[Federal Register Volume 71, Number 129 (Thursday, July 6, 2006)]
[Rules and Regulations]
[Pages 38264-38266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6029]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 413

[CMS-1531-F]
RIN 0938-AO35


Medicare Program; Revision of the Deadline for Submission of 
Emergency Graduate Medical Education Affiliation Agreements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule responds to comments on and revises the 
deadline for submission of the 2006 emergency Medicare graduate medical 
education (GME) affiliation agreements. The deadlines to submit the 
emergency Medicare GME affiliation agreements for the 2005 through 2006 
and 2006 through 2007 academic years are changed from on or before June 
30, 2006 and July 1, 2006, respectively, to on or before October 9, 
2006.

DATES: These regulations are effective on June 30, 2006.

FOR FURTHER INFORMATION CONTACT: Elizabeth Truong, (410) 786-6005.

SUPPLEMENTARY INFORMATION:

I. Background

A. Legislative and Regulatory History

    The stated purpose of section 1135 of the Social Security Act (the 
Act) is to enable the Secretary to ensure, to the maximum extent 
feasible, in any emergency area and during an emergency period, that 
sufficient health care items and services are available to meet the 
needs of enrollees in Medicare, Medicaid, and the State Children's 
Health Insurance Program (SCHIP). Section 1135 of the Act authorizes 
the Secretary, to the extent necessary to accomplish the statutory 
purpose, to temporarily waive or modify the application of certain 
types of statutory and regulatory provisions (such as conditions of 
participation or other certification requirements, program 
participation or similar requirements, or pre-approval requirements) 
with respect to health care items and services furnished by health care 
provider(s) in an emergency area during an emergency period.
    The Secretary's authority under section 1135 of the Act arises in 
the event there is an ``emergency area'' and continues during an 
``emergency period'' as those terms are defined in the statute. Under 
section 1135(g) of the Act, an emergency area is a geographic area in 
which there exists an emergency or disaster that is declared by the 
President according to the National Emergencies Act or the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, and a public 
health emergency declared by the Secretary according to section 319 of 
the Public Health Service Act. (Section 319 of the Public Health 
Service Act authorizes the Secretary to declare a public health 
emergency and take the appropriate action to respond to the emergency, 
consistent with existing authorities.) Throughout the remainder of this 
discussion, we will refer to such emergency areas and emergency periods 
as ``section 1135'' emergency areas and emergency periods.
    When Hurricane Katrina occurred on August 29, 2005, disrupting 
health care operations and medical residency training programs at 
teaching hospitals in New Orleans and the surrounding area, the 
conditions were met for an emergency area and emergency period under 
section 1135(g) of the Act. Under section 1135 of the Act, the 
Secretary was then authorized to waive a number of provisions to ensure 
that sufficient services would be available in the section 1135 
emergency area to meet the needs of Medicare, Medicaid, and SCHIP 
patients. Shortly after Hurricane Katrina occurred, we were informed by 
hospitals in New Orleans that the training programs at many teaching 
hospitals in the city were closed or partially closed as a result of 
the disaster and that the displaced residents were being transferred to 
training programs at host hospitals in other parts of the country. For 
purposes of discussion in this rule, a host hospital is a hospital that 
trains residents displaced from a training program in a section 1135 
emergency area. A home hospital is a hospital that meets all of the 
following: (1) Is located in a section 1135 emergency area, (2) had its 
inpatient bed occupancy decreased by 20 percent or more due to the 
disaster so that it is unable to train the number of residents it 
originally intended to train in that academic year, and (3) needs to 
send the displaced residents to train at a host hospital.
    In the April 12, 2006 Federal Register (71 FR 18654), we published 
an interim final rule with comment period to modify the Graduate 
Medical Education (GME) regulations as they apply to Medicare GME 
affiliations to provide for greater flexibility during times of 
disaster. Specifically, the interim final rule implemented the 
emergency Medicare GME affiliated group provisions to address issues 
that may be faced by certain teaching hospitals in the event that 
residents who would otherwise have trained at a hospital in an 
emergency area (as that term is defined in section 1135(g) of the 
Social Security Act (the Act)) are relocated to alternate training 
sites. To provide home hospitals with more flexibility to train 
displaced residents at various sites, and to allow host hospitals to 
count displaced residents for IME and direct GME, home hospitals may 
enter into emergency Medicare GME affiliation agreements effective 
retroactive to the date of the first day of the section 1135 emergency 
period.

B. Requirements for Issuance of Regulations

    Section 902 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) amended section 1871(a)(3) of the Act 
and requires the Secretary, in consultation with the Director of the 
Office of Management and Budget, to establish and publish timelines for 
the publication of Medicare final regulations based on the previous 
publication of a Medicare proposed or interim final regulation. Section 
902 of the MMA also states that the timelines for these regulations may 
vary but shall not exceed 3 years after publication of the preceding 
proposed or interim final

[[Page 38265]]

regulation except under exceptional circumstances.
    This final rule finalizes one provision set forth in the April 12, 
2006 interim final rule with comment period. In addition, this final 
rule has been published within the 3-year time limit imposed by section 
902 of the MMA. Therefore, we believe that the final rule is in 
accordance with the Congress' intent to ensure timely publication of 
final regulations.

II. Provisions of the Final Rule

    In this final rule we are responding to comments regarding the 
deadline for submission of emergency Medicare GME affiliation 
agreements and finalizing the provision from the April 12, 2006 interim 
final rule with comment period, specified at Sec.  413.79(f)(6)(ii), 
regarding this deadline. We will issue a separate Federal Register 
document to respond to comments received and finalize the other 
provisions of the April 12, 2006 interim final rule with comment 
period.
    In the April 12 interim final rule with comment period, we 
specified that for the year during which the section 1135 emergency was 
declared, each hospital participating in the emergency affiliation must 
submit a copy of the emergency Medicare GME affiliation agreement, as 
specified under Sec.  413.79(f)(6), to CMS and the CMS FI servicing 
each hospital by the later of 180 days after the section 1135 emergency 
period begins or by June 30 of the relevant training year. The interim 
final rule also specified that emergency Medicare GME affiliation 
agreements for the subsequent 2 academic years must be submitted by the 
later of 180 days after the section 1135 emergency period begins or by 
July 1 of each of the years. Furthermore, amendments to the emergency 
Medicare GME affiliation agreement to adjust the distribution of the 
number of full-time equivalent (FTE) residents in the original 
emergency Medicare GME affiliation among the hospitals that are part of 
the emergency Medicare GME affiliated group can be made through June 30 
of the academic year for which they are effective.
    We received a number of written comments to the interim final rule 
provision regarding the timely submission of the emergency Medicare GME 
affiliation agreements. A summary of the comments received on this 
provision and our responses are as follows:
    Comment: Commenters expressed concern that the year 2006 deadlines 
for submission of the emergency Medicare GME affiliation agreements 
(that is, June 30, 2006 and July 1, 2006 for the first and second 
effective years, respectively) are too restrictive and impose a 
hardship on hospitals that are coping with the destructive effects of 
Hurricanes Katrina and Rita, which have made even basic daily 
operations difficult. A commenter noted that the interim final rule 
with comment period was posted for public display on April 7, 2006, 
thereby giving hospitals only 84 days to negotiate and finalize 
agreements that often involve multiple parties and complex calculations 
to sort out the various cap transfers before the June 30, 2006 
deadline.
    Response: The June 30 and July 1 dates were selected at the time 
the interim final rule with comment period was published based on--(1) 
the current requirements for signing Medicare GME affiliation 
agreements; (2) the beginning of the academic year for residency 
programs, and (3) the belief that hospitals training residents were 
likely to want signed affiliation agreements in effect prior to the 
beginning of the residency training year. We had drafted the interim 
final rule with comment period to apply, not only to hospitals affected 
by the 2005 hurricanes, but to any similarly catastrophic event 
affecting hospitals in the future. Accordingly, the provision was 
drafted to allow hospitals until the later of 180 days after the 
section 1135 emergency period begins or June 30 to submit the emergency 
affiliation agreement for the academic year during the which the 
emergency occurs, and until the later of 180 days after the section 
1135 emergency period begins or July 1 of the relevant training year to 
submit the emergency agreement for the subsequent 2 academic years. We 
now recognize that the hospitals affected by Hurricanes Katrina and 
Rita had only 79 days from April 12, 2006, the date that the interim 
final rule with comment period appeared in the Federal Register, to 
finalize their written agreements. This is a far shorter period than 
180 days after the section 1135 emergency period began, which is the 
period allowed by our regulations in the event of future emergencies. 
We recognize and appreciate that it may not be administratively 
possible for all home and host hospitals to submit to the appropriate 
FIs and CMS all emergency Medicare GME affiliation agreements resulting 
from Hurricanes Katrina and Rita, due on or before June 30, 2006 (for 
the 2005 through 2006 academic year) and July 1, 2006 (for the 2006 
through 2007 academic year) because of the limited timeframe in which 
the affected hospitals had to negotiate and finalize these agreements.
    Therefore, in response to the many requests for an extension on the 
year 2006 deadlines, in this final rule we are revising Sec.  
413.79(f)(6)(ii) to extend the deadline for emergency Medicare GME 
affiliation agreements that would otherwise by required to be submitted 
by June 30, 2006 or July 1, 2006 to October 9, 2006, which is 180 days 
after the April 12, 2006 interim final rule with comment period.

III. Waiver of the Delay in the Effective Date

    The Administrative Procedure Act (APA) normally requires a 30-day 
delay in the effective date of a final rule. This delay may be waived, 
however, if an agency finds for good cause that the delay is 
impracticable, unnecessary or contrary to the public interest, and 
incorporates a statement of the finding and the reasons for it in the 
rule issued. The Secretary is subject to a similar requirement pursuant 
to section 1871(e)(1)(B) of the Act.
    We find that good cause exists to waive the 30-day delay in 
effective date because it would be contrary to the public interest to 
delay the effective date of this final rule. We believe that there is 
an urgent need for the regulation changes provided in this final rule 
to ensure that hospitals affected by Hurricanes Katrina and Rita do not 
face dramatic disruptions in their Medicare GME funding, with possible 
dire effects on their GME programs and financial stability. The 
existing regulations do not provide adequate time for hospitals to 
submit their emergency Medicare GME affiliation agreements for the 2005 
through 2006 and the 2006 through 2007 academic years.

IV. Collection of Information Requirements

    This document does not impose 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.

V. Regulatory Impact Statement

    We have examined the impact of this 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 directs agencies to assess all costs and 
benefits

[[Page 38266]]

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). This final rule does not reach 
the economic threshold and thus is not considered a major rule. In 
addition, we expect that there will not be an additional cost to the 
Medicare program due to our extension of the deadline to submit 2006 
emergency Medicare GME affiliation agreements to October 9, 2006.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. 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. Individuals and States are not 
included in the definition of a small entity. We are not preparing an 
analysis for the RFA because we have determined that this rule will not 
have a significant economic impact on a substantial number of small 
entities.
    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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. We are not preparing an 
analysis for section 1102(b) of the Act because we have determined that 
this rule will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. That threshold 
level is currently approximately $120 million. This rule will have no 
consequential effect on State, local, or tribal governments or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on State 
or local governments, the requirements of E.O. 13132 are not 
applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 413

    Health facilities, Kidney disease, Medicare, Puerto Rico, Reporting 
and recordkeeping requirements.


0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR chapter IV part 413 as set forth below:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
ENDSTAGE RENAL DISEASE SERVICES: PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES

0
1. The authority citation for part 413 continues to read as follows:

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and 
(n), 1861 (v), 1871, 1881, 1883, and 1886 of the Social Security Act 
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww) Sec. 124 of Pub. L. 
106-113, 113 Stat. 1515.

Subpart F--Specific Categories of Costs

0
2. Section 413.79 is amended by revising paragraph (f)(6)(ii) to read 
as follows:


Sec.  413.79  Direct GME payments: Determination of the weighted number 
of FTE residents.

* * * * *
    (f) * * *
    (6) * * *
    (ii) Deadline for submission of the emergency Medicare GME 
affiliation agreement. (A) Except for emergency Medicare GME 
affiliation agreements that meet the requirements of paragraph 
(f)(6)(ii)(B) of this section, each participating hospital must submit 
an emergency Medicare GME affiliation agreement to CMS and submit a 
copy to its CMS fiscal intermediary by--
    (1) First year. The later of 180 days after the section 1135 
emergency period begins or by June 30 of the academic year in which the 
section 1135 emergency was declared; or
    (2) Two subsequent academic years. The later of 180 days after the 
section 1135 emergency period begins, or by July 1 of each academic 
year for the 2 subsequent academic years.
    (B) For emergency Medicare GME affiliation agreements that would 
otherwise be required to be submitted by June 30, 2006 or July 1, 2006, 
each participating hospital must submit an emergency Medicare GME 
affiliation agreement to CMS and submit a copy to its CMS fiscal 
intermediary on or before October 9, 2006.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: June 30, 2006.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: June 30, 2006.
Michael O. Leavitt,
Secretary.
[FR Doc. 06-6029 Filed 6-30-06; 4:00 pm]
BILLING CODE 4120-01-P