[Federal Register Volume 72, Number 133 (Thursday, July 12, 2007)]
[Proposed Rules]
[Pages 38042-38045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13278]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AM40


Provision of Hospital Care and Medical Services During Certain 
Disasters or Emergencies

AGENCY: Department of Veterans Affairs (VA).

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to establish 
regulations regarding the provision of hospital care and medical 
services under the VA Emergency Preparedness Act of 2002 to individuals 
responding to, involved in, or otherwise affected by certain disasters 
or emergencies (including individuals who otherwise do not have VA 
eligibility for such care and services).

DATES: Comment Date: Comments must be received on or before September 
10, 2007.

ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to the Director, 
Regulations Management (00REG), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to (202) 
273-9026. Comments should indicate that they are submitted in response 
to ``RIN 2900-AM40--Provision of Hospital Care and Medical Services 
During Certain Disasters or Emergencies.'' Copies of comments received 
will be available for public inspection in the Office of Regulation 
Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 
p.m., Monday through Friday (except holidays). Please call (202) 273-
9515 for an appointment. In addition, during the comment period, 
comments may be viewed online in http://www.Regulations.gov through the 
Federal Docket Management System (FDMS).

FOR FURTHER INFORMATION CONTACT: Tony A. Guagliardo, Director, Business 
Policy, Chief Business Office (163), Veterans Health Administration, 
Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 
20420, (202) 254-0384. (This is not a toll free number.)

SUPPLEMENTARY INFORMATION: This document proposes to amend the VA 
``Medical'' regulations in 38 CFR part 17 by adding a new Sec.  17.86 
and by making technical amendments in Sec.  17.102. As indicated in 
paragraph (a) of proposed Sec.  17.86, this proposed rule would 
implement the provisions of Public Law 107-287, the VA Emergency 
Preparedness Act of 2002, regarding hospital care and medical services 
provided to individuals responding to, involved in, or otherwise 
affected by certain disasters or emergencies (including individuals who 
otherwise do not have VA eligibility for such care and services). These 
provisions are codified as 38 U.S.C. 1785.
    Paragraphs (b) and (c) of proposed Sec.  17.86 would reflect the 
provisions of 38 U.S.C. 1785, which provide that during and immediately 
following a disaster or emergency VA may furnish hospital care and 
medical services to individuals (including those who otherwise do not 
have VA eligibility for such care and services) responding to, involved 
in, or otherwise affected by:

[[Page 38043]]

     A major disaster or emergency declared by the President 
under the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act (42 U.S.C. 5121 et seq.) (``Stafford Act''), or
     A disaster or emergency in which the National Disaster 
Medical System established pursuant to section 2811(b) of the Public 
Health Service Act (42 U.S.C. 300hh-11(b)) is activated either by the 
Secretary of Health and Human Services under paragraph (3)(A) of that 
section or as otherwise authorized by law.
    Paragraph (d) of proposed Sec.  17.86 would define ``hospital 
care'' and ``medical services'' according to the existing definitions 
in 38 U.S.C. 1701(5) and 1701(6).
    Under paragraph (e) of proposed Sec.  17.86, charges for care and 
services furnished to an officer or employee of a department or agency 
of the United States (other than VA) or to a member of the Armed Forces 
would be calculated in accordance with the provisions of Sec.  
17.102(h). Section 1785 states that VA shall be reimbursed for the cost 
of any care or services furnished to an officer or employee of a 
department or agency of the United States (other than VA) or to a 
member of the Armed Forces at rates agreed upon based on the cost of 
the care or service provided. An established system for charging for 
care and services provided to beneficiaries of the Department of 
Defense or other Federal agencies is already in place in Sec.  
17.102(c), (e), and (h). The cost of such care is charged at rates 
agreed upon in a sharing agreement described in Sec.  17.102(e), or 
pursuant to the cost-based system described in Sec.  17.102(h). In 
accordance with Sec.  17.102(h), which provides authority to 
periodically do so, the Office of Management and Budget (OMB) and VA 
have published a document in the ``Notices'' section of the Federal 
Register entitled ``Cost-Based and Interagency Billing Rates for 
Medical Care or Services Provided by the Department of Veterans 
Affairs,'' 70 FR 66,866--66,868 (November 3, 2005). If the head of 
another Federal agency or the Secretary of a branch of the Armed Forces 
seeks VA hospital care or medical services for an officer, employee, or 
member, this cost-based system is the agreed-upon method for 
calculating the cost of such care or service unless the care provided 
falls within an existing sharing agreement as described in Sec.  
17.102(e).
    Section 1785 is silent regarding charges to other individuals 
(i.e., other than the Federal officers or employees or members of the 
Armed Forces discussed in the immediately preceding paragraph of this 
preamble) that are eligible for such care and services under section 
1785 but would not otherwise be eligible for such care and services as 
VA beneficiaries. This issue is discussed in the legislative history of 
the VA Emergency Preparedness Act of 2002 in S. Rep. No. 107-229 (July 
31, 2002), a report of the Senate Committee on Veterans' Affairs. The 
report states, at 9: ``[Section 1785] would also allow VA to receive 
reimbursement for the cost of services provided to employees of other 
Federal agencies or departments, to be credited to the facility that 
provided care. VA would not be required to charge other individuals for 
emergency care offered during a disaster.'' The language of the 
statute, when considered with this legislative history, suggests that 
Congress did not intend to require VA to seek reimbursement for 
hospital care or medical services provided to other individuals during 
a covered disaster or emergency. However, in addition to the statutory 
language in section 1785, VA's current appropriation act impacts the 
question of reimbursement for care provided to individuals who are not 
otherwise eligible for hospital care or medical services at VA expense.
    VA appropriation acts (including the appropriation act for fiscal 
year 2006, Pub. L. 109-114) have historically included a provision 
stating (with certain exceptions) that no appropriated funds shall be 
available ``for hospitalization or examination of any persons'' (Pub. 
L. 109-114, sec. 204) unless reimbursement for such care is made to the 
medical services account at rates set by the Secretary. In the 
appropriation act for fiscal year 2006 there are three exceptions. The 
first exception is care provided to ``beneficiaries entitled under the 
laws bestowing such benefits to veterans.'' In this preamble we use the 
phrase ``VA beneficiaries'' to refer to individuals eligible for 
hospitalization and medical care under the laws bestowing those 
benefits to veterans. The other two exceptions are persons receiving 
care under 5 U.S.C. 7901-7904 (employee services) or under the Stafford 
Act. This means that unless there has been a Presidential declaration 
under the Stafford Act, VA must seek reimbursement for the hospital 
care and medical services provided under section 1785 to persons who 
are not VA beneficiaries.
    Not all care authorized under 38 U.S.C. 1785 is provided under the 
Stafford Act. Section 1785 authorizes VA to provide care during a 
disaster or emergency declared under the Stafford Act or during 
activation of the National Disaster Medical System (NDMS) pursuant to 
section 2811(b) of the Public Health Service Act. Activation of the 
NDMS may take place without a Presidential declaration of a major 
disaster or emergency, and in that case would be without a Stafford Act 
declaration. If the care provided to other individuals (i.e., 
individuals other than the Federal officers or employees, members of 
the Armed Forces, or VA beneficiaries) does not fall under the Stafford 
Act (for example, if NDMS is activated without a Stafford Act 
declaration), the appropriation language referenced above compels VA to 
seek reimbursement for the care provided under 38 U.S.C. 1785 to 
individuals who are not otherwise eligible for hospital care or medical 
services at VA expense. Other than officers or employees of a non-VA 
department or agency of the United States, or members of the Armed 
Forces, those individuals would generally include, e.g., an individual 
who is not a veteran or a veteran's child, survivor, or dependent; an 
individual who is a veteran but who is not eligible for enrollment in 
the VA healthcare system under 38 U.S.C. 1705 and Sec.  17.36; or an 
individual who is a veteran's child, survivor, or dependent but who is 
not eligible for such care and services at VA expense under any laws 
regarding certain categories of those persons. Paragraph (e) of 
proposed Sec.  17.86 would provide a process for billing such 
individuals (other than officers or employees of a non-VA department or 
agency of the United States, or members of the Armed Forces) pursuant 
to Sec.  17.102(h).
    Besides the situation where the care provided to such other 
individuals does not fall under the Stafford Act, situations arise 
where the care does fall under the Act but VA does not receive 
reimbursement from any other-than-VA Federal department or agency. In 
such situations, VA seeks reimbursement from the individual. This has 
been long-standing VA practice and we propose to incorporate this 
practice in paragraph (e) by stating that ``[o]ther individuals who 
receive hospital care or medical services under this section are 
responsible for the cost of the hospital care or medical services when 
charges are mandated by Federal law (including applicable appropriation 
acts) or when the cost of care or services is not reimbursed by other-
than-VA Federal departments or agencies.'' (Emphasis added.)
    Under paragraph (e) of proposed Sec.  17.86, the charges would be 
calculated in accordance with the provisions of Sec.  17.102(h). (This 
document proposes to make technical changes to update the

[[Page 38044]]

provisions of Sec.  17.102(h) by removing ``Cost Distribution Report'', 
a report which documented costs through September, 2004, and by adding, 
in its place, ``Monthly Program Cost Report (MPCR)'', the report that 
VA currently uses for purposes of Sec.  17.102(h). This document also 
proposes to make in Sec.  17.102(h) clarifying technical changes in the 
description of the report's contents regarding outpatient care. Changes 
that this document is proposing to make to Sec.  17.102 for other 
reasons are described below in this preamble.) Paragraph (h) of Sec.  
17.102 provides a mechanism for charges to be based on the MPCR, which 
sets forth the actual basic costs and per diem rates by type of 
inpatient care, and actual basic costs and rates for outpatient care 
per visit or prescription filled, with additions based on:
     Factors for depreciation of buildings and equipment,
     Central Office overhead,
     Interest on capital investment, and
     Standard fringe benefit costs covering government employee 
retirement and disability costs.
    The formula in Sec.  17.102(h) provides an appropriate method for 
calculating charges for services provided under 38 U.S.C. 1785 during 
certain disasters or emergencies. As noted earlier, this formula is 
already used to charge for care to beneficiaries of the Department of 
Defense and other Federal agencies. It is also used to calculate 
charges for individuals who receive emergency hospital care or medical 
services on a humanitarian basis (38 U.S.C. 1784). Further, it is based 
on the cost of the care provided to non-otherwise-eligible 
beneficiaries, thereby ensuring that the medical services account is 
reimbursed for the cost of care provided, as required by the current 
appropriation act. The last sentence of paragraph (e) of proposed Sec.  
17.86 notes that VA would bill in accordance with Sec.  17.102(h) 
``without applying the exception provided in the first paragraph of 
Sec.  17.102.'' The exception provided in the first paragraph of Sec.  
17.102 is a reference to the possible applicability of Sec.  17.101, a 
regulation covering the collection or recovery by VA for medical care 
and services described in 38 U.S.C. 1729. The exception in the first 
sentence of Sec.  17.102 would not be applicable in any situation where 
care is provided under section 1785, as veterans would be receiving 
hospital care and medical services pursuant to section 1785 rather than 
section 1729.
    Paragraph (f) of proposed Sec.  17.86 would clarify that VA may 
furnish care and services under Sec.  17.86 to a veteran without regard 
to whether he or she is enrolled in the VA healthcare system. Paragraph 
(f) would reflect the provisions of 38 U.S.C. 1785(c), which state that 
VA may furnish care and services under section 1785 to an individual 
who is a veteran without regard to whether the veteran is enrolled in 
the VA patient enrollment system under 38 U.S.C. 1705. Section 1785(c) 
concerns the relationship of section 1785 and certain already existing 
provisions of law. It clarifies the possible impact of section 
1705(c)(1) on section 1785. A provision in section 1705(c)(1) states 
that VA may not provide hospital care or medical services to certain 
veterans under 38 U.S.C. 1710 (the statutory authorization that is a 
key basis for VA's provision of hospital care and medical services to 
veterans through its medical benefits package) unless those veterans 
have enrolled in the system of patient enrollment mandated by section 
1705(a). VA's regulation at 38 CFR 17.36 reflects this requirement and 
states that except in limited circumstances, a veteran must be enrolled 
in the VA healthcare system as a condition for receiving hospital care 
and medical services provided through VA's medical benefits package. 
The language in 38 U.S.C. 1705(c)(1) and the implementing regulations 
at 38 CFR 17.36, if the clarifying language in paragraph (c) had not 
been included in section 1785, could have led to an anomalous situation 
where VA would have been authorized to provide care to all individuals 
affected by a Presidentially-declared major disaster or emergency, or a 
disaster or emergency in which NDMS is activated, except certain 
veterans who were not previously enrolled for VA healthcare. Section 
1785(c) addresses this unique situation, clarifying that a veteran is 
not ineligible for care or services under section 1785 merely because 
the veteran (either because his or her priority group is not eligible 
for enrollment at the time, or because he or she elected not to enroll 
for VA benefits) is not enrolled in the VA healthcare system.
    This proposed rule would make a technical change to the existing 
regulations in Sec.  17.102 regarding the authority to provide 
humanitarian care under 38 U.S.C. 1784. The current cross-reference to 
the regulation authorizing emergency hospital care on a humanitarian 
basis is incorrect. 38 CFR 17.102(b)(1) refers to care or services 
rendered as a humanitarian service ``under Sec.  17.43(c)(1).'' There 
is no Sec.  17.43(c)(1) in title 38 CFR. The cross-reference listed in 
Sec.  17.102(b)(1) should be to Sec.  17.43(b)(1), rather than to Sec.  
17.43(c)(1). The proposed rule reflects this technical correction. In 
addition, to conform to the provisions of new Sec.  17.86, this 
proposed rule would amend Sec.  17.102(h) by adding a reference to 
Sec.  17.86.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or the private sector.

Paperwork Reduction Act of 1995

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

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, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a ``significant regulatory action,'' requiring review 
by OMB unless OMB waives such review, as any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this proposed rule have been examined and it has been 
determined to be a significant regulatory action under the Executive 
Order because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the

[[Page 38045]]

President's priorities, or the principles set forth in the Executive 
Order.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act. In 
addition to affecting individuals, this document would affect mainly 
large insurance companies. Further, where small entities would be 
involved, they would not be impacted significantly since an 
inconsequential portion of their business would be with VA. 
Accordingly, pursuant to 5 U.S.C. 605(b), this proposed rule is exempt 
from the initial and final regulatory flexibility analysis requirements 
of sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.005, Grants to States for 
the Construction of State Homes; 64.007, Blind Rehabilitation Centers; 
64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care 
Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental 
Care; 64.012, Veterans Prescription Service; 64.013, Veterans 
Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, 
Veterans State Nursing Home Care; 64.016, Veterans State Hospital Care; 
64.018, Sharing Specialized Medical Resources; 64.019, Veterans 
Rehabilitation Alcohol and Drug Dependence; and 64.022, Veterans Home 
Based Primary Care.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs-health, Grant programs-veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and Dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Approved: March 30, 2007.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.
    For the reasons set forth in the preamble, the Department of 
Veterans Affairs proposes to amend 38 CFR part 17 as follows:

PART 17--MEDICAL

    1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, 1721, and as noted in specific 
sections.

    2. Add an undesignated center heading and Sec.  17.86 to read as 
follows:

Care During Certain Disasters and Emergencies


Sec.  17.86  Provision of hospital care and medical services during 
certain disasters and emergencies under 38 U.S.C. 1785.

    (a) This section sets forth regulations regarding the provision of 
hospital care and medical services under 38 U.S.C. 1785.
    (b) During and immediately following a disaster or emergency 
referred to in paragraph (c) of this section, VA under 38 U.S.C. 1785 
may furnish hospital care and medical services to individuals 
(including those who otherwise do not have VA eligibility for such care 
and services) responding to, involved in, or otherwise affected by that 
disaster or emergency.
    (c) For purposes of this section, a ``disaster'' or ``emergency'' 
means:
    (1) A major disaster or emergency declared by the President under 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.)(``Stafford Act''); or
    (2) A disaster or emergency in which the National Disaster Medical 
System established pursuant to section 2811(b) of the Public Health 
Service Act (42 U.S.C. 300hh-11 (b)) is activated either by the 
Secretary of Health and Human Services under paragraph (3)(A) of that 
section or as otherwise authorized by law.
    (d) For purposes of paragraph (b) of this section, the terms 
``hospital care'' and ``medical services'' have the meanings given such 
terms by 38 U.S.C. 1701(5) and 1701(6).
    (e) Unless the cost of care is charged at rates agreed upon in a 
sharing agreement as described in Sec.  17.102(e), the cost of hospital 
care and medical services provided under this section to an officer or 
employee of a department or agency of the United States (other than VA) 
or to a member of the Armed Forces shall be calculated in accordance 
with the provisions of Sec.  17.102(c) and (h). Other individuals who 
receive hospital care or medical services under this section are 
responsible for the cost of the hospital care or medical services when 
charges are mandated by Federal law (including applicable appropriation 
acts) or when the cost of care or services is not reimbursed by other-
than-VA Federal departments or agencies. When individuals are 
responsible under this section for the cost of hospital care or medical 
services, VA will bill in the amounts calculated in accordance with the 
provisions of Sec.  17.102(h), without applying the exception provided 
in the first paragraph of Sec.  17.102.
    (f) VA may furnish care and services under this section to a 
veteran without regard to whether that individual is enrolled in the VA 
healthcare system under 38 U.S.C. 1705 and Sec.  17.36 of this part.

(Authority: 38 U.S.C. 501, 1785)


Sec.  17.102  [Amended]

    3. Amend Sec.  17.102 by:
    a. In paragraph (b)(1), removing ``Sec.  17.43(c)(1)'' and adding, 
in its place, ``Sec.  17.43(b)(1)''.
    b. In the first sentence of paragraph (h), adding ``Sec.  17.86 and 
under'' after ``charges under''; removing ``Cost Distribution Report'' 
and adding, in its place, ``Monthly Program Cost Report (MPCR)''; and 
removing ``and outpatient visit'' and adding, in its place, ``, and 
actual basic costs and rates for outpatient care visits or 
prescriptions filled''.
    c. In the fifth sentence of paragraph (h), removing ``Cost 
Distribution Report'' and adding, in its place, ``MPCR''.

 [FR Doc. E7-13278 Filed 7-11-07; 8:45 am]
BILLING CODE 8320-01-P