS proposed rule, we are, essentially, using the same CMS Wage Index Occupational Mix Survey and Bureau of Labor Statistics data to calculate the adjustment. Because there are no significant differences between the FY 2005 and the FY 2006 occupational mix survey data and results, we believe it is appropriate to adopt the IPPS rule and apply the same occupational mix adjustment to 10 percent of the proposed FY 2006 wage index.
3. The reclassifications of hospitals to geographic areas for purposes of the wage index. For purposes of the OPPS wage index, we are proposing to adopt all of the IPPS reclassifications proposed for FY 2006, including reclassifications that the Medicare Geographic Classification Review Board (MGCRB) approved under the one-time appeal process for hospitals under section 508 of Pub. L. 108-173. We note that section 508 reclassifications will terminate March 31, 2007.
4. The proposed continuation of an adjustment to the wage index to reflect the “out-migration” of hospital employees who reside in one county but commute to work in a different county with a higher wage index, in accordance with section 505 of Pub. L. 108-173 (FY 2006 IPPS proposed rule (70 FR 23381 and 23382, May 4, 2005)). Hospitals paid under the IPPS located in the qualifying section 505 “out-migration” counties receive a wage index increase unless they have already been reclassified under section 1886(d)(10) of the Act, redesignated under section 1886(d)(8)(B) of the Act, or reclassified under section 508. As discussed in the FY 2006 IPPS proposed rule, we proposed that reclassified hospitals not receive the out-migration adjustment unless they waive their reclassified
The following proposed FY 2006 IPPS wage indices that were published in the May 4, 2005
With the exception of reclassifications resulting from the implementation of the one-time appeal process under section 508 of Pub. L. 108-173, all changes to the wage index resulting from geographic labor market area reclassifications or other adjustments must be incorporated in a budget neutral manner. Accordingly, in calculating the OPPS budget neutrality estimates for CY 2006, we have included the wage index changes that result from MGCRB reclassifications, implementation of section 505 of Pub. L. 108-173, and other refinements made in the FY 2006 IPPS proposed rule, such as the hold harmless provision for hospitals changing status from urban to rural under the new CBSA geographic statistical area definitions. However, section 508 set aside $900 million to implement the section 508 reclassifications. We considered the increased Medicare payments that the section 508 reclassifications would create in both the IPPS and OPPS when we determined the impact of the one-time appeal process. Because the increased OPPS payments already counted against the $900 million limit, we did not consider these reclassifications when we calculated the OPPS budget neutrality adjustment.
CMS uses CCRs to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS. Some hospitals do not have a valid CCR. These hospitals include, but are not limited to, hospitals that are new and have not yet submitted a cost report, hospitals that have a CCR that falls outside predetermined floor and ceiling thresholds for a valid CCR, or hospitals that have recently given up their all-inclusive rate status. Last year we updated the default urban and rural CCRs for CY 2005 in our final rule published on November 15, 2004 (69 FR 65821 through 65825). We are proposing to update the default ratios using the most recent cost report data for CY 2006.
We calculated the proposed statewide default CCRs using the same CCRs that we use to adjust charges to costs on claims data. Table 3 lists the proposed CY 2006 default urban and rural CCRs by State. These CCRs are the ratio of total costs to total charges from each provider's most recently submitted cost report, for those cost centers relevant to outpatient services. We also adjusted these ratios to reflect final settled status by applying the differential between settled to submitted costs and charges from the most recent pair of settled to submitted cost reports.
The majority of submitted cost reports, 80.79 percent, were for CY 2003. We only used valid CCRs to calculate these default ratios. That is, we removed the CCRs for all-inclusive hospitals, CAHs, and hospitals in Guam and the U.S. Virgin Islands because these entities are not paid under the OPPS, or in the case of all-inclusive hospitals, because their CCRs are suspect. We further identified and removed any obvious error CCRs and trimmed any outliers. We limited the hospitals used in the calculation of the default CCRs to those hospitals that billed for services under the OPPS during CY 2003.
Finally, we calculated an overall average CCR, weighted by a measure of volume, for each State except Maryland. This measure of volume is the total lines on claims and is the same one that we use in our impact tables. For Maryland, we used an overall weighted average CCR for all hospitals in the nation as a substitute for Maryland CCRs, which appear in Table 3. Very few providers in Maryland are eligible to receive payment under the OPPS, which limits the data available to calculate an accurate and representative CCR. The overall decrease in default statewide CCRs can be attributed to the general decline in the ratio between costs and charges widely observed in the cost report data.
When the OPPS was implemented, every provider was eligible to receive an additional payment adjustment (transitional corridor payment) if the payments it received for covered OPD services under the OPPS were less than the payments it would have received for the same services under the prior reasonable cost-based system (section 1833(t)(7) of the Act). Section 1833(t)(7) of the Act provides that the transitional corridor payments are temporary payments for most providers, with two exceptions, to ease their transition from the prior reasonable cost-based payment system to the OPPS system. Cancer hospitals and children's hospitals receive the transitional corridor payments on a permanent basis. Section 1833(t)(7)(D)(i) of the Act originally provided for transitional corridor payments to rural hospitals with 100 or fewer beds for covered OPD services furnished before January 1, 2004. However, section 411 of Pub. L. 108-173 amended section 1833(t)(7)(D)(i) of the Act to extend these payments through December 31, 2005, for rural hospitals with 100 or fewer beds. Section 411 also extended the transitional corridor payments to sole community hospitals located in rural areas for services furnished during the period that begins with the provider's first cost reporting period beginning on or after January 1, 2004, and ends on December 31, 2005. Accordingly, the authority for making transitional corridor payments under section 1833(t)(7)(D)(i) of the Act, as amended by section 411 of Pub . L. 108-173, will expire for rural hospitals having 100 or fewer beds and sole community hospitals located in rural areas on December 31, 2005. For CY 2006, transitional corridor payments will continue to be available to cancer and children's hospitals. (We note that the succeeding section II.G. of this preamble discusses an additional provision of section 411 of Pub. L. 108-173 that related to a study to determine appropriate adjustment to payments for rural hospitals under the OPPS beginning January 2006.)
Section 411 of Pub. L. 108-173 added a new paragraph (13) to section 1833(t) of the Act. New section 1833(t)(13)(A) specifically instructs the Secretary to conduct a study to determine if rural hospital outpatient costs exceed urban hospital outpatient costs. Moreover, under new section 1833(t)(13)(B) of the Act, the Secretary is given authorization to provide an appropriate adjustment to rural hospitals by January 1, 2006, if rural hospital costs are determined to be greater than urban hospital costs.
To conduct the study required under section 1833(t)(13)(A), as added by section 411 of Pub. L. 108-173, we believe that a simple comparison of unit costs is insufficient because the costs faced by hospitals, whether urban or rural, will be a function of many factors. These include the local labor supply, and the complexity and volume of services provided. Therefore, we used regression analysis to study differences in the outpatient cost per unit between rural and urban hospitals in order to compare costs after accounting for the influence of these other factors.
Our regression analysis included all 4,077 hospitals billing under OPPS for which we could model accurate cost per unit estimates. For each hospital, total outpatient costs and descriptive information were derived from CY 2004 Medicare claims and the hospital's most recently submitted cost report. The description of claims used, our methodology for creating costs from charges, and a description of the specific hospitals included in our modeling are discussed in section II.A. of this preamble. We excluded separately payable drugs and biologicals, and clinical laboratory services paid on a fee schedule from our analysis. We excluded the 49 hospitals in Puerto Rico because their wage indices and unit costs are so different that they would have skewed results. Finally, we excluded facilities whose unit outpatient costs were outside of 3 standard deviations from the geometric mean unit outpatient cost.
Total unit outpatient cost for each hospital was calculated by dividing total outpatient cost by the total number of APC units discounted for the joint performance of multiple procedures. (See section II.G.2. below for a definition of discounted units.) We modeled both explanatory and payment regression models. In an “explanatory model” approach, all variables that are hypothesized to be important determinants of cost are included in the cost regression, whether or not they are going to be used as payment adjustments. In a “payment model” approach, the only independent variables included in the cost regression are those variables that are used as payment adjustments. The regression
In considering potential independent variables that might explain differences in unit outpatient costs between urban and rural hospitals, we determined that several factors would be important:
• First, unit outpatient costs are expected to vary directly with the prices of inputs used to produce outpatient services, especially labor. Wage rates tend to be lower in rural areas than in urban areas.
• Second, there may be economies of scale in producing outpatient services, which imply that unit costs will vary inversely with the volume of outpatient services provided.
• Third, independent of the volume of outpatient services, hospitals that provide more complex outpatient services are expected to have higher unit costs than hospitals with less complex service-mixes. Typically, greater complexity involves a combination of higher equipment and labor costs. Rural hospitals usually have less volume and perform less complex services than urban hospitals.
• Fourth, the size of a hospital may influence the volume and service-mix of outpatient services. Large hospitals generally provide a wider range of more complex services than do small hospitals. Large hospitals may also have larger volumes in ancillary departments that are shared between outpatient and inpatient services, and as a result, benefit from greater economies of scale than do small hospitals. Rural hospitals tend to be smaller than urban hospitals. Our primary measure of outpatient volume is units of APCs, which only reflects the volume of Medicare services paid under the outpatient PPS. This measure does not include the inpatient utilization of shared ancillary departments or non-Medicare outpatient services. For all these reasons, it seems appropriate to include a broader measure of facility size in the explanatory regression model. Therefore, as explained below, we used the total number of facility beds to measure facility size. Unit outpatient costs may be positively or negatively related to facility size depending on whether complexity effects or scale economies are more important.
We used the hospital wage index as our measure of labor input prices. To reflect the complexity of outpatient services, we used a service-mix index defined as the ratio of the number of discounted units weighted by APC relative weights divided by the number of unweighted discounted units. Discounted units are the total number of units after we adjust for the multiple procedure reduction of 50 percent that applies to payment for surgical services when two surgical procedures are performed during the same operative session and for selected radiology procedures, as proposed (see section XIV. of the preamble). For example, if a procedure is paid at 100 percent of payment 1,000 times and the same procedure is paid at 50 percent of payment 100 times, the discounted units for that procedure equal 1,050 units (the sum of 1,000 units at full payment plus 100 units at 50 percent payment). We then calculate the total weight for that procedure by multiplying the discounted units by the full weight for the procedure. The service-mix index reflects the average APC weight of each facility's outpatient services. Outpatient service volume was measured as the total number of unweighted discounted units. We used the total number of facility beds as the broader measure of facility size. We also included categorical variables to indicate the types of specialty hospitals that participate in OPPS, specifically cancer, children's, long-term care, rehabilitation, and psychiatric hospitals. Finally, we included a categorical variable for rural/urban location to capture variation unexplained by the other independent variables in the model. For all of the rural dummy variables discussed below, urban hospitals are the reference group. Table 4 provides descriptive statistics for the dependent variable and key independent variables by urban and rural status. Without controlling for the other influences on per unit cost, rural hospitals have lower cost per unit than urban hospitals. However, when standardized for the service-mix wage indices, average unit costs are nearly identical between urban and rural hospitals
Overall, all rural hospitals give some indication of having higher cost per unit, after controlling for labor input prices, service-mix complexity, volume, facility size, and type of hospital. In an explanatory model regressing unit costs on all independent variables discussed above, the coefficient for the rural categorical variable was 0.024 (p=0.058), which suggests that rural hospitals are approximately 2.4 percent more costly than urban hospitals after accounting for the impact of other explanatory variables. The results of this regression appear in Table 5. This regression demonstrated reasonably good explanatory power with an adjusted R2 of 0.53 (rounded). Adjusted R2 is the percentage of variation in the dependent variable explained by the independent variables and is a standard measure of how well the regression model fits the data. The regression coefficients of the key explanatory variables all move in the expected direction: positive for the wage index, indicating that rural hospitals can be expected to have lower unit outpatient costs because they tend to be located in areas with lower wage rates; positive for the outpatient service-mix index, consistent with the hypothesis that rural hospitals' less complex outpatient service-mixes result in lower unit costs than those of the typical urban hospital; negative for outpatient service volume, implying that, on average, rural hospitals' lower service volumes are a source of higher unit cost compared to urban hospitals; and positive for the facility size variable (beds), suggesting that facility size is more reflective of complexity than any economies of scale. The rural dummy variable has a coefficient of 0.02414. If the unit costs of rural hospitals are the same as the unit costs of urban hospitals, the probability of observing a value as extreme as or more extreme than 2.4 percent would be approximately 6 percent or less. This explanatory regression model provides some evidence that outpatient services provided by rural hospitals are more costly than outpatient services provided by urban hospitals, but the evidence is weak. The payment regression that accompanies this explanatory model indicates an adjustment for all rural hospitals of 3.7 percent.
In order to assess whether the small difference in costs was uniform across rural hospitals or whether all of the variation was attributable to a specific class of rural hospitals, we included more specific categories of rural hospitals in our explanatory regression analysis. We divided rural hospitals into rural SCHs, rural hospitals with less than 100 beds that are not rural sole community hospitals, and other rural hospitals. The first two categories of rural hospitals are currently eligible for payments under the expiring hold-harmless provision. Because it appears that rural SCHs are responsible for the variation in rural hospital costs, we then collapsed the last remaining categories in an “all other” rural hospital category.
We found that rural SCHs demonstrated significantly higher cost per unit than urban hospitals after controlling for labor input prices, service-mix complexity, volume, facility size, and type of hospital. The results of this regression appear in Table 6. With the exception of the new rural variables, the independent variables have the same sign and significance as in Table 5. Rural SCHs have a positive and significant coefficient; all other rural hospitals do not. The rural SCH “dummy” variable has an explanatory regression coefficient of 0.05668 and an observed probability that the coefficient is zero of less than 0.001. If the unit costs of rural SCHs are the same as those of urban hospitals, the probability of observing a value as extreme or more extreme than 5.8 percent would be less than 0.1 percent. Accordingly, we have determined that rural SCHs are more costly than urban hospitals, holding all other variables constant. Notably, we observed no significant difference between all other rural hospitals and urban hospitals.
Based on the above analysis and as noted in the explanatory regression in Table 6, we believe that a payment adjustment for rural SCHs is warranted. The accompanying payment regression, also appearing in Table 6, indicates a cost impact of 6.6 percent. Thus, in accordance with the authority provided in section 1833(t)(13)(B) of the Act, as added by section 411 of Pub. L. 108-173, we are proposing a 6.6 percent payment increase for rural SCHs for CY 2006. This adjustment would apply to all services and procedures paid under the OPPS, excluding drugs and biologicals. We note that this adjustment would be budget neutral, and would be applied before calculating outliers and coinsurance. We may revisit this adjustment in the future.
Additional descriptive statistics are available on the CMS Web site.
Currently, the OPPS pays outlier payments on a service-by-service basis. For CY 2005, the outlier threshold is met when the cost of furnishing a service or procedure by a hospital exceeds 1.75 times the APC payment amount and exceeds the APC payment rate plus a $1,175 fixed dollar threshold. We introduced a fixed dollar threshold in CY 2005 in addition to the traditional multiple threshold to better target outliers to those high cost and complex procedures where a very costly case could present a hospital with significant financial loss. If a provider meets both of these conditions, the multiple threshold and the fixed dollar threshold, the outlier payment is calculated as 50 percent of the amount by which the cost of furnishing the service exceeds 1.75 times the APC payment rate. For CMHCs, the outlier threshold is met when the cost of furnishing a service or procedure by a CMHC exceeds 3.5 times the APC payment rate. If a CMHC provider meets this condition, the outlier payment is calculated as 50 percent of the amount by which the cost exceeds 3.5 times the APC payment rate.
As explained in our CY 2005 final rule (69 FR 65844), we set our projected target for aggregate outlier payments at 2.0 percent of aggregate total payments under OPPS. Our outlier thresholds were set so that estimated CY 2005 aggregate outlier payments would equal 2.0 percent of aggregate total payments under OPPS.
For CY 2006, we are proposing to set our projected target for aggregate outlier payments at 1.0 percent of aggregate total payments under OPPS. A portion of that 1.0 percent, an amount equal to .006 percent of aggregate total payments under OPPS, would be allocated to CMHCs for partial hospitalization program service outliers. In its March 2004 Report, MedPAC recommended that Congress should eliminate the outlier policy under the outpatient prospective payment system. While this would require a statutory change, many of the reasons cited by MedPAC for the elimination of the outlier policy are equally applicable to any reduction in the size of the percentage of total payments dedicated to outlier payments, including the following: the narrow definition of many of the services provided in hospital outpatient departments suggests that variability in costs should not be great; the distribution of outlier payments benefits some hospital groups more than others; the outlier policy is susceptible to “gaming” through charge inflation; and, the OPPS is the only ambulatory payment system with an outlier policy.
In order to ensure that estimated CY 2006 aggregate outlier payments would equal 1.0 percent of estimated aggregate total payments under OPPS, we are proposing that the outlier threshold be modified so that outlier payments are triggered when the cost of furnishing a service or procedure by a hospital exceeds 1.75 times the APC payment amount and exceeds the APC payment rate plus a $1,575 fixed dollar threshold. We choose to modify the fixed dollar threshold to target 1.0 percent of estimated aggregate total payment under OPPS and not modify the current 1.75 multiple to further our policy of targeting outlier payments to complex and expensive procedures with sufficient variability to pose a financial risk for hospitals. Modifying the multiple would do less to target outlier payments to complex and expensive procedures. For example, if we were to establish a multiple of 2.00 rather than 1.75, then an APC with a payment rate of $20,000 would see the outlier threshold associated with the multiple increase from $35,000 to $40,000. Raising the fixed dollar threshold to
For CY 2006, the outlier threshold for CMHCs is met when the cost of furnishing a service or procedure by a CMHC exceeds 3.45 times the APC payment rate. If a CMHC provider meets this condition, the outlier payment is calculated as 50 percent of the amount by which the cost exceeds 3.45 times the APC payment rate.
The following is an example of an outlier calculation for CY 2006 under our proposed policy. A hospital charges $26,000 for a procedure. The APC payment for the procedure is $3,000, including a rural adjustment, if applicable. Using the provider's cost-to-charge ratio of 0.30, the estimated cost to the hospital is $7,800. To determine whether this provider is eligible for outlier payments for this procedure, the provider must determine whether the cost for the service exceeds both the APC outlier cost threshold (1.75 × APC payment) and the fixed dollar threshold ($1,575 + APC payment). In this example, the provider meets both criteria:
(1) $7,800 exceeds $5,250 (1.75 × $3,000)
(2) $7,800 exceeds $4,575 ($1,575 + $3,000)
To calculate the outlier payment, which is 50 percent of the amount by which the cost of furnishing the service exceeds 1.75 times the APC rate, subtract $5,250 (1.75 × $3,000) from $7,800 (resulting in $2,550). The provider is eligible for 50 percent of the difference, in this case $1,275 ($2,550/2). The formula is (cost −(1.75 × APC payment rate))/2.
The basic methodology for determining prospective payment rates for OPD services under the OPPS is set forth in existing regulations at § 419.31 and § 419.32. The payment rate for services and procedures for which payment is made under the OPPS is the product of the conversion factor calculated in accordance with section II.C. of this proposed rule, and the relative weight determined under section II.A. of this proposed rule. Therefore, the national unadjusted payment rate for APCs contained in Addendum A to this proposed rule and for payable HCPCS codes in Addendum B to this proposed rule (Addendum B is provided as a convenience for readers) was calculated by multiplying the proposed CY 2006 scaled weight for the APC by the proposed CY 2006 conversion factor.
However, to determine the payment that would be made in a calendar year under the OPPS to a specific hospital for an APC for a service other than a drug, in a circumstance in which the multiple procedure discount does not apply, we take the following steps:
Section 1833(t)(3)(B) of the Act requires the Secretary to set rules for determining copayment amounts to be paid by beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of the Act specifies that the Secretary must reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed specified percentages. For all services paid under the OPPS in CY 2006, and in calendar years thereafter, the specified percentage is 40 percent of the APC payment rate. Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted coinsurance amount cannot be less than 20 percent of the OPD fee schedule amount.
For CY 2006, we are proposing to determine copayment amounts for new and revised APCs using the same methodology that we implemented for CY 2004 (see the November 7, 2003 OPPS final rule with comment period, 68 FR 63458). The proposed unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2006, are shown in Addendum A and Addendum B of this proposed rule.
To calculate the unadjusted copayment amount for an APC group, take the following steps:
Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient services. Section 1833(t)(2)(B) provides that this classification system may be composed of groups of services, so that services within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we developed a grouping classification system, referred to as the Ambulatory Payment Classification Groups (or APCs), as set forth in § 419.31 of the regulations. We use Level I and Level II HCPCS codes and descriptors to identify and group the services within each APC. The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of surgical, diagnostic, and partial hospitalization services, and medical visits. We also have developed separate APC groups for certain medical devices, drugs, biologicals, radiopharmaceuticals, and devices of brachytherapy.
We have packaged into each procedure or service within an APC group the cost associated with those items or services that are directly related and integral to performing a procedure or furnishing a service. Therefore, we do not make separate payment for packaged items or services. For example, packaged items and services include: use of an operating, treatment, or procedure room; use of a recovery room; use of an observation bed; anesthesia; medical/surgical supplies; pharmaceuticals (other than those for which separate payment may be allowed under the provisions discussed in section V. of this preamble); and incidental services such as venipuncture. Our packaging methodology is discussed in section II.A. of this proposed rule.
Under the OPPS, we pay for hospital outpatient services on a rate-per-service basis that varies according to the APC group to which the service is assigned. Each APC weight represents the median hospital cost of the services included in that APC relative to the median hospital cost of the services included in APC 0601 (Mid-Level Clinic Visits). The APC weights are scaled to APC 0601 because a mid-level clinic visit is one of the most frequently performed services in the outpatient setting.
Section 1833(t)(9)(A) of the Act requires the Secretary to review the components of the OPPS not less than annually and to revise the groups and relative payment weights and make other adjustments to take into account changes in medical practice, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of the BBRA of 1999, also requires the Secretary, beginning in CY 2001, to consult with an outside panel of experts to review the APC groups and the relative payment weights (the APC Panel recommendations for CY 2006 OPPS and our responses to them are discussed in sections III.B. and III.C.4. of this preamble).
Finally, as discussed earlier, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median (or mean cost, if elected by the Secretary) for an item or service in the group is more than 2 times greater than the lowest median cost for an item or service within the same group (referred to as the “2 times rule”). We use the median cost of the item or service in implementing this provision. The statute authorizes the Secretary to make exceptions to the 2 times rule in unusual cases, such as low-volume items and services.
In accordance with section 1833(t)(2) of the Act and § 419.31 of the regulations, we annually review the items and services within an APC group to determine with respect to comparability of the use of resources if the median of the highest cost item or service within an APC group is more than 2 times greater than the median of the lowest cost item or service within that same group (“2 times rule”). We make exceptions to this limit on the variation of costs within each APC group in unusual cases such as low-volume items and services. The statute provides no exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act because these drugs are assigned to individual APC's.
During the APC Panel's February 2005 meeting, we presented median cost and utilization data for the period of January 1, 2004, through September 30, 2004, concerning a number of APCs that violate the 2 times rule and asked the APC Panel for its recommendation. After carefully considering the information and data we presented, the APC Panel recommended moving a total of 65 HCPCS codes from their currently assigned APC to a different APC to resolve the 2 times rule violations. Of the 65 HCPCS code reassignments recommended by the APC Panel, we concur with 58 of the recommended reassignments. Therefore, we are proposing to reassign these HCPCS codes as shown in Table 7.
The seven HCPCS code movements that the APC Panel recommended, but upon further review we are proposing not to accept, are discussed below. We include in our discussion our proposal specific to each of them to resolve the 2 times rule violations.
a. APC 0146: Level I Sigmoidoscopy, APC 0147: Level II Sigmoidoscopy, APC 0428: Level III Sigmoidoscopy.
APCs 0146 and 0147 were exceptions to the 2 times rule in CY 2005. Our analysis of these two APCs based on the most current CY 2004 data revealed greater violations of the 2 times rule and changing relative frequencies of simple and complex procedures in these two APCs. Thus, for CY 2006, the APC Panel assisted us in reconfiguring these two APCs into three related APCs to resolve the two times violations and improve their clinical and resource homogeneity based on the most current hospital claims data and to remove these APCs from the list of exceptions. The APC Panel recommended moving CPT codes 45303 (Proctosigmoidoscopy dilate) and 45305 (Proctosigmoidoscopy w/bx) from APC 0147 to APC 0146 because the median cost for these codes appeared too high, and was likely based primarily on aberrant CY 2004 claims. In addition, the APC Panel recommended that CMS move CPT code 45309 (Proctosigmoidoscopy removal) from APC 0147 to a new proposed APC 0428.
b. APC 0342: Level I Pathology, APC 0433: Level II Pathology, APC 0343: Level III Pathology.
To resolve a 2 times rule violation, the APC Panel recommended moving CPT codes 88108 (Cytopath, concentrate tech) and 88112 (Cytopath, cell enhance tech) from APC 0343 to a proposed new APC 0433. The APC Panel also recommended moving CPT codes 88319 (Enzyme histochemistry) and 88321 (Microslide consultation) from APC 0342 to a proposed new APC 0433. Based on the results of our review of several years of claims data and the study of hospital resource homogeneity, we are proposing a different way to resolve the 2 times rule violation: We are proposing to place CPT codes 88319 and 88112 in APC 0343 and to place CPT codes 88108 and 88321 in APC 0433.
As discussed earlier, we may make exceptions to the 2 times limit on the variation of costs within each APC group in unusual cases such as low-volume items and services. Taking into account the APC changes that we are proposing for CY 2006 based on the APC Panel recommendations discussed in section III.B.1. of this preamble and the use of CY 2004 claims data to calculate the median cost of procedures classified in the APCs, we reviewed all the APCs to determine which APCs would not meet the 2 times limit. We used the following criteria to decide whether to propose exceptions to the 2 times rule for affected APCs:
• Resource homogeneity
• Clinical homogeneity
• Hospital concentration
• Frequency of service (volume)
• Opportunity for upcoding and code fragments.
For a detailed discussion of these criteria, refer to the April 7, 2000 OPPS final rule with comment period (65 FR 18457).
Table 8 below contains the APCs that we are proposing to exempt from the 2 times rule based on the criteria cited above. In cases in which a recommendation of the APC Panel appeared to result in or allow a violation of the 2 times rule, we generally accepted the APC Panel's recommendation because these recommendations were based on explicit consideration of resource use, clinical homogeneity, hospital specialization, and the quality of the data used to determine the APC payment rates that we are proposing for CY 2006. The median cost for hospital outpatient services for these and all other APCs can be found on the CMS Web site:
In the November 30, 2001 final rule (66 FR 59903), we finalized changes to the time period a service was eligible for payment under a New Technology APC. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to a clinically appropriate APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 3 years if sufficient data upon which to base a decision for reassignment have not been collected.
In the November 7, 2003 final rule with comment period, we last restructured the New Technology APC groups to make the cost intervals more consistent across payment levels (68 FR 63416). We established payment levels in $50, $100, and $500 intervals and expanded the number of New Technology APCs. We also retained two parallel sets of New Technology APCs, one set with a status indicator of “S” (Significant Procedure, Not Discounted When Multiple) and the other set with a status indicator of “T” (Significant Procedures, Multiple Reduction Applies). We did this restructuring because the number of procedures assigned to New Technology APCs had increased, and narrower cost bands were necessary to avoid significant payment inaccuracies for New Technology services. Therefore, we dedicated two new series of APCs to the restructured New Technology APCs, which allowed us to narrow the cost bands and afforded us the flexibility to create additional bands as future needs dictated.
As the number of procedures that qualify for placement in the New Technology APCs has continued to increase over the past 2 years, the $0 to $50 cost band represented by “S” status APC 1501 (New Technology, Level I, $0-$50) and “T” status APC 1538 (New Technology, Level I, $0-$50) spans too broad of a cost interval to accurately represent the lower costs of an ever-increasing number of procedures that qualify for New Technology payment. Therefore, we are proposing to refine this cost band to five $10 increments, resulting in the creation of an additional 10 New Technology APCs to accommodate the two parallel sets of New Technology APCs, one set with a status indicator of “S” and the other set with a status indicator of “T.” We are also proposing to eliminate the two $0 to $50 cost band New Technology APCs 1501 and 1538, so that the cost bands of all New Technology APCs would continue to be mutually exclusive. Table 9 contains a listing of the 10 additional New Technology APCs that we are proposing for CY 2006.
As we explained in the November 30, 2001 final rule (66 FR 59897), we generally keep a procedure in the New Technology APC to which it is initially assigned until we have collected data sufficient to enable us to move the procedure to a clinically appropriate APC. However, in cases where we find that our original New Technology APC assignment was based on inaccurate or inadequate information, or where the New Technology APCs are restructured, we may, based on more recent resource utilization information (including claims data) or the availability of refined New Technology APC bands, reassign the procedure or service to a different New Technology APC that most appropriately reflects its cost. Therefore, we are proposing to discontinue New Technology APCs 1501 and 1538, and reassign the procedures currently assigned to them to proposed New Technology APCs 1491 through 1500. Table 10 summarizes these proposed New Technology APC reassignments.
In the April 7, 2000 final rule (65 FR 18477), we created a set of New Technology APCs to pay for certain new technology services under the OPPS. We described a group of criteria for use in determining whether a service is eligible for assignment to a New Technology APC. We subsequently modified this set of criteria in our November 30, 2001 final rule (66 FR 59897 to 59901), effective January 1, 2002. These modifications were based on changes in the data (we were no longer required to use 1996 data to set payment rates) and on our continuing experience with the assignment of services to New Technology APCs.
Based on our history of reviewing applications for New Technology APC assignments under the OPPS, we have encountered situations where there is extremely limited clinical experience with new technology services regarding their use and efficacy in the typical Medicare population. In some cases, there may be ambiguity regarding how the new technology services fit within the standard coding framework for established procedures, and there may be no specific coding available for the new technology services in other settings or for use by other payers. Nevertheless, applicants requesting assignment of services to New Technology APCs request that we provide billing and payment mechanisms under the OPPS for the new technology services through the establishment of codes, descriptors, and payment rates. As stated in section I.F. of this preamble, we remain committed to the overarching goal of ensuring that Medicare beneficiaries have timely access to the most effective new medical treatments and technologies in clinically appropriate settings. We believe that our current New Technology APC assignment process helps to assure such access, and that an enhancement to the New Technology service application process may further encourage appropriate dissemination of and Medicare beneficiary access to new technology services.
We are interested in promoting review of the coding, clinical use, and efficacy of new technology services by the greater medical community through our New Technology service application and review process for the OPPS. Therefore, in addition to our current information requirements at the time of application, we are proposing to require that an application for a code for a new technology service be submitted to the American Medical Association's (AMA's) CPT Editorial Panel before we accept a New Technology APC application for review. This will not change our current criteria for assignment of a service to a New Technology APC. This requirement will encourage timely review by the wider medical community as CMS is reviewing the service for possible new coding and assignment to a New Technology APC under the OPPS. There is only one CPT code application that is used by applicants requesting consideration for either Category I or III codes. We would accept either a Category I or Category III code application to the CPT Editorial Panel. The application requests relevant clinical information regarding new services, including their appropriate use and the patient populations expected to benefit from the services which will provide us with useful additional information. CPT code applications are reviewed by the CPT Editorial Panel, whose members bring diverse clinical expertise to that review. We believe that consideration by the CPT Editorial Panel may facilitate appropriate dissemination of the new technology services across delivery settings and may bring to light other needed coding changes or clarifications. We are further proposing that a copy of the submitted CPT application be filed with us as part of the application for a New Technology APC assignment under the OPPS, along with CPT's letter acknowledging or accepting the coding application. We remind the public that we do not consider an application complete until all informational requirements are provided. In addition, we remind the public that when we assign a new service a HCPCS code and provide for payment under the OPPS, these actions do not imply coverage by the Medicare program, but indicate only how the procedure or service may be paid if covered by the program. Fiscal intermediaries must determine whether a service meets all program requirements for coverage, for example, that it is reasonable and necessary to treat the beneficiary's condition and whether it is excluded from payment. CMS may also make National Coverage Determinations (NCDs) on new technology procedures.
The procedures discussed below represent New Technology services for which we believe we have sufficient data to reassign to a clinically appropriate APC.
In the August 16, 2004 proposed rule (69 FR 50467), we proposed to reassign CPT codes 77523 (Proton treatment delivery, intermediate) and 77525 (Proton treatment delivery, complex) from New Technology APC 1511 (New Technology, Level XI, $900-$1,000) to clinical APC 0419 (Proton Beam Therapy, Level II). In response to this proposal, we received numerous comments urging that we maintain CPT codes 77523 and 77525 in New Technology APC 1511 at a payment rate of $950 for CY 2005, arguing that the proposed payment rate of $678.31 for
In the November 15, 2004 final rule with comment period (69 FR 65719 through 65720), we considered the concerns expressed by numerous commenters that patient access to proton beam therapy might be impeded by a significant reduction in OPPS payment. Therefore, we set the CY 2005 payment rate for CPT codes 77523 and 77525 by calculating a 50/50 blend of the median cost for intermediate and complex proton beam therapies of $690.45 derived from CY 2003 claims and the CY 2004 New Technology payment rate of $950. We used the result of this calculation ($820) to assign intermediate and complex proton beam therapies (CPT codes 77523 and 77525) to New Technology APC 1510 (New Technology—Level X ($800-$900) for a blended payment rate of $850 for CY 2005.
Our examination of the CY 2004 claims data has revealed a second year of a stable, albeit modest, number of claims on which to set the CY 2006 payment rates for CPT codes 77523 and 77525. However, unlike the median of $690.45 for the CY 2005 Level II proton beam radiation therapy clinical APC containing CPT codes 77523 and 77525 derived from the CY 2003 claims data, the median for a comparable Level II proton beam radiation therapy clinical APC is $934.46 derived from CY 2004 claims data. This more recent median appears to more accurately reflect the significant capital expense and high operating costs of a proton beam therapy facility, and supports patient access to proton beam therapy. Therefore, we are proposing to move CPT codes 77523 and 77525 from New Technology APC 1510 to clinical APC 0667 (Level II Proton Beam Radiation Therapy) based on a median cost of $934.46 for CY 2006.
In a correction to the November 7, 2003 final rule with comment period, issued on December 31, 2003 (68 FR 75442), we considered a commenter's request to combine HCPCS codes G0242 (Cobalt 60-based stereotactic radiosurgery planning) and G0243 (Cobalt 60-based stereotactic radiosurgery delivery) into a single procedure code in order to capture the costs of this treatment in single procedure claims because the majority of patients receive the planning and delivery of this treatment on the same day. We responded to the commenter's request by explaining that several other commenters stated that HCPCS code G0242 was being misused to code for the planning phase of linear accelerator-based stereotactic radiosurgery planning. Because the claims data for HCPCS code G0242 represented costs for linear accelerator-based stereotactic radiosurgery planning (due to misuse of the code), in addition to Cobalt 60-based stereotactic radiosurgery planning, we were uncertain of how to combine these data with HCPCS code G0243 to determine an accurate payment rate for a combined code for planning and delivery of Cobalt 60-based stereotactic radiosurgery.
In consideration of the misuse of HCPCS code G0242 and the potential for causing greater confusion by combining HCPCS codes G0242 and G0243 into a single procedure code, for CY 2004 we created a planning code for linear accelerator-based stereotactic radiosurgery (HCPCS code G0338) to distinguish this service from Cobalt 60-based stereotactic radiosurgery planning. We maintained both HCPCS codes G0242 and G0243 for the planning and delivery of Cobalt 60-based stereotactic radiosurgery, consistent with the use of the two G-codes for planning (HCPCS code G0338) and delivery (HCPCS codes G0173, G0251, G0339, G0340, as applicable) of each type of linear accelerator-based stereotactic radiosurgery (SRS). We indicated that we intended to maintain these new codes in their current New Technology APCs until we had sufficient hospital claims data reflecting the costs of the services to consider moving them to clinical APCs.
During the February 2005 APC Panel meeting, the APC Panel discussed the clinical and resource cost similarities between planning for Cobalt 60-based and linear accelerator-based SRS. The APC Panel also discussed the use of CPT codes instead of specific G-codes to describe the services involved in SRS planning, noting the clinical similarities in radiation treatment planning regardless of the mode of treatment delivery. Acknowledging the possible need for CMS to separately track planning for SRS, the APC Panel eventually recommended that we create a single HCPCS code to encompass both Cobalt 60-based and linear accelerator-based SRS planning. However, a hospital association and other presenters at the APC Panel meeting urged that we discontinue the use of G-codes for SRS planning, and instead, recognize the current CPT codes that describe the specific component services involved in SRS planning to reduce the burden on hospitals of maintaining duplicative codes for the same services to accommodate different payers. Lastly, one presenter urged that we combine HCPCS codes G0242 (Cobalt 60-based stereotactic radiosurgery planning) and G0243 (Cobalt 60-based stereotactic radiosurgery delivery) into a single procedure code to reflect that the majority of patients receive the planning and delivery of this treatment on the same day as a single fully integrated service.
The APC Panel recommended that we make no changes to the coding or APC placement of SRS delivery codes G0173, G0243, G0251, G0339, and G0340 for CY 2006. We first established the above full group of delivery codes in 2004, so we have only one year of hospital claims data reflecting costs of the services. In addition, presenters to the APC Panel described current ongoing deliberations amongst interested professional societies around the descriptions and coding for SRS. The APC Panel and presenters suggested that we wait for the outcome of these deliberations prior to making any significant changes to SRS delivery coding or payment rates.
In an effort to balance the recommendations of the APC Panel with the recommendations of presenters at the APC Panel meeting, in accordance with the APC Panel recommendations, we are proposing to make no changes to the APC placement of the following SRS treatment delivery codes for CY 2006: HCPCS codes G0173, G0243, G0251, G0339, and G0340.
We recognize concerns expressed by some presenters urging that we discontinue the use of the G-codes for SRS planning, and instead, recognize the current CPT codes that describe the specific component services involved in SRS planning to reduce the burden on hospitals of maintaining duplicative codes for the same services to accommodate different payers. In addition, we have no need to separately track SRS planning services, which share clinical and resource homogeneity with other radiation treatment planning
When HCPCS code G0242 was established for SRS planning, several radiology planning services were considered in determining its APC placement. In the November 30, 2001 final rule, in which we described our determination of the total cost for SRS planning based on our claims experience, we added the median costs of the following CPT codes that we found to be regularly billed with SRS delivery (CPT code 61793 in the available hospital data): 77295, 77300, 77370, and 77315. Our examination of the costs from the CY 2004 claims data for the above-mentioned CPT codes closely approximates the CY 2004 median costs reported for HCPCS codes G0242 and G0338. The APC median costs for the above-mentioned CPT codes based on the CY 2004 claims data total $1,297, while the median cost for HCPCS code G0242 is $1,366 and the median cost for HCPCS code G0338 is $1,100 based on the CY 2004 claims data. In addition, three of the above-mentioned CPT codes are included on the proposed bypass list for CY 2006, so we would not anticipate that the billing of these codes on the same day as an SRS treatment service would cause significant problems with multiple bills for SRS services. Therefore, we are proposing to discontinue HCPCS codes G0242 and G0338 for the reporting of charges for SRS planning under the OPPS, and to instruct hospitals to bill charges for SRS planning using all of the available CPT codes that most accurately reflect the services provided.
We acknowledge one APC Panel presenter's concern that the coding structure of Cobalt 60-based SRS, using either the current SRS planning G code or the appropriate CPT codes for planning services as we are proposing for CY 2006, may not necessarily reflect the same day, integrated Cobalt 60-based SRS service furnished to the majority of patients receiving Cobalt 60-based SRS. Thus, we are seeking public comment on the clinical, administrative, or other concerns that could arise if we were to bundle Cobalt 60-based SRS planning services, currently reported using HCPCS code G0242 and proposed for CY 2006 to be billed using the appropriate CPT codes for planning services, into the Cobalt 60-based SRS treatment service, currently reported under the OPPS using HCPCS code G0243. Under such a scenario, the SRS treatment service described by HCPCS code G0243 would be placed in a higher paying New Technology APC to reflect payment for the costs of the SRS planning and delivery as an integrated service. Hospitals would be prohibited from billing other radiation planning services along with the Cobalt 60-based SRS treatment delivery code. In contrast to Cobalt 60-based SRS coding, we would not consider bundling the planning for linear accelerator-based SRS with the treatment delivery services, given the various timeframes for planning that may occur with linear accelerator-based SRS.
Other than proton beam and stereotactic radiosurgery services, there are 10 procedures currently assigned to New Technology APCs for which we have data adequate to support their assignment to clinical APCs. We are proposing to reassign these procedures to clinically appropriate APCs, using CY 2004 claims data to establish median costs on which payments would be based. These procedures and their proposed APC assignments are displayed below in Table 11.
We are proposing to move these 10 procedures to new or established clinical APCs that contain services that exhibit clinical and resource homogeneity. HCPCS code C9713 (Noncontact laser vaporization of prostate, including coagulation control of intraoperative and post-operative bleeding) is similar to CPT code 52647 (Noncontact laser coagulation of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)) and CPT code 52648 (Contact laser vaporization with or without transurethral resection of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included)) with respect to their clinical characteristics and hospital resource utilization. However, instead of mapping HCPCS code C9713 to APC 163 (Level IV Cystourethroscopy and other Genitourinary Procedures), where CPT codes 52647 and 52648 are currently mapped for CY 2005, we are proposing to create a Level V APC for Cystourethroscopy and Other Genitourinary Procedures. These codes are more clinically sound in this new Level V APC. We are also proposing to map CPT codes 52647 and 52648 to this new Level V APC. In addition, we are proposing to move CPT codes 50080 and 50081 from APC 0163 to this new Level V APC, since they are similar clinically and use similar hospital resources. We believe that this configuration would improve homogeneity as well as result in a
When hyperbaric oxygen therapy (HBOT) is prescribed for promoting the healing of chronic wounds, it typically is prescribed on average for 90 minutes, which would be billed using multiple units of HBOT to achieve full body hyperbaric oxygen therapy. In addition to the therapeutic time spent at full hyperbaric oxygen pressure, treatment involves additional time for achieving full pressure (descent), providing air breaks to prevent neurological and other complications from occurring during the course of treatment, and returning the patient to atmospheric pressure (ascent). The OPPS recognizes HCPCS code C1300 (Hyperbaric oxygen under pressure, full body chamber, per 30 minute interval) for HBOT provided in the hospital outpatient setting.
We explained in the August 16, 2004 proposed rule (69 FR 50495) that our CY 2003 claims data revealed that many providers were improperly reporting charges for 90 to 120 minutes under only one unit rather than three or four units of HBOT. This inaccurate coding resulted in an inflated median cost of $177.96 for HBOT, derived using single service claims and “pseudo” single service claims. Because of these single claims coding anomalies, we proposed to calculate a “per unit” median cost for APC 0659, using only multiple units or multiple occurrences of HBOT, excluding claims with only one unit of HBOT and excluding packaged costs. To convert HBOT charges to costs, we used the CCR from the respiratory therapy cost center when available; otherwise, we used the hospital's overall CCR. Using this “per unit” methodology, we proposed a median cost for APC 0659 of $82.91 for CY 2005.
In the November 15, 2004 final rule with comment period (69 FR 65758), we agreed with commenters that there was sufficient evidence that the CCR for HBOT was not reflected solely in the respiratory therapy cost center; rather, the CCR for HBOT was reflected in a variety of cost centers. Therefore, we calculated a “per unit” median of $93.26 for HBOT, using only multiple units or multiple occurrences of HBOT and each hospital's overall CCR.
Our examination of the CY 2004 single procedure claims filed for HCPCS code C1300 revealed similar coding anomalies to those encountered in the CY 2003 single procedure claims data. Therefore, for CY 2006 ratesetting, we recalculated a “per unit” median cost for HCPCS code C1300 using only multiple units or multiple occurrences of HBOT and each hospital's overall CCR, which is the same methodology we used for setting the CY 2005 payment rate for HBOT. Excluding claims with only one unit of HBOT, we used a total of 26,556 claims to calculate the median for APC 0659 for CY 2006. Applying the methodology described above, we are proposing a median cost for APC 0659 of $93.71 for CY 2006.
A number of providers have expressed confusion related to the reporting of units for allergy testing described by CPT codes 95004 through 95078. Most of the CPT codes in the code range are assigned to APC 0370 (Allergy Tests) for the CY 2005 OPPS. Nine of these CPT codes assigned to APC 0370 instruct providers to specify the number of tests or use the singular word “test” in their descriptors, while five of these CPT codes assigned to APC 0370 do not contain such an instruction or do not contain “tests” or “testing” in their descriptors. Some providers have stated that the lack of clarity related to the reporting of units has resulted in erroneous reporting of charges for multiple allergy tests under one unit (that is, “per visit”) for the CPT codes that instruct providers to specify the number of tests.
In light of the variable hospital billing that may be inconsistent with the CPT code descriptors, we have examined carefully the CY 2004 single and multiple procedure claims data for the allergy test codes that reside in APC 0370 to set the CY 2006 payment rates. Our examination of the CY 2004 claims data revealed that many of the services for which providers billed multiple units of an allergy test reported a consistent charge for each unit. Conversely, some providers that billed only a single unit of an allergy test reported a charge many times greater than the “per test” charge reported by providers billing multiple units of an allergy test.
Our analysis of the claims data appears to validate reports made by a number of providers that the charges reported on many of the single procedure claims represent a “per visit” charge, rather than a “per test” charge, including claims for the allergy test codes that instruct providers to specify the number of tests. Because the OPPS relies only on these single procedure claims in establishing payment rates, we believe this inaccurate coding would have resulted in an inflated CY 2006 median cost of $66.44 for services that are in the CY 2005 configuration of APC 0370.
Therefore, we are proposing to move the allergy test CPT codes that instruct providers to specify the number of tests or use the singular word “test” in their descriptors from APC 0370 (Allergy Tests) to proposed APC 0381 (Single Allergy Tests) for CY 2006. We are proposing to calculate a “per unit” median cost for proposed APC 0381 using a total of 306 claims containing multiple units or multiple occurrences of a single CPT code. Packaging on the claims was allocated equally to each unit of the CPT code. Using this “per unit” methodology, we are proposing a median cost for APC 0381 of $11.37 for CY 2006. Because we believe the single procedure claims for the codes remaining in APC 0370 reflect accurate coding of these services, we are proposing to use the standard OPPS methodology to calculate the median for APC 0370. Table 12 below lists the proposed assignment of CPT codes to APC 0370 and proposed APC 0381 for CY 2006.
CPT code 43257, effective January 1, 2005, is used for esophagoscopy with delivery of thermal energy to the muscle of the lower esophageal sphincter and/or gastric cardia for the treatment of gastresophageal reflux disease. This code describes the Stretta procedure, including use of the Stretta System and all endoscopies associated with the Stretta procedure. Prior to CY 2005, the Stretta procedure was recognized under HCPCS code C9701 in the OPPS. For the CY 2005 OPPS, C9701 was deleted and CPT code 43257 was utilized for the Stretta procedure. In CY 2005, the Stretta procedure was transitioned from a New Technology APC to clinical APC 0422 (Level II Upper GI Procedures) based on several years of hospital cost data. Procedures within APC 0422 were similar to the Stretta procedure in terms of clinical characteristics and resource use.
For CY 2006, we are proposing to use both CY 2004 single claims for C9701 and multiple procedure claims containing one unit of HCPCS code C9701 and one unit of either CPT code 43234 or CPT code 43235 to calculate the Stretta procedure's contribution to the median for APC 0422. Claims reporting one endoscopy code (43234 or 43235) along with HCPCS code C9701 are included in the proposed median calculation because, in CY 2002, CMS authorized the separate and additional billing of a single endoscopy code with HCPCS code C9701, while CPT code 43257 now includes all endoscopies performed during the procedure.
Using this proposed methodology, we calculated a median for CPT code 43257 (HCPCS code C9701 in the CY 2004 claims data) of $1669.43. Using these claims in the calculation of the median cost for APC 0422, we calculated a median cost of $1385.77. We are proposing to use this methodology, applied to the more complete final rule claims set, to calculate the final CY 2006 OPPS median cost for APC 0422.
Many of the codes that currently describe vascular access procedures were new in the 2004 version of CPT and were assigned into APC groups by crosswalking the newly created CPT codes to the deleted codes' APC assignments. Although the new codes were implemented in January 2004, because of the delay between a bill being submitted to Medicare and when the bill data are viable for analysis, we did not have cost and utilization data for the new codes available for analysis until this year in preparation for the CY 2006 OPPS.
Since those original APC assignments were made, we have received requests from the public for specific APC assignment changes. We were reluctant to make changes without data to support reassignments and, therefore, made few changes to those original APC assignments.
As an outcome of an analysis of procedure-specific median costs and 2 times rule violations in preparation for the CY 2006 update of the OPPS, we developed a new APC configuration for vascular access procedure codes and several other related codes. The proposed new assignments are supported by CY 2004 hospital claims data and are based on median cost and clinical considerations.
Thus, for CY 2006, we are proposing to reassign many of the CPT codes that are currently in the following APCs:
• APC 0032 (Insertion of Central Venous/Arterial Catheter).
• APC 0109 (Removal of Implanted Devices).
• APC 0115 (Cannula/Access Device Procedures).
• APC 0119 (Implantation of Infusion Pump).
• APC 0124 (Revision of Implanted Infusion Pump).
• APC 0187 (Miscellaneous Placement/Repositioning).
The configuration that we are proposing places all of the procedures currently assigned to APC 0187 into more clinically appropriate APCs. We are also proposing to reassign all of the vascular access procedure codes currently assigned to any of the identified APCs to existing or newly reconfigured clinical APCs to create more clinical and median cost homogeneity. As a result of the proposed reassignments, those APCs are comprised of a different mix of codes than is currently the case for the CY 2005 OPPS. There are no codes assigned to APC 0187 because the only procedures that remained in APC 0187 after reassigning the vascular access procedures as we are proposing were CPT code 75940 (X-ray placement of vein filter) and CPT code 76095 (Stereotactic breast biopsy), which we reassigned to more clinically appropriate APCs. We are proposing to reassign CPT code 75940 to APC 0297 (Level II Therapeutic Radiologic Procedures) and CPT code 76095 to APC 0264 (Level II Miscellaneous Radiology Procedures).
We are proposing to create three new APCs, APC 0621 (Level I Vascular Access Codes), APC 0622 (Level II Vascular Access Codes), and APC 0623 (Level III Vascular Access Codes) and assign procedures to each of these based on median cost and clinical homogeneity. We are also proposing to rename APCs 0109 and 0115 as follows: APC 0109 (Removal of Implanted Devices); and APC 0115 (Cannula/Access Device Procedures). Table 13 displays the procedures and their current and the CY 2006 proposed APC assignments.
We presented this proposal to the APC Panel at its February, 2005 meeting. The APC Panel was supportive of the proposed reassignments and recommended that we make these changes. Therefore, for the stated reasons, we are proposing the APC modifications for CY 2006 OPPS as summarized in Table 13 above.
During the second quarter of CY 2005, we created 11 HCPCS codes that were not addressed in the November 15, 2004 final rule with comment period that updated the CY 2005 OPPS. We have designated the payment status of those codes and added them to the April update of the CY 2005 OPPS (Transmittal 514). The codes are shown in Table 14 below. In this proposed rule, we are soliciting comment on the APC assignment of these services.
Further, consistent with our annual APC updating policy, we are proposing to assign the new HCPCS codes for CY 2006 to the appropriate APC's and
Device-dependent APCs are populated by HCPCS codes that usually, but not always, require that a device be implanted or used to perform the procedure. For the CY 2002 OPPS, we used external data, in part, to establish the device-dependent APC medians used for weight setting. At that time, many devices were eligible for pass-through payment. For the CY 2002 OPPS, we estimated that the total amount of pass-through payments would far exceed the limit imposed by statute. To reduce the amount of a pro rata adjustment to all pass-through items, we packaged 75 percent of the cost of the devices, using external data furnished by commenters on the August 24, 2001 proposed rule and information furnished on applications for pass-through payment, into the median cost for the device-dependent APCs associated with these pass-through devices. The remaining 25 percent of the cost was considered to be pass-through payment.
In the CY 2003 OPPS, we determined APC medians for device-dependent APCs using a three pronged approach. First, we used only claims with device codes on the claim to set the medians for these APCs. Second, we used external data, in part, to set the medians for selected device-dependent APCs by blending that external data with claims data to establish the APC medians. Finally, we also adjusted the median for any APC (whether device-dependent or not) that declined more than 15 percent. In addition, in the CY 2003 OPPS, we deleted the device codes (“C” codes) from the HCPCS file in the belief that hospitals would include the charges for the devices on their claims, notwithstanding the absence of specific codes for devices used.
In the CY 2004 OPPS, we used only claims containing device codes to set the medians for device-dependent APCs and again used external data in a 50-percent blend with claims data to adjust medians for a few device-dependent codes when it appeared that the adjustments were important to ensure access to care. However, hospital device code reporting was optional.
In the CY 2005 OPPS, which was based on CY 2003 claims data, there were no device codes on the claims and, therefore, we could not use device-coded claims in median calculations as a proxy for completeness of the coding and charges on the claims. For the CY 2005 OPPS, we adjusted device-dependent APC medians for those device-dependent APCs for which the CY 2005 OPPS payment median was less than 95 percent of the CY 2004 OPPS payment median. In these cases, the CY 2005 OPPS payment median was adjusted to 95 percent of the CY 2004 OPPS payment median. We also reinstated the device codes and made the use of the device codes mandatory where an appropriate code exists to describe a device utilized in a procedure and also implemented HCPCS code edits to facilitate complete reporting of the charges for the devices used in the procedures assigned to the device-dependent APCs.
We are proposing to base the CY 2006 OPPS device-dependent APC medians on CY 2004 claims, the most current data available. In CY 2004, the use of device codes was optional. Thus, for the CY 2006 OPPS, we calculated median costs for these APCs using all single bills without regard to whether there was a device code on the claim. We calculated median costs for this set of APCs using the standard median calculation methodology. This methodology uses single procedure claims to set the median costs for the APC. We then compared these unadjusted median costs to the adjusted median costs that we used to set the payment rates for the CY 2005 OPPS. We found that 21 APCs experienced increases in median cost compared to the CY 2005 OPPS adjusted median costs, 1 APC median was unchanged, 16 APCs experienced decreases in median costs, and 8 APCs are proposed to be reconfigured in such a way that no valid comparison was possible. Table 15 shows the comparison of these median costs.
As we stated previously, in CY 2004, CMS reissued HCPCS codes for devices and asked that hospitals voluntarily code devices utilized to provide services. As part of our development of the proposed medians for this proposed rule, we examined CY 2004 claims that contained device codes that met our device edits, as posted on the OPPS Web site at
When we considered whether to base the weights for these APCs on the unadjusted median costs, we found that for 10 of the 38 APCs for which the APC composition is stable, basing the payment weight on the unadjusted median cost would result in a reduction of more than 15 percent in the median cost for the CY 2006 OPPS compared to the CY 2005 OPPS.
We fully expect to use the unadjusted median costs for device-dependent APCs as the basis of their payment weights for the CY 2007 OPPS because device coding is required for CY 2005 and device editing is being implemented in CY 2005, so that all CY 2005 claims should reflect the costs of devices used to provide services. Nevertheless we recognize that a payment reduction of more than 15 percent from the CY 2005 OPPS to the CY 2006 OPPS may be problematic for hospitals that provide the services contained in these APCs. Therefore, for the CY 2006 OPPS, as we have consistently done for device-dependent APCs, we are proposing to adjust the median costs for the device-dependent APCs listed in Table 15 for which comparisons with prior years are valid to the higher of the CY 2006 unadjusted APC median or 85 percent of the adjusted median on which payment was based for the CY 2005 OPPS. This would result in the use of adjusted medians for 10 device-dependent APCs. We view this as a transitional step from the adjusted medians of past years to the use of unadjusted medians based solely on hospital claims data with device codes in future years.
We expect that this would be the last year in which we would make an across the board adjustment to the median costs for these device-dependent APCs based on comparisons to the prior year's payment medians. We believe that mandatory reporting of device codes for services furnished in CY 2005, combined with the editing of claims for the presence of device codes, where such codes are appropriate, would result in claims data that more fully reflect the relative costs of these services and that across the board adjustments to median costs for these APCs would no longer be appropriate.
We recognize that the APC Panel recommended that CMS set a corridor of median costs for device-dependent APCs at no less than 90 percent of the CY 2005 payment median nor more than 110 percent of the CY 2005 payment median for purposes of setting the payment rate for the CY 2006 OPPS for these APCs. We do not believe that setting a corridor to control both increases and decreases in median costs is consistent with the use of adjusted medians as a means of transitioning hospitals to the use of the unadjusted claims data. The purpose of the transition is to moderate the rate of decline in payments so that hospitals can determine how to best adjust to payments based on unadjusted claims data. Limiting the rate of increase in payments based on such claims data would be inconsistent with that purpose. Therefore, we are proposing to adjust median costs to the greater of the median from claims data or 85 percent of the CY 2005 median used to set the payment rate in CY 2005 and not to impose a limit on the extent to which a median cost can increase.
The median costs for APC 0107 (Implantation of Cardioverter-Defibrillator) and APC 0108 (Insertion/Replacement/Repair of Cardioverter-Defibrillator Leads and Insertion of Cardioverter-Defibrillator) have been adjusted each year since CY 2003 when pass-through payment expired for cardioverter-defibrillators, because the unadjusted medians have differed significantly from the prior year's payment medians. Moreover, because we use single procedure claims to set the median costs, the median costs for these APCs have always been set on a relatively small number of claims as compared to the total frequency of claims for the services under the OPPS. For example, for this CY 2006 OPPS proposed rule, the unadjusted median cost for APC 0107 was set based on 445 single procedure claims, which is 5.5 percent of the 8,073 claims on which a procedure code in the APC was billed. Similarly, the unadjusted median cost for APC 0108 was set based on 520 single procedure claims, which is 8.7 percent of the 6,003 claims on which a procedure code in the APC was billed. Commenters have frequently told us that using the single procedure median costs for these APCs does not accurately reflect the costs of the procedures because claims from typical clinical circumstances involving multiple procedures are not used to establish the medians.
At the February 2005 APC Panel meeting, the APC Panel recommended that CMS package CPT codes 93640 and 93641 (electrophysiologic evaluation at time of initial implantation or replacement of cardioverter-defibrillator leads). The APC Panel recommended that we always package the costs for these codes because the definitions of the codes state that these evaluations are done at the time of lead implantation. Therefore, CPT codes 93640 and 93641 would never be correctly reported without a code in APC 0107 or APC 0108 also being reported. In addition, when a service assigned to APC 0107 or APC 0108 is provided, we would expect that CPT codes 93640 or 93641 for electrophysiologic evaluation and testing would also be performed frequently, and CY 2004 claims data for services in APC 0107 and APC 0108 confirm this. The APC Panel believed that packaging the costs of CPT codes 93640 and 93641 would result in more single bills available for setting the median costs for APC 0107 and APC 0108, and thus would likely yield more appropriate median costs for those APCs. Those medians would then include the costs of the electrophysiologic testing commonly performed at the time of the implantable cardioverter-defibrillator (ICD) insertion.
The APC Panel further recommended that CMS treat CPT code 33241 (Subcutaneous removal of cardioverter-defibrillator) as a bypass code when the code appeared on the same claims with services assigned to APC 0107 or APC 0108. The APC Panel recommended bypassing charges for this code only when it appeared on the same claim with codes in APC 0107 or APC 0108, because when a cardioverter defibrillator (ICD) is removed and replaced in the same operative session, it is appropriate to attribute all of the packaged costs on the claim to the implantation of the device rather than to the removal of the device. The line costs for CPT code 33241 that are removed from the claims in this case would be discarded and would not be used to set the median for APC 0105 (the APC in which the code is located).
We modeled the median costs that would be calculated for APCs 0107 and 0108, if we were to make the changes recommended by the APC Panel for these APCs, under four possible scenarios: (1) The cardioverter-defibrillator device is inserted without removal or testing; (2) the device is inserted and tested with no removal; (3) the device is removed and inserted but not tested; and (4) the device is removed, inserted, and tested. We then compared the sum of the unadjusted median costs, the sum of the proposed adjusted median costs and the sum of the costs that we modeled using the APC Panel recommendations. These results are shown in Table 16 below.
We also found that if we were to adopt the APC Panel recommendations for APCs 0107 and 0108 for the CY 2006 OPPS, the number of single bills that would be available for use in median setting would increase significantly, as shown in Table 17.
In general, we believe that the recommendations of the APC Panel show great potential for providing a far more robust set of single bills for use in setting medians for APCs 0107 and 0108 and, therefore, for improving the accuracy of the median costs acquired from the claims data. However, for the CY 2006 OPPS, adopting the APC Panel recommendations would result in higher total payments for services related to cardioverter-defibrillator insertion for some possible clinical scenarios than under the proposed adjustment methodology but would result in lower total payments in other cases. Moreover, the effects are not identical for both APCs. Both APCs require the insertion of an ICD, but the codes in APC 0108 also require the repair, revision or insertion of leads. Because the APCs are so closely related clinically and both APCs include payments for expensive implanted cardioverter-defibrillators, we are proposing to apply the same payment policy to both APC 0107 and APC 0108. We would like to receive input from the APC Panel and from the affected parties regarding the results of modeling the methodology before we decide whether to implement this multiple procedure claim strategy for both of these APCs.
Specifically, we are proposing to set the medians for these APCs at 85 percent of their CY 2005 payment medians and have based our modeling of the scaler and the impact analysis on that proposal, although we believe that the APC Panel recommendations have significant merit, particularly when we move to complete reliance on claims data in updating the OPPS for CY 2007. Although we are proposing to adjust the median costs for these APCs in the same manner as other device-dependent APCs, we will consider, based on the public comments, whether it would be appropriate to apply the multiple procedure claims methodology to these APCs for the CY 2006 OPPS. We look forward to specifically receiving public comments on the APC Panel recommendations regarding packaging and bypassing services frequently performed with procedures assigned to APC 0107 and APC 0108, with the goal of increasing single bills available for ratesetting in order to improve the accuracy of median costs based upon hospital claims.
Section 1833(t)(6)(B)(iii) of the Act requires that, under the OPPS, a category of devices be eligible for transitional pass-through payments for at least 2, but not more than 3 years. This period begins with the first date on which a transitional pass-through payment is made for any medical device that is described by the category. In our November 15, 2004 final rule with comment period (69 FR 65773), we specified three device categories currently in effect that would cease to be eligible for pass-through payment effective January 1, 2006.
The device category codes became effective April 1, 2001, under the provisions of the BIPA. Prior to pass-through device categories, we paid for pass-through devices under the OPPS on a brand-specific basis. All of the initial 97 category codes that were established as of April 1, 2001, have
There are three categories for devices that would have been eligible for pass-through payments for at least 2 years as of December 31, 2005. In the November 15, 2004 final rule with comment period, we finalized the December 31, 2005 expiration dates for these three categories—C1814 (Retinal tamponade device, silicone oil), C1818 (Integrated keratoprosthesis), and C1819 (Tissue localization excision device). Each category includes devices for which pass-through payment was first made under the OPPS in CY 2003 or CY 2004.
In the November 1, 2002 final rule, we established a policy for payment of devices included in pass-through categories that are due to expire (67 FR 66763). For CY 2003, we packaged the costs of the devices no longer eligible for pass-through payments into the costs of the procedures with which the devices were billed in CY 2001. There were few exceptions to this established policy (brachytherapy sources for other than prostate brachytherapy, which is now also separately paid in accordance with section 621(b)(2) of Pub. L. 108-173). For CY 2005, we continued to apply this policy, the same as we did in CY 2003 and 2004, to categories of devices that expired on December 31, 2004.
For CY 2006, we are proposing to implement the final decision we made in the November 15, 2004 final rule with comment period that finalizes the expiration date for pass-through status for device categories C1814, C1818, and C1819. Therefore, as of January 1, 2006, we will discontinue pass-through payment for C1814, C1818, and C1819. In accordance with our established policy, we are proposing to package the costs of the devices assigned to these three categories into the costs of the procedures with which the devices were billed in CY 2004, the year of hospital claims data used for this proposed OPPS update.
In the November 30, 2001 final rule, we explained the methodology we used to estimate the portion of each APC payment rate that could reasonably be attributed to the cost of the associated devices that are eligible for pass-through payments (66 FR 59904). Beginning with the implementation of the CY 2002 OPPS quarterly update (April 1, 2002), we deducted from the pass-through payments for the identified devices an amount that reflected the portion of the APC payment amount that we determined was associated with the cost of the device, as required by section 1833(t)(6)(D)(ii) of the Act. In the November 1, 2002 interim final rule with comment period, we published the applicable offset amounts for CY 2003 (67 FR 66801).
For the CY 2002 and CY 2003 OPPS updates, to estimate the portion of each APC payment rate that could reasonably be attributed to the cost of an associated device eligible for pass-through payment, we used claims data from the period used for recalibration of the APC rates. That is, for CY 2002 OPPS updating, we used CY 2000 claims data and for CY 2003 OPPS updating, we used CY 2001 claims data. For CY 2002, we used median cost claims data based on specific revenue centers used for device related costs because C-code cost data were not available until CY 2003. For CY 2003, we calculated a median cost for every APC without packaging the costs of associated C-codes for device categories that were billed with the APC. We then calculated a median cost for every APC with the costs of the associated device category C-codes that were billed with the APC packaged into the median. Comparing the median APC cost without device packaging to the median APC cost including device packaging enabled us to determine the percentage of the median APC cost that is attributable to the associated pass-through devices. By applying those percentages to the APC payment rates, we determined the applicable amount to be deducted from the pass-through payment, the ”offset” amount. We created an offset list comprised of any APC for which the device cost was at least 1 percent of the APC's cost.
The offset list that we have published each year is a list of offset amounts associated with those APCs with identified offset amounts developed using the methodology described above. As a rule, we do not know in advance which procedures residing in certain APCs may be billed with new device categories. Therefore, an offset amount is applied only when a new device category is billed with a HCPCS procedure code that is assigned to an APC appearing on the offset list. The list of potential offsets for CY 2005 is currently published on the CMS Web site:
For CY 2004, we modified our policy for applying offsets to device pass-through payments. Specifically, we indicated that we would apply an offset to a new device category only when we could determine that an APC contains costs associated with the device. We continued our existing methodology for determining the offset amount, described earlier. We were able to use this methodology to establish the device offset amounts for CY 2004 because providers reported device codes (C-codes) on the CY 2002 claims used for the CY 2004 OPPS update. For the CY 2005 update to the OPPS, our data consisted of CY 2003 claims that did not contain device codes and, therefore, for CY 2005 we utilized the device percentages as developed for CY 2004. In the CY 2004 OPPS update, we reviewed the device categories eligible
For the CY 2006 OPPS update, CY 2004 hospital claims are available for analysis. Hospitals billed device C-codes in CY 2004 on a voluntary basis. We have reviewed our CY 2004 data, examining hospital claims for services that included device C-codes and utilizing the methodology for calculating device offsets noted above. The numbers of claims for services in many of the APCs for which we calculated device percentages using CY 2004 data were quite small. Many of these APCs already had relatively few single claims available for median calculations compared with the total bill frequencies because of our inability to use many multiple bills in establishing median costs for all APCs, and subsetting the single claims to only those including C-codes often reduced those single bills by 80 percent or more. Our claims demonstrate that relatively few hospitals specifically coded for devices utilized in CY 2004. Thus, we do not feel confident that CY 2004 claims reporting C-codes represent the typical costs of all hospitals providing the services. Therefore, we do not propose to use CY 2004 claims with device coding to propose CY 2006 device offset amounts at this time. In addition, we do not propose to use CY 2005's methodology, for which we utilized the device percentages as developed for CY 2004. Two years have passed since we developed the device offsets for CY 2004, and the device offsets originally calculated from CY 2002 hospitals' claims data may not appropriately reflect the contributions of device costs to procedural costs in the current outpatient hospital environment. In addition, a number of the APCs on the CY 2004 and CY 2005 device offset percentage lists are either no longer in existence or have been so significantly reconfigured that the past device offsets likely do not apply.
For CY 2006, we are proposing to continue to review each new device category on a case-by-case basis as we have done in CY 2004 and CY 2005, to determine whether device costs associated with the new category are packaged into the existing APC structure. If we do not determine that for any new device category that device costs associated with the new category are packaged into existing APCs, we are proposing to continue our current policy of setting the offset for the new category to $0 for CY 2006. There are currently no established categories that would continue for pass-through payment in CY 2006. However, we may establish new categories in any quarter. If we create a new device category and determine that our data contain a sufficient number of claims with identifiable costs associated with the devices in any APC, we would adjust the APC payment if the offset is greater than $0. If we determine that a device offset greater than $0 is appropriate for any new category that we create, we are proposing to announce the offset amounts in the program transmittal that announces the new category.
For CY 2006, we are proposing to use available partial year or full year CY 2005 hospital claims data to calculate device percentages and potential offsets for CY 2006 applications for new device categories. Effective January 1, 2005, we require hospitals to report device C-codes and their costs when hospitals bill for services which utilize devices described by the existing C-codes. In addition, during CY 2005 we are implementing device edits for many services which require devices and for which appropriate device C-codes exist. Therefore, we expect that the number of claims including device codes and their respective costs will be much more robust and representative for CY 2005 than for CY 2004. We also note that offsets would not be used for any existing categories at this time. If a new device category is created for payment, for CY 2006 we are proposing to examine the available CY 2005 claims data, including device costs, to determine whether device costs associated with the new category are already packaged into the existing APC structure, as indicated earlier. If we conclude that some related device costs are packaged into existing APCs, we are proposing to utilize the methodology described earlier and first used for the CY 2003 OPPS to determine an appropriate device offset percentage for those APCs with which the new category would be reported.
Our proposal not to publish a list of APCs with device percentages at this time would be a transitional policy for CY 2006 because of the previously discussed limitations of the CY 2004 OPPS data with respect to device costs associated with procedures. We expect that we will reexamine our previous methodology for calculating the device percentages and offset amounts for the CY 2007 OPPS update, which will be based on CY 2005 hospitals claims data where device C-code reporting is required.
One of our criteria, as set forth in § 419.66(b)(3) of the regulations, for establishing a new category of devices for pass-through payment is that the item be surgically inserted or implanted. The criterion that a device be surgically inserted or implanted is one of our original criteria adopted when we implemented the BBRA requirement that we establish pass-through payment for devices. This criterion helps us define whether an item is a device, as distinguished from other items, such as materials and supplies. We further clarified our definition of the surgical insertion and implantation criterion in the November 13, 2000 final rule (65 FR 67805). In that rule we stated that we consider a device to be surgically inserted or implanted if it is introduced into the human body through a surgically created incision. We also stated that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically inserted or implanted.
In our November 15, 2004 final rule with comment period, we responded to comments received on our August 16, 2004 proposed rule, which requested that we revisit our surgical insertion and implantation criterion for establishing a new device category. The commenters specifically requested that CMS eliminate the current requirement that items that are included in new pass-through device categories must be surgically inserted or implanted through a surgically created incision. The commenters expressed concern that the current requirement may prevent access to innovative and less invasive technologies, particularly in the areas of gynecologic, urologic, colorectal and gastrointestinal procedures. These commenters asked that CMS change the surgical insertion or implantation criterion to allow pass-through payment for potential new device categories that include items introduced into the human body through a natural orifice, as well as through a surgically created incision. Several of the commenters
In responding to the commenters, we stated in the November 15, 2004 final rule with comment period (69 FR 65774) that we were also interested in hearing the views of other parties and receiving additional information on these issues. While we appreciate and welcome additional comments on these issues from the medical device makers, we were also interested in hearing the views of Medicare beneficiaries, of the hospitals that are paid under the OPPS, and of physicians and other practitioners who attend to patients in the hospital outpatient setting. For that reason, we solicited additional comments on this topic within the 60-day comment period for the November 15, 2004 final rule with comment period (69 FR 65774 through 65775). In framing their comments, we asked that commenters consider the following questions specific to devices introduced into the body through natural orifices:
1. Whether orifices include those that are either naturally or surgically created, as in the case of ostomies. If you believe this includes only natural orifices, why do you distinguish between natural and surgically created orifices?
2. How would you define “new,” with respect to time and to predecessor technology? What additional criteria or characteristics do you believe distinguish “new” devices that are surgically introduced through an existing orifice from older technology that also is inserted through an orifice?
3. What characteristics do you consider to distinguish a device that might be eligible for a pass-through category even if inserted through an existing orifice from materials and supplies such as sutures, clips or customized surgical kits that are used incident to a service or procedure?
4. Are there differences with respect to instruments that are seen as supplies or equipment for open procedures when those same instruments are passed through an orifice using a scope?
Below is a summary of the public comments we received on the four stated surgical insertion and implantation device criterion questions and our response to them.
Regarding the first specific question we posed, whether devices introduced into the body through natural orifices includes orifices that are either naturally or surgically created, commenters generally stated we should include devices as potentially eligible for pass-through categories whether they are introduced through orifices that are either naturally or surgically created, as in the case of ostomies, if the devices meet other cost and clinical criteria, in order to encourage the development of new technologies.
Regarding the second question restated above, which asked how the public would define “new” with respect to time and to predecessor technology, some commenters stated that they believed the current clinical and cost criteria are sufficient and that no additional criteria or characteristics are needed. Several commenters indicated that the timeframe for what we consider “new” could be clarified if the device in question was not FDA approved or in use in the OPD during the year that hospital claims are used for that calendar year's OPPS update, that is, it should be considered “new.” Some commenters elaborated by example. They stated that if we change the surgical insertion or implantation requirement to include devices inserted through natural orifices in 2005, devices approved by the FDA and in use in the OPD in 2003 or previously would not be eligible, while devices approved by FDA in 2004 or later and used in the OPD settings would be eligible for pass-through consideration. Another commenter stated that the definition of “new” device should include those devices that require only an FDA investigational device exemption (IDE) clearance. The commenter further stated that these devices should be granted “new” status at the time of FDA release as an IDE. The commenter stated that if FDA required a premarket approval (PMA) for the device, a determination of newness should be made on a case by case basis.
Regarding the question of what characteristics distinguish a device that might be eligible for a pass-through category even if inserted through an existing orifice from materials and supplies that are used incident to a service or procedure, some commenters generally stated their belief that the current clinical and cost criteria are sufficient to distinguish devices that might be eligible from materials and supplies. Other commenters stated that the device must be an integral part of the procedure or that it should include the characteristic of having a diagnostic or therapeutic purpose, without which the procedure could not be performed. Thus, according to these commenters, the device must function for a specific procedure, while supplies may be used for many procedures. One commenter pointed out that many devices are now implanted through the use of naturally occurring orifices or without significant incisions. This commenter indicated that the requirement of a “traditional incision” no longer serves the purpose of distinguishing between devices that are and are not implanted, or between devices and supplies and instruments. The commenter stated that retaining the requirement of a traditional incision could create incentives to use more invasive technology, if that is the technology that is eligible for pass-through payments and less invasive technology is not. This commenter suggested excluding tools and disposable supplies by excluding any item that is used primarily for the purpose of cutting or delivering an implantable device. However, the commenter recommended not reducing payment when delivery systems are packaged with the device. The commenter further recommended that the term incision be clearly defined to include all procedures involving the cutting, breaking or puncturing of tissue or skin, regardless of how small that cut is, provided that the device is attached to or inserted into the body via this cut or puncture or break. Another commenter stated that there are items included in a surgical kit that have significant cost and are single use, for example, guide wires, implying that it is sometimes difficult to determine what a supply is.
Regarding our question about whether there are differences with respect to instruments that are seen as supplies or equipment for open procedures when those same instruments are passed through an orifice using a scope,
One commenter urged us to consider the points that the surgical incision requirement is not mandated by statute and that CMS's criterion to limit devices to only those that are surgically inserted or implanted may have been based upon concern that less restrictive criteria would cause spending on pass-though items to exceed the pool of money set to fund the pass-though payments. This commenter indicated that this concern would no longer be valid, given the relatively few items currently paid on a pass-through basis.
We carefully considered the comments and are proposing to maintain our current criterion that a device must be surgically inserted or implanted, but are also proposing to modify the way we currently interpret this criterion under § 419.66(b)(3) of the regulations. We are proposing to consider eligible those items that are surgically inserted or implanted either through a natural orifice or a surgically created orifice (such as through an ostomy), as well as those that are inserted or implanted through a surgically created incision. We will maintain all of our other criteria in § 419.66 of the regulations, as elaborated in our various rules, such as the November 1, 2002 final rule (67 FR 66781 through 66787). Specifically, the clarification made at the time we clarified the surgically inserted or implanted criterion in our August 3, 2000 interim final rule with comment period, namely, that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted (65 FR 67805).
With this revision of our definition of devices that are surgically inserted or implanted, we remind the public that device category eligibility for transitional pass-through payment continues to depend on meeting our substantial clinical improvement criterion, where we compare the clinical outcomes of treatment options using the device to currently available treatments, including treatments using devices in existing or previously established pass-through device categories. We expect that requested new pass-through device categories that successfully demonstrate substantial clinical improvement for Medicare beneficiaries would describe new devices, where the additional device costs would not be reflected in the hospital claims data providing the costs of treatments available during the time period used for the most recent OPPS update.
One of our criteria, as set forth in § 419.66(c)(1) of the regulations, to establish a new device category for pass-through payment, is that the devices that would populate the category not be described by any existing or previously existing category. Commenters to our various proposed rules, as well as applicants for new device categories, have expressed concern that some of our existing and previously existing device category descriptors are overly broad, and that the category descriptors as they are currently written may preclude some new technologies from qualifying for establishment of a new device category for pass-through payment. Such parties have recommended that we consider modifying the descriptors for existing device categories, especially when a device would otherwise meet all the other criteria for establishing a new device category to qualify for pass-through payment.
We agree that implementation of the requirement that a new device category not be described by an existing or previously existing category merits review. Beginning with CY 2006, 3 years will have elapsed since 95 of the 97 initial device categories we established on April 1, 2001 will have expired: 95 categories expired after December 31, 2002, and 2 categories expired after December 31, 2003. Several additional years will have passed since those categories were first populated in CY 2000 or CY 2001. Thus, while some of the initial device category descriptors sufficed at the time they were first created, further clarification as to the types of devices that they are meant to describe is indicated. Therefore, we are proposing to create an additional category for devices that meet all of the criteria required to establish a new category for pass-through payment in instances where we believe that an existing or previously existing category descriptor does not appropriately describe the new type of device. This may entail the need to clarify or refine the short or long descriptors of the previous category. We would evaluate each situation on a case by case basis. We are proposing that any such clarification would be made prospectively from the date the new category would be made effective.
We are also proposing to revise § 419.66(c)(1) of the regulations, accordingly, to reflect as one of the criteria for establishing a device category our determination that a device is not appropriately described by any of the existing categories or by any category previously in effect. In order to determine if a “new” device is appropriately described by an existing or previously existing category of devices, we are proposing to apply two tests based upon our evaluation of information provided to us in the device category application. First, we will expect an applicant for a new device category to show that their device is not similar to devices (including related predicate devices) whose costs are reflected in our OPPS claims data in the most recent OPPS update. Second, we will require an applicant for a new device category to demonstrate that utilization of their device provides a substantial clinical improvement for Medicare beneficiaries compared with currently available treatments, including procedures utilizing devices in existing or previously existing device categories. We would consider a new device that meets both of these tests not to be appropriately described by one of the existing or previously existing pass-through device categories.
Section 1833(t)(6) of the Act provides for temporary additional payments or “transitional pass-through payments” for certain drugs and biological agents. As originally enacted by the BBRA, this
Transitional pass-through payments are also required for certain “new” drugs, devices, and biological agents that were not being paid for as a hospital OPD service as of December 31, 1996, and whose cost is “not insignificant” in relation to the OPPS payment for the procedures or services associated with the new drug, device, or biological. Under the statute, transitional pass-through payments can be made for at least 2 years but not more than 3 years. In Addenda A and B to this proposed rule, pass-through drugs and biological agents are identified by status indicator “G.”
The process to apply for transitional pass-through payment for eligible drugs and biological agents can be found on our CMS Web site:
Section 1833(t)(6)(C)(i) of the Act specifies that the duration of transitional pass-through payments for drugs and biologicals must be no less than 2 years and no longer than 3 years. The drugs whose pass-through status will expire on December 31, 2005, meet that criterion. Table 19 below lists the 10 drugs and biologicals for which we are proposing that pass-through status would expire on December 31, 2005.
We are proposing to continue pass-through status in CY 2006 for 14 drugs and biologicals. These items, which are listed in Table 20 below, were given pass-through status as of April 1, 2005. The APCs and HCPCS codes for drugs and biologicals that we are proposing to continue with pass-through status in CY 2006 are assigned status indicator “G” in Addendum A and Addendum B of this proposed rule.
Section 1833(t)(6)(D)(i) of the Act sets the payment rate for pass-through eligible drugs (assuming that no pro rata reduction in pass-through payment is necessary) as the amount determined under section 1842(o) of the Act. We note that this section of the Act also states that if a drug or biological is covered under a competitive acquisition contract under section 1847(B), then the payment rate be equal to the average price for the drug or biological for all competitive acquisition areas and year established as calculated and adjusted by the Secretary. The competitive acquisition program has not yet been implemented as of the development of this proposed rule; therefore, we do not have payment rates for certain drugs and biologicals that would be covered under this program at this time. Section 1847(A) of the Act, as added by section 303(c) of Pub. L. 108-173, establishes the use of the average sales price (ASP) methodology as the basis for payment of drugs and biologicals described in section 1842(o)(1)(C) of the Act and furnished on or after January 1, 2005. This payment methodology is set forth in § 419.64 of the regulations. Similar to the payment policy established for pass-through drugs and biologicals in CY 2005, we are proposing to pay under the OPPS for drugs and biologicals with pass-through status in CY 2006 consistent with the provisions of section 1842(o) of the Act, as amended by section 621 of Pub. L. 108-173, at a rate that is equivalent to the payment these drugs and biologicals would receive in the physician office setting.
Section 1833(t)(6)(D)(i) of the Act also sets the amount of additional payment for pass-through eligible drugs and biologicals (the pass-through payment amount). The pass-through payment amount is the difference between the amount authorized under section 1842(o) of the Act, and the portion of the otherwise applicable fee schedule amount (that is, the APC payment rate) that the Secretary determines is associated with the drug or biological.
As we explain in section V.B. of this proposed rule, we are proposing to continue to make separate payment in CY 2006 for new drugs and biologicals with a HCPCS code consistent with the provisions of section 1842(o) of the Act, as amended by section 621 of Pub. L. 108-173, at a rate that is equivalent to the payment they would receive in a physician office setting, whether or not we have received a pass-through application for the item. Accordingly, in CY 2006, the pass-through payment amount would equal zero for those new drugs and biologicals that we determine have pass-through status. That is, when we subtract the amount to be paid for pass-through drugs and biologicals under section 1842(o) of the Act, as amended by section 621 of Pub. L. 108-173, from the portion of the otherwise applicable fee schedule amount, or the APC payment rate associated with the drug or biological that would be the amount paid for drugs and biologicals under section 1842(o) of the Act as amended by section 621 of Pub. L. 108-173, the resulting difference is equal to zero.
We are proposing to use payment rates based on the ASP data from the fourth quarter of 2004 for budget neutrality estimates, impact analyses, and to complete Addenda A and B of this proposed rule because these are the most recent numbers available to us during the development of this proposed rule. These payment rates were also the basis for drug payments in the physician office setting effective April 1, 2005. To be consistent with the ASP-based payments that would be made when these drugs and biologicals are furnished in physician offices, we plan to make any appropriate adjustments to the amounts shown in Addenda A and B of this proposed rule when we publish our final rule and also on a quarterly basis on our Web site during CY 2006 if later quarter ASP submissions indicate that adjustments to the payment rates for these pass-
Table 20 lists the drugs and biologicals for which we are proposing that pass-through status continue in CY 2006. We assigned pass-through status to these drugs and biologicals as of April 1, 2005. We also have included in Addenda A and B to this proposed rule the proposed CY 2006 APC payment rates for these pass-through drugs and biologicals.
Under the OPPS, we currently pay for drugs, biologicals including blood and blood products, and radiopharmaceuticals that do not have pass-through status in one of two ways: packaged payment and separate payment (individual APCs). We explained in the April 7, 2000 final rule (65 FR 18450) that we generally package the cost of drugs and radiopharmaceuticals into the APC payment rate for the procedure or treatment with which the products are usually furnished. Hospitals do not receive separate payment from Medicare for packaged items and supplies, and hospitals may not bill beneficiaries separately for any packaged items and supplies whose costs are recognized and paid for within the national OPPS payment rate for the associated procedure or service. (Program Memorandum Transmittal A-01-133, issued on November 20, 2001, explains in greater detail the rules regarding separate payment for packaged services.)
Packaging costs into a single aggregate payment for a service, procedure, or episode of care is a fundamental principle that distinguishes a prospective payment system from a fee schedule. In general, packaging the costs of items and services into the payment for the primary procedure or service with which they are associated encourages hospital efficiencies and also enables hospitals to manage their resources with maximum flexibility. Notwithstanding our commitment to package as many costs as possible, we are aware that packaging payments for certain drugs, biologicals, and radiopharmaceuticals, especially those that are particularly expensive or rarely used, might result in insufficient payments to hospitals, which could adversely affect beneficiary access to medically necessary services.
Section 1833(t)(16)(B) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, requires that the threshold for establishing separate APCs for drugs and biologicals be set at $50 per administration for CYs 2005 and 2006. For CY 2005, we finalized our policy to continue paying separately for drugs, biologicals, and radiopharmaceuticals whose median cost per day exceeds $50 and packaging the cost of drugs, biologicals, and radiopharmaceuticals whose median cost per day is less than $50 into the procedures with which they are billed. For CY 2005, we also adopted an exception policy to our packaging rule for one particular class of drugs, the oral and injectible 5HT3 forms of anti-emetic treatments (69 FR 65779 through 65780).
For CY 2006, the threshold for establishing separate APCs for drugs and biologicals is required to be set at $50 per administration according to section 1833(t)(16)(B) of the Act. Therefore, we are proposing to continue our existing policy of paying separately for drugs, biologicals, and radiopharmaceuticals whose per day cost exceeds $50 and packaging the cost of drugs, biologicals, and radiopharmaceuticals whose per day cost is less than $50 into the procedures with which they are billed. We are also proposing to continue our policy of exempting the oral and injectible 5HT3 anti-emetic products from our packaging rule (Table 21), thereby making separate payment for all of the 5HT3 anti-emetic products. As stated in our CY 2005 final rule with comment period (69 FR 65779 through 65780), chemotherapy is very difficult for many patients to tolerate as the side effects are often debilitating. In order for beneficiaries to achieve the maximum therapeutic benefit from chemotherapy and other therapies with side effects of nausea and vomiting, anti-emetic use is often an integral part of the treatment regimen. We want to continue to ensure that our payment rules do not impede a beneficiary's access to the particular anti-emetic that is most effective for him or her as determined by the beneficiary and his or her physician.
For the CY 2006 proposed payment rates, we calculated the per day cost of all drugs, biologicals, and radiopharmaceuticals that had a HCPCS code in CY 2004 and were paid (via packaged or separate payment) under the OPPS using claims data from January 1, 2004, to December 31, 2004. In CY 2004, multisource drugs and radiopharmaceuticals had two HCPCS codes that distinguished the innovator multisource (brand) drug or radiopharmaceutical from the noninnovator multisource (generic) drug or radiopharmaceutical. We aggregated claims for both the brand and generic HCPCS codes in our packaging analysis of these multisource products. Items such as single indication orphan drugs, certain vaccines, and blood and blood products were excluded from these calculations and our treatment of these items is discussed separately in sections V.F., E., and I., respectively, of this preamble.
In order to calculate the per day cost for drugs, biologicals, and radiopharmaceuticals to determine their packaging status in CY 2006, we are proposing several changes in the methodology that was described in detail in the CY 2004 OPPS proposed rule (68 FR 47996 through 47997) and finalized in the CY 2004 final rule with comment period (68 FR 63444 through 63447). For CY 2006, to calculate the per day cost of the drugs, biologicals, and radiopharmaceuticals, we took the following steps:
In the past, many commenters have alleged that hospitals do not accurately bill the number of units for drugs and radiopharmaceuticals. We have consistently decided not to identify which hospital claims contain correctly coded units because we do not believe we should be identifying when a dosage is clinically appropriate from hospital claims information. Variations among patients with respect to appropriate doses, the variety of indications with different dosing regimens for some agents, and the possibility of off-label uses make it difficult to know when units are incorrect. However, we do believe that trimming the units would improve the accuracy of estimates by removing those records with the most extreme units, without requiring us to speculate about clinically appropriate dosing. Therefore, we believe that trimming the records with unit counts greater or less than 3 standard deviations from the geometric mean will eliminate claims from our analysis that may not appropriately represent the actual number of units of a drug or radiopharmaceutical furnished by a hospital to a patient during a specific clinical encounter. Because it reduces extreme variation, trimming on greater or less than 3 standard deviations from the geometric mean makes this trim more conservative and removes fewer records. This change in methodology gives us even greater confidence in the cost estimates we use for our packaging decisions. We are seeking comments on the changes that we are proposing in our methodology for packaging drugs and radiopharmaceuticals.
Section 1833(t)(16)(B) of the Act that requires the threshold for establishing separate APCs for drugs and biologicals to be set at $50 per administration will expire at the end of CY 2006. Therefore, we will be evaluating other packaging thresholds for these products for the CY 2007 OPPS update. We are specifically requesting comments on the use of alternative thresholds for packaging drugs and radiopharmaceuticals in CY 2007.
Section 1833(t)(14) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, requires special classification of certain separately paid radiopharmaceutical agents, drugs, and biologicals and mandates specific payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a “specified covered outpatient drug” is a covered outpatient drug, as defined in section 1927(k)(2) of the Act, for which a separate APC exists and that either is a radiopharmaceutical agent or is a drug or biological for which payment was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and biologicals are designated as exceptions and are not included in the definition of “specified covered outpatient drugs.” These exceptions are—
• A drug or biological for which payment is first made on or after January 1, 2003, under the transitional pass-through payment provision in section 1833(t)(6) of the Act.
• A drug or biological for which a temporary HCPCS code has not been assigned.
• During CYs 2004 and 2005, an orphan drug (as designated by the Secretary).
Section 1833(t)(14)(F) of the Act defines the categories of drugs based on section 1861(t)(1) and sections 1927(k)(7)(A)(ii), (k)(7)(A)(iii), and (k)(7)(A)(iv) of the Act. The categories of drugs are “sole source drugs (includes a biological product or a single source drug),” “innovator multiple source drugs,” and “noninnovator multiple source drugs.” The definitions of these specified categories for drugs, biologicals, and radiopharmaceutical agents were discussed in the January 6, 2004 OPPS interim final rule with comment period (69 FR 822), along with our use of the Medicaid average manufacturer price database to determine the appropriate classification
Section 1833(t)(14)(A) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, also provides that payment for these specified covered outpatient drugs for CYs 2004 and 2005 is to be based on its “reference average wholesale price.” Section 1833(t)(14)(G) of the Act) defines reference AWP as the AWP determined under section 1842(o) of the Act as of May 1, 2003. Section 1833(t)(14)(A)(ii) of the Act, as added by section 621(a) of Pub. L. 108-173 requires that in CY 2005—
• A sole source drug must be paid no less than 83 percent and no more than 95 percent of the reference AWP.
• An innovator multiple source drug must be paid no more than 68 percent of the reference AWP.
• A noninnovator multiple source drug must be paid no more than 46 percent of the reference AWP.
Section 1833(t)(14)(G) of the Act defines “reference AWP” as the AWP determined under section 1842(o) the Act as of May 1, 2003. We interpreted this to mean the AWP set under the CMS single drug pricer (SDP) based on prices published in the Red Book on May 1, 2003.
For CY 2005, we finalized our policy to determine the payment rates for specified covered outpatient drugs under the provisions of Pub. L. 108-173 by comparing the payment amount calculated under the median cost methodology as done for procedural APCs to the AWP percentages specified in section 1833(t)(14)(A)(ii) of the Act.
Section 1833(t)(14)(A)(iii) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, requires that payment for specified covered outpatient drugs in CY 2006 be equal to the average acquisition cost for the drug for that year as determined by the Secretary but subject to any adjustment for overhead costs and taking into account the hospital acquisition cost survey data collected by the GAO in 2004 and 2005. If hospital acquisition cost data are not available, then the law requires that payment be equal to payment rates established under the methodology described in section 1842(o), section 1847(A), or section 1847(B) of the Act as calculated and adjusted by the Secretary as necessary.
Section 1833(t)(14)(D) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, outlines the provisions of the hospital outpatient drug acquisition cost survey mandated for the GAO. This provision directs the GAO to collect data on hospital acquisition costs of specified covered outpatient drugs and to provide information based on these data that can be taken into consideration for setting CY 2006 payment rates for these products under the OPPS. Accordingly, the GAO conducted a survey of 1,400 acute care, Medicare-certified hospitals requesting hospitals to provide purchase prices for specified covered outpatient drugs purchased from July 1, 2003 to June 30, 2004. The survey yielded a response rate of 83 percent where 1,157 hospitals provided usable information. To ensure that its methodology for data collection and analysis were sound, the GAO consulted an advisory panel of experts in pharmaceutical economics, pharmacy, medicine, survey sampling and Medicare payment.
The GAO reported the average and median purchase prices for 55 specified covered outpatient drug categories for the period July 1, 2003 to June 30, 2004. These items represented 86 percent of the Medicare spending for specified covered outpatient drugs during the first 9 months of 2004. The initial GAO data did not include any radiopharmaceuticals. The report noted that the purchase price information accounted for volume and other discounts provided at the time of purchase, but excluded subsequent rebates from manufacturers and payments from group purchasing organizations.
Another source of drug pricing information that we have is the ASP data from the fourth quarter of 2004, which were used to set payment rates for drugs and biologicals in the physician office setting effective April 1, 2005. We have ASP-based prices for approximately 475 drugs and biologicals (including contrast agents) payable under the OPPS; however, we currently do not have any ASP data on radiopharmaceuticals. Payments for most of the drugs and biologicals paid in the physician office setting are based on the ASP+6 percent. Payments for items with no reported ASP are based on wholesale acquisition cost (WAC).
Lastly, the third source of cost data we have for drugs, biologicals, and radiopharmaceuticals are the mean and median costs derived from the CY 2004 hospital claims data. In our data analysis, we compared the payment rates for drugs and biologicals using data from all three sources described above. As section 1833(t)(14)(A)(iii) of the Act clearly specifies that payment for specified covered outpatient drugs in CY 2006 be equal to the “average” acquisition cost for the drug, we limited our analysis to the mean costs of drugs determined using the GAO acquisition cost survey and the hospital claims data, instead of using median costs.
We estimated aggregate expenditures for all drugs and biologicals (excluding radiopharmaceuticals) that would be separately payable in CY 2006 and for the 55 drugs and biologicals reported by the GAO using mean cost from the claims data, the GAO mean purchase price, and the ASP-based payment amount (ASP+6 percent in most cases), and then calculated the equivalent average ASP-based payment rate under each of the three payment methodologies. The results are presented in Table 22 below.
Prior to any adjustments for the differing time periods of the pricing data, the results indicated that using the GAO mean purchase prices as the basis for paying the 55 drugs and biologicals would be equivalent to paying for those drugs and biologicals, on average, at ASP+3 percent. Additionally, using mean unit cost to set the payment rates for the drugs and biologicals that would be separately payable in CY 2006 would be equivalent to basing their payment rates, on average, at ASP+8 percent.
In determining the payment rates for drugs and biologicals in CY 2006, we are not proposing to use the GAO mean purchase prices for the 55 drugs and biologicals because the GAO data reflect hospital acquisition costs from a less recent period of time. The survey was conducted from July 1, 2003 to June 30, 2004; thus, the purchase prices are generally reflective of the time that is the midpoint of this period, which is January 1, 2004. The hospital purchase price data also does not fully account for rebates from manufacturers or payments from group purchasing organizations made to hospitals. We also note that it would be difficult to update the GAO mean purchase prices during CY 2006 and in future years.
We are also not proposing, in general, to use mean costs from CY 2004 hospital claims data to set payment rates for drugs and biologicals in CY 2006. In previous OPPS rules, we stated that pharmacy overhead costs are captured in the pharmacy revenue cost centers and reflected in the median cost of drug administration APCs, and the payment rate we established for a drug, biological, or radiopharmaceutical APC was intended to pay only for the cost of acquiring the item (66 FR 59896 and 67 FR 66769). However, findings from a MedPAC survey of hospital charging practices indicated that hospitals set charges for drugs, biologicals, and radiopharmaceuticals high enough to reflect their handling costs as well as their acquisition costs; therefore, the mean costs calculated using charges from hospital claims data converted to costs are representative of hospital acquisition costs for these products, as well as their overhead costs. For CY 2006, the statute specifies that payments for specified covered outpatient drugs are required to be equal to the “average” acquisition cost for the drug. Payments based on mean costs would represent the products' acquisition costs plus overhead costs, instead of acquisition costs only. Therefore, we believe that it is appropriate for us to use a source of cost information other than the CY 2004 hospital claims data to set the payment rates for most drugs and biologicals in CY 2006.
We are proposing to pay ASP+6 percent for separately payable drugs and biologicals in CY 2006. Given the data as described above, we believe this is our best estimate of average acquisition costs for CY 2006. We note that the comparison between the GAO purchase price data and the ASP data indicated that the GAO data on average were equivalent to ASP+3 percent. However, as noted earlier, this comparison is problematic for two reasons. First, there are differences in the time periods for two sources of data. The GAO data are from the 12 months ending June 2004 and the ASP data are from the fourth quarter of 2004. It could be argued that prices increased in the intervening time period. However, we do not have a source of reliable information on specific price changes for this time period for the drugs studied by the GAO. In the future, we will have better information on price trends for Medicare Part B drugs as more quarters of pricing information are reported under the ASP system.
We also note the comparison between the GAO data and the ASP data is problematic as the ASP data include rebates and other price concessions and the GAO data do not. Inclusion of these rebates and price concession in the GAO data would decrease the GAO prices relative to the ASP prices, suggesting that ASP+6 percent may be an overestimate of hospitals' average acquisition costs. Unfornately, we do not have a source of information on the magnitude of the rebates and price concessions for the specific drugs in the GAO data at this time.
At the present time, therefore, it is difficult to adjust the GAO prices for inflation, rebates, and price concessions to make the comparison with ASP more precise. We will continue to examine new data to improve our future estimates of acquisition costs. In future years, our proposed pricing will be modified as appropriate to reflect the most recent data and analyses available. We also note that, in addition to the importance of making accurate estimates of acquisition costs for drug pricing, there are important implications for prices of other services due to the required budget neutrality of the OPPS. For example, drugs and biological prices set at ASP+3 percent instead of ASP+6 percent would have made available approximately an additional $60 million for other items and services under the OPPS.
We note that ASP data are unavailable for some drugs and biologicals. For the few drugs and biologicals, other than radiopharmaceuticals as discussed later, where ASP data are unavailable, we are proposing to use the mean costs from the CY 2004 hospital claims data to determine their packaging status for ratesetting. Until we receive ASP data for these items, payment will be based on their mean cost.
Our proposal uses payment rates based on ASP data from the fourth quarter of 2004 because these are the most recent numbers available to us during the development of this proposed rule. To be consistent with the ASP-based payments that would be made when these drugs and biologicals are furnished in physician offices, we plan to make any appropriate adjustments to the amounts shown in Addenda A and B to this proposed rule for these items based on more recent ASP data from the second quarter of 2005, which will be the basis for setting payment rates for drugs and biologicals in the physician office setting effective October 1, 2005, prior to our publication of the CY 2006 OPPS final rule and also on a quarterly basis on our Web site during CY 2006. We note that we would determine the packaging status of each drug or biological only once during the year during the update process; however, for the separately payable drugs and biologicals, we would update their ASP-based payment rates on a quarterly basis.
We intend for the quarterly updates of the ASP-based payment rates for separately payable drugs and biologicals to function as future surveys of hospital acquisition cost data, as section 1833(t)(14)(D)(ii) of the Act instructs us to conduct periodic subsequent surveys to determine hospital acquisition cost for each specified covered outpatient drug.
We are specifically requesting comments on our proposal to pay for drugs and biologicals (including contrast agents) under the OPPS using the ASP-based methodology that is also used to set the payment rates for drugs and biologicals furnished in physician offices and the adequacy of the payment rates to account for acquisition costs of the drugs and biologicals.
In CY 2005, we applied an equitable adjustment to determine the payment rate for darbepoetin alfa (Q0137) pursuant to section 1833(t)(2)(E) of the Act. However, for CY 2006, we are proposing to establish the payment rate for this biological using the ASP methodology. The ASP data represents market prices for this biological; therefore, we believe it is appropriate to use the ASP methodology to establish payment rates for darbepoetin alfa because this method will permit market forces to determine the appropriate payment for this biological. We are seeking comments on the proposed payment policy for this biological.
Effective April 1, 2005, several HCPCS codes were created to describe various concentrations of low osmolar contrast material (LOCM). These new codes are Q9945 through Q9951. However, in Transmittal 514 (April 2005 Update of the OPPS), we instructed hospitals to continue reporting LOCM in CY 2005 using the existing HCPCS codes A4644, A4645, and A4646 and made Q9945 through Q9951 not payable under the OPPS. For CY 2006, we are proposing to activate the new Q-codes for hospitals and discontinue the use of HCPCS codes A4644 through A4646 for billing LOCM products. We have CY 2004 hospital claims data for HCPCS codes A4644 through A4646, which show that the mean costs per day for these products are greater than $50. Because we do not have CY 2004 hospital claims data for HCPCS codes Q9945 through Q9951, we crosswalked the cost data for the HCPCS A-codes to the new Q-codes. There is no predecessor code which crosswalks to HCPCS code Q9951 for LOCM with a concentration of 400 or greater mg/ml of iodine. Therefore, our general payment policy of paying separately for new codes while hospital data are being collected applies to HCPCS code Q9951. As our historical hospital mean per day costs for the three A codes exceed the packaging threshold and our payment policy for new codes without predecessors applies to one of the new codes, we are proposing to pay for the HCPCS codes Q9945 through Q9951 separately in CY 2006 at payment rates calculated using the ASP methodology. We note that because the new Q-codes describing LOCM are more descriptively discriminating and have different units than the previous A-codes for LOCM as well as widely varying ASPs, we expect that the packaging status of these Q-codes may change in future years when we have specific OPPS claims data for these new codes. We are seeking comments specifically on our proposed policy to pay separately for LOCM described by HCPCS codes Q9945 through Q9951 in CY 2006.
We do not have ASP data for radiopharmaceuticals. Therefore, for CY 2006, we are proposing to calculate per day costs of radiopharmaceuticals using mean unit cost from the CY 2004 hospital claims data to determine the items' packaging status similar to the drugs and biologicals with no ASP data. In a separate report, the GAO provided CMS with hospital purchase price information for nine radiopharmaceutical agents. As part of the GAO survey described earlier, the GAO surveyed 1,400 acute-care, Medicare-certified hospitals requesting hospitals to provide purchase prices for radiopharmaceuticals from July 1, 2003 to June 30, 2004. The radiopharmaceutical part of the survey yielded a response rate of 61 percent, where 808 hospitals provided usable information. The GAO reported the average and median purchase prices for nine radiopharmaceuticals for the period July 1, 2003 to June 30, 2004. These items represented 9 percent of the Medicare spending for specified covered outpatient drugs during the first 9 months of 2004. The report noted that the purchase price information accounted for volume and other discounts provided at the time of purchase, but excluded subsequent rebates from manufacturers and payments from group purchasing organizations.
When we examined differences between the CY 2005 payment rates for these nine radiopharmaceutical agents and their GAO mean purchase prices, we saw that the GAO purchase prices were substantially lower for several of these agents. We also saw similar patterns when we compared the CY 2005 payment rates for radiopharmaceutical agents with their CY 2004 median and mean costs from hospital claims data. Our intent is to maintain consistency, whenever possible between the payment rates for these agents from CY 2005 to CY 2006, because such rapid reductions could adversely affect beneficiary access to services utilizing radiopharmaceuticals.
As we do not have ASPs for radiopharmaceuticals that best represent market prices, we are proposing as a temporary 1-year policy for CY 2006 to pay for radiopharmaceutical agents that are separately payable in CY 2006 based on the hospital's charge for each radiopharmaceutical agent adjusted to cost. As MedPAC has indicated that hospitals currently include the charge for pharmacy overhead costs in their charge for the radiopharmaceutical, if we pay for these items using charges converted to cost, we believe that payment at cost would be the best available proxy for the average acquisition cost of the radiopharmaceutical along with its handling cost until we receive ASP information and overhead information on these agents. We expect that hospitals' different purchasing and preparation and handling practices for radiopharmaceuticals would be reflected in their charges, which would be converted to costs using hospital-specific cost-to-charge ratios. To better identify the separately payable radiopharmaceutical agents to which this policy would apply, we propose to assign them to status indicator “H” in Addendum B of this rule. Should ASP data be unavailable for radiopharmaceuticals for CY 2007, it is not apparent to us what methodology we could use to establish payment rates for these items in CY 2007 other than the hospital CY 2006 claims-based methodology. We are seeking comments specifically on the proposed payment policy for separately payable radiopharmaceutical agents in CY 2006.
Section 303(h) of Pub. L. 108-173 exempted radiopharmaceuticals from ASP pricing in the physician office setting where the fewer numbers (relative to the hospital outpatient setting) of radiopharmaceuticals are priced locally by Medicare contractors. However, radiopharmaceuticals are subject to ASP reporting. We currently do not require reporting for radiopharmaceuticals because we do not pay for any of the radiopharmaceuticals using the ASP methodology. However, for CY 2006, we are proposing to begin collecting ASP data on all radiopharmaceutical agents for purposes of ASP-based payment of
We recognize that there are significant complex issues surrounding the reporting of ASPs for radiopharmaceutical agents. Most radiopharmaceuticals must be compounded from a “cold kit” containing necessary nonradioactive materials for the final product to which a radioisotope is added. There are critical timing issues, given the short half-lives of many radioisotopes used for diagnostic or therapeutic purposes. Significant variations in practices exist with respect to what entity purchases the constituents and who then compounds the radiopharmaceutical to develop a final product for administration to a patient. For example, manufacturers may sell the components of a radiopharmaceutical to independent radiopharmacies. These radiopharmacies may then sell unit or multi-doses to many hospitals; however, some hospitals also may purchase the components of the radiopharmaceutical and prepare the radiopharmaceutical themselves. In some cases, hospitals may generate the radioisotope on-site, rather than purchasing it. The costs associated with acquiring the radiopharmaceutical in these instances may significantly vary. Also, there may only be manufacturer pricing for the components; however, the price set by the manufacturer for one component of a radiopharmaceutical may not directly translate into the acquisition cost of the ”complete” radiopharmaceutical, which may result from the combination of several components. In general, for drugs other than radiopharmaceuticals, the products sold by manufacturers with National Drug Codes (NDCs) correspond directly with the HCPCS codes for the products administered to patients so ASPs may be directly calculated for the HCPCS codes. In the case of radiopharmaceuticals this 1:1 relationship may not hold, potentially making the calculation of ASPs for radiopharmaceuticals more complex. In addition, some hospitals may generate their own radioisotopes, which they then use for radiopharmaceutical compounding, and they may sell these complete products to other sites. The costs associated with this practice could be difficult to capture through ASP reporting. We seek very specific comments on these and all other relevant issues surrounding implementation of ASP reporting for radiopharmaceuticals. We discuss in section V.B.3.a.(5) of this preamble under the MedPAC report on APC payment rate adjustments, our CY 2006 proposed payment policies for overhead costs of drugs, biologicals, and radiopharmaceuticals.
In section V.D. of the preamble we discuss the methodology that we are proposing to use to determine the CY 2006 payment rates for new drugs, biologicals, and radiopharmaceuticals.
While payments for drugs, biologicals and radiopharmaceuticals are taken into account when calculating budget neutrality, we note that we are proposing to pay for drugs, biologicals and radiopharmaceuticals without scaling these payment amounts. We believe that these payment amounts are the best proxies we have for the average acquisition costs of drugs, biologicals, and radiopharmaceuticals for CY 2006; therefore, Congress would not have intended for us to scale these payment rates. In section V.B.3.a.(5) of this preamble, we also discuss that we propose to add 2 percent of the ASP to the payment rates for drugs and biologicals with rates based on the ASP methodology to provide payment to hospitals for pharmacy overhead costs associated with furnishing these products. We are proposing to scale these additional payment amounts for pharmacy overhead costs. We are seeking comments on whether it is appropriate to exempt payment rates for drugs, biologicals, and radiopharmaceuticals from scaling and scale the additional payment amount for pharmacy overhead costs.
We note that further discussion of the budget neutrality implications of the various drug payment proposals that we considered is included in section XIV.C. of this preamble.
Section 1833(t)(14)(E) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, requires MedPAC to submit a report to the Secretary, not later than July 1, 2005, on adjusting the APC rates for specified covered outpatient drugs to take into account overhead and related expenses, such as pharmacy services and handling costs. This provision also requires that the MedPAC report include the following: A description and analysis of the data available for adjusting such overhead expenses; recommendation as to whether a payment adjustment should be made; and the methodology for adjusting payment, if an adjustment is recommended. Section 1833(t)(14)(E)(ii) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, authorizes the Secretary to adjust the APC weights for specified covered outpatient drugs to reflect the MedPAC recommendation.
The statute mandates MedPAC to report on whether drug APC payments under the OPPS should be adjusted to account for pharmacy overhead and nuclear medicine handling costs associated with providing specified covered outpatient drugs. In creating its framework for analysis, MedPAC interviewed stakeholders, analyzed cost report data, conducted four individual hospital case studies, and received technical advice on grouping items with similar handling costs from a team of experts in hospital pharmacy, hospital finance, cost accounting, and nuclear medicine.
MedPAC concluded that the handling costs for drugs, biologicals, and radiopharmaceuticals delivered in the hospital outpatient department are not insignificant, as medications typically administered in outpatient departments generally require greater pharmacy preparation time than do those provided to inpatients. MedPAC found that little information is currently available about the magnitude of these costs. According to the MedPAC analysis, hospitals historically set charges for drugs, biologicals, and radiopharmaceuticals at levels that reflected their respective handling costs, and payments covered both drug acquisition and handling. Moreover, hospitals vary considerably in their likelihood of providing services which utilize drugs, biologicals, or radiopharmaceuticals with different handling costs.
MedPAC developed seven drug categories for pharmacy and nuclear medicine handling costs, according to the level of resources used to prepare the products (Table 23). Characteristics associated with the level of handling resources required included radioactivity, toxicity, mode of administration, and the need for special handling. Groupings ranged from dispensing an oral medication on the low end of relative cost to providing radiopharmaceuticals on the high end. MedPAC collected cost data from four hospitals that were then used to develop relative median costs for all categories but radiopharmaceuticals (Category 7+). The case study facilities were not able to provide sufficient cost information regarding the handling of outpatient radiopharmaceuticals to develop a cost relative for Category 7+. The MedPAC study classified about 230 different drugs, biologicals, and radiopharmaceuticals into the seven categories based on input from their expert panel and each case study facility.
In its report, MedPAC recommended the following:
(1) Establish separate, budget neutral payments to cover the costs hospitals incur for handling separately payable drugs, biologicals, and radiopharmaceuticals; and
(2) Define a set of handling fee APCs that group drugs, biologicals, and radiopharmaceuticals based on attributes of the products that affect handling costs; instruct hospitals to submit charges for these APCs; and base payment rates for the handling fee APCs on submitted charges reduced to costs.
MedPAC found some differences in the categorizations of drug and radiopharmaceutical products by different experts and across the case study sites. In the majority of cases where groupings disagreed, hospitals used different forms of the products which were coded with the same HCPCS code. For example, a drug may be purchased as a prepackaged liquid or as a powder requiring reconstitution. Such a drug would vary in the handling resources required for its preparation and would fall into a different drug category depending on its form. In addition, the handling cost groupings may vary depending on the intended method of drug delivery, such as via intravenous push or intravenous infusion. For a number of commonly used drugs, MedPAC provided two categories in their final consensus categorizations, with the categories 2 and 3 reported as the most frequent combination. For example, MedPAC placed HCPCS codes J1260 (Injection, dolasetron mesylate, 10 mg) and J2020 (Injection, linezolid, 200 mg) in consensus categories 2 and 3, acknowledging that the appropriate categorization could vary depending on the clinical preparation and use of the drug. We note that we have no information regarding hospitals' frequencies of use of various forms of drugs provided in the outpatient department under the OPPS, as the case studies only included four facilities and the technical advisory committee was similarly small. Thus, in many cases it is impossible to exclusively and appropriately assign a drug to a certain overhead category that would apply to all hospital outpatient uses of the drug because of the different handling resources required to prepare different forms of the drugs.
There are over 100 separately payable drugs, biologicals, and radiopharmaceuticals that are separately payable under the OPPS but for which MedPAC provided no consensus categorizations in its seven drug groups. We independently examined these products and considered the handling cost categories that could be appropriately assigned to each product as described by an individual HCPCS code. As discussed above, many of the drugs had several forms which would place them in different handling cost groupings depending on the specific form of the drug prepared by the hospital pharmacy for a patient's treatment. Additionally, we believe that hospitals may have difficulty discriminating among the seven categories for some drugs, because the applicability of a given category description to a specific clinical situation may be ambiguous. Indeed, in the MedPAC study, initially only about 80 percent of the case study pharmacists agreed with the expert panel category assignments; however, concurrence increased that percentage to almost 90 percent after discussion and review. Nevertheless, there remained a number of drugs for which differences in categorization by the case study facilities and the expert panel persisted.
In light of our concerns over our ability to appropriately assign drugs to the seven MedPAC drug categories so that the categories accurately describe the drugs' attributes in all of the OPPS hospitals and the MedPAC recommendations, for CY 2006 we are proposing to establish three distinct HCPCS C-codes and three corresponding APCs for drug handling categories to differentiate overhead costs for drugs and biologicals, by combining several of the categories identified in the MedPAC report. We collapsed the MedPAC categories 2, 3, and 4 into a single category described by HCPCS code CXXXX, and MedPAC categories 5 and 6 into another category described by HCPCS code CYYYY, while maintaining MedPAC category 1 as described by HCPCS code CWWWW. Our rationale for not creating an overhead payment category for radiopharmaceuticals is discussed below. We believe that merging categories in this way generally resolves the categorization dilemmas resulting from the most common scenarios where drugs may fall into more than one grouping and minimizes the administrative burden on hospitals to determine which category applies to the handling of a drug in a specific clinical situation. In addition, these broader handling cost groupings minimize any undesirable payment policy incentives to utilize particular forms of drugs or specific preparation methods. We have only collapsed those categories whose MedPAC relative weights differ by less than a factor of two, consistent with the principle outlined in section 1833(t)(2) of the Act that provides that items and services within an APC group cannot be considered comparable with respect to the use of resources if the median of the highest cost item or service within an APC group is more than 2 times greater than the median of the lowest cost item or service within that same group.
As noted previously, we believe that pharmacy overhead costs are captured in the pharmacy revenue cost centers and reflected in the median cost of drug
We believe that these three categories are sufficiently distinct and reflective of the resources necessary for drug handling to permit appropriate hospital billing and to capture the varying overhead costs of the drugs and biologicals separately payable under the OPPS. We are not proposing to adopt the median cost relatives reported for MedPAC's six categories (excluding radiopharmaceuticals). It is very difficult to accurately crosswalk the cost relatives for the six categories to the three categories we are proposing. In addition, we are not confident that the cost relatives that were based on cost data from four hospitals appropriately reflect the median relative resource costs of all hospitals that would bill these drug handling services under the OPPS. Instead, we believe it is most appropriate to collect hospital charges for the drug handling services based on attributes of the products that affect the hospital resources required for their handling, and consider making future payments under the OPPS using the proposed C-codes based on the medians of charges converted to costs for the drug handling APC associated with each administration of a separately payable drug or biological.
For CY 2006, pursuant to section 1833(t)(14)(E)(ii) of the Act, we propose an adjustment to cover the costs hospitals incur for handling separately payable drugs and biologicals. As we do not currently have separate hospital charge data on pharmacy overhead, we are proposing for CY 2006 to pay for drug and biological overhead costs based on 2 percent of the ASP. As described earlier, we estimated aggregate expenditure for all separately payable OPPS drugs and biologicals (excluding radiopharmaceuticals) using mean costs from the claims data and then determined the equivalent average ASP-based rates. Our calculations indicated that using mean unit costs to set the payment rates for all separately payable drugs and biologicals would be equivalent to basing their payment rates on the ASP+8 percent. As noted previously, because pharmacy overhead costs are already built into the charges for drugs, biologicals, and radiopharmaceuticals as indicated by the MedPAC study described above, we believe that payment for drugs and biologicals and overhead at a combined ASP+8 percent would serve as a proxy for representing both the acquisition cost and overhead cost of each of these products. Moreover, as we are proposing to pay for all separately payable drugs and biologicals using the ASP methodology, where payment rates for most of these items are set at the ASP+6 percent, we believe that an additional 2 percent of the ASP would provide adequate additional payment for the overhead cost of these products and be consistent with historical hospital costs for drug acquisition and handling. Even though we are not proposing to scale the payment rates for drugs and biologicals based on the ASP methodology, we are proposing to scale the additional payment amount of 2 percent of the ASP for pharmacy overhead costs. Therefore, for CY 2006, we are proposing to pay an additional 2 percent of the ASP scaled for budget neutrality for overhead costs associated with separately payable drugs and biologicals, along with paying ASP+6 percent for the acquisition costs of the drugs and biologicals. The payment rate for a separately payable drug or biological shown in Addenda A and B to this proposed rule represents the payment rate for the drug or biological in addition to payment for its overhead costs. We are specifically seeking comments on this proposed policy for paying for pharmacy overhead costs in CY 2006 and on the proposed policy regarding hospital billing of drug handling charges associated with each administration of each separately payable drug or biological using the proposed C-codes.
As discussed earlier, we are proposing to pay for separately payable radiopharmaceutical agents based on their charges in the claims submitted by hospitals converted to costs. MedPAC found that the handling resource costs
However, because we are proposing to collect ASP information for radiopharmaceuticals in CY 2006, we are seeking specific comments on appropriate categories for potentially capturing radiopharmaceutical handling costs. We believe that these handling costs may vary depending on many factors. The handling cost categories should exclude any resources covered by specific diagnostic procedures or administration codes for patient services that utilize the radiopharmaceuticals. However, the handling cost categories should include all aspects of radiopharmaceutical handling and preparation, including transportation, storage, compounding, required shielding, inventory management, revision of dosages based on patient conditions, documentation, disposal, and regulatory compliance. The MedPAC study contractor suggested a variety of discriminating factors which may be related to the magnitude of radiopharmaceutical handling costs, including the complexity of the calculations and manipulations involved with compounding, the intended use of the product for diagnostic or therapeutic purposes, the item's status as a radioimmunoconjugate or non-radioimmunoconjugate, short-lived agents produced in-house, and preparation of the radiopharmaceutical in-house versus production in a commercial radiopharmacy. We are seeking comments on the construction of radiopharmaceutical handling cost categories that would meaningfully reflect differences in the levels of necessary hospital resources and that could easily be understood and applied by hospitals characterizing their preparation of radiopharmaceuticals.
Pub. L. 108-173 does not address the OPPS payment in CY 2005 and after for new drugs, biologicals, and radiopharmaceuticals that have assigned HCPCS codes, but that do not have a reference AWP or approval for payment as pass-through drugs or biologicals. Because there is no statutory provision that dictated payment for such drugs and biologicals in CY 2005, and because we had no hospital claims data to use in establishing a payment rate for them, we investigated several payment options for CY 2005 and discussed them in detail in the CY 2005 OPPS final rule with comment period (69 FR 65797 through 65799).
For CY 2006, we are proposing to use the same methodology that we used in CY 2005. That is, we are proposing to pay for these new drugs and biologicals with HCPCS codes but which do not have pass-through status at a rate that is equivalent to the payment they would receive in the physician office setting, which would be established in accordance with the ASP methodology described in the CY 2005 Medicare Physician Fee Schedule final rule (69 FR 66299). As discussed in the OPPS CY 2005 final rule (69 FR 65797), new drugs, biologicals, and radiopharmaceuticals may be expensive and we are concerned that packaging these new items may jeopardize beneficiary access to them. In addition, we do not want to delay separate payment for these items solely because a pass-through application was not submitted. We note that this payment methodology is the same as the methodology that would be used to calculate the OPPS payment amount that pass-through drugs and biologicals would be paid in CY 2006 in accordance with section 1842(o) of the Act, as amended by section 303(b) of Pub. L. 108-173, and section 1847A of the Act. Thus, we are proposing to continue to treat new drugs, biologicals, and radiopharmaceuticals with established HCPCS codes the same, irrespective of whether pass-through status has been determined. We are also proposing to assign status indicator “K” to HCPCS codes for new drugs and biologicals for which we have not received a pass-through application.
There are several drugs, biologicals, and radiopharmaceuticals that were payable during CY 2004 or their HCPCS codes were created effective January 1, 2005 for which we do not have any CY 2004 hospital claims data. In order to determine the packaging status of these items for CY 2006, we calculated an estimate of per day cost of each of these items by multiplying the payment rate for each product as determined using the ASP methodology by an estimated average number of units of each product that would be furnished to a patient during one administration. We are proposing to package items for which we estimated the per administration cost to be less than $50 and pay separately for items with estimated per administration cost greater than $50. Payment for the separately payable items would be based on rates determined using the ASP methodology established in the physician office setting. There are two codes 90393 (Vaccina ig, im) and Q9953 (Inj Fe-based MR contrast, ml) for which we were not able to determine payment rates based on the ASP methodology. Because we are unable to estimate the per administration cost of these items, we are proposing to package them in CY 2006. We are specifically seeking comments on our proposed policy for determining per administration cost of these drugs, biologicals, and radiopharmaceuticals that are payable under the OPPS, but do not have any CY 2004 claims data.
As discussed in the January 6, 2004 interim final rule with comment period (69 FR 826), we instructed hospitals to bill for sole source drugs using the existing HCPCS codes, which were priced in accordance with the provisions of section 1833(t)(14)(A)(i) of the Act, as added by Pub. L. 108-173. However, at that time, the existing HCPCS codes did not allow us to differentiate payment amounts for innovator multiple source and noninnovator multiple source forms of the drug. Therefore, effective April 1, 2004, we implemented new HCPCS codes via Program Transmittal 112 (Change Request 3144, February 27, 2004) and Program Transmittal 132 (Change Request 3154, March 30, 2004) that providers were instructed to use to bill for innovator multiple source drugs in order to receive appropriate payment in accordance with section 1833(t)(14)(A)(i)(II) of the Act. We also instructed providers to continue to use the existing HCPCS codes to bill for noninnovator multiple source drugs to receive payment in accordance with section 1833(t)(14)(A)(i)(III) of the Act. These coding policies allowed hospitals to appropriately code for drugs, biologicals, and radiopharmaceuticals based on their classification and to be paid accordingly. We continued this coding practice in CY 2005 with payment made in accordance with section 1833(t)(14)(A)(ii) of the Act.
For CY 2006, we are proposing to base the payment rates for drugs and biologicals and their pharmacy overhead costs on the ASP methodology that is used to set payment rates for these items in the physician office setting. Under this methodology, a single payment rate for the drug is calculated by considering the prices for both the innovator multiple source (brand) and noninnovator multiple source (generic) forms of the drug. Therefore, under the OPPS, we believe that there is no longer a need to differentiate between the brand and generic forms of a drug. Thus, we are proposing to discontinue use of the C-codes that were created to represent the innovator multiple source drugs. In CY 2006, hospitals would use the HCPCS codes for noninnovator multiple source (generic) drugs to bill for both the brand and generic forms of a drug as they did prior to implementation of section 1833(t)(14)(A) in Pub. L. 108-173. We are specifically requesting comments on this proposed policy.
Historically, hospitals have used a HCPCS code for an unlisted or unclassified drug, biological, or radiopharmaceutical or used an appropriate revenue code to bill for drugs, biologicals, and radiopharmaceuticals furnished in the outpatient department that do not have an assigned HCPCS code. The codes for not otherwise classified drugs, biologicals, and radiopharmaceuticals are assigned packaged status under the OPPS. That is, separate payment is not made for the code, but charges for the code would be eligible for an outlier payment and, in future OPPS updates, the charges for the code are packaged with the separately payable service with which the code is reported for the same date of service.
Drugs and biologicals that are newly approved by the FDA and for which a HCPCS code has not yet been assigned by the National HCPCS Alpha-Numeric Workgroup could qualify for pass-through payment under the OPPS. An application must be submitted to CMS in order for a drug or biological to be assigned pass-through status, a temporary C-code assigned for billing purposes, and an APC payment amount to be determined. Pass-through applications are reviewed on a flow basis, and payment for drugs and biologicals approved for pass-through status is implemented throughout the year as part of the quarterly updates of the OPPS.
Section 1833(t)(15) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, provides for payment for new drugs and biologicals until HCPCS codes are assigned under the OPPS. Under this provision, we are required to make payment for an outpatient drug or
We initially adopted the methodology for determining payment under section 1833(t)(15) of the Act on an interim basis on May 28, 2004, via Transmittal 188, Change Request 3287, and finalized the methodology for CY 2005 in our CY 2005 OPPS final rule with comment period. In that final rule with comment period, we also expanded the methodology to include payment for new radiopharmaceuticals to which a HCPCS code is not assigned (69 FR 65804 through 65807). We instructed hospitals to bill for a drug or biological that is newly approved by the FDA by reporting the NDC for the product along with a new HCPCS code, C9399 (Unclassified drug or biological). When HCPCS code C9399 appears on a claim, the OCE suspends the claim for manual pricing by the fiscal intermediary. The fiscal intermediary prices the claim at 95 percent of its AWP using the Red Book or an equivalent recognized compendium, and processes the claim for payment. This approach enables hospitals to bill and receive payment for a new drug, biological, or radiopharmaceutical concurrent with its approval by the FDA. The hospital does not have to wait for the next OPPS quarterly release or for approval of a product-specific HCPCS code to receive payment for a newly approved drug, biological, or radiopharmaceutical. In addition, the hospital does not have to resubmit claims for adjustment. Hospitals would discontinue billing HCPCS code C9399 and the NDC upon implementation of a HCPCS code, status indicator, and appropriate payment amount with the next OPPS quarterly update.
For CY 2006, we are proposing to continue the same methodology for paying for new drugs, biologicals, and radiopharmaceuticals without HCPCS codes.
Outpatient hospital departments administer large numbers of immunizations for influenza (flu) and pneumococcal pneumonia (PPV), typically by participating in immunization programs. In recent years, the availability and cost of some vaccines (particularly the flu vaccine) have fluctuated considerably. As discussed in the November 1, 2002 final rule (67 FR 66718), we were advised by providers that the OPPS payment was insufficient to cover the costs of the flu vaccine and that access of Medicare beneficiaries to flu vaccines might be limited. They cited the timing of updates to the OPPS rates as a major concern. They indicated that our update methodology, which uses 2-year-old claims data to recalibrate payment rates, would never be able to take into account yearly fluctuations in the costs of the flu vaccine. We agreed with this concern and decided to pay hospitals for influenza and pneumococcal pneumonia vaccines based on a reasonable cost methodology. As a result of this change, hospitals, home health agencies (HHAs), and hospices, which were paid for these vaccines under the OPPS in CY 2002, have been receiving payment at reasonable cost for these vaccines since CY 2003.
Influenza, pneumococcal, and hepatitis B vaccines and their administration are specifically covered by Medicare under section 1861(s)(10) of the Act. We are proposing to continue to pay influenza and pneumococcal vaccines at reasonable cost in CY 2006. However, hepatitis B vaccines so far have been paid under clinical APCs that also include other vaccines. For CY 2006, we are proposing to pay for all hepatitis B vaccines at reasonable cost, consistent with the payment methodology for influenza and pneumococcal vaccines. Influenza and pneumococcal vaccines are exempt from coinsurance and deductible payments under sections 1833(a)(3) and 1833(b) of the Act and have been assigned to status indicator “L”. However, hepatitis B vaccines have no similar coinsurance or deductible exemption. Therefore, we are proposing to assign these items to status indicator “F”.
Previously, under the OPPS, separately payable vaccines other than influenza and pneumococcal were grouped into clinical APCs 355 and 356 for payment purposes. Payment rates for these APCs were based on the APCs' median costs, calculated from the costs of all of the vaccines grouped within the APCs. For CY 2006, we are proposing to pay for each separately payable vaccine under its own APC, consistent with our policy for separately payable drugs other than vaccines, instead of aggregating them into clinical APCs with other vaccines. We believe this policy would allow us to more appropriately establish a payment rate for each separately payable vaccine based on the ASP methodology. We are specifically requesting comments on our proposed vaccine policies for CY 2006. Proposed policy changes to coding and payments for the administration of these vaccines are discussed in section VIII. of this preamble.
Section 1833 (t)(1)((B)(i) of the Act gives the Secretary the authority to designate the hospital outpatient services to be covered. The Secretary has specified coverage for certain drugs as orphan drugs (section 1833(t)(14)(B)(ii)(III) of the Act, as added by section 621(a)(1) of Pub. L. 108-173). Section 1833 (t)(14)(C) of the Act, as added by section 621(a)(1) of Pub. L. 108-173, gives the Secretary the authority in CYs 2004 and 2005 to specify the amount of payment for an orphan drug that has been designated as such by the Secretary.
We recognize that orphan drugs that are used solely for an orphan condition or conditions are generally expensive and, by definition, are rarely used. We believe that if the costs of these drugs were packaged into the payment for an associated procedure or visit, the payment for the procedure might be insufficient to compensate a hospital for the typically high costs of this special type of drug. Therefore, we are proposing to continue paying for them separately.
In the November 1, 2002 final rule (67 FR 66772), we identified 11 single indication orphan drugs that are used solely for orphan conditions by applying the following criteria:
• The drug is designated as an orphan drug by the FDA and approved by the FDA for treatment of only one or more orphan condition(s).
• The current United States Pharmacopoeia Drug Information (USPDI) shows that the drug has neither an approved use nor an off-label use for other than the orphan condition(s).
Eleven single indication orphan drugs were identified as having met these criteria and payments for these drugs were made outside of the OPPS on a reasonable cost basis.
In the November 7, 2003 final rule with comment period (68 FR 63452), we discontinued payment for orphan drugs on a reasonable cost basis and made separate payments for each single indication orphan drug under its own APC. Payments for the orphan drugs were made at 88 percent of the AWP listed for these drugs in the April 1, 2003 single drug pricer, unless we were presented with verifiable information
In the December 31, 2003 correction of the November 7, 2003 final rule with comment period (68 FR 75442), we added HCPCS code J9017 (Arsenic trioxide, 1 mg) to our list of single indication orphan drugs. In the November 15, 2004 final rule with comment period (69 FR 65807), we retained the same criteria for identifying single indication orphan drugs and added two HCPCS codes to our list—C9218 (Injection, Azactidine, per 1 mg) and J9010 (Alemtuzumab, 10 mg) (69 FR 65808). As of CY 2005, the following are the 14 orphan drugs that we have identified as meeting our criteria: C9218 (Injection, Azactidine, per 1 mg); J0205 (Injection, Alglucerase, per 10 units); J0256 (Injection, Alpha 1-proteinase inhibitor, 10 mg); J9300 (Gemtuzumab ozogamicin, 5mg); J1785 (Injection, Imiglucerase, per unit); J2355 (Injection, Oprelvekin, 5 mg); J3240 (Injection, Thyrotropin alpha, 0.9 mg); J7513 (Daclizumab, parenteral, 25 mg); J9010 (Alemtuzumab, 10 mg); J9015 (Aldesleukin, per single use vial); J9017 (Arsenic trioxide, 1 mg); J9160 (Denileukin diftitox, 300 mcg); J9216 (Interferon, gamma 1-b, 3 million units); and Q2019 (Injection, Basiliximab, 20 mg).
In the November 15, 2004 final rule with comment period (69 FR 65808), we stated that had we not classified these drugs as single indication orphan drugs for payment under the OPPS, they would have met the definition of single source specified covered outpatient drugs and received lower payments, which could have impeded beneficiary access to these unique drugs dedicated to the treatment of rare diseases. Instead, for CY 2005, under our authority at section 1833(t)(14)(C) of the Act, we set payment for all 14 single indication orphan drugs at the higher of 88 percent of the AWP or the ASP+6 percent. For CY 2005, we also updated on a quarterly basis the payment rates through comparison of the most current ASP and AWP information available to us. Given that CY 2005 was the first year of mandatory ASP reporting by manufacturers, we did not want potential significant fluctuations in the ASPs to affect payments to hospitals furnishing these drugs, which in turn might cause access problems for beneficiaries. Therefore, in the November 15, 2004 final rule, we did not implement the proposed 95 percent AWP cap on payments for single indication orphan drugs which was described in the August 16, 2004 proposed rule (69 FR 50518), as we intended to monitor the impact of our payment policy and consider the need for a cap in future OPPS updates if appropriate (69 FR 65809).
As a part of the GAO study on hospital acquisition costs of specified covered outpatient drugs, the GAO provided the average hospital purchase prices for four orphan drugs: J0256 (Injection, Alpha 1-proteinase inhibitor, 10 mg), J1785 (Injection, Imiglucerase, per unit), J9160 (Denileukin difitox, 300 mcg), and J9010 (Alemtuzumab, 10 mg).
For alpha 1-proteinase inhibitor (J0256), the hospitals in the study sample represented only about 14 percent of the estimated total number of hospitals purchasing the drug. The mean hospital purchase price was about 73 percent of the payment rate based on ASP+6 percent rate and about 63 percent of the CY 2005 payment rate updated in April 2005. We believe the GAO acquisition data for alpha 1-proteinase inhibitor are likely not representative of hospital acquisition costs for the drug because the number of hospitals providing data was so small compared to the total number of hospitals expected to utilize the drug. Furthermore, we recognize that the GAO data on hospital drug acquisition costs do not reflect the current acquisition costs experienced by hospitals but instead, rely on past cost data from late CY 2003 through early CY 2004. On the other hand, the ASP data are more current and thus are likely more reflective of present hospital acquisition costs for alpha 1-proteinase inhibitor.
In contrast to the GAO data for alpha 1-proteinase inhibitor, the GAO data for imiglucerase (J1785) reflect hospital purchase prices from about 69 percent of the hospitals expected to utilize the drug. For this drug, the mean hospital purchase price was about 93 percent of the CY 2005 payment rate for imiglucerase updated in April 2005, which was based on ASP+6 percent rate. Thus, the ASP-based payment rate also would appear to be appropriately reflective of hospital acquisition costs for imiglucerase, and to be consistent with the GAO mean purchase price.
For denileukin difitox (J9160) and alemtuzumab (J9010), the GAO data for these drugs reflect hospital purchase prices from about 77 percent and 66 percent of the hospitals expected to acquire these drugs, respectively. The mean hospital purchase price for denileukin difitox was about 94 percent of the payment rate based on the ASP+6 percent rate and about 79 percent of the CY 2005 payment rate. As for alemtuzumab, the mean hospital purchase price was about 95 percent of the payment rate based on the ASP+6 percent rate and about 89 percent of the CY 2005 payment rate. For both of these drugs, the ASP-based payment rates also appear to be appropriately reflective of their hospital acquisition costs, based on confirmation by the GAO average purchase price data from over two-thirds of the hospitals expected to acquire the drugs.
During the quarterly updates to payment rates for single indication orphan drugs for CY 2005, we observed significant improvement in the accuracy and consistency of manufacturers' reporting of the ASPs for these orphan drugs. Overall, we found that the ASPs as compared to the AWPs were less likely to experience dramatic fluctuations in prices from quarter to quarter. We expect that as the ASP system continues to mature, manufacturers will further refine their quarterly reporting, leading to even greater stability and accuracy in their reporting of sales prices. As the ASPs reflect the average sales prices to all purchasers, the ASP data also include drug sales to hospitals. Past commenters have indicated to us that some orphan drugs are administered principally in hospitals, and to the extent that this is true their ASPs should predominantly be based upon the sales of drugs used by hospitals. For three of the orphan drugs for which the GAO provided average purchase prices from a large percentage of hospitals expected to acquire the drugs, the GAO data were very consistent with the ASP+6 percent. For the fourth drug, the GAO mean was significantly lower than the ASP+6 percent and the confidence interval around that mean was quite tight, although only a small proportion of hospitals expected to acquire the drug reported their purchase prices. Thus, we believe that proposing to pay for orphan drugs based on an ASP methodology is appropriate for the CY 2006 OPPS and should assure patients' continued access to these orphan drugs in the hospital outpatient department. Therefore, for CY 2006, we are proposing to pay for single indication orphan drugs at the ASP+6 percent. We believe that paying for orphan drugs using the ASP methodology is consistent with our proposed general drug payment policy for other separately payable drugs and
Section 1833(t)(6)(E) of the Act limits the total projected amount of transitional pass-through payments for drugs, biologicals, radiopharmaceuticals, and categories of devices for a given year to an “applicable percentage” of projected total Medicare and beneficiary payments under the hospital OPPS. For a year before CY 2004, the applicable percentage was 2.5 percent; for CY 2005 and subsequent years, we specify the applicable percentage up to 2.0 percent.
If we estimate before the beginning of the calendar year that the total amount of pass-through payments in that year would exceed the applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a uniform reduction in the amount of each of the transitional pass-through payments made in that year to ensure that the limit is not exceeded. We make an estimate of pass-through spending to determine not only whether payments exceed the applicable percentage, but also to determine the appropriate reduction to the conversion factor for the projected level of pass-through spending in the following year.
For devices, making an estimate of pass-through spending in CY 2006 entails estimating spending for two groups of items. The first group consists of those items for which we have claims data for procedures that we believe used devices that were eligible for pass-through status in CY 2004 and CY 2005 and that would continue to be eligible for pass-through payment in CY 2006. The second group consists of those items for which we have no direct claims data, that is, items that became, or would become, eligible in CY 2005 and would retain pass-through status in CY 2006, as well as items that would be newly eligible for pass-through payment beginning in CY 2006.
We are proposing to set the applicable percentage cap at 2.0 percent of the total OPPS projected payments for CY 2006. As we discuss in section IV.C. of this preamble, the three remaining device categories receiving pass-through payment in CY 2005 will expire on December 31, 2005. Therefore, we estimate pass-through spending attributable to the first group of items described above to equal zero.
To estimate CY 2006 pass-through spending for device categories in the second group, that is, items for which we have no direct claims data, we are proposing to use the following approach: For additional device categories that are approved for pass-through status after July 1, 2005, but before January 1, 2006, we are proposing to use price information from manufacturers and volume estimates based on claims for procedures that would most likely use the devices in question because we would have no CY 2004 claims data upon which to base a spending estimate. We are proposing to project these data forward to CY 2006 using inflation and utilization factors based on total growth in OPPS services as projected by CMS' Office of the Actuary (OACT) to estimate CY 2006 pass-through spending for this group of device categories. For device categories that become eligible for pass-through status in CY 2006, we are proposing to use the same methodology. We anticipate that any new categories for January 1, 2006, would be announced after the publication of this proposed rule, but before publication of the final rule. Therefore, the estimate of pass-through spending in the CY 2006 OPPS final rule would incorporate any pass-through spending for device categories made effective January 1, 2006, and during subsequent quarters of CY 2006.
With respect to CY 2006 pass-through spending for drugs and biologicals, as we explain in section V.A.3. of this proposed rule, the pass-through payment amount for new drugs and biologicals that we determine have pass-through status would equal zero. Therefore, our estimate of pass-through spending for drugs and biologicals with pass-through status in CY 2006 equals zero.
In accordance with the methodology described above and the methodology for estimating pass-through spending discussed in the August 16, 2004 proposed rule (69 FR 50526), we estimate that total pass-through spending for device categories that first become eligible for pass-through status after publication of this proposed rule for which pass-through payment continues in CY 2006 or become eligible during CY 2006 would equal approximately $12.5 million, which represents 0.05 percent of total OPPS projected payments for CY 2006. This figure includes estimates for the current device categories continuing into CY 2006, which equals zero, in addition to projections for categories that first become eligible during the second half of CY 2005 or in CY 2006.
This estimate of total pass-through spending for CY 2006 is significantly lower than previous years' estimates both because of the method we are proposing in section V.A.3. of this preamble for determining the amount of pass-through payment for drugs and biologicals with pass-through status, and the fact that there are no CY 2005 pass-through device categories that are being carried over to CY 2006.
Because we estimate pass-through spending in CY 2006 would not amount to 2.0 percent of total projected OPPS CY 2006 spending, we are proposing to return 1.95 percent of the pass-through pool to adjust the conversion factor, as we discuss in section II.C. of this preamble.
Section 1833(t)(16)(C) and section 1833(t)(2)(H) of the Act, as added by sections 621(b)(1) and (b)(2) of Pub. L. 108-173, respectively, establish separate payment for devices of brachytherapy consisting of a seed or seeds (or radioactive source) based on a hospital's charges for the service, adjusted to cost. Charges for the brachytherapy devices may not be used in determining any outlier payments under the OPPS. In addition, consistent with our practice under the OPPS to exclude items paid at cost from budget neutrality consideration, these items must be excluded from budget neutrality as well. The period of payment under this provision is for brachytherapy sources furnished from January 1, 2004, through December 31, 2006.
Section 621(b)(3) of Pub. L. 108-173 requires the Government Accountability Office (GAO) to conduct a study to determine appropriate payment amounts for devices of brachytherapy, and to submit a report on its study to the Congress and the Secretary, including recommendations. We are awaiting the report and any recommendations on the payment of brachytherapy, which would pertain to brachytherapy payments after December 31, 2006.
In the OPPS interim final rule with comment period published on January 6, 2004 (69 FR 827), we implemented sections 621(b)(1) and (b)(2)(C) of Pub. L. 108-173. In that rule, we stated that we will pay for the brachytherapy sources listed in Table 4 of the interim final rule with comment period (69 FR 828) on a cost basis, as required by the statute. The status indicator for brachytherapy sources was changed to “H.” The definition of status indicator “H” was for pass-through payment only for devices, but the brachytherapy sources affected by sections 1833(t)(16)(C) and 1833(t)(2)(H) of the Act are not pass-through device categories. Therefore, we also changed, for CY 2004, the definition of payment status indicator “H” to include nonpass-through brachytherapy sources paid on a cost basis. This use of status indicator “H” was a pragmatic decision that allowed us to pay for brachytherapy sources in accordance with section 1833(t)(16)(C) of the Act, effective January 1, 2004, without having to modify our claims processing systems. We stated in the January 6, 2004 interim final rule with comment period that we would revisit the use and definition of status indicator “H” for this purpose in the OPPS update for CY 2005. In the November 15, 2004 final rule with comment period, we finalized this policy for CY 2005 (69 FR 65838).
As we indicated in the January 6, 2004 interim final rule with comment period, we began payment for the brachytherapy source in HCPCS code C1717 (Brachytx source, HCR lr-192) based on the hospital's charge adjusted to cost beginning January 1, 2004. Prior to enactment of Pub. L. 108-173, these sources were paid as packaged services in APC 0313. As a result of the requirement under Pub. L. 108-173 to pay for HCPCS code C1717 separately, we adjusted the payment rate for APC 0313, Brachytherapy, to reflect the unpackaging of the brachytherapy source. We finalized this payment methodology in our November 15, 2004 final rule with comment period (69 FR 65839).
Section 1833(t)(2)(H) of the Act, as added by section 621(b)(2)(C) of Pub. L. 108-173, mandated the creation of separate groups of covered OPD services that classify brachytherapy devices separately from other services or groups of services. The additional groups must be created in a manner that reflects the number, isotope, and radioactive intensity of the devices of brachytherapy furnished, including separate groups for Palladium-103 and Iodine-125 devices. At its meetings in February 2004, the APC Panel heard from parties that recommended the addition of two new codes to describe brachtherapy sources in a manner that reflects the number, radioisostope, and radioactive intensity of the sources. The presenters recommended two new brachytherapy HCPCS codes and APCs for high activity Iodine-125 and high activity Palladium-103. The APC Panel, in turn, recommended that CMS establish new HCPCS codes and new APCs, on a per source basis, for these two brachytherapy sources.
We considered this recommendation and agreed with the APC Panel. Therefore, in the November 15, 2004 final rule with comment period, we established the following two new brachytherapy source codes for CY 2005:
C2634 Brachytherapy source, High Activity Iodine-125, greater than 1.01 mCi (NIST), per source
C2635 Brachytherapy source, High Activity Palladium-103, greater than 2.2 mCi (NIST), per source
In addition, we believed the APC Panel's recommendation to establish new HCPCS codes that would distinguish high activity Iodine-125 from high activity Palladium-103 on a per source basis should have been implemented for other brachytherapy code descriptors, as well. Therefore, beginning January 1, 2005, we included “per source” in the HCPCS code descriptors for all those brachytherapy source descriptors for which units of payment were not already delineated. Table 40 published in the November 15, 2004 final rule with comment period included a complete listing of the HCPCS codes, long descriptors, APC assignments, and status indicators that we used for brachytherapy sources paid under the OPPS in CY 2005 (69 FR 65840 through 65841).
Further, for CY 2005, we added the following code of linear source Palladium-103 to be paid at cost: C2636 Brachytherapy linear source, Palladium-103, per 1 mm. We had indicated in our August 16, 2004 proposed rule that we were aware of a new linear source Palladium-103, which came to our attention in CY 2003 through an application for a new device category for pass-through payment. We stated that, while we decided not to create a new category for pass-through payment, we believed that the new linear source fell under the provisions of Pub. L. 108-173. Therefore, we made final our proposal to add HCPCS code C2636 as a new brachytherapy source to be paid at cost in CY 2005.
We have consistently invited the public to submit recommendations for new codes to describe brachytherapy sources in a manner reflecting the number, radioisotope, and radioactivity intensity of the sources. We requested that commenters provide a detailed rationale to support recommended new codes and to send recommendations to us. We stated that we would endeavor to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis. We have only very recently received one such request for coding and payment of a new brachytherapy source since we added separate APC payment beginning in CY 2005 for the three brachytherapy sources discussed above. We will evaluate this source prior to our final rule for CY 2006. Therefore, we are not proposing any coding changes to the sources of brachytherapy for CY 2006 at this time. Table 26 below includes a list of the separately payable brachytherapy
From the start of the OPPS until the end of CY 2004, three HCPCS codes were used to bill drug administration services provided in the hospital outpatient department:
• Q0081 (Infusion therapy, using other than chemotherapeutic drugs, per visit)
• Q0083 (Chemotherapy administration by other than infusion technique only, per visit)
• Q0084 (Chemotherapy administration by infusion technique only, per visit) A fourth OPPS drug administration HCPCS code, Q0085 (Administration of chemotherapy by both infusion and another route, per visit) was active from the beginning of the OPPS through the end of CY 2003.
Each of these four HCPCS codes mapped to an APC (that is, Q0081 mapped to APC 0120, Q0083 mapped to APC 0116, Q0084 mapped to APC 0117, and Q0085 mapped to APC 0118), and APC payment rates for these codes were made on a per-visit basis. The per-visit payment included payment for all hospital resources (except separately payable drugs) associated with the drug administration procedures. For CY 2004, we discontinued using HCPCS code Q0085 to identify drug administration services, moving to a combination of HCPCS codes Q0083 and Q0084 that allowed more accurate calculations when determining OPPS payment rates.
In response to comments we received concerning the available opportunities to gather additional drug administration data (and subsequently facilitate development of more accurate payment rates for drug administration services in future years) and to reduce hospital administrative burden, we proposed for the CY 2005 OPPS to change our coding and payment methodologies related to drug administration services.
After examining comments and suggestions, including recommendations of the APC Panel, we adopted a crosswalk for the CY 2005 OPPS that identified all active CPT drug administration codes and the corresponding Q-codes, which hospitals had previously used to report their charges for the procedures. Hospitals were instructed to begin billing CPT codes for drug administration services in the hospital outpatient department effective January 1, 2005.
Payment rates for CY 2005 drug administration services were set using CY 2003 claims data. These data reflected per-visit costs associated with the four Q-codes listed above. To allow for the time necessary to collect data at the more specific CPT code level and to continue accurate payments based on available claims data, we used the Q-code crosswalk to map CPT drug administration codes to existing drug administration APCs. While hospitals were instructed to bill all relevant CPT codes that describe the services provided, the Outpatient Code Editor (OCE) collapsed payments for drug administration services attributed to the same APC and paid a single APC amount for those services for each visit, unless a modifier was used to identify drug administration services provided more than once in a separate encounter on the same day.
In 2004, the CPT Editorial Panel approved several new drug administration codes and revised several existing codes for use beginning in 2006. For use in the physician office setting in CY 2005, we established HCPCS G-codes that correspond with the expected new CPT codes that will become active in 2006.
For CY 2006 OPPS billing purposes, we are proposing to continue our policy of using CPT codes to bill for drug administration services provided in the hospital outpatient department. We anticipate that the current CPT codes will no longer be effective in CY 2006, and, therefore, we are proposing a CY 2006 crosswalk that maps current CPT codes to the CPT drug administration codes approved by the CPT Editorial Panel in 2004, which correspond to the G-codes used in the physician office setting for CY 2005 and which we expect to become active CPT codes for 2006.
The OPPS drug administration payment rates that we are proposing for CY 2006 are dependent on CY 2004 data
Table 27 shows the crosswalk from the CY 2005 CPT codes to the expected CY 2006 CPT codes (indicated by definition and 2005 HCPCS G-code) and includes the proposed CY 2006 status indicators and APC payment groups for these services. At its February 2005 meeting, the APC Panel recommended that this crosswalk be used to establish drug administration payments for the CY 2006 OPPS. Therefore, we are proposing to use the crosswalk as illustrated in Table 27 to assign drug administration services to APC payment groups for CY 2006 OPPS.
Hospitals currently use three HCPCS G-codes to indicate the administration of the following vaccines that have specific statutory coverage:
• G0008—Administration of Influenza Virus Vaccine
• G0009—Administration of Pneumococcal Vaccine
• G0010—Administration of Hepatitis B Vaccine
HCPCS codes G0008 and G0009 are exempt from beneficiary coinsurance and deductible applications and, as such, payment has been made outside of the OPPS since CY 2003 based on reasonable cost. We have made payment for HCPCS code G0010 through a clinical APC (that is, APC 0355) that included vaccines along with this vaccine administration code. Additional vaccine administration codes have been packaged or not paid under the OPPS.
We believe that HCPCS codes G0008, G0009 and G0010 are clinically similar and comparable in resource use to one another and to the administration of other immunizations and other therapeutic, prophylactic, or diagnostic injections. The appropriate APC assignment for these vaccine administration services is newly reconfigured APC 0353 (“Injection, Level II”). However, because of their statutory exemption regarding beneficiary deductible and coinsurance, for operational reasons we are unable to include HCPCS codes G0008 and G0009 in an APC with codes that do not share this exemption.
Therefore, for CY 2006, we are proposing to map HCPCS codes G0008 and G0009 to new APC 0350 (Administration of flu and PPV vaccines). As dictated by statute, HCPCS codes G0008 and G0009 will continue to be exempt from beneficiary coinsurance and deductible.
We are also proposing to change the status indicator for HCPCS code G0010 from “K” (Separate APC Payment) to “B” (Not paid under OPPS; Alternate code may be available), and to change the status indicators for vaccine administration codes 90471 and 90472 from “N” (Packaged) to “X” (Separate APC Payment), in agreement with the recommendation of the APC Panel to unpackage these services. Hospitals would code for hepatitis B vaccine administration using codes 96471 or 96472 (as appropriate), and payment would be mapped to reconfigured APC 0353 (“Injection, Level II”) that will include other injection services that are clinically similar and comparable in resource use.
Additionally, in order to pay appropriately for services that we believe are clinically similar and comparable in resource use and, barring technical restrictions, would otherwise be assigned to the same APC, we are proposing to calculate a combined median cost for all services assigned to APC 0350 and APC 0353 that would then serve as the median cost for both APCs. This combined median would be calculated using charges converted to costs from claims for services in both APCs and would have the effect of making the OPPS payment rates for APC 0350 and APC 0353 identical, although beneficiary copayment and deductible would not be applied to services in APC 0350.
In addition, we are proposing to change the status indicators for vaccine administration codes 90473 and 90474 from “E” (Not paid under OPPS) to “S” (Paid under OPPS) and make payments for these services when they are covered through proposed APC 1491 (New Technology—Level IA ($0-$10)). Finally, we are proposing to change the status indicators for the four remaining vaccine administration codes involving physician counseling (90465, 90466, 90467 and 90468) from “N” (Packaged) to “B” (Not paid under OPPS; Alternate code may be available). Hospitals providing immunization services with physician counseling would use the vaccine administration codes 90471, 90472, 90473, and 90473 to report such services, as we do not believe the provision of physician counseling significantly affects the hospital resources required for administration of immunizations. Table 28 displays the changes that we are proposing for CY 2006.
In the November 15, 2004 final rule with comment period (69 FR 65838), we noted our primary concerns and direction for developing the proposed coding guidelines for emergency department and clinic visits. We intend to make available for public comment the proposed coding guidelines that we are considering through the CMS OPPS Web site as soon as we have completed them. We will notify the public through our listserve when these proposed guidelines become available. To subscribe to this listserve, please go to the following CMS Web site:
We will continue to be considerate of the time necessary to educate clinicians and coders on the use of the new codes and guidelines and for hospitals to modify their systems. We anticipate providing a minimum notice of between 6 and 12 months prior to implementation of the new evaluation and management codes and guidelines. We will continue developing and testing the new codes even though we have not yet made plans for their implementation.
Since the implementation of the OPPS in August 2000, separate payments have been made for blood and blood products through APCs rather than packaging them into payments for the procedures with which they were administered. Hospital payments for the costs of blood and blood products, as well as the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs. On April 12, 2001, CMS issued the original billing guidance for blood products to hospitals (Program Transmittal A-01-50). In response to requests for clarification of these instructions, CMS issued Transmittal 496 on March 4, 2005. The comprehensive billing guidelines in the Transmittal also addressed specific concerns and issues related to billing for blood-related services, which the public had brought to our attention.
In CY 2000, payments for blood and blood products were established based on external data provided by commenters due to limited Medicare claims data. From CY 2000 to CY 2002, payment rates for blood and blood products were updated for inflation. For CY 2003, as described in the November 1, 2002 final rule with comment period (67 FR 66773), we applied a special dampening methodology to blood and blood products that had significant reductions in payment rates from CY 2002 to CY 2003, when median costs were first calculated from hospital claims. Using the dampening methodology, we limited the decrease in payment rates for blood and blood products to approximately 15 percent. For CY 2004, as recommended by the APC Panel, we froze payment rates for blood and blood products at CY 2003 levels as we studied concerns raised by commenters and presenters at the August 2003 and February 2004 APC Panel meetings.
For CY 2005, we established new APCs that allowed each blood product to be assigned to its own separate APC, as several of the previous blood product APCs contained multiple blood products with no clinical homogeneity or whose product-specific median costs may not have been similar. Some of the blood product HCPCS codes were reassigned to the new APCs (Table 34 of the November 15, 2004 final rule with comment period (69 FR 65819)).
We also noted in the November 15, 2004 final rule with comment period that public comments to previous OPPS rules had stated that the CCRs that were used to adjust charges to costs for blood products in past years were too low. Past commenters indicated that this approach resulted in an underestimation of the true hospital costs for blood and blood products. In response to these comments and APC Panel recommendations from their February 2004 and September 2004 meetings, we conducted a thorough analysis of the OPPS CY 2003 claims (used to calculate the CY 2005 APC payment rates) to compare CCRs between those hospitals reporting a blood-specific cost center and those hospitals defaulting to the overall hospital CCR in the conversion of their blood product charges to costs. As a result of this analysis, we observed a significant difference in CCRs utilized for conversion of blood product charges to costs for those hospitals with and without blood-specific cost centers. The median hospital blood-specific CCRs were almost two times the median overall hospital CCR. As discussed in the November 15, 2004 final rule with comment period, we applied a methodology for hospitals not reporting a blood-specific cost center, which simulated a blood-specific CCR for each hospital that we then used to convert charges to costs for blood products. Thus, we developed simulated medians for all blood and blood products based on CY 2003 hospital claims data (69 FR 65816).
For CY 2005, we also identified a subset of blood products that had less than 1,000 units billed in CY 2003. For these low-volume blood products, we based the CY 2005 payment rate on a 50/50 blend of CY 2004 product-specific OPPS median costs and the CY 2005 simulated medians based on the application of blood-specific CCRs to all claims. We were concerned that, given the low frequency in which these products were billed, a few occurrences of coding or billing errors may have led to significant variability in the median calculation. The claims data may not have captured the complete costs of these products to hospitals as fully as possible. This low-volume adjustment methodology also allowed us to further study the issues raised by commenters and by presenters at the September 2004 APC Panel meeting, without putting beneficiary access to these low-volume blood products at risk.
For CY 2006, we are proposing to continue to make separate payments for blood and blood products under the OPPS through individual APCs for each product. We are also proposing to establish payment rates for these blood and blood products by using the same simulation methodology described in the November 15, 2004 final rule with comment period (69 FR 65816), which utilized hospital-specific actual or simulated CCRs for blood cost centers to convert hospital charges to costs, with an adjustment applied to some products. We continue to believe that using blood-specific CCRs applied to hospital claims data will result in reasonably accurate payments that more fully reflect hospitals' true costs of providing blood and blood products than our general methodology of defaulting to the overall hospital CCR when more specific CCRs are unavailable.
For blood and blood products whose CY 2006 simulated medians experienced a decrease of more than 10 percent in comparison to their CY 2005 payment medians, we are proposing to limit the decrease in medians to 10 percent. Therefore, overall we are proposing to base median costs for blood and blood products in CY 2006 on the greater of: (1) Simulated medians calculated using CY 2004 claims data; or (2) 90 percent of the APC payment median for CY 2005 for such products. We recognize that possible errors in hospital billing or coding for blood products in CY 2004 may have contributed to these decreases in medians. In particular, hospitals may have been uncertain about which of their many different costs for providing blood and blood products should be captured in their charges for the products, based on variations in the specific circumstances of the services they provided. In addition, the six products affected by the proposed CY 2006 adjustment policy all were relatively low volume with fewer than 7,000 units billed in CY 2004. Three of these products were affected by the low-volume payment adjustment for CY 2005 because there were less than 1,000 units billed, and their CY 2005 payment medians would have decreased without the adjustment. In the interim, as hospitals become more familiar with the comprehensive billing guidelines for blood and blood products that are described in Program Transmittal 496, (Change Request 3681 dated March 4, 2005), we acknowledge the need to protect beneficiaries' access to a safe blood supply and are proposing to do so by limiting significant decreases in payment rates for blood and blood products from CY 2005 to CY 2006. We expect that our billing guidance will assist hospitals in more fully including all appropriate costs for providing blood and blood products in their charges for those products, so that our data for CY 2005, which will be used to set median costs for blood and blood products in the CY 2007 OPPS, should more accurately capture the hospital costs associated with each different blood product.
Displayed in Table 29 is the list of blood product HCPCS codes with their proposed CY 2006 payment medians. Overall, medians from CY 2005 and CY 2006 were relatively stable, and we expect that as hospitals improve their billing and coding practices, medians based on historical hospital claims data should continue to become more consistent and reflective of all hospital costs. For blood and blood products whose CY 2006 simulated median would have experienced a decrease from CY 2005 to CY 2006 of greater than 10 percent, the adjusted median is shown.
Therefore, for CY 2006, we are proposing to establish payment rates for blood and blood products under the OPPS by using the same simulation methodology described in the November 15, 2004 final rule with comment period (69 FR 65816). For blood and blood products whose 2006 medians would have otherwise experienced a decrease of more than 10 percent in comparison with their CY 2005 payment rates, we are proposing to adjust the simulated medians by limiting their decrease to 10 percent.
In addition, we are proposing to change the status indicator for CPT code 85060 (Blood smear, peripheral, interpretation by physician with written report) from “X” (separately paid under the OPPS) to “B” (not paid under the OPPS). When a hospital provides a physician interpretation of an abnormal peripheral blood smear interpretation for a hospital outpatient, the charge for the facility resources associated with the interpretation should be bundled into the charge reported for the ordered hematology lab service, such as, CPT code 85007 (Blood count; blood smear, microscopic examination with manual differential WBC count) or CPT code 85008 (Blood count; blood smear, microscopic examination without manual differential WBC count), which are paid under the Clinical Laboratory Fee Schedule (CLFS). A physician interpretation of an abnormal peripheral blood smear is considered a routine part of the ordered hematology lab service, such as CPT codes 85007 and 85008 paid under the CLFS, so hospitals would receive duplicate payment for the facility resources associated with a physician's blood smear interpretation if we were to continue to pay separately for CPT code 85060 under the OPPS for hospital outpatients. Therefore, for CY 2006, we are proposing to discontinue payment under the OPPS for CPT code 85060 by changing its status indicator from “X” to “B.”
Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment, before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation status is commonly assigned to patients with unexpectedly prolonged recovery after surgery and to patients who present to the emergency department and who then require a significant period of treatment or monitoring before a decision is made concerning their next placement. For a detailed discussion of the clinical and payment history of observation services, refer to the November 1, 2002 final rule with comment period (67 FR 66794).
Before the implementation of the OPPS in CY 2000, payment for observation care was made on a reasonable cost basis. With the initiation of the OPPS, costs for observation services were packaged into payments for the services with which the observation care was associated but no separate payment for observation services was implemented.
For CY 2002, we implemented separate payment for observation services (APC 0339) under the OPPS for three medical conditions (chest pain, congestive heart failure, and asthma). Additional criteria, such as the billing of select diagnosis codes, an evaluation and management service, a minimum and maximum number of observation hours, and provision of certain condition-specific diagnostic tests, along with documentation of the physician's determination that the patient would benefit from observation care, were also required in order for hospitals to receive the separate APC payment (APC 0339) for observation services.
Taking into account numerous comments from providers about the increased administrative burden caused by reporting requirements associated with payment for APC 0339 and after reviewing comments and recommendations by the APC Panel, we removed the mandated diagnostic testing requirements beginning in CY 2005 (Transmittal 514, Change Request 3756, released March 30, 2005). Hospitals were instructed to rely on clinical judgment in combination with internal and external quality review processes to ensure that appropriate diagnostic testing is provided for patients receiving high quality, medically necessary observation care. In an effort to further reduce administrative burden related to accurate billing and in response to suggestions from hospitals and the APC Panel, effective January 1, 2005, we clarified our instructions for counting time in observation care to end at the time the outpatient is actually discharged from the hospital or admitted as an inpatient. Our expectation was that specific, medically necessary observation services were being provided to the patient up until
In updating the CY 2005 OPPS, we also looked at CY 2003 claims data for all packaged visit-related observation care for all medical conditions in order to determine whether or not there were other diagnoses that would be candidates for separately payable observation services. This year, we again reviewed the most recent claims data (CY 2004) for packaged and unpackaged observation services to assess the current appropriateness of the three medical conditions for separately payable observation services and to determine if the list of diagnosis codes was complete for those conditions. The APC Panel recommended at the February 2005 APC Panel meeting that CMS expand the list of diagnoses eligible for separate observation payments.
The diagnoses currently associated with the three medical conditions continue to be frequently reported on OPPS visit-related claims with packaged observation services, and there are a large number of claims for separately payable observation care for the three medical conditions. At this time, our data show almost 80,000 claims from CY 2004 for separately payable observation services, compared with 67,182 for CY 2003 hospital claims. We have also explored other diagnoses that appeared in hospital claims data with packaged observation services. However, the data on packaged observation services continue to be incomplete and unreliable, reported using a number of different CPT codes with “per day” in their code descriptors. Some hospitals appear to be reporting observation services per day, while others appear to be reporting each hour of observation care as one unit, as we instructed them to do when reporting HCPCS code G0244 for separately payable observation. As described in section XI.B. of this preamble, we are proposing to make changes to hospital coding for all observation services for CY 2006, both separately payable and packaged. We are currently not convinced that there are other conditions for which there is a well-defined set of hospital services that are distinct from the services provided during a clinic or emergency visit. Moreover, hospital data from CY 2004 do not reflect our CY 2005 changes in separately payable observation policy. We also seek to gain additional experience with more consistent hospital billing for observation services, both packaged and separately payable, to guide our future analyses of observation care. Thus, we believe it is premature to expand the conditions for which we would separately pay for visit-related observation services.
In response to comments received regarding the continuing administrative burden on hospitals when attempting to differentiate between packaged and separately payable observation services for purposes of billing correctly, and recommendations put forward by the APC Panel and participants at the February 2005 APC Panel meeting, we are proposing two changes in payment policy for observation services in CY 2006. First, we are proposing to discontinue HCPCS codes G0244 (Observation care by facility to patient), G0263 (Direct admission with CHF, CP, asthma), and G0264 (Assessment other than CHF, CP, asthma) and to create two new HCPCS codes to be used by hospitals to report all observation services whether separately payable or packaged, and direct admission for observation care:
• GXXXX—Hospital observation services, per hour
• GYYYY—Direct admission of patient for hospital observation care
Second, we are proposing to shift determination of whether or not observation services are separately payable under APC 0339 from the hospital billing department to the OPPS claims processing logic. That is, hospitals would bill GXXXX when observation services are provided to any patient admitted to “observation status,” regardless of the patient's status as an inpatient or outpatient. Hospitals would additionally bill GYYYY when observation services are the result of a direct admission to “observation status” without an associated emergency room visit, hospital outpatient clinic visit, or critical care service on the day of or day before the observation services. Both of these new HCPCS codes would be assigned a new status indicator that would trigger OCE logic during the processing of the claim to determine if the observation service is packaged with the other separately payable hospital services provided or if a separate APC payment for observation services is appropriate in accordance with the criteria discussed below in section XI.C. of this preamble. In addition, we are proposing to change the status indicator for CPT codes 99217 through 99220 and 99234 through 99236 from “N” (packaged) to “B” (code not recognized by OPPS). We will expect hospitals to utilize GXXXX to accurately report all observation services provided to beneficiaries, whether the observation would be packaged or separately payable, to assist us in developing consistent and complete hospital claims data regarding the utilization and costs of observation services. The units of service reported with GXXXX would equal the number of hours the patient is in observation status.
For CY 2006, we are proposing to continue applying the existing CY 2005 criteria (69 FR 65830), which determine if hospitals may receive separate payment for medically necessary observation care provided to a patient with congestive heart failure, chest pain, or asthma. In addition, we are proposing to continue our policy of packaging payment for all other observation services into the payments for the separately payable services with which the observation service is reported. As explained previously in section XI.B. of this section, the only changes we are proposing are related to the codes hospitals would use to report observation services, and the point at which a payment determination is made. Rather than requiring the hospital to determine prior to claims submission whether patient condition and the services furnished meet the criteria for payment of APC 0339, that determination would shift to the claims processing modules installed by the fiscal intermediaries to process all OPPS bills, thereby reducing the administrative burden on hospitals.
Criteria for separate observation service payments include documentation of specific ICD-9-CM diagnostic codes (International Classification of Diseases, Ninth Edition, Clinical Modification); the length of time a patient is in observation status; hospital services provided before, during, and after the patient receives observation care; and ongoing physician evaluation of the patient's status.
As we stated in Transmittal A-02-129, released in January 2003, we will continue to update any changes in the list of ICD-9-CM codes required for payment of HCPCS code GXXXX resulting from the October 1 annual update of ICD-9-CM in the October quarterly update of the OPPS. In addition, changes to the ICD-9-CM codes, which are listed in Table 30 below, would be included in the OPPS CY 2006 final rule.
Below are the criteria that we are proposing to continue using in CY 2006 to determine if hospitals may receive separate OPPS payment for medically necessary observation care provided to a patient with congestive heart failure, chest pain, or asthma.
a. The beneficiary must have one of three medical conditions: Congestive heart failure, chest pain, or asthma.
b. The hospital bill must report as the reason for visit or principal diagnosis an appropriate ICD-9-CM code (as shown in Table 30 below) to reflect the condition.
c. The qualifying ICD-9-CM diagnosis code must be reported in Form Locator (FL) 76, Patient Reason for Visit, or FL 67, principal diagnosis, or both, in order for the hospital to receive separate payment for APC 0339. If a qualifying ICD-9-CM diagnosis code(s) is reported in the secondary diagnosis field but is not reported in either the Patient Reason for Visit field (FL 76) or in the principal diagnosis field (FL 67), separate payment for APC 0339 will not be allowed.
a. Observation time must be documented in the medical record.
b. A beneficiary's time in observation (and hospital billing) begins with the beneficiary's admission to an observation bed.
c. A beneficiary's time in observation (and hospital billing) ends when all clinical or medical interventions have been completed, including followup care furnished by hospital staff and physicians that may take place after a physician has ordered the patient be released or admitted as an inpatient.
d. The number of units reported with HCPCS code GXXXX must equal or exceed 8 hours.
a. The hospital must provide on the same day or the day before and report on the bill:
• An emergency department visit (APC 0610, 0611, or 0612),
• A clinic visit (APC 0600, 0601, or 0602), or
• Critical care (APC 0620).
b. No procedure with a “T” status indicator can be reported on the same day or day before observation care is provided.
a. The beneficiary must be in the care of a physician during the period of observation, as documented in the medical record by admission, discharge, and other appropriate progress notes that are timed, written, and signed by the physician.
b. The medical record must include documentation that the physician explicitly assessed patient risk to determine that the beneficiary would benefit from observation care.
For CY 2006, we are proposing to continue paying for direct admission to observation at a rate equal to that of a Level I Clinic Visit when a Medicare beneficiary is directly admitted into a hospital outpatient department for observation care that does not qualify for separate payment under APC 0339. In order to receive separate payment for a direct admission into observation (APC 0600), the claim must show:
1. Both HCPCS codes GXXXX (Hourly Observation) and GYYYY (Direct Admit to Observation) with the same date of service.
2. That no services with a status indicator “T” or “V” were provided on the same day of service as HCPCS code GYYYY.
Section 1833(t)(B)(i) of the Act gives the Secretary broad authority to determine the services to be covered and paid for under the OPPS. Before implementation of the OPPS in August 2000, Medicare paid reasonable costs for services provided in the outpatient department. The claims submitted were subject to medical review by the fiscal intermediaries to determine the appropriateness of providing certain services in the outpatient setting. We did not specify in regulations those services that were appropriate to provide only in the inpatient setting and that, therefore, should be payable only when provided in that setting.
In the April 7, 2000 final rule with comment period, we identified procedures that are typically provided only in an inpatient setting and, therefore, would not be paid by Medicare under the OPPS (65 FR 18455). These procedures comprise what is referred to as the “inpatient list.” The inpatient list specifies those services that are only paid when provided in an inpatient setting because of the nature of the procedure, the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged, or the underlying physical condition of the patient. As we discussed in the April 7, 2000 final rule with comment period (65 FR 18455) and the November 30, 2001 final rule (66 FR 59856), we use the following criteria when reviewing procedures to determine whether or not they should be moved from the inpatient list and assigned to an APC group for payment under the OPPS:
• Most outpatient departments are equipped to provide the services to the Medicare population.
• The simplest procedure described by the code may be performed in most outpatient departments.
• The procedure is related to codes that we have already removed from the inpatient list.
In the November 1, 2002 final rule with comment period (67 FR 66792), we removed 43 procedures from the inpatient list for payment under OPPS. We also added the following criteria for use in reviewing procedures to determine whether they should be removed from the inpatient list and assigned to an APC group for payment under the OPPS:
• We have determined that the procedure is being performed in multiple hospitals on an outpatient basis; or
• We have determined that the procedure can be appropriately and safely performed in an ambulatory surgical center (ASC) and is on the list of approved ASC procedures or proposed by us for addition to the ASC list.
We believe that these additional criteria help us to identify procedures that are appropriate for removal from the inpatient list.
In the November 7, 2003 final rule with comment period (68 FR 63465), no significant changes were made to the inpatient list. In the November 15, 2004 final rule 5with comment period (69 FR 65834), we removed 22 procedures from the inpatient list, effective for services furnished on or after January 1, 2005.
We used the same methodology as described in the November 15, 2004 final rule with comment period (69 FR 65837) to identify a subset of procedures currently on the inpatient list that were being widely performed on an outpatient basis. These procedures were then clinically reviewed for possible removal from the inpatient list. We solicited input from the APC Panel on the appropriateness of the removal of 26 procedures from the inpatient list at the February 2005 APC Panel meeting. The APC Panel recommended that these 26 procedures be removed from the list and further recommended that CMS consider CPT code 37183 (Remove hepatic shunt (TIPS)) for removal. We agree with the APC Panel's recommendation that CPT code 37183 be removed from the inpatient list for CY 2006 and we are proposing to remove it from the inpatient list.
However, subsequent to the APC Panel's February 2005 meeting, we conducted further clinical evaluations of three procedures (CPT codes 33420, 65273, and 59856) included among the 26 procedures that the APC Panel recommended for removal from the inpatient list. Upon further clinical evaluation of CPT code 33420 (Valvotomy, mitral valve; closed heart), we believe that the utilization data suggesting that this procedure is an office-based procedure were errant. Additional sources of utilization data suggest that this procedure is predominately performed on an inpatient basis. Concomitant with not meeting our criteria of being performed on an outpatient basis in multiple hospitals and not appearing on the ASC list of approved procedures, we are not compelled to support the removal of this procedure from the inpatient list. For this reason, we are proposing to retain CPT code 33420 on the inpatient list for CY 2006.
CPT codes 65273 and 59856 were similarly reevaluated because of our concern with the HCPCS long descriptors for these two codes. The long descriptors for these codes are as follows: CPT code 65273 (Repair of laceration; conjunctiva, by mobilization and rearrangement, with hospitalization) and CPT code 59856 (Induced abortion, by one or more vaginal suppositories (eg, prostaglandin) with or without cervical dilation (eg, laminaria), including hospital admission and visits, delivery of fetus and secundines; with dilation and
In addition, we are proposing to remove CPT code 62160 (Neuroendoscopy) from the inpatient list. Questions about this service have been raised to us by the hospital community because CPT code 62160 is an add-on CPT code (that is, a code that is commonly performed as an “additional or supplemental” procedure to the primary procedure). Two of the separately coded services that CPT indicates are to be used with the add-on code are currently payable under the OPPS. Further clinical evaluation of this add-on procedure and its use in various sites of service leads us to believe it is appropriate for removal from the inpatient list.
Therefore, for CY 2006, we are proposing to remove 25 procedures from the inpatient list and to assign 23 of these procedures to clinically appropriate APCs, as shown below in Table 31. We are not proposing to assign two of these procedures to APC groups, that is, CPT codes 00634 (Anesthesia for procedures in lumbar region; chemonucleoysis) and 01190 (Anesthesia for obturator neurectomy; intrapelvic) because they are anesthesia procedures for which a separate payment is not made under the OPPS. Payment for these two procedures would be packaged into the procedures with which they are billed. The proposed changes to the inpatient list would be effective for services furnished on or after January 1, 2006.
As discussed in the November 7, 2003 final rule with comment period, we created APC 0375 to pay for services furnished on the same date as a procedure with SI “C” and billed with the modifier -CA (68 FR 63467) because we were concerned that payment under a New Technology APC would not result in an appropriate payment. Payment under a New Technology APC is a fixed amount that does not have a relative payment weight and, therefore, is not subject to recalibration based on hospital costs. In the absence of hospital claims data to determine costs, the clinical APC 0375 payment rate for CY 2004 was set at of $1,150, which was the payment amount for the newly structured New Technology APC that replaced APC 0977.
For CY 2005, payment for otherwise payable outpatient services furnished on the same date of service that a procedure with SI “C” was performed on an emergent basis on an outpatient who died before inpatient admission and where modifier -CA was appended to the inpatient procedure continued to be made under APC 0375 (Ancillary Outpatient Services When Patient Expires) at a payment rate of $3,217.47. As discussed in the November 15, 2004 final rule with comment period (69 FR 65841), the payment median was set in accordance with the same methodology we followed to set payment rates for the other procedural APCs in CY 2005, based on the relative payment weight calculated for APC 0375. A review of the 18 hospital claims utilized for ratesetting revealed a reasonable mix of outpatient services that a hospital could be expected to furnish during an encounter with a patient with an emergency condition requiring immediate medical intervention, as well as a wide range of costs.
For CY 2006, we are not proposing any changes to our payment policy for services billed on the same date as a “C” status procedure appended with modifier -CA. We are proposing to continue to make one payment under APC 0375 for the services that meet the specific conditions discussed in previous rules for using modifier -CA, based on calculation of the relative payment weight for APC 0375, using charge data from CY 2004 claims for line items with a HCPCS code and status indicator “V,” “S,” “T,” “X,” “N,” “K,” “G,” and “H,” in addition to charges for revenue codes without a HCPCS code.
In accordance with this methodology, for CY 2006, we calculated a median cost of $2,528.61 for APC 0375 for the aggregated otherwise payable outpatient hospital services based on 300 CY 2004 hospital claims reporting modifier -CA with an inpatient procedure. These 300 claims were billed by 218 different hospital providers, each submitting between 1 and 10 claims with modifier -CA appended to a “C” status procedure. This median cost for APC 0375 is relatively consistent with the median calculated for the CY 2005 OPPS update, and, as expected, the hospital claims once again show a wide range of costs. Nevertheless, we are concerned with the very large increase in the volume of hospital claims billed with the -CA modifier from CY 2003 to CY 2004, growing from 18 to 300 claims over that 1-year time period. We acknowledge that modifier -CA was first introduced quite recently in CY 2003, and in CY 2003 and CY 2004 hospitals may have been experiencing a learning curve with respect to its appropriate use on claims for services payable under the OPPS.
However, our clinical review of the 300 claims reporting modifier -CA lends some support to our early concerns regarding the increased CY 2004 modifier volume and hospitals' possible incorrect use of the modifier for services that do not meet the payment conditions we established. Hospitals should be using this modifier only under circumstances described in section VI. of Transmittal A-02-129, which provided specific billing guidance for the use of modifier -CA. In addition to expected use of the -CA modifier for exploratory laparotomies and insertions of intra-aortic balloon assist devices, other unanticipated examples of “C” status procedures reported with the -CA modifier by hospitals in CY 2004 include knee arthroplasty, thyroidectomy, repair of nonunion or malunion of the femur, and thromboendarterectomy of the carotid, vertebral, or subclavian arteries. Moreover, few of the claims also include a clinic or emergency room visit on the same date of service as the procedure appended with modifier -CA, as might be expected for some patients presenting to a hospital with serious medical conditions which require urgent interventions with inpatient procedures. We are concerned that some procedures reported by hospitals with the -CA modifier in CY 2004 may not have been provided to patients with emergent, life-threatening conditions, where the inpatient procedure was performed on an emergency basis to resuscitate or stabilize the patient. Instead, those procedures may have been provided to hospital outpatients as scheduled inpatient procedures that were not emergency interventions for patients in critical or unstable condition and such circumstances would have been inconsistent with our billing and payment rules regarding correct use of the -CA modifier to receive payment for APC 0375. In light of these claims findings and our current analysis, we will continue to closely monitor hospital use of modifier -CA, following changes in the claims volume, noting inpatient procedures to which the -CA modifier is appended, examining other services billed on the same date as the inpatient procedure, and analyzing specific hospital patterns of billing for services with modifier -CA appended, to assess whether a proposal to change our policies regarding payment for APC 0375 would be warranted in the future or whether hospitals require further education regarding correct use of the modifier -CA.
The payment status indicators (SIs) that we assign to HCPCS codes and APCs under the OPPS play an important role in determining payment for services under the OPPS because they indicate whether a service represented by a HCPCS code is payable under the OPPS or another payment system and also whether particular OPPS policies apply to the code. For CY 2006, we are providing our proposed status indicator assignments for APCs in Addendum A, for the HCPCS codes in Addendum B, and the definitions of the status indicators in Addendum D1 to this proposed rule.
Payment under the OPPS is based on HCPCS codes for medical and other health services. These codes are used for a wide variety of payment systems under Medicare, including, but not limited to, the Medicare fee schedule for physician services, the Medicare fee schedule for durable medical equipment and prosthetic devices, and the Medicare clinical laboratory fee schedule. For purposes of making payment under the OPPS, we must be able to signal the claims processing system through the OCE software as to HCPCS codes that are paid under the OPPS and those codes to which particular OPPS payment policies apply. We accomplish this identification in the OPPS through the establishment of a system of status indicators with specific meanings. Addendum D1 contains the proposed definitions of each status indicator for purposes of the OPPS for CY 2006.
We assign one and only one status indicator to each APC and to each HCPCS code. Each HCPCS code that is assigned to an APC has the same status indicator as the APC to which it is assigned.
Specifically, for CY 2006, we are proposing to use the following status indicators in the specified manner:
• “A” to indicate services that are billable to fiscal intermediaries but are paid under some payment method other than OPPS, such as under the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fee schedule or the Medicare Physician Fee Schedule. Some, but not all, of these other payment systems are identified in Addendum D1 to this proposed rule.
• “B” to indicate the services that are billable to fiscal intermediaries but are not payable under the OPPS when submitted on an outpatient hospital Part B bill type, but that may be payable by fiscal intermediaries to other provider types when submitted on an appropriate bill type.
• “C” to indicate inpatient services that are not payable under the OPPS.
• “D” to indicate a code that is discontinued, effective January 1, 2006.
• “E” to indicate items or services that are not covered by Medicare or codes that are not recognized by Medicare.
• “F” to indicate acquisition of corneal tissue which is paid on a reasonable cost basis, certain CRNA services, and hepatitis B vaccines that are paid on a reasonable cost basis.
• “G” to indicate drugs and biologicals that are paid under the OPPS transitional pass-through rules.
• “H” to indicate pass-through devices, brachytherapy sources, and separately payable radiopharmaceuticals that are paid on a cost basis.
• “K” to indicate drugs and biologicals (including blood and blood products) and radiopharmaceutical agents that are paid in separate APCs under the OPPS, but that are not paid under the OPPS transitional pass-through rules.
• “L” to indicate flu and pneumococcal immunizations that are paid at reasonable cost but to which no coinsurance or copayment apply.
• “M” to indicate services that are only billable to carriers and not to fiscal intermediaries and that are not payable under the OPPS.
• “N” to indicate services that are paid under the OPPS, but for which payment is packaged into another service or APC group.
• “P” to indicate services that are paid under the OPPS, but only in partial hospitalization programs.
• “Q” to indicate packaged services subject to separate payment under OPPS payment criteria.
• “S” to indicate significant services subject to separate payment under the OPPS.
• “T” to indicate significant services that are paid under the OPPS and to which the multiple procedure payment discount under the OPPS applies.
• “V” to indicate medical visits (including emergency department or clinic visits) that are paid under the OPPS.
• “X” to indicate ancillary services that are paid under the OPPS.
• “Y” to indicate nonimplantable durable medical equipment that must be billed directly to the durable medical equipment regional carrier rather than to the fiscal intermediary.
We are proposing the payment status indicators identified above, of which indicators “M” and “Q” are new for CY 2006, for each HCPCS code and each APC listed in Addenda A and B and are requesting comments on the appropriateness of the indicators we have assigned.
We are proposing to continue our use of the two comment indicators finalized in the November 15, 2004 final rule with comment period (69 FR 65827 and 65828) to identify in the CY 2006 OPPS final rule the assignment status of a specific HCPCS code to an APC and the timeframe when comments on the HCPCS APC assignment will be accepted. The two comment indicators are listed below, and in Addendum D2 of this proposed rule:
• “NF”—New code, final APC assignment; Comments were accepted on a proposed APC assignment in the Proposed Rule; APC assignment is no longer open to comment.
• “NI”—New code, interim APC assignment; Comments will be accepted on the interim APC assignment for the new code.
Currently, under the OPPS, hospitals billing for diagnostic imaging procedures receive full APC payments for each service on a claim, regardless of how many procedures are performed using a single imaging modality and whether or not contiguous areas of the body are studied in the same session. In its March 2005 Report to Congress, MedPAC recommended that the Secretary should improve Medicare coding edits that detect unbundled diagnostic imaging services and reduce the technical component payment for multiple imaging services when they are performed on contiguous areas of the body (Recommendation 3-B). MedPAC pointed out that Medicare's payment rates are based on each service being provided independently and that the rates do not account for efficiencies that may be gained when multiple studies using the same imaging modality are performed in the same session. Those efficiencies are especially likely when contiguous body areas are the focus of the imaging because the patient and
Under the OPPS, we have a longstanding policy of reducing payment for multiple surgical procedures performed on the same patient in the same operative session (§ 419.44(a) of the regulations). In such cases, full payment is made for the procedure with the highest APC payment rate, and each subsequent procedure is paid at 50 percent of its respective APC payment rate. We believe that a similar policy for payment of diagnostic imaging services would be more appropriate than our current policy because it would lead to more appropriate payment for multiple imaging procedures of contiguous body areas that are performed during the same session.
In our efforts to determine whether or not such a policy would improve the accuracy of OPPS payments, we identified 11 “families” of imaging procedures by imaging modality (ultrasound, computerized tomography (CT) and computerized tomography angiography (CTA), magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA)) and contiguous body area (for example, CT and CTA of Chest/Thorax/Abdomen/Pelvis), as displayed in Table 32. Using those Families of procedures, we examined OPPS bills for CY 2004 and found that there were numerous claims reporting more than one imaging procedure within the same Family provided to a beneficiary by a hospital on the same day. For instance, of the approximately 2.7 million OPPS claims billed for services within Family 2 (CT and CTA of the Chest/Thorax/Abdomen/Pelvis), approximately 1.1 million were claims for multiple procedures within Family 2. In particular, there were 288,200 claims for the combination of CPT codes 72192 (CT of the pelvis without dye) and 74150 (CT of the abdomen without dye).
The imaging procedures described by CPT codes 72192 and 74150 study two adjacent body regions. Appropriate diagnostic evaluation of many constellations of patients' signs and symptoms and potentially affected organ systems may involve assessment of pathology in both the abdomen and pelvis, body areas that are anatomically and functionally closely related. Therefore, both studies are frequently performed in the same session to provide the necessary clinical information to diagnose and treat a patient. Although each procedure, by itself, entails the use of hospital resources, including certain staff, equipment, and supplies, some of those resource costs are not incurred twice when the procedures are performed in the same session and thus, should not be paid as if they were. Beginning with the beneficiary's arrival in the outpatient department, costs are incurred only once for registering the patient, taking the patient to the procedure room, positioning the patient on the table for the CT scan, among others. We believe it is clear that reducing the payment for the second and subsequent procedures within the identified families would result in more accurate payments with respect to the hospital resources utilized for multiple imaging procedures performed in the same session.
OPPS bills do not contain detailed information on the hospitals' costs that are incurred in furnishing imaging procedures. Much of the costs are packaged and included in the overall charges for the procedures. Even if bundled costs are reported with charges on separate lines either with HCPCS codes or with revenue codes, when there are multiple procedures on the claims, it is impossible for us to accurately attribute bundled costs to each procedure. However, our analysis of CY 2004 hospital claims convinced us that some discounting of multiple imaging procedures is warranted. In order to determine the level of adjustment that would be appropriate for the second and subsequent procedures performed within a family in the same session, we used the MPFS methodology and data.
Under the resource-based practice expense methodology used for Medicare payments to physicians, specific practice expense inputs of clinical labor, supplies and equipment are used to calculate “relative value units” on which physician payments are based. When multiple images are acquired in a single session, most of the clinical labor activities are not performed twice and many of the supplies are not furnished twice. Specifically, we consider that the following clinical labor activities included in the “technical component” (TC) of the MPFS are not duplicated for subsequent procedures: Greeting, positioning and escorting the patient; providing education and obtaining consent; retrieving prior exams; setting up the IV; and preparing and cleaning the room. In addition, we consider that supplies, with the exception of film, are not duplicated for subsequent procedures. Equipment time and indirect costs are allocated based on clinical labor time in the physician payment methodology and, therefore, these inputs should be reduced accordingly.
We performed analyses and found that excluding those practice expense inputs, along with the corresponding portion of equipment time and indirect costs, supports a 50-percent reduction in the payment for the TC portion of subsequent procedures. The items and services that make up hospitals' facility costs are generally very similar to those that are counted in the TC portion of the MPFS for diagnostic imaging procedures. We believe that the analytic justification for a 50-percent reduction of the TC for the second and subsequent imaging procedures using the MPFS input data also provides a basis for a similar relative reduction to payments for multiple imaging procedures performed in the hospital outpatient department. Therefore, we are proposing to make a 50-percent reduction in the OPPS payments for some second and subsequent imaging procedures performed in the same session, similar to our policy of reducing payments for some second and subsequent surgical procedures.
We are proposing to apply the multiple imaging procedure reduction only to individual services described by codes within one Family, not across Families. Reductions would apply when more than one procedure within the Family is performed in the same session. For example, no reduction would apply to an MRI of the brain (CPT code 70552) in code Family 5, when performed in the same session as an MRI of the spinal canal and contents (CPT code 72142) in code Family 6. We are proposing to make full payment for the procedure with the highest APC payment rate, and payment at 50 percent of the applicable APC payment rate for every additional procedure, when performed in the same session.
Since implementation of the OPPS in 2000, we have required hospitals to report modifiers -52, -73, and -74 to indicate procedures that were terminated before their completion. Modifier -52 indicates partial reduction or discontinuation of services that do not require anesthesia, while modifiers -73 and -74 are used for procedures requiring anesthesia, where the patient was taken to the treatment room and the procedure was discontinued before anesthesia administration or after anesthesia administration/procedure initiation respectively. The elective cancellation of procedures is not reported. Hospitals are paid 50 percent of the APC payment for services with -73 appended and 100 percent for procedures with modifier -52 or -74 reported, in accordance with § 419.44(b) of the regulations. In January 2005, we clarified in Program Transmittal 442 the definition of anesthesia for purposes of billing for services furnished in the hospital outpatient department in the context of reporting modifiers -73 and -74. The APC Panel considered the
Current OPPS policy requires providers to use modifier -52 to indicate that a service that did not require anesthesia was partially reduced or discontinued at the physician's discretion. The physician may discontinue or cancel a procedure that is not completed in its entirety due to a number of circumstances, such as adverse patient reaction or medical judgment that completion of the full study is unnecessary. Based on an analysis of CY 2004 hospital claims data, in the outpatient hospital setting modifier -52 is used infrequently. The modifier is reported most often to identify interrupted or reduced radiological and imaging procedures, and our current policy is to make full payment for procedures with a -52 modifier.
We are now reconsidering our payment policy for interrupted or reduced services not requiring anesthesia and reported with a -52 modifier. At its February 2005 meeting, the APC Panel recommended continuing current OPPS payment policy at 100 percent of the APC payment for reduced services reported with modifier -52, although the Panel members acknowledged their limited familiarity with the specific outpatient hospital services and their clinical circumstances that would warrant the reporting of modifier -52. We have examined our data to determine the appropriateness of our current policy regarding payment for services that are reduced, and although some hospital resources are used to provide even an incomplete service, such as a radiology service, we are skeptical that it is accurate to pay the full rate for a discontinued or reduced radiological service. Compared to surgical procedures that require anesthesia, a number of general and procedure-specific supplies, and reserved procedure rooms that must be cleaned and prepared prior to performance of each specific procedure, the costs to the hospital outpatient department for the rooms and supplies typically associated with procedures not requiring anesthesia are much more limited. For example, the scheduling maintained for radiological services not requiring anesthesia generally exhibits greater flexibility than that for surgical procedures, and the procedure rooms are used for many unscheduled services that are fit in, when possible, between those that are scheduled. Consequently, we believe that the loss of revenue that may result from a surgical procedure being discontinued prior to its initiation in the procedure room is usually more substantial than that lost as the result of a discontinued service not requiring anesthesia, such as a radiology procedure. Nonetheless, under our current policy, Medicare makes the full APC payment for discontinued or reduced radiological procedures and only 50 percent of the APC payment for surgical procedures that are discontinued prior to initiation of the procedure or the administration of anesthesia.
Therefore, we are proposing to pay 50 percent of the APC payment amount for a discontinued procedure that does not require anesthesia where modifier -52 is reported. We believe that this proposed payment would appropriately recognize the hospital's costs involved with the delivery of a typical reduced service, similar to our payment policies for interrupted procedures that require anesthesia.
When a procedure requiring anesthesia is discontinued after the beneficiary was prepared for the procedure and taken to the room where it was to be performed but before the administration of anesthesia, hospitals currently report modifier -73 and receive 50 percent of the APC payment for the planned service. The APC Panel recommended that we make full APC payment for services with modifier -73 reported, because significant hospital resources were expended to prepare the patient and the treatment room or operating room for the procedure. Although the circumstances that require use of modifier -73 occur infrequently, we continue to believe that hospitals realize significant savings when procedures are discontinued prior to initiation but after the beneficiary is taken to the procedure room. We believe savings are recognized for treatment/operating room time, single use devices, drugs, equipment, supplies, and recovery room time. Thus, we believe our policy of paying 50 percent of the procedure's APC payment when modifier -73 is reported remains appropriate.
Further, we are exploring the possibility of applying a payment reduction for interrupted procedures in which anesthesia was to be used (and may have been administered) and the procedure was initiated. Currently, those cases are reported using modifier -74, and we make the full APC payment for the planned service. We are now reviewing that policy and are soliciting comments that include information regarding what costs are incurred by providers in these cases.
The payment policy for interrupted procedures reported with modifier -74 was originally adopted because we believed that the facility costs incurred for discontinued procedures that were initiated to some degree were as significant to the hospital provider as for a completed procedure, including resources for patient preparation, operating room use, and recovery room care. However, we have come to question that underlying assumption, especially as many surgical procedures have come to require specialized and costly devices and equipment, and our APC payments include the costs for those devices and equipment. We now believe that there are costs that are not incurred in the event of a procedure's discontinuation, if a hospital is managing its use of devices, supplies, and equipment efficiently and conservatively. For example, the patient's recovery time may be less than the recovery time would have been for the planned procedure, because less extensive surgery was performed or costly devices planned for the procedure may not be used.
The APC Panel recommended that we continue to pay 100 percent of the procedural APC payment when modifier -74 is appended to the surgical service because, in its opinion, procedures may frequently be terminated prior to completion because the patient is experiencing adverse effects from the surgical service or the anesthesia. The Panel speculated that, in fact, significant additional resources could be expended in such a situation to stabilize and treat the patient if a procedure were discontinued because of patient complications. However, we believe that many of such additional services, including critical care, drugs, blood and blood products, and x-rays that may be necessary to manage and treat such patients, are separately payable under the OPPS and thus the hospital's costs need not be paid through the APC payment for the planned procedure. Because the OPPS is paying for the time in the operating room, recovery room, outpatient department staff, and supplies related to the typical procedure, it would seem that those costs may be lower in those infrequent cases when the procedure is initiated but not completed. We acknowledge that the costs on claims reporting a service with modifier -74 may be particularly diverse, depending upon the point in the procedure the service is interrupted. Thus, we are seeking comment on the clinical circumstances in which modifier -74 is used in the
The Medicare Payment Advisory Commission (MedPAC) submits reports to Congress in March and June that summarize payment policy recommendations. The March 2005 MedPAC report included the following two recommendations relating specifically to the hospital OPPS:
a. Recommendation 1: The Congress should increase payment rates for the outpatient prospective payment system by the projected increase in the hospital market basket index less 0.4 percent for calendar year 2006. A discussion regarding hospital update payments, and the effect of the market basket update in relation to other factors influencing OPPS proposed payment rates, is included in section II.C. (“Proposed Conversion Factor Update for CY 2006”) of this preamble.
b. Recommendation 2: The Congress should extend hold-harmless payments under the outpatient prospective payment system for rural sole community hospitals and other rural hospitals with 100 or fewer beds through calendar year 2006. A discussion of the expiration of the hold-harmless provision is included in section II.F. of this preamble. See also section II.G. (“Proposed Adjustment for Rural Hospitals”) of this preamble for a discussion of section 411 of Pub. L. 108-173.
A discussion of the MedPAC recommendations relating to pharmacy overhead payments in the hospital outpatient department can be found in section V. of the preamble of this proposed rule.
Recommendations made by the APC Panel are discussed in sections of this preamble that correspond to topics addressed by the APC Panel. Minutes of the APC Panel's February 2005 meeting are available online at
A discussion of the June 30, 2005 GAO report entitled “Medicare: Drug Purchase Prices for CMS Consideration in Hospital Outpatient Rate-Setting” and section 621(a)(1) of the MMA is included in section V. of the preamble of this proposed rule.
Section 1820 of the Act, as amended by section 4201 of the Balanced Budget Act of 1997, Pub. L. 105-33, provides for the establishment of Medicare Rural Hospital Flexibility Programs (MRHFPs), under which individual States may designate certain facilities as critical access hospitals (CAHs). Facilities that are so designated and meet the CAH conditions of participations (COPs) under 42 CFR Part 485, Subpart F, will be certified as CAHs by CMS. The MRHFP replaced the Essential Access Community Hospital (EACH)/ Rural Primary Care Hospital (RPCH) program.
Under the former EACH/RPCH program, physician oversight was required for services provided by nonphysician practitioners such as physician assistants (PAs), nurse practitioners (NPs), and clinical nurse specialists (CNSs) in a CAH. Under the MRHFP, the statute likewise required a physician oversight provision for nonphysician practitioners.
We note that under the EACH/RPCH program, we allowed for situations when the RPCH had an unusually high volume of outpatients (100 or more during a 2-week period) that were treated by nonphysician practitioners. We stated that it would be sufficient for a physician to review and sign a 25-percent sample of medical records for patients cared for by a mid-level practitioner unless State practice and laws require higher standards for physician oversight for mid-level practitioners.
However, the current regulation does not distinguish between inpatient and outpatient physician oversight. Although the CAH CoPs at § 485.631(b)(iv) provide that a doctor of medicine or osteopathy periodically reviews and signs the records of patients cared for by NPs, CNSs, or PAs, section 1820(c)(2)(B)(iv)(III) of the Act states that CAH inpatient care provided by a PA or NP is subject to the oversight of a physician. The review of outpatient records is not addressed in the statute. Presently, for patients cared for by nonphysician practitioners, the interpretative guidelines set forth in Appendix W of the State Operations Manual (CMS Publication 107) set parameters for inpatient and outpatient physician reviews. To maintain consistency from the EACH/RPCH program to the CAH program, we indicated that CAHs with a high volume of outpatients need to have a physician review and sign a random sample of 25 percent outpatient medical records. Therefore, the interpretative guidelines allow a physician to review and sign a 25-percent sample of outpatient records for patients under the care of a nonphysician practitioner.
Nonphysician practitioners recently brought to our attention their concerns regarding their ability to practice under their State laws governing scope of practice. Particularly, the nonphysician practitioners believe the current regulations and guidelines impede their ability to practice in CAHs. Certified nurse midwives, NPs, and CNSs disagree with the need for a physician to review records of patients that have been in their care when State law permits them to practice independently.
MedPAC, in its June 2002 Report to the Congress, stated that certified nurse midwives, NPs, CNSs, and PAs are health care practitioners who furnish many of the same health care services traditionally provided by physicians, such as diagnosing illnesses, performing physical examinations, ordering and interpreting laboratory tests, and providing preventive health services. In many States, advance practice nurses are permitted to practice independently or in collaboration with a physician. MedPAC reported that NPs have independent practice authority in 21 States, and CNSs have independent practice authority in 20 States. PAs, by law, must work under the supervision of a physician. Based on the American Medical Association's guidelines for PAs, the definition of supervision varies by State. Generally, the physician assistant is a representative of the
MedPAC further reported that several studies have shown comparable patient outcomes for the services provided by physician and nonphysician practitioners. MedPAC reported that research conducted by Mundinger
We believe sufficient control and oversight of these nonphysician practitioners is generated by State laws which allow independent practice authority. Moreover, it further appears that quality is not impaired by such nonphysician practitioners. We remain concerned, however, that in those States without independent practice laws we have a responsibility to continue to ensure the safety and quality of services provided to Medicare beneficiaries.
Therefore, we are proposing to revise the regulation at § 485.631(b)(iv) to defer to State law regarding the review of records for outpatients cared for by nonphysician practitioners. We are proposing that if State law allows these practitioners to practice independently, we would not require physicians to review and sign medical records of outpatients cared for by nonphysician practitioners. However, for those States that do not allow independent practice of nonphysician practitioners, we would continue to maintain that periodic review is performed by the physician on outpatient records under the care of a nonphysician practitioner. We believe a review of at least every 2 weeks provides a sufficient time period without unduly imposing an administrative burden on the physician or the CAH. In addition, we would allow the CAH to determine the sample size of the reviewed records in accordance with current standards of practice to allow the CAH flexibility in adapting the review to its particular circumstances. Specifically, we are proposing that the physician periodically (that is, at least once every 2 weeks) reviews and signs a sample of the outpatient records of nonphysician practitioners according to the facility policy and current standards of practice. We would still require periodic review and oversight of all inpatient records by physicians.
The data referenced for Addendum C and Addendum P to this proposed rule are available on the following CMS Web site via Internet only:
This file contains the HCPCS codes sorted by the APCs into which they are assigned for payment under the OPPS. The file also includes the APC status indicators, relative weights, and OPPS payment amounts.
Under the Paperwork Reduction Act of 1995 (PRA), we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of the agency.
• The accuracy of our estimates 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 comments on each of these issues for the information requirement discussed below.
The following information collection requirements in this proposed rule and the associated burdens are subject to the PRA:
Existing § 485.631(b)(1)(iv) requires, as a condition of participation for a CAH, that a doctor of medicine or osteopathy to periodically review and sign the records of patients cared for by nurse practitioners, clinical specialists, or physician assistants. This proposed rule would amend those requirements to require that a doctor of medicine or osteopathy (1) periodically review and sign the records of all inpatients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants; and (2) periodically, but not less than every 2 weeks, review and sign a sample of outpatient records of patients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants according to the policy and standard practice of the CAH when State law does not allow these nonphysician practitioners to practice independently. In addition, the proposed rule would provide that a doctor of medicine or osteopathy is not required to review and sign outpatient records of patients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants when State law allows these nonphysician practitioners to practice independently.
The information collection requirements associated with these provisions are subject to the PRA. However, the collection requirement is currently approved under OMB control number 0938-0328 with an expiration date of January 31, 2008.
We have submitted a copy of this proposed rule to OMB for its review of the information collection requirements described above. These requirements are
If you comment on any of these information collection and record keeping requirements, please mail copies directly to the following:
Comments submitted to OMB may also be e-mailed to the following address:
Because of the large number of items of correspondence we normally receive on a proposed rule, we are not able to acknowledge or respond to them individually. However, in preparing the final rule, we will consider all comments concerning the provisions of this proposed rule that we receive by the date and time specified in the DATES section of this preamble, and when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.
We have examined the impacts of this proposed rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year).
We estimate the effects of the provisions that would be implemented by this proposed rule would result in expenditures exceeding $100 million in any 1 year. We estimate the total increase (from changes in this proposed rule as well as enrollment, utilization, and case-mix changes) in expenditures under the OPPS for CY 2006 compared to CY 2005 to be approximately $1.4 billion. Therefore, this proposed rule is an economically significant rule under Executive Order 12866, and a major rule under 5 U.S.C. 804(2).
The RFA requires agencies to determine whether a rule would have a significant economic impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year (65 FR 69432).
For purposes of the RFA, we have determined that approximately 37 percent of hospitals would be considered small entities according to the Small Business Administration (SBA) size standards. We do not have data available to calculate the percentages of entities in the pharmaceutical preparation manufacturing, biological products, or medical instrument industries that would be considered to be small entities according to the SBA size standards. For the pharmaceutical preparation manufacturing industry (NAICS 325412), the size standard is 750 or fewer employees and $67.6 billion in annual sales (1997 business census). For biological products (except diagnostic) (NAICS 325414), with $5.7 billion in annual sales, and medical instruments (NAICS 339112), with $18.5 billion in annual sales, the standard is 50 or fewer employees (
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. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we previously defined a small rural hospital as a hospital with fewer than 100 beds that is located outside of a Metropolitan Statistical Area (MSA) (or New England County Metropolitan Area (NECMA)). However, under the new labor market definitions that we are adopted in the November 15, 2004 final rule with comment period, for CY 2005, (consistent with the FY 2005 IPPS final rule), we no longer employ NECMAs to define urban areas in New England. Therefore, we now define a small rural hospital as a hospital with fewer than 100 beds that is located outside of an MSA. Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent NECMA. Thus, for purposes of the OPPS, we classify these hospitals as urban hospitals. We believe that the changes in this proposed rule would affect both a substantial number of rural hospitals as well as other classes of hospitals and that the effects on some may be significant. Therefore, we conclude that this proposed rule would have a significant impact on a substantial number of small entities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in an expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. This proposed rule does not mandate any requirements for State, local, or tribal governments. This proposed rule also does not impose unfunded mandates on the private sector of more than $110 million dollars.
Executive Order 13132 establishes certain requirements that an agency must meet when it publishes any rule (proposed or final rule) that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has Federalism implications.
We have examined this proposed rule in accordance with Executive Order 13132, Federalism, and have determined that it would not have an impact on the rights, roles, and responsibilities of State, local or tribal
We are proposing several changes to the OPPS that are required by the statute. We are required under section 1833(t)(3)(C)(ii) of the Act to update annually the conversion factor used to determine the APC payment rates. We are also required under section 1833(t)(9)(A) of the Act to revise, not less often than annually, the wage index and other adjustments. In addition, we must review the clinical integrity of payment groups and weights at least annually. Accordingly, in this proposed rule, we are proposing to update the conversion factor and the wage index adjustment for hospital outpatient services furnished beginning January 1, 2006, as we discuss in sections II.C. and II.D., respectively, of this proposed rule. We also are proposing to revise the relative APC payment weights using claims data from January 1, 2004, through December 31, 2004. In response to a provision in Pub. L. 108-173 that we analyze the cost of outpatient services in rural hospitals relative to urban hospitals, we are proposing to increase payments to rural sole community hospitals. Refer to section II.G. of the preamble to this proposed rule for greater detail on this adjustment. Finally, we are proposing to remove 3 device categories from pass-through payment status. In particular, refer to section IV.C.1 of the preamble of this proposed rule with regard to the expiration of pass-through status for devices.
Under this proposed rule, the update change to the conversion factor as provided by statute would increase total OPPS payments by 3.2 percent in CY 2006. The inclusion in CY 2006 of payment for specific covered outpatient drugs within budget neutrality, and the expiration of additional drug payment outside budget neutrality, which were authorized by Pub. L. 108-173 result in a net increase of 1.9 percent. The changes to the APC weights, the introduction of a multiple procedure discount for diagnostic imaging, changes to the wage index, and the introduction of a payment adjustment for rural sole community hospitals would not increase OPPS payments because these changes to the OPPS are budget neutral. However, these updates do change the distribution of payments within the budget neutral system as shown in Table 33 and described in more detail in this section.
Alternatives to the changes we are making and the reasons that we have chosen the options we have are discussed throughout this proposed rule. Some of the major issues discussed in this proposed rule and the options considered are discussed below.
As discussed in detail in section V.B.3 of the preamble of this proposed rule, section 1833(t)(14)(A)(iii) of the Act requires that payment for specified covered outpatient drugs in CY 2006, as adjusted for pharmacy overhead costs, be equal to the average acquisition cost for the drug for that year as determined by the Secretary and taking into account the hospital acquisition cost survey data collected by the GAO in 2004 and 2005. If hospital acquisition cost data are not available, then the law requires that payment be equal to payment rates established under the methodology described in section 1842(o), section 1847(A), or section 1847(B) of the Act as calculated and adjusted by the Secretary as necessary.
The payment policy that we are proposing for CY 2006 is to pay for all separately payable drugs and biologicals at the payment rates effective in the physician office setting as determined using the manufacturer's average sales price (ASP) methodology. Our proposal uses payment rates based on ASP data from the fourth quarter of 2004, which were used to set payment rates for drugs and biologicals in the physician office setting effective April 1, 2005, as these are the most recent numbers available to us during the development of this proposed rule. For the few drugs and biologicals, other than radiopharmaceuticals as discussed earlier, where ASP data are unavailable, we are proposing to use the mean costs from the CY 2004 hospital claims data to determine their packaging status and for ratesetting. We believe that the ASP-based payment rates serve as the best proxy for the average acquisition cost for the drug or biological because the rates calculated using the ASP methodology are based on the manufacturers' sales prices from the fourth quarter of 2004 and take into consideration information on sales prices to hospitals. Furthermore, payments for drugs and biologicals using the ASP methodology would allow for consistency of drug pricing between the physician offices and hospital outpatient departments.
An alternative payment option for separately payable drugs and biologicals (before payment for pharmacy overhead) we considered was using ASP+3 percent based on the average relationship between the GAO mean purchase prices and ASP. A second payment option we considered using was ASP+8 percent (again before payment for pharmacy overhead) based on the average relationship between the mean costs from hospital claims data and ASP.
We are not proposing to set payment rates for separately payable drugs and biologcals at ASP+3 percent because the GAO data reflect hospital acquisition costs from a less recent period of time as the midpoint of the time period when the survey was conducted is January 1, 2004, and it would be difficult to update the GAO mean purchase prices during CY 2006 and in future years. Because the changes in drug payments are required to be budget neutral by law, we note that paying for separately payable drugs and biologicals at ASP+3 percent relative to ASP+6 percent would have made available approximately an additional $60 million for other items and services paid under the OPPS.
We are also not proposing to use ASP+8 percent to set payment rates for drugs and biologicals in CY 2006. The statute specifies that CY 2006 payments for specified covered outpatient drugs are required to be equal to the “average” acquisition cost for the drug. Payment at ASP+8 percent for drugs or biologicals, which represents the average relationship between the mean cost from hospital claims data and ASP, would reflect the product's acquisition cost plus overhead cost, instead of acquisition cost only. Therefore, we believe that it would not be appropriate for us to use ASP+8 percent to set the payment rates for drugs and biologicals in CY 2006. Using ASP+8 percent to set payments for separately payable drugs and biologicals relative to ASP+6 percent would have reduced payments for other items and services paid under the OPPS by approximately $40 million as the law requires that changes in drug payments be made in a budget neutral manner.
In section II.G. of the preamble of this proposed rule, we propose a 6.6 percent payment adjustment increase to rural sole community hospitals. Section 1833(t)(13)(A) of the Act instructs the Secretary to conduct a study to determine if rural hospital outpatient costs exceed urban hospital outpatient
To conduct the study, we believe that a simple comparison of unit costs is insufficient because the costs faced by hospitals, whether urban or rural, will be a function of many factors. These include the local labor supply, and the complexity and volume of services provided. (We note that without controlling for the other influences on per unit cost, rural hospitals have lower cost per unit than urban hospitals.) Therefore, we rejected the option of using a simple comparison of unit costs and instead used regression analysis to analyze the differences in the outpatient cost per unit between rural and urban hospitals in order to compare costs after accounting for the influence of these other factors.
Our initial regression analysis found that all rural hospitals give some indication of having higher cost per unit, after controlling for labor input prices, service-mix complexity, volume, facility size, and type of hospital. Initially, we planned a small adjustment to all rural hospitals. However, in order to assess whether the small difference in costs was uniform across rural hospitals or whether all of the variation was attributable to a specific class of rural hospitals, we included more specific categories of rural hospitals in our explanatory regression analysis. Further analysis revealed that only rural sole community hospitals are more costly than urban hospitals holding all other variables constant. Notably, we observed no significant difference between all other rural hospitals and urban hospitals. Therefore, we propose not to pay a small adjustment increase to all rural hospitals, but to instead pay a 6.6 percent payment increase to rural sole community hospitals.
In section II.H. of the preamble of this proposed rule, we are proposing to change the percentage of total OPPS payments dedicated to outlier payments to 1.0 percent in CY 2006 from the current policy of 2.0 percent. We also are proposing to continue using a fixed-dollar threshold in addition to the threshold based on a multiple of the APC amount that we have applied since the beginning of the OPPS. In response to findings reported by the MedPAC in their March 2004 Report to Congress that the OPPS outlier policy did not provide sufficient insurance against large financial loses for certain complex procedures that ultimately could impact beneficiary access to services, we implemented the fixed-dollar threshold in the CY 2005 OPPS. Our decision to reduce the percentage of total payments dedicated to outlier payments continues to refine our outlier policy to improve its appropriateness for OPPS. Because OPPS pays by service, rather than by case, hospitals are already paid for every increased service associated with a costly case. A reduction in the size of the outlier pool combined with the fixed dollar threshold continues to target outlier payments to those services where one costly occurrence could pose a financial risk for hospitals, but limits these payments to the most complex and costly services. At the same time, reducing the outlier pool increases overall payments for all services by 1.0 percent.
Alternatives to this policy are either to remain at 2.0 percent or to increase the percentage of payments dedicated to outliers to the statutory limit of 3.0 percent. Increasing the percentage of payments dedicated to outliers could target more payment to outliers, but is at odds with OPPS payment by service rather than case. It is not possible to eliminate outlier payments entirely without a statutory change.
The distributional impacts presented here are the projected effects of the policy changes, as well as the statutory changes that would be effective for CY 2006, on various hospital groups. We estimate the effects of individual policy changes by estimating payments per service while holding all other payment policies constant. We use the best data available but do not attempt to predict behavioral responses to our policy changes. In addition, we are not proposing to make adjustments for future changes in variables such as service volume, service-mix, or number of encounters. As we have done in previous proposed rules, we are soliciting comments and information about the anticipated effects of these proposed changes on hospitals and our methodology for estimating them.
The estimated increase in the total payments made under OPPS is limited by the increase to the conversion factor set under the methodology in the statute. The distributional impacts presented do not include assumptions about changes in volume and service-mix. However, total payments actually made under the system also may be influenced by changes in volume and service-mix, which CMS cannot forecast. The enactment of Pub. L. 108-173 on December 8, 2003, provided for the payment of additional dollars in CY 2004 and CY 2005 to providers of OPPS services outside of the budget neutrality requirements for specified covered outpatient drugs. These provisions expire CY 2006, as noted in this proposed rule. Pub. L. 108-173 also provided for additional payment for wage indexes for specific hospitals reclassified under section 508 through 2007. Table 33 shows the estimated redistribution of hospital payments among providers as a result of a new APC structure, multiple procedure discount for diagnostic imaging, wage indices, and rural adjustment, which are budget neutral; the estimated distribution of increased payments in CY 2006 resulting from the combined impact of proposed APC recalibration, proposed wage effects, the proposed rural sole community hospital adjustment, and the proposed market basket update to the conversion factor; and, finally, estimated payments considering all proposed payments for CY 2006 relative to all payments for CY 2005 including the expiration of the provision in Pub. L. 108-173 that required payment for specified covered outpatient drugs outside budget neutrality and the proposed change in the percentage of total payments dedicated to outlier payments. The expiration of the requirement that payment for specified covered outpatient drugs need not be budget neutral, leaves most classes of hospitals with a positive update that is lower than the proposed market basket. We also estimate that a few classes of hospitals may receive less payment in CY 2006. Because updates to the conversion factor, including the market basket, any reintroduction of transitional pass-through dollars, and change in the percentage of total payments dedicated to outlier payments are applied uniformly, observed redistributions of payments in the impact table largely depends on the mix of services furnished by a hospital (for example, how the APCs for the hospital's most frequently furnished services would change) and the impact of the wage index changes on the hospital. However, the extent to which this proposed rule redistributes money during implementation would also depend on changes in volume, practice patterns, and case-mix of services billed between CY 2005 and CY 2006. Overall, the
To illustrate the impact of the proposed CY 2006 changes, our analysis begins with a baseline simulation model that uses the final CY 2005 weights, the FY 2005 final post-reclassification IPPS wage indices, as subsequently corrected, without changes in wage indices resulting from section 508 reclassifications, and the final CY 2005 conversion factor. Columns 2, 3, and 4 in Table 33 reflect the independent effects of the proposed changes in the APC reclassification and recalibration changes, the proposed multiple procedure discount for diagnostic imaging, the proposed wage indices, and the proposed adjustment for rural sole community hospitals respectively. These effects are budget neutral, which is apparent in the overall zero impact in payment for all hospitals in the top row. Column 2 shows the independent effect of changes resulting from the proposed reclassification of HCPCS codes among APC groups and the proposed recalibration of APC weights based on a complete year of CY 2004 hospital OPPS claims data. This column also shows the impact of incorporating drug payment at 106 percent of ASP plus overhead and, for radiopharmaceuticals, at cost, within budget neutrality. This column also includes the impact of a multiple procedure discount for diagnostic imaging services. We modeled the independent effect of APC recalibration by varying only the weights, the final CY 2005 weights versus the proposed CY 2006 weights, in our baseline model, and calculating the percent difference in payments. Column 3 shows the impact of updating the wage indices used to calculate payment by applying the proposed FY 2006 IPPS wage indices. The OPPS wage indices used in Column 3 do not include changes to the wage indices for hospitals reclassified under section 508 of Pub. L. 108-173. We modeled the independent effect of introducing the new wage indices by varying only the wage index, using the proposed CY 2006 scaled weights, and a CY 2005 conversion factor that included a budget neutrality adjustment for changes in wage effects between CY 2005 and CY 2006. Column 4 shows the budget neutral impact of adding a proposed 6.6 percent adjustment to payment for services other than drugs and biologicals to rural sole community hospitals. We modeled the independent effect of the proposed payment adjustment for rural sole community hospitals by varying only the presence of the rural adjustment, using CY 2006 scaled weights, FY 2006 wage index, and a CY 2005 conversion factor with the wage and rural budget neutrality adjustments.
Column 5 demonstrates the combined “budget neutral” impact of proposed APC recalibration and wage index updates on various classes of hospitals, as well as the impact of updating the conversion factor with the market basket. We modeled the independent effect of proposed budget neutrality adjustments and the market basket update by using the weights and wage indices for each year to model CY 2006 requirements, and using a CY 2005 conversion factor that included a budget neutrality adjustment for differences in wages, the proposed adjustment for rural sole community hospitals, and the market basket increase.
Finally, Column 6 depicts the full impact of the proposed CY 2006 policy on each hospital group by including the effect of all the changes for CY 2006 and comparing them to the full effect of all payments in CY 2005, including those required by Pub. L. 108-173. Column 6 shows the combined budget neutral effects of Columns 2 through 5, as well as the impact of changing the percentage of total payments dedicated to outlier payments to 1.0 percent, changing the percentage of total payments dedicated to transitional pass-through payments to 0.05 percent, the effects of expiring monies added to OPPS in CY 2005 as a result of Pub. L. 108-173, and the continued presence of payment for wage indices reclassified under section 508 of Pub. L. 108-173.
We modeled the independent effect of all changes in column 6 using the final weights for CY 2005 with additional money for drugs required by section 621 of Pub. L. 108-173 and the proposed weights for CY 2006. The wage indices in each year include wage index increases for hospitals eligible for reclassification under section 508 of Pub. L. 108-173. We used the final conversion factor for CY 2005 and the proposed CY 2006 conversion factor of $59.35. Column 6 also contains simulated outlier payments for each year. We used the charge inflation factor used in the proposed FY 2006 IPPS rule of 8.65 percent to increase individual costs on the CY 2004 claims to reflect CY 2005 and CY 2006 dollars respectively. Using the CY 2004 claims and an 8.65 percent charge inflation factor, we currently estimate that actual outlier payments for CY 2005, using a multiple threshold of 1.75 and a fixed dollar threshold of $1,175 will be 1.0 percent of total payments, which is 1.0 percent lower than the 2.0 percent that we projected in setting outlier policies for CY 2005. Outlier payments of only 1.0 percent appear in the CY 2005 comparison in Column 6. We used the same set of claims and a charge inflation factor of 18.04 percent to model the proposed CY 2006 outliers at 1.0 percent of total payments using a multiple threshold of 1.75 and a fixed dollar threshold of $1,575.
Column 1 in Table 33 shows the total number of hospital providers (4,212) for which we were able to use CY 2004 hospital outpatient claims to model CY 2005 and CY 2006 payments by classes of hospitals. We excluded all hospitals for which we could not accurately estimate CY 2005 or CY 2006 payment and entities that are not paid under the OPPS. The latter include critical access hospitals, all-inclusive hospitals, and hospitals located in Guam, the U.S. Virgin Islands, and the State of Maryland. This process is discussed in greater detail in section II.A. of this proposed rule. At this time we are unable to calculate a disproportionate share (DSH) variable for hospitals not participating in the IPPS. Hospitals for whom we do not have a DSH variable are grouped separately. Finally, because section 1833(t)(7)(D) of the Act permanently holds harmless cancer hospitals and children's hospitals, that is, these hospitals cannot receive less payment in CY 2006 than they did in the CY 2005, we removed these hospitals from our impact analyses.
The combined effect of proposed APC reclassification and recalibration, including the proposal to pay for drugs and biologicals as 106 percent of ASP plus 2 percent of ASP for overhead, and the introduction of a proposed multiple procedure discount for diagnostic imaging resulted in larger changes in Column 2 than are typically observed for APC recalibration. In general, these changes have a greater negative impact on some classes of urban hospitals than on rural hospitals. APC changes effect the distribution of hospital payments by increasing payments to specific subsets of urban hospitals while decreasing payments made to large urban hospitals and rural hospitals.
Overall, these changes have no impact on all urban hospitals, which show no projected change in payments, although some classes of urban hospitals experience large decreases in payments. However, changes to the APC structure
Overall, rural hospitals show a modest 0.1 percent decrease as a result of changes to the APC structure, and this 0.1 percent decrease appears to be concentrated in rural hospitals that are not rural sole community hospitals. Notwithstanding a modest overall decline, there is substantial variation among classes of rural hospitals. Specifically, rural hospitals with less than 100 beds and between 150 and 199 beds experience decreases, with hospitals having less than 50 beds experiencing the largest decrease of 0.9 percent. Rural hospitals with greater than 100 and less than 150 beds experience the largest increase of 1.4 percent. With regard to volume, all rural hospitals except those with the highest volume, experience a decrease in payments. The lowest volume hospitals experience the largest decrease of 2.9 percent. Rural hospitals providing the highest volume of services demonstrate a projected increase of 0.7 percent as a result of APC recalibration. Decreases for rural hospitals occur in every region except West North Central and the Middle Atlantic. The largest decreases are observed in West South Central and Mountain regions. On the other hand, hospitals in the Middle Atlantic and West North Central experience increases of 1.9 and 1.8 percent respectively.
Among other classes of hospitals, the largest observed impacts resulting from APC recalibration include declines of 0.4 percent for non-teaching hospitals and increases of 0.5 percent for major teaching hospitals. Hospitals without a valid DSH variable, most of which are TEFRA hospitals, experience decreases of 0.9 percent, and of these, those in urban areas experience a decline of 1.4 percent. Hospitals treating the most low-income patients (high DSH percentage) demonstrate declines of 0.3 percent, where as all other hospitals treating DSH patients appear to experience slight increases of 0.1 percent. Hospitals that are treating DSH patients and are also teaching hospitals experience increases of 0.4 percent. Classifying hospitals by type of ownership suggests that proprietary hospitals will lose 1.3 percent and voluntary and government hospitals will gain at least 0.1 percent.
Changes introduced by the proposed FY 2006 IPPS wage indices would have a modest impact in CY 2006, increasing payments to rural hospitals slightly and reducing payments to specific classes of urban hospitals. We estimate that rural hospitals, and specifically rural hospitals that are not sole community hospitals, will experience an increase in payments of 0.1 percent. With respect to facility size, only rural hospitals with between 150 and 199 beds experience a decrease in payments of 0.2 percent. Similarly, moderate rural volume hospitals experience a decrease of 0.1 percent. For both facility size and volume, no category of rural hospitals experiences an increase greater than 0.2 percent. Examining hospitals by region reveals slightly greater variability. We estimate that rural hospitals in several regions will experience decreases in payment up to 0.4 percent due to wage changes, including the Middle Atlantic, South Atlantic, West North Central, West South Central. However, rural hospitals in the remaining regions experience increases. We estimate that the Pacific region will see the largest increase of 1.8 percent.
Overall, urban hospitals experience no change in payments as a result of the new wage indices. With respect to facility size, we estimate that urban hospitals with between 300 and 499 beds will experience a decrease in payments of 0.1 percent. Urban hospitals with less than 99 beds experience the largest increase of 0.2 percent. When categorized by volume, no class of urban hospitals experience a decrease in payment as a result of changes to the wage index. We estimate that urban hospitals in all but the Pacific and East South Central region will experience modest decreases due to wage changes of no more than 0.4 percent. Urban hospitals in the Pacific region will experience an increase of 1.1 percent, and urban hospitals in the East South Central region will experience no change in payments.
Looking across other categories of hospitals, we estimate that updating the wage index will lead major teaching hospitals to lose 0.2 percent and hospitals without graduate medical education programs are estimated to gain 0.1 percent. Hospitals serving between 0.0 and 0.10 percent of low-income patients and between 0.23 and 0.35 percent of low-income patients lose up to 0.2 percent and 0.1 percent respectively, whereas hospitals serving other percentages of low-income patients gain by up to 0.1 percent or experience no change. Government hospitals will experience an increase of 0.1 percent.
As discussed in section II.G. of the preamble of this proposed rule, we have proposed to increase payments for all services except drugs and biologicals to rural sole community hospitals by 6.6 percent. This resulted in an adjustment to the conversion factor of 0.997. Targeting payments to these rural hospitals uniformly reduces payments to all other hospitals by 0.3 percent. The uniform reduction for all urban and other rural hospitals is evident in Column 4. The observed increase of 5.2 percent for rural sole community hospitals is lower than 6.6 percent because drugs and biologicals do not receive the proposed payment adjustment. The remaining classes of rural hospitals show variable increases that reflect the distribution of rural sole community hospitals. The largest increases are observed among rural hospitals with small numbers of beds, with moderate volume, and regions in the western half of the country.
With the exception of urban hospitals with the lowest volume of services, the addition of the market basket update alleviates any negative impacts on payments for CY 2006 created by the budget neutrality adjustments made in Columns 2, 3, and 4. In many instances, and especially among rural hospitals, the redistribution of payments created by proposed APC recalibration offset those introduced by updating the wage
We estimate that the cumulative impact of proposed budget neutrality adjustments and the addition of the market basket would result in an increase in payments for urban hospitals of 2.8 percent, which is less than the market basket update of 3.2 percent. Large urban hospitals would experience an increase of 2.0 percent and other urban hospitals would experience an increase of 3.8 percent. This trend of updates lower than the market basket holds for most other classes of urban hospitals. For example, of all classes of urban hospitals, urban hospitals with the lowest volume are the only group to experience a negative market basket update, which is largely a function of the 5.8 percent decrease in payments attributable to proposed changes to the APC structure. Urban hospitals with moderate volume would also lose the bulk of the market basket update as a result of a −2.8 percent change resulting from proposed APC recalibration and the addition of the proposed payment adjustment for rural sole community hospitals. The same compounding effect holds true for urban hospitals in New England as well. Urban hospitals in New England would experience a 1.2 percent loss due to changes in APC structure, a 0.1 percent loss for changes to the wage index and a 0.3 percent loss for the new rural adjustment, reducing their increase to 1.5 percent. Urban hospitals in a few regions experience increases in payment for CY 2006 above the market basket, including the East South Central, Middle Atlantic, and West North Central regions.
We estimate that the cumulative impact of budget neutrality adjustments and the market basket update will result in an overall increase for rural hospitals of 5.0 percent, with rural sole community hospitals experiencing an update of 8.6 percent and other rural hospitals experiencing an update of 2.8 percent. In general, rural hospitals with more than 100 beds and high volume rural hospitals experience increases of more than 5.0 percent, which generally results from the combined impact of increases in payment from APC recalibration, wage changes, and the new adjustment for rural sole community hospitals. Rural hospitals also demonstrate large increases by region, with Middle Atlantic, West North Central, Mountain, and Pacific regions experiencing large increases. For these regions, in aggregate, the payment adjustment for rural sole community hospitals compensates for observed loses in the APC recalibration column.
The changes across columns for other classes of hospitals are fairly moderate and most show updates relatively close to the market basket. TEFRA hospitals that are not paid under OPPS show payment updates much lower than the market basket as a result of negative payment changes for proposed APC recalibration and the proposed adjustment for rural sole community hospitals. Proprietary hospitals also show an increase much less than the market basket as a result of negative payments under APC recalibration.
Column 6 compares all proposed changes for CY 2006 to final payment for CY 2005 and includes any additional dollars resulting from provisions in Pub. L. 108-173 in both years, changes in outlier payment percentages and proposed thresholds, and the difference in pass-through estimates. Overall, we estimate that hospitals would gain 1.9 percent under this proposed rule in CY 2006 relative to total spending in CY 2005, which included Pub. L. 108-173 dollars for drugs and wage indices. While hospitals receive the 3.2 percent increase due to the market basket appearing in Column 5 and the additional 1.0 percent in outlier payments that we estimate as not being paid in CY 2005, we estimate that hospitals also experience an overall 2.3 percent loss due to the expiration of additional payment for drugs in CY 2005. That is, without the additional 1.0 percent increase in outlier payments due to lower than expected payment for outliers in CY 2005, hospitals would receive a positive increase in payments of 0.9 percent. Paying the additional 1.0 percent in outlier payments in CY 2006 increases overall gains to 1.9 percent, which is lower than the market basket. Overall, the change in the outlier thresholds has a minimal redistributive impact by class of hospital and the vast majority of redistributive impacts observed between Columns 5 and 6 can be attributed to the loss of additional payment for drugs outside budget neutrality required by Pub. L. 108-173.
In general, urban hospitals appear to experience the largest negative impacts from the loss of additional payments for drugs because of the combined effects of decreases in payment from the proposed payment adjustment for rural sole community hospitals and, frequently, negative changes in payments due to APC recalibration. We estimate that hospitals in large urban areas will gain 0.8 percent in CY 2006 and hospitals in other urban areas will gain 2.6 percent. We estimate that some urban hospitals will experience a decrease in total payments between CY 2005 and CY 2006. Specifically, low volume urban hospitals will experience a decrease in payments of 2.1 percent, which includes the cumulative effect of negative payments from APC recalibration, a negative impact of the payment adjustment for rural sole community hospitals, and a loss of payments outside budget neutrality for drugs. We estimate that urban hospitals in New England would experience a loss of 0.2 percent in CY 2006. The reason for this is the same as that for low volume urban hospitals, except that the urban hospitals in New England also experience a decrease in payments from updating the wage index. Other classes of urban hospitals generally show increases between 1.0 and 3.0 percent. Urban hospitals in the East South Central and West North Central experience the largest increases for urban hospitals of 3.4 and 3.7 percent, respectively.
Overall, rural hospitals experience larger increases than those observed for urban hospitals because the proposed payment adjustment for rural sole community hospitals tends to buffer the loss of payments for drugs from Pub. L. 108-173. However, this adjustment is only for rural sole community hospitals. Overall, we estimate that rural hospitals will experience an increase in payments of 3.4 percent. But, we also estimate that rural sole community hospitals will experience an increase of 6.4 percent and that other rural hospitals will only experience an increase of 1.6 percent. No rural hospital experiences a decrease in payments between CY 2005 and CY 2006 and some classes of rural hospitals show increases comparable to the market basket. For example rural hospitals with more than 100 beds experience increases of at least 3.1 percent. Rural hospitals with moderate to high volume experience increases comparable to the market basket. Across the regions, rural hospitals in the Middle Atlantic, South Atlantic, West North Central, West South Central, Mountain, and Pacific all experience increases in payments greater than 3 percent. Low volume rural hospitals and rural hospitals in New England experience the lowest updates of only 1.0 percent.
Among other classes of hospitals, we estimate that TEFRA hospitals not paid
For services for which the beneficiary pays a copayment of 20 percent of the payment rate, the beneficiary share of payment will increase for services for which OPPS payments will rise and will decrease for services for which OPPS payments will fall. For example, for a mid-level office visit (APC 0601), the minimum unadjusted copayment in CY 2005 was $11.22. In this proposed rule, the minimum unadjusted copayment for APC 601 is $11.86 because the OPPS payment for the service will increase under this proposed rule. In another example, for a Level IV Needle Biopsy (APC 0037), the minimum unadjusted copayment in CY 2005 was $234.20. In this proposed rule, the minimum unadjusted copayment for APC 0037 is $223.91 because the minimum unadjusted copayment is limited to 40 percent of the APC payment rate for CY 2006, as discussed in section II. of the preamble to this proposed rule. However, in all cases, the statute limits beneficiary liability for copayment for a service to the inpatient hospital deductible for the applicable year.
In order to better understand the impact of changes in copayment on beneficiaries we modeled the percent change in total copayment liability using CY 2004 claims. We estimate that total beneficiary liability for copayments will decline as an overall percentage of total payments from 32 percent in CY 2005 to 30 percent in CY 2006.
The changes in this proposed rule would affect all classes of hospitals. Some hospitals experience significant gains and others less significant gains, but all hospitals would experience positive updates in OPPS payments in CY 2006. Table 33 demonstrates the estimated distributional impact of the OPPS budget neutrality requirements and an additional 1.9 percent increase in payments for CY 2006, after considering the expiring provision for additional drug payment under Pub. L. 108-173 and a change in the percentage of total payments dedicated to outliers and transitional pass-through payments, exclusive of transitional pass-through payments, across various classes of hospitals. The accompanying discussion, in combination with the rest of this proposed rule constitutes a regulatory impact analysis.
In accordance with the provisions of Executive Order 12866, this proposed rule was reviewed by the Office of Management and Budget.
Hospitals, Medicare, Reporting and recordkeeping requirements.
Grant program-health, Health facilities, Medicaid, Medicare, Reporting and recordkeeping requirements.
For the reasons stated in the preamble of this proposed rule, the Centers for Medicare & Medicaid Services is proposing to amend 42 CFR Chapter IV as set forth below:
A. Part 419 is amended as follows:
1. The authority citation for Part 419 continues to read as follows:
Secs. 1102, 1833(t), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395l(t), and 1395hh).
2. Section 419.43 is amended by adding a new paragraph (g) to read as follows:
(g)
(i) Is a sole community hospital under § 412.92 of this chapter; and
(ii) Is located in a rural area as defined in § 412.64(b) of this chapter or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act.
(2)
(3)
(4)
(5)
(6)
3. Section 419.66 is amended by revising paragraph (c)(1) to read as follows:
(c)
(1) CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.
B. Part 485 is amended as follows:
1. The authority citation for Part 485 continues to read as follows:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
2. Section 485.631 is amended by—
a. Republishing paragraph (b)(1).
b. Revising paragraph (b)(1)(iv).
c. Adding new paragraphs (b)(1)(v) and (b)(1)(vi).
The revision and additions read as follows:
(b)
(iv) Periodically reviews and signs the records of all inpatients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants.
(v) Periodically, but not less than every 2 weeks, reviews and signs a sample of outpatient records of patients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants according to the policies of the CAH and according to current standards of practice where State law does not allow these nonphysician practitioners to practice independently.
(vi) Is not required to review and sign outpatient records of patients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants where State law allows these nonphysician practitioners to practice independently.
The Bureau of International Labor Affairs, United States Department of Labor.
Request for information on efforts by certain countries to eliminate the worst forms of child labor.
This notice is a request for information for use by the Department of Labor in preparation of an annual report on certain trade beneficiary countries' implementation of international commitments to eliminate the worst forms of child labor. This will be the fifth such report by the Department of Labor under the Trade and Development Act of 2000 (TDA).
Submitters of information are requested to provide two (2) copies of their written submission to the International Child Labor Program at the address below by 5 p.m., August 19, 2005.
Written submissions should be addressed to Tina McCarter at the International Child Labor Program, Bureau of International Labor Affairs, U.S. Department of Labor, 200 Constitution Avenue, NW., Room S-5307, Washington, DC 20210.
Tina McCarter, Bureau of International Labor Affairs, International Child Labor Program, at (202) 693-4846, fax: (202) 693-4830, or e-mail:
The Trade and Development Act of 2000 [Pub. L. 106-200], established a new eligibility criterion for receipt of trade benefits under the Generalized System of Preferences (GSP), Caribbean Basin Trade and Partnership Act (CBTPA), and Africa Growth and Opportunity Act (AGOA) programs. The TDA amends the GSP reporting requirements of the Trade Act of 1974 (Section 504) [19 U.S.C. 2464] to require that the President's annual report on the status of internationally recognized worker rights include “findings by the Secretary of Labor with respect to the beneficiary country's implementation of its international commitments to eliminate the worst forms of child labor.”
Likewise, Title II of the TDA includes as a criterion for receiving benefits under the CBTPA “whether the country has implemented its commitments to eliminate the worst forms of child labor, as defined in section 507(6) of the Trade Act of 1974.” The TDA Conference Report [Joint Explanatory Statement of the Committee of Conference, 106th Cong.2d.sess. (2000)] indicates that “the conferees intend that the GSP standard, including the provision with respect to implementation of obligations to eliminate the worst forms of child labor, apply to eligibility for those additional benefits” [provided for in the AGOA.]
Countries presently eligible under the GSP and to be included in the report are: Afghanistan, Albania, Algeria, Angola, Anguilla, Argentina, Armenia, Bahrain, Bangladesh, Belize, Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Virgin Islands, British Indian Ocean Territory, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Christmas Islands, Cocos Islands, Colombia, Comoros, Republic of Congo, Democratic Republic of the Congo, Cook Islands, Costa Rica, Cote d'Ivoire, Croatia, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Falkland Islands, Fiji, Gabon, the Gambia, Georgia, Ghana, Gibraltar, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Heard Island and MacDonald Islands, Honduras, India, Indonesia, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Kyrgyzstan, Lebanon, Lesotho, Macedonia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Moldova, Mongolia, Montserrat, Morocco, Mozambique, Namibia, Nepal, Niger, Nigeria, Niue, Norfolk Island, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Pitcairn Island, Romania, Russia, Rwanda, Saint Helena, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Africa, Sri Lanka, Suriname, Swaziland, Tanzania, Thailand, Togo, Tokelau Island, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, Tuvalu, Uganda, Uruguay, Uzbekistan, Vanuatu, Venezuela, Wallis and Futuna, West Bank and Gaza Strip, Western Sahara, Republic of Yemen, Zambia, and Zimbabwe.
Countries eligible or potentially eligible for additional benefits under the AGOA include: Angola, Benin, Botswana, Burkina Faso, Cameroon, Cape Verde, Chad, Republic of Congo, Democratic Republic of the Congo, Djibouti, Ethiopia, Gabon, the Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, and Zambia.
Countries potentially eligible for additional benefits under the CBTPA are: Barbados, Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Saint Lucia, and Trinidad and Tobago.
The Department invites interested parties to submit written information relevant to the findings to be made by the Department of Labor under the TDA, for all listed countries. Information provided through public submission will be considered by the Department of Labor in preparing its findings. Materials submitted should be confined to the specific topic of the study. In particular, the Department's Bureau of International Labor Affairs is seeking written submissions on the following topics:
1. Whether the country has adequate laws and regulations proscribing the worst forms of child labor;
2. Whether the country has adequate laws and regulations for the implementation and enforcement of such laws and regulations;
3. Whether the country has established formal institutional mechanisms to investigate and address complaints relating to allegations of the worst forms of child labor;
4. Whether social programs exist in the country to prevent the engagement of children in the worst forms of child labor, and to assist in the removal of children engaged in the worst forms of child labor;
5. Whether the country has a comprehensive policy for the elimination of the worst forms of child labor;
6. Whether the country is making continual progress toward eliminating the worst forms of child labor.
Information relating to the nature and extent of child labor in the country is also sought. Information submitted may include reports, statistics, newspaper articles, or other materials. Governments that have ratified ILO Convention 182 are requested to submit copies of their most recent article 22 submissions under the Convention, especially those with information on types of work
The term “worst forms of child labor” is defined in section 412(b) of the TDA as comprising:
* * * (A) all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including forced or compulsory recruitment of children for use in armed conflict;
(B) the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances;
(C) the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in relevant international treaties; and
(D) work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children. * * *
The TDA Conference Report noted that the phrase,
* * * work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children * * * is to be defined as in Article II of Recommendation No. 190, which accompanies ILO Convention No. 182. This includes work that exposes children to physical, psychological, or sexual abuse; work underground, under water, at dangerous heights or in confined spaces; work with dangerous machinery, equipment or tools, or work under circumstances which involve the manual handling or transport of heavy loads; work in an unhealthy environment that exposes children to hazardous substances, agents or processes, or to temperatures, noise levels, or vibrations damaging to their health; and work under particularly difficult conditions such as for long hours, during the night or under conditions where children are unreasonably confined to the premises of the employer.
The TDA Conference Report further indicated that this phrase be interpreted in a manner consistent with the intent of Article 4 of ILO Convention No. 182, which states that such work shall be determined by national laws or regulations or by the competent authority in the country involved.
This notice is a general solicitation of comments from the public.