[Federal Register Volume 71, Number 111 (Friday, June 9, 2006)]
[Proposed Rules]
[Pages 33420-33423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-8992]



[[Page 33420]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration

42 CFR Part 100

RIN 0905-AA68


National Vaccine Injury Compensation Program: Calculation of 
Average Cost of a Health Insurance Policy

AGENCY: Health Resources and Services Administration (HRSA), HHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Subtitle 2 of Title XXI of the Public Health Service Act, as 
enacted by the National Childhood Vaccine Injury Act of 1986, as 
amended (the Act), governs the National Vaccine Injury Compensation 
Program (VICP). The VICP, administered by the Secretary of Health and 
Human Services (the Secretary), provides that a proceeding for 
compensation for a vaccine-related injury or death shall be initiated 
by service upon the Secretary, and the filing of a petition with the 
United States Court of Federal Claims (the Court). In some cases, the 
injured individual may receive compensation for future lost earnings, 
less appropriate taxes and the ``average cost of a health insurance 
policy, as determined by the Secretary.'' The Secretary now proposes a 
new method of calculating the average cost of a health insurance 
policy.

DATES: Comments must be submitted by August 8, 2006. Subject to 
consideration of the comments submitted, the Secretary intends to 
publish final regulations.

ADDRESSES: You may submit comments, identified by the Regulatory 
Information Number (RIN) 0905-AD25, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include RIN 0905-AD25 in the 
subject line of the message.
     Mail: Geoffrey Evans, M.D., Director, Division of Vaccine 
Injury Compensation, Healthcare Systems Bureau, Health Resources and 
Services Administration (HRSA), Room 11C-26, Parklawn Building, 5600 
Fishers Lane, Rockville, Maryland 20857.
    Instructions: All submissions received must include the agency name 
and RIN for this rulemaking. All comments received will be available 
for public inspection and copying without charge, including any 
personal information provided, at Parklawn Building, 5600 Fishers Lane 
Room 11C-26, Rockville, Maryland 20857, weekdays (Federal holidays 
excepted) between the hours of 8:30 a.m. and 5 p.m.

FOR FURTHER INFORMATION CONTACT: Geoffrey Evans, M.D. at the mail or e-
mail address above or by telephone at (301) 443-6593.

SUPPLEMENTARY INFORMATION: Under the Act, an individual may file a 
petition with the Court for compensation for a vaccine-related injury 
or death. The Secretary is named by the Act as the Respondent in these 
proceedings and carries out other functions under the Act. The 
Secretary's authorities under the VICP established by the Act have been 
delegated to the HRSA.
    The elements of compensation that may be awarded to a successful 
petitioner are set out in Section 2115 of the Public Health Service 
(PHS) Act, 42 U.S.C. 300aa-15. Subsection (a)(3)(B) specifically 
provides for compensation for lost earnings for a person who has 
sustained a vaccine-related injury before attaining the age of 18, and 
whose earning capacity is or has been impaired sufficiently to 
anticipate that such person is likely to suffer impaired earning 
capacity at age 18 and beyond. The injured person would be eligible to 
receive compensation for lost earnings, after the age of 18, which are 
calculated on the basis of the average gross weekly earnings of workers 
in the private, non-farm sector, less appropriate taxes and the ``* * * 
average cost of a health insurance policy, as determined by the 
Secretary.'' The wage data are taken from the Employment and Earnings 
survey done by the Department of Labor, Bureau of Labor Statistics 
(BLS). (Subsection (a)(3)(A) specifically provides for payment of 
actual and anticipated lost earnings for individuals injured after 
reaching age 18 and does not include deductions for taxes and the cost 
of health insurance.)
    The Department of Health and Human Services (HHS) is proposing to 
revise the current methodology for calculating the average cost of a 
health insurance policy, which is an amount deducted from the award of 
compensation in certain cases. Due to the availability of an improved 
data source, the current methodology should be changed because the 
proposed methodology will yield a more accurate calculation of the 
average cost of a health insurance policy.
    Currently, the methodology uses a baseline of $141.00, which was 
the average monthly premium cost for individuals covered under 
employment related group insurance in 1990 according to the 1990 
Employer Health Benefits survey conducted by the Health Insurance 
Association of America (HIAA). This baseline of $141.00 has been 
increased by the increase in the medical care component of the Consumer 
Price Index (CPI)--All Urban Consumers, U.S. City Average, which is 
published by the BLS, plus a 2 percent per year increase. The medical 
care component of the CPI has been used because it was the only Federal 
Government survey available at the time which reflected average changes 
in the costs of health insurance. The two percent is added to account 
for technological advances in and higher utilization of health care. 
From time to time, the Secretary has published notices in the Federal 
Register with updated amounts which reflect the average monthly cost of 
a health insurance policy, as calculated above.
    The medical care component of the CPI consists of the changes in 
the costs of medical care (e.g. non-prescription drugs and medical 
supplies), not just changes in the cost of health insurance. 
Furthermore, it only tracks the changes in the costs of health 
insurance, not the actual cost of a health insurance policy. Therefore, 
the Secretary is proposing a new methodology to calculate the average 
cost of a health insurance policy. The proposed methodology uses the 
Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) data to 
periodically determine the baseline for calculating the average cost of 
a health insurance policy because it is the only national annual survey 
solely estimating health insurance costs among various populations that 
is conducted by a Federal Government agency. The MEPS-IC is conducted 
annually by the Agency for Healthcare Research and Quality (AHRQ), an 
agency within HHS. The MEPS-IC began in 1997 with data collected for 
calendar year 1996. It has the largest sample size of the national 
surveys used to estimate health insurance costs. The number of 
respondents ranges from 30,000 to 40,000 annually. For more information 
about MEPS-IC, call the Project Director, Center for Cost and Financing 
Studies, Medical Expenditure Panel Survey, Agency for Healthcare 
Research and Quality, 540 Gaither Road, Rockville, Maryland 20850; 
telephone (301) 427-1406, e-mail: [email protected], or visit the MEPS 
Web site at: http://www.ahrq.gov/data/mepsix.htm.
    The Secretary proposes to obtain a new baseline periodically 
(generally on an annual basis) from the average total single premium 
per enrolled employee at private-sector establishments that offer 
health insurance, as reported by

[[Page 33421]]

the most recent MEPS-IC data. Because MEPS-IC data are collected 
retrospectively, there is a time lag between when the data are 
collected and when they are reported. Currently, this is a 2-year time 
lag. Therefore, the Secretary proposes increasing or decreasing the 
most recent MEPS-IC baseline by the annual percentage change(s) in the 
average monthly premium costs for covered single workers from the most 
recent Kaiser Family Foundation and Health Research and Educational 
Trust (KFF/HRET) annual survey, ``Employer Health Benefits'' or other 
authoritative sources that may be more accurate or appropriate in the 
future. If another authoritative source is used, the Secretary will 
publish a notice in the Federal Register announcing this change.
    Since 1999, the KFF/HRET, independent non-profit organizations, 
have conducted the ``Employer Health Benefits'' survey. This survey 
collects prospective data from about 3,000 randomly selected public and 
private employers on the cost of health insurance benefits per employee 
per employer and combines the data for public and private employers. 
Data are collected based on the anticipated cost of a health insurance 
policy, not necessarily the actual cost because the data are collected 
prospectively. For more information about this survey, visit the KFF/
HRET Web site at http://www.kff.org/insurance/index.cfm.
    Using the KFF/HRET percentage change(s) to modify the baseline 
number would make the calculation of the average cost of a health 
insurance policy current, and would produce an accurate deduction from 
the compensation award. We note that the KFF/HRET survey data are 
reported the same year in which they are collected, and tend to have 
comparable annual percentage increases or decreases to the subsequent 
MEPS-IC data for the same years as detailed in the table in the 
Economic and Regulatory Impact Section of this NPRM. The annual 
percentage change as reported by the KFF/HRET survey provides a more 
accurate modifier than the addition of the medical care component of 
the CPI plus 2 percent, as has been used under the current regulation 
because the medical care component of the CPI consists of the changes 
in the costs of medical care (e.g. non-prescription drugs, medical 
supplies, health insurance), not the actual cost of a health insurance 
policy.
    Given the current 2-year time lag, the calculation for 2005 would 
be as follows. In August 2005, MEPS-IC published the annual 2003 
average total single premium per enrolled employee at private-sector 
establishments that provide health insurance. The figure published was 
$3,481. This figure is divided by 12 months to determine the cost per 
month of $290.08 which is the proposed new baseline figure for 2003. 
The Secretary proposes that the baseline of $290.08 be increased or 
decreased by the percentage change reported by the most recent KFF/HRET 
survey. The percentage increase from 2003-2004 was 11.2 percent. By 
adding this percentage increase, the calculated average monthly cost of 
a health insurance policy in 2004 is $322.57. The KFF/HRET reported 
increase from 2004-2005 was 9.2 percent. By adding this percentage 
increase to the calculated $322.57 for 2004, the calculated average 
monthly cost of a health insurance policy in 2005 would be $352.25. 
Under the current methodology, the calculated average monthly cost of a 
health insurance policy would be $374.82. If the revised calculation of 
the new baseline is published in the Federal Register in final form 
using this new methodology, the Secretary will include in the Final 
Rule the latest calculation of the average cost of a health insurance 
policy using the new methodology.
    Since the KFF/HRET survey is published annually, the Department 
will periodically (generally on an annual basis) recalculate the 
average cost of a health insurance policy by obtaining a new baseline 
from the latest MEPS-IC data and updating this baseline using the 
percentage change(s) reported by the most recent data from KFF/HRET or 
other authoritative source that may be more accurate or appropriate in 
the future. The updated calculation will be published as a notice in 
the  Federal Register and filed with the Court.
    This proposed methodology will result in a more accurate reflection 
of the actual average cost of a health insurance policy as compared to 
the figure reached under the current methodology. Because the amount of 
compensation for lost wages is reduced by this figure for some 
petitioners receiving compensation under the VICP, such petitioners 
will receive a more accurate amount of compensation if the proposed 
methodology is adopted.
    The reduction in the compensation is done once and that is at the 
time the award is made. It is based on the average cost of a health 
insurance policy at that point in time. No further reductions are made 
because of increases in the cost of a health insurance policy.
    This proposed methodology will only apply to the determination of 
lost wages after the effective date of the Final Rule. Awards already 
made before this date will not be recalculated.

Economic and Regulatory Impact

Regulatory Flexibility Act and Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when rulemaking is 
necessary, to select regulatory approaches that provide the greatest 
net benefits (including potential economic, environmental, public 
health, safety distributive and equity effects). In addition, under the 
Regulatory Flexibility Act of 1980 (RFA), if a rule has a significant 
economic effect on a substantial number of small entities, the 
Secretary must specifically consider the economic effect of a rule on 
small entities and analyze regulatory options that could lessen the 
impact of the rule. Executive Order 12866 requires that all regulations 
reflect consideration of alternatives, of costs, of benefits, of 
incentives, of equity, and of available information.
    Regulations must meet certain standards, such as avoiding an 
unnecessary burden. Regulations that are ``significant'' because of 
cost, adverse effects on the economy, inconsistency with other agency 
actions, effects on the budget, or novel legal or policy issues, 
require special analysis. In the Secretary's view, the amendment 
proposed in this notice would require minimal resources to implement, 
if any. Therefore, in accordance with the RFA, and the Small Business 
Regulatory Enforcement Fairness Act of 1996, which amended the RFA, the 
Secretary certifies that the amendment proposed by this rule will not 
affect any entities defined as small under this Act and will not have a 
significant impact on a substantial number of small entities.
    The change proposed here does not meet the criteria for a major 
rule as defined by Executive Order 12866 and would have no major effect 
on the economy or Federal expenditures. The Secretary has determined 
that the proposed rule is not a ``major rule''' within the meaning of 
the statute providing for Congressional Review of Agency Rulemaking, 5 
U.S.C. 801. The Secretary conducted a cost analysis of the current 
versus the proposed methodology. The difference in using the current 
vs. proposed methodologies was calculated for a single claim. This 
difference was multiplied by the annual average percent of claims 
compensated that include this calculation (20

[[Page 33422]]

percent). The proposed methodology is estimated to increase the annual 
total amount of awards by $50,000. Therefore, the additional cost to 
the Federal government will be about $50,000 per year.
    The table below compares the average cost of a health insurance 
policy using MEPS-IC only, KFF/HRET only and the proposed methodology.

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                                                                                                     Proposed
                              Year                                 KFF/HRET only   MEPS-IC  only    methodology
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2000............................................................            $202         $221.22      \1\$206.44
2001............................................................             221          240.77      \2\ 232.46
2002............................................................             255          265.75      \3\ 276.98
2003............................................................             282          290.08      \4\ 309.61
2004............................................................             308             N/A      \5\ 336.59
2005............................................................             335             N/A      \6\ 352.25
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N/A--Not available due to 2-year lag in reporting data.
\1\ 1998 MEPS-IC increased by 1999 and 2000 percent changes from KFF/HRET.
\2\ 1999 MEPS-IC increased by 2000 and 2001 percent changes from KFF/HRET.
\3\ 2000 MEPS-IC increased by 2001and 2002 percent changes from KFF/HRET.
\4\ 2001 MEPS-IC increased by 2002 and 2003 percent changes from KFF/HRET.
\5\ 2002 MEPS-IC increased by 2003 and 2004 percent changes from KFF/HRET.
\6\ 2003 MEPS-IC increased by 2004 and 2005 percent changes from KFF/HRET.

    The table below shows a comparison of the average cost of a health 
insurance policy using the current and proposed methodologies, and the 
percent change between these methodologies.

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                                                                                                  Percent change
                              Year                                    Current        Proposed       (current vs.
                                                                    methodology     methodology      proposed)
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2000............................................................         $276.28         $206.44             -25
2001............................................................          294.24          232.46             -21
2002............................................................          313.78          276.98             -12
2003............................................................          332.60          309.61              -7
2004............................................................          353.81          336.59              -5
2005............................................................          374.82          352.25              -6
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    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

    The Secretary has determined that the amendment proposed in this 
notice would not have effects on State, local, and tribal governments 
and on the private sector such as to require consultation under the 
Unfunded Mandates Reform Act of 1995.

Federalism Impact Statement

    The Secretary has also reviewed this proposed rule in accordance 
with Executive Order 13132 regarding federalism, and has determined 
that it does not have ``federalism implications.'' The proposed rule 
would not ``have substantial direct effects on the States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.''

Impact on Family Well-Being

    This proposed rule will not adversely affect the following elements 
of family well-being: family safety, family stability, marital 
commitment; parental rights in the education, nurture and supervision 
of their children; family functioning, disposable income or poverty; or 
the behavior and personal responsibility of youth, as determined under 
section 654(c) of the Treasury and General Government Appropriations 
Act of 1999.

Impact of the New Rule

    If the amendment proposed in this notice is adopted, Sec.  100.2 
will be revised to incorporate a new methodology for calculating the 
average cost of a health insurance policy. As explained in this notice, 
we expect this new methodology to result in a more accurate reflection 
of the actual average cost of a health insurance policy as compared to 
the figure reached under the methodology that is currently used which 
resulted in a number that was too high in the past.

Paperwork Reduction Act of 1980

    This proposed rule has no information collection requirements.

List of Subjects

    Biologics, Compensation, Health insurance, Immunizations.

    Dated: May 25, 2006.
Elizabeth M. Duke,
Administrator, HRSA.
    Approved: February 28, 2006.

Michael O. Leavitt,
Secretary.
    For the reasons stated above, HHS proposes to amend part 100 of 42 
CFR as follows:

PART 100--VACCINE INJURY COMPENSATION

    1. The authority section for 42 CFR part 100 is revised to read as 
follows:

    Authority: Secs. 312 and 313 of Pub. L. 99-660, 100 Stat. 3779-
3782 (42 U.S.C. 300aa-1 note); sec. 2114(c) and (e) of the PHS Act 
(42 U.S.C. 300aa-14(c) and (e)); sec. 2115(a)(3)(B) of the PHS Act 
(42 U.S.C. 300aa-15(a)(3)(B)); sec. 904(b) of Pub. L. 105-34, 111 
Stat. 873; sec. 1503 of Pub. L. 105-277, 112 Stat. 2681-741; and 
sec. 523(a) of Pub. L. 106-170, 113 Stat. 1927-1928.

    2. Section 100.2 is revised to read as follows:


Sec.  100.2  Average cost of a health insurance policy.

    For purposes of determining the amount of compensation under the 
VICP, section 2115(a)(3)(B) of the PHS

[[Page 33423]]

Act, 42 U.S.C. 300aa-15(a)(3)(B), provides that certain individuals are 
entitled to receive an amount reflecting lost earnings, less certain 
deductions. One of the deductions is the average cost of a health 
insurance policy, as determined by the Secretary. The Secretary has 
determined that the average cost of a health insurance policy is 
$352.25 for 2005. This figure is calculated periodically (generally on 
an annual basis) using the most recent Medical Expenditure Panel 
Survey-Insurance Component (MEPS-IC) data available as the baseline for 
the average monthly cost of a health insurance policy. This baseline is 
adjusted by the annual percentage increase/decrease obtained from the 
most recent annual Kaiser Family Foundation and Health Research and 
Educational Trust (KFF/HRET) Employer Health Benefits survey or other 
authoritative source that may be more accurate or appropriate in the 
future. The revised amount will be effective upon its delivery by the 
Secretary to the United States Court of Federal Claims, and the amount 
will be published as a notice in the Federal Register periodically 
(generally on an annual basis).

 [FR Doc. E6-8992 Filed 6-8-06; 8:45 am]
BILLING CODE 4165-15-P