[Federal Register Volume 78, Number 100 (Thursday, May 23, 2013)]
[Rules and Regulations]
[Pages 30767-30768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12252]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AO58


Copayments for Medications in 2013

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, without change, an 
interim final rule amending the Department of Veterans Affairs (VA) 
medical regulations to freeze the copayments required for certain 
medications provided by VA until December 31, 2013. Under that rule, 
the copayment amounts for all enrolled veterans were maintained at the 
same rates as they were in 2012, which were $8 for veterans in priority 
groups 2-6 and $9 for veterans in priority groups 7 and 8. On January 
1, 2014, the copayment amounts may increase based on the prescription 
drug component of the Medical Consumer Price Index (CPI-P).

DATES: Effective Date: This rule is effective on May 23, 2013.

FOR FURTHER INFORMATION CONTACT: Kristin Cunningham, Director, Business 
Policy, Chief Business Office, 810 Vermont Avenue NW., Washington, DC 
20420, (202) 461-1599. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On December 31, 2012, VA published in the 
Federal Register (77 FR 76865) an interim final rule that froze 
copayments required for certain medications provided by VA until 
December 31, 2013.
    Under 38 U.S.C. 1722A(a), VA must require veterans to pay a $2 
copayment for each 30-day supply of medication furnished on an 
outpatient basis for the treatment of a non-service-connected 
disability or condition unless a veteran has a service-connected 
disability rated 50 percent or more, is a former prisoner of war, or 
has an annual income at or below the maximum annual rate of VA pension 
that would be payable if the veteran were eligible for pension. Under 
38 U.S.C. 1722A(b), VA ``may,'' by regulation, increase that copayment 
amount and establish a maximum annual copayment amount (a ``cap''). We 
have consistently interpreted section 1722A(b) to mean that VA has 
discretion to determine the appropriate copayment amount and annual cap 
amount for medication furnished on an outpatient basis for covered 
treatment, provided that any decision by VA to increase the copayment 
amount or annual cap amount is the subject of a rulemaking proceeding. 
We have implemented this statute in 38 CFR 17.110.
    Under 38 CFR 17.110(b)(1), veterans are obligated to pay VA a 
copayment for each 30-day or less supply of medication provided by VA 
on an outpatient basis (other than medication administered during 
treatment). Under the regulation as amended by the interim final rule 
published on December 31, 2012, 77 FR 76865, for the period from July 
1, 2010, through December 31, 2013, the copayment amount for veterans 
in priority categories 2 through 6 of VA's health care system is $8. 38 
CFR 17.110(b)(1)(ii). Thereafter, the copayment amount for all affected 
veterans will be established using a formula based on the prescription 
drug component of the CPI-P, set forth in 38 CFR 17.110(b)(1)(iv). For 
veterans in priority categories 7 and 8, the copayment amount from July 
1, 2010, through December 31, 2011, was $9. 38 CFR 17.110(b)(1)(iii). 
After December 31, 2011, copayments for veterans in priority categories 
7 and 8 were subject to the regulatory formula; however, that formula 
did not trigger an increase in the copayment amount, so it remains $9.
    Current Sec.  17.110(b)(2) also includes a ``cap'' on the total 
amount of copayments in a calendar year for a veteran enrolled in one 
of VA's health care enrollment system priority categories 2 through 6. 
As a result of the interim final rule, the annual cap is set at $960 
through December 31, 2013. Thereafter, the cap is to increase ``by $120 
for each $1 increase in the copayment amount'' applicable to veterans 
enrolled in one of VA's health care enrollment system priority 
categories 2 through 6.
    VA invited interested persons to submit comments on the interim 
final rule on or before March 1, 2013, and we received one comment. The 
commenter suggested that VA should not charge veterans a medication 
copayment. No changes are made based on this comment. With certain 
statutory exceptions set forth in 38 CFR 17.110(c), the provisions of 
38 U.S.C. 1722A require veterans to pay a copayment for each 30-day or 
less supply of medication furnished on an outpatient basis for the 
treatment of a non-service-connected disability or condition. VA has no 
authority to exempt veterans from this statutory requirement.
    At the end of calendar year 2013, unless additional rulemaking is 
initiated, VA will once again use the CPI-P methodology in Sec.  
17.110(b)(1)(iv) to determine whether to increase copayments and 
calculate any mandated increase in the copayment amount for veterans in 
priority categories 2 through 8. At that time, the CPI-P as of 
September 30, 2013, will be divided by the index as of September 30, 
2001, which was 304.8. The ratio will then be multiplied by the 
original copayment amount of $7. The copayment amount of the new 
calendar year will be rounded down to the whole dollar amount. As 
mandated by current Sec.  17.110(b)(2), the annual cap will be 
calculated by increasing the cap by $120 for each $1 increase in the 
copayment amount. Any change in the copayment amount and cap, along 
with the associated calculations explaining the basis for the increase, 
will be published in a Federal Register notice.
    Therefore, based on the rationale set forth here and in the interim 
final rule, VA is adopting the provisions of the interim final rule as 
a final rule with no changes.

Administrative Procedure Act

    In accordance with 5 U.S.C. 553(b)(B) and (d)(3), the Secretary of 
Veterans Affairs concluded that there was good cause to dispense with 
the opportunity for advance notice and opportunity for public comment 
and good cause to publish this rule with an immediate effective date. 
The Secretary found that it was impracticable and contrary to the 
public interest to delay this rule for the purpose of soliciting 
advance public comment or to have a delayed effective date. Increasing 
the copayment amount on January 1, 2013, might have caused a 
significant financial hardship for some veterans.

[[Page 30768]]

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
final rulemaking, represents VA's implementation of its legal authority 
on this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance must be read to conform with 
this rulemaking if possible or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

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

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
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, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), 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 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

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 an 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 final rule will have no such effect 
on State, local, and tribal governments, or on the private sector.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This final rule will temporarily freeze the copayments that 
certain veterans are required to pay for prescription drugs furnished 
by VA. This final rule affects individuals and has no impact on small 
entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking 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 program number and title 
for this rule are as follows: 64.005, Grants to States for Construction 
of State Home Facilities; 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; 64.022, Veterans Home Based Primary Care; 
and 64.024, VA Homeless Providers Grant and Per Diem Program.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jose D. 
Riojas, Interim Chief of Staff, approved this document on May 14, 2013, 
for publication.

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.

    Dated: May 20, 2013.
Robert C. McFetridge,
Director, Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

PART 17--MEDICAL

    Based on the rationale set forth in the interim final rule 
published in the Federal Register at 77 FR 76865 on December 31, 2012, 
and in this document, VA is adopting the provisions of the interim 
final rule as a final rule with no changes.

[FR Doc. 2013-12252 Filed 5-22-13; 8:45 am]
BILLING CODE 8320-01-P