[Federal Register Volume 81, Number 173 (Wednesday, September 7, 2016)]
[Proposed Rules]
[Pages 61639-61646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21359]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 59

RIN 937-AA04


Compliance With Title X Requirements by Project Recipients in 
Selecting Subrecipients

AGENCY: Office of Population Affairs, Office of the Secretary, 
Department of Health and Human Services.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document seeks comment on the proposed amendment of Title 
X regulations specifying the requirements Title X projects must meet to 
be eligible for awards. The amendment precludes project recipients from 
using criteria in their selection of subrecipients that are unrelated 
to the ability to deliver services to program beneficiaries in an 
effective manner.

DATES: To be considered, comments should be submitted by October 7, 
2016. Subject to consideration of the comments submitted, the 
Department will publish final regulations.

[[Page 61640]]


ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 937-AA04, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Enter the above docket ID number in the ``Enter Keyword or ID'' field 
and click on ``Search.'' On the next Web page, click on ``Submit a 
Comment'' action and follow the instructions.
     Mail/Hand delivery/Courier [For paper, disk, or CD-ROM 
submissions] to: Susan B. Moskosky, MS, WHNP-BC, Office of Population 
Affairs, Department of Health and Human Services, 200 Independence 
Avenue SW., Suite 716G, Washington, DC 20201. Comments received, 
including any personal information, will be posted without change to 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Susan B. Moskosky, MS, WHNP-BC, Office 
of Population Affairs (OPA), 200 Independence Avenue SW., Suite 716G, 
Washington, DC 20201; telephone: 240-453-2800; facsimile: 240-453-2801; 
email: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. Title X Background

    The Title X Family Planning Program, Public Health Service Act 
(PHSA) secs. 1001 et seq. [42 U.S.C. 300], was enacted in 1970 as part 
of the Public Health Service Act. Administered by the Office of 
Population Affairs (OPA) within the Office of the Assistant Secretary 
for Health (OASH), Title X is the only Federal program focused solely 
on providing family planning and related preventive services. In 2015, 
more than 4 million individuals received services through more than 
3,900 Title X-funded health centers.\1\
---------------------------------------------------------------------------

    \1\ Fowler, C. I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Title X serves women, men, and adolescents to enable individuals to 
freely determine the number and spacing of children. By law, services 
are provided to low-income individuals at no or reduced cost. Services 
provided through Title X-funded health centers assist in preventing 
unintended pregnancies and achieving pregnancies that result in 
positive birth outcomes. These services include contraceptive services, 
pregnancy testing and counseling, preconception health services, 
screening and treatment for sexually transmitted diseases (STD) and HIV 
testing and referral for treatment, services to aid with achieving 
pregnancy, basic infertility services, and screening for cervical and 
breast cancer. By statute, Title X funds are not available to programs 
where abortion is a method of family planning (PHSA sec. 1008), and no 
federal funds in Title X or any federal program may be expended for 
abortions except in cases of rape, incest, or where the life of the 
mother would be endangered.\2\ Additionally, Title X implementing 
regulations require that all pregnancy counseling shall be neutral and 
nondirective. 42 CFR 59.5(a)(5)(ii).
---------------------------------------------------------------------------

    \2\ Consolidated Appropriations Act, 2016, Division H, Title V, 
Public Law 114-113, secs. 506-07, 129 Stat. 2242, 2649 (2015).
---------------------------------------------------------------------------

    The Title X statute authorizes the Secretary ``to make grants to 
and enter into contracts with public or nonprofit private entities to 
assist in the establishment and operation of voluntary family planning 
projects which shall offer a broad range of acceptable and effective 
family planning methods and services (including natural family planning 
methods, infertility services, and services for adolescents).'' PHSA 
sec. 1001(a). In addition, in awarding Title X grants and contracts, 
the Secretary must ``take into account the number of patients to be 
served, the relative need of the applicant, and its capacity to make 
rapid and effective use of such assistance.'' PHSA sec. 1001(b). The 
statute also mandates that local and regional entities ``shall be 
assured the right to apply for direct grants and contracts.'' PHSA sec. 
1001(b). The statute delegates rulemaking authority to the Secretary to 
set the terms and conditions of these grants and contracts. PHSA sec. 
1006. These regulations were last revised in 2000. 65 FR 41270 (July 3, 
2000).
    Title X regulations delineating the criteria used to decide which 
family planning projects to fund and in what amount, include, among 
other factors, the extent to which family planning services are needed 
locally, the number of patients to be served (and, in particular, low-
income patients), and the adequacy of the applicant's facilities and 
staff. 42 CFR 59.7. Project recipients receive funds directly from the 
Federal government following a competitive process. The project 
recipients may elect to provide Title X services directly or by 
subawarding funds to qualified entities (subrecipients). HHS is 
responsible for monitoring and evaluating the project recipient's 
performance and outcomes, and each project recipient that subawards to 
qualified subrecipients is responsible for monitoring the performance 
and outcomes of those subrecipients. The subrecipients must meet the 
same Federal requirements as the project recipients, including being a 
public or private nonprofit entity, and adhering to all Title X and 
other applicable federal requirements. In the event of poor performance 
or noncompliance, a project recipient may take enforcement actions as 
described in the uniform grants rules at 45 CFR 75.371.

B. State Restrictions on Subrecipients

    In the past several years, a number of states have taken actions to 
restrict participation by certain types of providers as subrecipients 
in the Title X Program, unrelated to the provider's ability to provide 
the services required under Title X. In at least several instances, 
this has led to disruption of services or reduction of services. Since 
2011, 13 states have placed restrictions on or eliminated subawards 
with specific types of providers based on reasons unrelated to their 
ability to provide required services in an effective manner. When the 
state health department is a Title X recipient, these restrictions on 
subrecipient participation can apply. In several instances, these 
restrictions have interfered with the ``capacity [of the applicant] to 
make rapid and effective use of [Title X federal] assistance.'' PHSA 
sec. 1001(b). Moreover, states that restrict eligibility of 
subrecipients have caused limitations in the geographic distribution of 
services, and decreased access to services through trusted and 
qualified providers.
    States have restricted subrecipients from participating in the 
Title X program in several ways. Some states have employed a tiered 
approach to compete or distribute Title X funds, whereby entities such 
as comprehensive primary care providers, state health departments, or 
community health centers receive a preference in the distribution of 
Title X funds. This approach effectively excludes providers focused on 
reproductive health from receiving funds, even though they have been 
shown to provide higher quality services, such as preconception 
services, and accomplish Title X programmatic objectives more 
effectively.3 4 For example, in 2011,

[[Page 61641]]

Texas reduced its contribution to family planning services, and also 
re-competed subawards of Title X funds using a tiered approach. The 
combination of these actions decreased the Title X provider network 
from 48 to 36 providers, and the number of Title X clients served was 
reduced dramatically. Although another entity became the statewide 
project recipient in 2013, the number of Title X clients served 
decreased from 259,606 in 2011 to 166,538 in 2015.5 6 In 
other cases, states have prohibited specific types of providers from 
being eligible to receive Title X subawards, which has had a direct 
impact on service availability, primarily for low-income women. In some 
cases, experienced providers that have historically served large 
numbers of patients in major cities or geographic areas have been 
eliminated from participation in the Title X program. In Kansas, for 
example, following the exclusion of specific family planning providers 
in 2011, the number of clients, 87 percent of whom were low income (at 
or below 200 percent of the Federal Poverty Level), declined from 
38,461 in 2011 to 24,047 in 2015, a decrease of more than 37 percent. 
As with the declines in Texas, this is a far greater decrease than the 
national average of 20 percent.7 8
---------------------------------------------------------------------------

    \3\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine. 
doi:10.1016/j.amepre.2016.02.013
    \4\ Carter, M.W., Gavin, L., Zapata, L.B., Bornstein, M., 
Mautone-Smith, N., & Moskosky, S. B. (2016). Four aspects of the 
scope and quality of family planning services in US publicly funded 
health centers: Results from a survey of health center 
administrators. Contraception. doi:10.1016/
j.contraception.2016.04.009
    \5\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \6\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
    \7\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \8\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    In New Hampshire, in 2011, the New Hampshire Executive Council 
voted not to renew the state's contract with a specific provider that 
was contracted to provide Title X family planning services for more 
than half of the state. To restore services to clients in the unserved 
part of the state, HHS issued an emergency replacement grant, but there 
was significant disruption in the delivery of services, and for 
approximately three months, no Title X services were available to 
potential clients in a part of the state.
    Most recently, in 2016 Florida enacted a law that would have gone 
into effect on July 1, 2016, prohibiting the state from making Title X 
subawards to certain family planning providers.\9\ In one county alone, 
1,820 clients are served by the family planning provider that would 
have been excluded, and it is not clear how the needs of those clients 
would have been met.
---------------------------------------------------------------------------

    \9\ H.B. 1411, 2016 Leg., Reg. Sess. (Fla. 2016). The law was 
preliminarily enjoined on June 30, 2016. Planned Parenthood of 
Southwest and Central Florida v. Philip, et al. No. 4:16cv321-RH/
CAS, 2016 U.S. Lexis 86251 (N.D. Fla. June 30, 2016) (``the 
defunding provision does not survive the unconstitutional conditions 
doctrine.''). The law was permanently enjoined on August 18, 2016, 
in an unpublished order.
---------------------------------------------------------------------------

    None of these state restrictions are related to the subrecipients' 
ability to effectively deliver Title X services. The previously 
mentioned exclusions are based either on non-Title X health services 
offered or other activities the providers conduct with non-federal 
funds, or because they are a certain type of provider. The Title X 
program provides family planning services based on ``the number of 
patients to be served, the extent to which family planning services are 
needed locally, the relative need of the applicant, and its capacity to 
make rapid and effective use of [Title X Federal] assistance.'' PHSA 
sec. 1001(b). Allowing project recipients, including states and other 
entities, to impose restrictions on subrecipients that are unrelated to 
the ability of subrecipients to provide Title X services in an 
effective manner has been shown to have an adverse effect on access to 
Title X services and therefore the fundamental goals of the Title X 
program.

C. Litigation

    Litigation concerning these restrictions has led to inconsistency 
across states in how recipients may choose subrecipients. As the 
restrictions vary, so have the statutory and constitutional issues in 
the cases. For example, in Planned Parenthood of Kansas & Mid-Missouri 
v. Moser, 747 F.3d 814, 824-25 (10th Cir. 2014), the U.S. Court of 
Appeals for the Tenth Circuit preliminarily upheld a state law that did 
not explicitly exclude a particular provider, but directed all Title X 
funding to be allocated to hospitals and community health centers. In 
finding that Title X did not provide a private cause of action for the 
plaintiffs, the Court reasoned: ``HHS has deep experience and expertise 
in administering Title X, and the great breadth of the statutory 
language suggests a congressional intent to leave the details to the 
agency. . . . Absent private suits, HHS can maintain uniformity in 
administration with centralized control. . . . Of course, 
administrative actions taken by HHS will often be reviewable under the 
Administrative Procedure Act, but only after the federal agency has 
examined the matter and had the opportunity to explain its analysis to 
a court that must show substantial deference.'' Thus, while finding 
deference would be afforded any agency determination of Title X 
requirements, the court did not reach the merits of the plaintiff's 
Supremacy Clause claims.
    At least two other U.S. Courts of Appeal have specifically held 
that Title X prohibits state laws that have restrictive subrecipient 
eligibility criteria. See Planned Parenthood of Houston & Se. Tex. v. 
Sanchez, 403 F.3d 324, 337 (5th Cir. 2005) (``[A] state eligibility 
standard that altogether excludes entities that might otherwise be 
eligible for federal funds is invalid under the Supremacy Clause.''); 
Planned Parenthood Fed'n of Am. v. Heckler, 712 F.2d 650, 663 (D.C. 
Cir. 1983) (``Although Congress is free to permit the states to 
establish eligibility requirements for recipients of Title X funds, 
Congress has not delegated that power to the states. Title X does not 
provide, or suggest, that states are permitted to determine eligibility 
criteria for participants in Title X programs.'' (internal quotation 
marks and citation omitted)); see also Planned Parenthood of Cent. N. 
Carolina v. Cansler, 877 F. Supp. 2d 310, 331-32 (M.D.N.C. 2012) 
(``Therefore, the Court concludes once again that the fact that 
Plaintiff may, at some point in the future, be able to apply directly 
for Title X funding does not mean that the state may now or in the 
future impose additional eligibility criteria or exclusions with 
respect to the Title X funding administered by the state.''); Planned 
Parenthood of Billings, Inc. v. State of Mont., 648 F. Supp. 47, 50 (D. 
Mont. 1986) (``Based on the foregoing, the Court concludes the co-
location proviso contained in the Montana General Appropriations Act of 
1985 adds an impermissible condition of eligibility for federal funding 
under the Public Health Service Act, in violation of the Supremacy 
clause.'').
    These and other appellate courts have also considered First 
Amendment issues in adjudicating state restrictions, though not all 
cases have involved Title X funds. Some courts have concluded certain 
state restrictions do not violate the Constitution. See, e.g., Planned 
Parenthood of Indiana, Inc. v. Comm'r of Indiana State Dep't of Health, 
699 F. 3d 962, 988 (7th Cir. 2012); see also Planned Parenthood Ass'n 
of Hidalgo Cty. Texas, Inc. v. Suehs, 692 F.3d 343, 350 (5th Cir. 
2012). Other courts have found the restrictions violate the 
Constitution by conditioning funding on First Amendment rights. See 
Planned

[[Page 61642]]

Parenthood Association of Utah v. Herbert, No. 2:15-CV-00693-CW, 2016 
U.S. App. LEXIS 12788, *36-38, (10th Cir. July 12, 2016)); Planned 
Parenthood of Southwest and Central Florida v. Philip et al., No. 
4:16cv321-RH/CAS, 2016 U.S. Dist. LEXIS 86251, *15-16 (N.D. Fl. June 
30, 2016); Planned Parenthood of Greater Ohio v. Hodges, No 1:116cv539, 
2016 U.S. Dist. Lexis 106985, *22 (S.D. Oh. August 12, 2016).

II. Proposed Rule

    The Department is proposing to amend the regulations at 42 CFR 59.3 
to require that project recipients that do not provide services 
directly may not prohibit subrecipients from participating on bases 
unrelated to their ability to provide Title X services effectively. The 
proposed rule will maintain uniformity in administration, ensure 
consistency of subrecipient participation across grant awards, improve 
the provision of services to populations in appropriate geographic 
areas, and guarantee Title X resources are allocated on the basis of 
fulfilling Title X family planning goals. The deleterious effects 
already caused by restrictions in several states as outlined above 
justify a rule in order to fulfill the purpose of Title X. The proposed 
rule helps fulfill the declared purpose of providing a broad range of 
family planning methods and services to populations most in need. 
Nothing in the statute supports giving discretion to project recipients 
to make eligibility restrictions that may adversely affect 
accessibility of Title X services.
    The proposed rule will further Title X's purpose by protecting 
access of intended beneficiaries to Title X service providers that 
offer a broad range of acceptable and effective family planning methods 
and services. Title X regulations at 42 CFR 59.7 lay out the criteria 
for how the Department decides which family planning projects to fund 
and in what amount, based on the Department's judgment as to which 
projects best promote the purposes of the statute. Among these criteria 
are: The number of patients to be served (in particular, low-income 
patients), as well as the adequacy of the applicant's facilities and 
staff.
    Data show that specific provider types with a reproductive health 
focus provide a broader range of contraceptive methods on-site, and are 
more likely to have protocols that assist clients with initiating and 
continuing to use methods without barriers.\10\ In addition, these 
providers have been shown to serve disproportionately more clients in 
need of publicly funded family planning services than do public health 
departments and federally qualified health centers (FQHCs). One 
reproductive-focused provider constitutes ten percent of all publicly 
supported family planning centers, yet serves more than one-third of 
the clients who obtain publicly supported contraceptive services. In 
comparison, one-third of all publicly funded clinics are administered 
by public health departments, and they serve only about one-third of 
clients that receive publicly-funded family planning services. On 
average, an individual FQHC serves 330 contraceptive clients per year 
and a health department serves 750, as compared to specific family 
planning providers that on average serve 3,000 contraceptive clients 
per year.\11\ To exclude providers that serve large numbers of clients 
in need of publicly funded services limits access for patients who need 
these services. Furthermore, in 2011, 71 percent of family planning 
organizations in Texas widely offered long-acting reversible 
contraception; in 2012-2013 following enactment of legislation in Texas 
that reduced funding and restricted provider participation in the 
state's family planning program, only 46 percent of family planning 
agencies did so.\12\
---------------------------------------------------------------------------

    \10\ Frost JJ et al., Variation in Service Delivery Practices 
Among Clinics Providing Publicly Funded Family Planning Services in 
2010, New York: Guttmacher Institute, 2012, <www.guttmacher.org/pubs/clinic-survey-2010.pdf>.
    \11\ Frost JJ, Zolna MR and Frohwirth L, Contraceptive Needs and 
Services, 2010, New York: Guttmacher Institute, 2013, <http://www.guttmacher.org/pubs/win/contraceptive-needs-2010.pdf>.
    \12\ White, K., Hopkins, K., Aiken, A., Stevenson, A., Lopez, 
C.H., Grossman, D., & Potter, J. (2013). The impact of reproductive 
health legislation on family planning clinic services in Texas. 
Contraception, 88(3), 445. doi:10.1016/j.contraception.2013.05.059
---------------------------------------------------------------------------

    In April 2014, CDC and the Office of Population Affairs released 
clinical recommendations, ``Providing Quality Family Planning Services: 
Recommendations of CDC and the U.S. Office of Population Affairs,'' 
\13\ (QFP) which identify core components of quality family planning 
services. Preconception care (PCC) was identified as one of the most 
important services to be provided as part of high quality family 
planning. As explained in QFP, preconception care services ``promote 
the health of women of reproductive age before conception, and help to 
reduce pregnancy-related adverse outcomes, such as low birth weight, 
premature birth, and infant mortality.'' A nationally representative 
study was performed prior to release of these recommendations to assess 
the prevalence of PCC services being delivered. Study results were 
tabulated according to the type of publicly funded site where the 
services were provided (Community Health Center, Health Department, 
Planned Parenthood, Outpatient Hospitals, and other clinics). Study 
results indicated that all provider types lagged behind the focused 
reproductive health providers in providing these PCC services, an 
indication of higher quality services.\14\
---------------------------------------------------------------------------

    \13\ Gavin, L., & Pazol, K. (2016). Update: Providing Quality 
Family Planning Services--Recommendations from CDC and the U.S. 
Office of Population Affairs, 2015. MMWR. Morbidity and Mortality 
Weekly Report MMWR Morb. Mortal. Wkly. Rep., 65(9), 231-234. 
doi:10.15585/mmwr.mm6509a3.
    \14\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine. 
doi:10.1016/j.amepre.2016.02.013.
---------------------------------------------------------------------------

    Another study, using nationally representative survey data, 
examined four aspects of the scope and quality of family planning 
service delivery before release of the QFP: The scope of family 
planning services provided, contraceptive methods provided onsite, 
written contraceptive counseling protocols, and youth-friendly 
services. In assessing the scope of family planning services provided, 
providers were asked about the provision of the following services in 
the past three months: Pregnancy diagnosis and counseling, 
contraceptive services, basic infertility services, STD screening, and 
preconception health care. To assess contraceptive methods provided 
onsite, questions were asked regarding the provision of a range of 
reversible methods on site, as well as the presence of contraceptive 
counseling protocols. Again, as described in the previous study, 
results were tabulated according to the type of publicly funded site 
where services were provided. Across all four aspects, the focused 
reproductive health providers provided services that were broader in 
scope and of higher quality across all four aspects of family planning 
service delivery.\15\
---------------------------------------------------------------------------

    \15\ Carter, M.W., Gavin, L., Zapata, L.B., Bornstein, M., 
Mautone-Smith, N., & Moskosky, S.B. (2016). Four aspects of the 
scope and quality of family planning services in US publicly funded 
health centers: Results from a survey of health center 
administrators. Contraception. doi:10.1016/
j.contraception.2016.04.009.
---------------------------------------------------------------------------

    Data show that restricting specific providers of Title X services 
has harmful effects on access to family planning services and is linked 
with increased pregnancy rates that are not in line with population-
wide trends. In addition, studies have shown that state actions to 
exclude specific family

[[Page 61643]]

planning providers from publicly funded programs has contributed to a 
host of barriers to care and poor health outcomes, including reduced 
use of highly effective methods of contraception and corresponding 
increases in rates of childbirth among populations that rely on 
Federally supported care; \16\ decreased utilization rates of other 
preventive services, including cancer screenings, particularly for 
women with low educational attainment; \17\ and an increase in reported 
barriers to reproductive health care services, particularly for young, 
low-income, Spanish-speaking, and immigrant women.\18\ Specifically, in 
Texas, when certain Title X providers were barred from participation in 
the program, in counties where those providers provided services, 
uptake of the most effective forms of contraception decreased by up to 
35.5 percent, and the rate of childbirth covered by Medicaid increased 
by 1.9 percentage points, while pregnancy rates decreased in the rest 
of the state. Specifically, the study assessed rates of contraceptive 
method provision, method continuation, and childbirth covered by 
Medicaid between 2011 and 2014, corresponding to two years before and 
two years after the providers' exclusion.\19\
---------------------------------------------------------------------------

    \16\ Frost, J.J., Frowirth, L., & Zolna, M.R. Contraceptive 
Needs and Services, 2013 Update, Guttmacher Institute, July 2015.
    \17\ Lu, Y. and Slusky, D.J.G., ``The Impact of Family Planning 
Cuts on Preventive Care,'' Princeton Center for Health and Wellbeing 
Working Paper, (May 20, 2014), available at http://ssrn.com/abstract=2442148.
    \18\ Texas Policy Evaluation Project, Research Brief: Barriers 
to Family Planning Access in Texas (May 2015), available at http://www.utexas.edu/cola/orgs/txpep/_files/pdf/TxPEP-ResearchBrief_Barriers-to-Family-Planning-Access-in-Texas_May2015.pdf.
    \19\ Effect of Removal of Planned Parenthood from the Texas 
Women's Health Program. (2016). New England Journal of Medicine N 
Engl J Med, 374(13), 1298-1298. doi:10.1056/nejmx160006.
---------------------------------------------------------------------------

    Denying participation by family planning providers that can provide 
effective services has also resulted in populations in certain 
geographic areas being left without a Title X provider for an extended 
period of time, such as in New Hampshire in 2011 (detailed previously). 
In some cases, excluded providers do not have the administrative 
capacity to directly apply for and manage a Title X grant, as was the 
case in Kansas when specific family planning providers were excluded by 
the state from participation in the Title X Program. The data show that 
restrictions hurt the priority population for publicly funded family 
planning services, and that providers that are focused specifically on 
family planning service provision generally provide better access and 
higher quality family planning services, which is the purpose of the 
program.\20\
---------------------------------------------------------------------------

    \20\ Carter, M.W., Gavin, L., Zapata, L.B., Bornstein, M., 
Mautone-Smith, N., & Moskosky, S.B. (2016). Four aspects of the 
scope and quality of family planning services in US publicly funded 
health centers: Results from a survey of health center 
administrators. Contraception. doi:10.1016/
j.contraception.2016.04.009.
---------------------------------------------------------------------------

    Under the proposed rule, all project recipients that do not provide 
the services directly must only choose subrecipients on the basis of 
their ability to effectively deliver Title X required services.\21\ 
Non-profit project recipients that do not provide all services directly 
must also allow any qualified providers that can effectively provide 
services in a given area to apply to provide those services, and they 
may not continue or begin contracting (or subawarding) with providers 
simply because they are affiliated in some way that is unrelated to 
programmatic objectives of Title X. Project recipients that directly 
provide services will not be required to start awarding to 
subrecipients. For instance, some recipients provide services directly, 
meaning they directly operate the service sites, the business 
operations are controlled by the recipient, and the recipient directly 
controls the clinics (e.g., clinic hours, staffing, etc.) and the 
delivery of services (e.g., consistent clinical protocols throughout 
the system). This is the case for some public recipients, such as state 
health departments, as well as non-profits. For example, some state 
departments of health provide all services directly--the local and 
county health departments are considered part of the state, and the 
staff in the health departments are state health department staff. In 
comparison, some health departments make subawards to county health 
departments and/or non-profit agencies within their services network 
for the delivery of family planning services.
---------------------------------------------------------------------------

    \21\ Grant recipients would also continue to be subject to 
uniform grant rule requirements, 45 CFR 75.352.
---------------------------------------------------------------------------

    Under the proposed rule, a tiering structure--described above--
would not be allowable unless it could be shown that the top tier 
provider (e.g., community health center or other provider type) more 
effectively delivered Title X services than a lower tier provider. In 
addition, a preference for particular subspecialty providers would have 
to be justified by showing that they more effectively deliver Title X 
services. Furthermore, actions that favor `comprehensive providers' 
would require justification that those providers are at least as 
effective as other subrecipients applying for funds. The proposed rule 
does not limit all types of providers from competing for subrecipient 
funds, but delimits the criteria by which a project recipient can 
allocate those funds based on the objectives in Title X.
    The Department seeks comments on several issues. The Department is 
cognizant of administrative burdens on both itself and project 
recipients that could result from the proposed changes, as discussed 
further below in the Regulatory Impact Analysis, and seeks comment on 
how to minimize them. Additionally, the Department seeks input on 
whether other portions of the Title X rules might need to be amended to 
conform to this rule regarding the selection of subrecipients. We 
invite comments on the utility of requiring compliance reports or other 
records demonstrating a project recipient's criteria for selecting 
providers, or whether a complaint-driven process would promote the same 
goals more efficiently. Project recipients found out of compliance 
would have all the same rights to appeal adverse determinations under 
the proposed rule as they do any other agency decision. For example, 
after voluntary compliance avenues have failed and the Department 
determines to terminate the grant, grantees could appeal wrongful 
termination claims through the Departmental Appeals Board process. 42 
CFR 59.10.
    While the Department is also aware of the scope of the proposed 
rule, it does not believe it will interfere with other generally 
applicable state laws. If, for example, a state law requires certain 
wage rates, or addresses family leave or non-discrimination, this rule 
will not interfere with that law, since all subrecipients will be 
similarly situated as to that state law. Only those laws which directly 
distinguish among Title X providers for reasons unrelated to their 
ability to deliver services would be implicated, and then, only if the 
state chooses to continue to apply for funding. The Department seeks 
comment on the regulatory language and ways it may be seen as 
interacting with other state law provisions.
    While specifically seeking comment on the issues outlined above, 
the Department invites comments on any other issues raised by the 
proposed regulation.

III. Regulatory Impact Analysis

A. Introduction

    HHS has examined the impact of this proposed rule under Executive 
Order

[[Page 61644]]

12866 on Regulatory Planning and Review (September 30, 1993), Executive 
Order 13563 on Improving Regulation and Regulatory Review (January 18, 
2011), the Regulatory Flexibility Act of 1980 (Pub. L. 96-354, 
September 19, 1980), the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4, March 22, 1995), and Executive Order 13132 on Federalism (August 
4, 1999).
    Executive Order 12866 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). Executive Order 13563 is 
supplemental to and reaffirms the principles, structures, and 
definitions governing regulatory review as established in Executive 
Order 12866. HHS expects that this proposed rule will not have an 
annual effect on the economy of $100 million or more in at least 1 
year. Therefore, this rule will not be an economically significant 
regulatory action as defined by Executive Order 12866.
    The Regulatory Flexibility Act (RFA) requires agencies that issue a 
regulation to analyze options for regulatory relief of small businesses 
if a rule has a significant impact on a substantial number of small 
entities. The RFA generally defines a ``small entity'' as (1) a 
proprietary firm meeting the size standards of the Small Business 
Administration; (2) a nonprofit organization that is not dominant in 
its field; or (3) a small government jurisdiction with a population of 
less than 50,000 (States and individuals are not included in the 
definition of ``small entity''). For similar rules, HHS considers a 
rule to have a significant economic impact on a substantial number of 
small entities if at least 5 percent of small entities experience an 
impact of more than 3 percent of revenue. HHS anticipates that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $146 million, using the most current (2015) implicit 
price deflator for the gross domestic product. This proposed rule would 
not trigger the Unfunded Mandate Reform Act because it will not result 
in any expenditure by states or other government entities.

B. Summary of the Proposed Rule

    Since 2011, 13 states have taken actions to restrict participation 
by certain types of providers as subrecipients in the Title X program 
based on factors unrelated to the providers' ability to provide the 
services required under Title X effectively. In at least several 
instances, this has led to disruption of services or reduction of 
services where a public entity, such as a state health department, 
holds a Title X grant and makes subawards to subrecipients for the 
provision of services. In response to these actions, this proposed rule 
requires that any Title X recipient subawarding funds for the provision 
of Title X services not prohibit a potential subrecipient from 
participating for reasons unrelated to its ability to provide services 
effectively.

C. Need for the Proposed Rule

    Certain states have policies in place which limit access to high 
quality family planning services by restricting specific types of 
providers from participating in the Title X program. These policies, 
and varying court decisions on their legality, has led to uncertainty 
among grantees, inconsistency in program administration, and diminished 
access to services for Title X target populations. These restrictive 
state policies exclude certain providers for reasons unrelated to their 
ability to provide Title X services effectively. As a result of these 
state policies, providers previously determined by Title X grantees to 
be effective providers of family planning services have been excluded 
from participation in the Title X program. In turn, the exclusion of 
these high quality providers is associated with a reduction in the 
quality of family planning services, the number of Title X service 
sites, reduced geographic availability of Title X services, and fewer 
Title X clients served.22 23 This proposed regulation seeks 
to ensure that state policies regarding Title X do not direct funding 
to subrecipients for reasons other than their ability to meet the 
objectives of the Title X program.
---------------------------------------------------------------------------

    \22\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \23\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2015, 
August). Family Planning Annual Report: 2014 national summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Reducing access to Title X services has many adverse effects. Title 
X services have a dramatic effect on the number of unintended 
pregnancies and births in the United States. For example, services 
provided by Title X-funded sites helped prevent an estimated 1 million 
unintended pregnancies in 2010 which would have resulted in an 
estimated 501,000 unplanned births.\24\ The Title X program also helps 
prevent the spread of STDs by providing screening and treatment.\25\ 
The program helps reduce maternal morbidity and mortality, as well as 
low birth weight, premature birth, and infant 
mortality.26 27 Title X as it exists today is also very cost 
effective: Every grant dollar spent on family planning saves an average 
of $7.09 in Medicaid-related costs.\28\
---------------------------------------------------------------------------

    \24\ Frost JJ, Zolna MR and Frohwirth L, Contraceptive Needs and 
Services, 2010, New York: Guttmacher Institute, 2013, <http://www.guttmacher.org/pubs/win/contraceptive-needs-2010.pdf>.
    \25\ Fowler, CI, Gable, J, Wang, J, and McClure, E. (November 
2013). Family Planning Annual Report: 2012 National Summary. 
Research Triangle Park, NC: RTI International.
    \26\ Kavanaugh ML and Anderson RM, Contraception and Beyond: The 
Health Benefits of Services Provided at Family Planning Centers, New 
York: Guttmacher Institute, 2013 <https://www.guttmacher.org/sites/default/files/report_pdf/health-benefits.pdf>.
    \27\ Preconception Health and Reproductive Life Plan. (n.d.). 
Retrieved May 18, 2016, from http://www.hhs.gov/opa/title-x-family-planning/initiatives-and-resources/preconception-reproductive-life-plan/.
    \28\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749. doi:10.1111/1468-0009.12080.
---------------------------------------------------------------------------

    In addition to reducing access to the Title X program, these 
policies may reduce the quality of Title X services, as described 
previously. Research has shown that providers with a reproductive 
health focus provide services that more closely align with the 
statutory and regulatory goals and purposes of the Title X Program. In 
particular, these entities provide a broader range of contraceptive 
methods on-site, are more likely to have written protocols that assist 
clients with initiating and continuing contraceptive use without 
barriers, disproportionately serve more clients in need of family 
planning services, and provide higher quality services as stipulated in 
national recommendations, ``Providing Quality Family Planning Services: 
Recommendations of CDC and the U.S. Office of Population Affairs.''
    Policies that eliminate specific reproductive health providers for

[[Page 61645]]

reasons unrelated to their ability to provide the quality family 
planning services in an effective manner may shift funding from 
relatively high quality family planning service providers to providers 
of lower quality. This, in turn, can reduce access to high quality 
family planning services for the populations that need these services 
the most. This regulation takes the simplest approach to reverse the 
adverse effects of these policies that exclude certain reproductive 
health care providers for reasons unrelated to their ability to provide 
services effectively.

D. Analysis of Benefits and Costs

1. Benefits to Potential Title X Clients and Reduced Federal 
Expenditures
    This proposed rule directly prohibits Title X recipients that 
subaward funds for the provision of Title X services from excluding an 
entity from participating for reasons unrelated to its ability to 
provide services effectively. Following the implementation of policies 
this regulation proposes to reverse, states shifted funding away from 
family planning service providers previously determined to be most 
effective. We believe that this proposed rule is likely to undo these 
effects, resulting in a shift toward service providers previously 
determined to be the most effective. To the extent that a state may 
come into compliance with this regulation by relinquishing its Title X 
grant or not applying for a Title X grant, other organizations could 
compete for Title X funding to deliver services in areas where a state 
entity previously subawarded funds for the delivery of Title X 
services. In turn, we expect that this will reverse the associated 
reduction in access to Title X services and deterioration of outcomes 
for affected populations.
    Research has shown that every grant dollar spent on family planning 
saves an average of $7.09 in Medicaid-related expenditures.\29\ In 
addition to reducing spending, these services improve health and 
quality of life for affected individuals, suggesting the return on 
investment to these family planning services is even higher. For 
example, these services reduce the incidence of invasive cervical 
cancer and sexually transmitted infections in addition to improving 
birth outcomes through reductions in preterm and low birth weight 
births.\30\ Data show that specific provider types with a reproductive 
health focus have been shown to serve disproportionately more clients 
in need of publicly funded family planning services than do public 
health departments and federally qualified health centers (FQHCs).\31\ 
Therefore, eliminating discrimination against certain providers is 
expected to result in an increased number of patients served and 
services delivered by the Title X program. We expect that the return on 
investment among higher quality, more efficient providers is even 
higher than the average return on investment discussed above, and that 
shifting funding away from these providers has reduced the return on 
investment to family planning services. We estimate that the changes 
proposed here will reduce unintended pregnancies, increase savings to 
Medicaid, and improve the health and wellbeing of many individuals 
across the country.
---------------------------------------------------------------------------

    \29\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749. doi:10.1111/1468-0009.12080.
    \30\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749. doi:10.1111/1468-0009.12080.
    \31\ Frost JJ, Zolna MR and Frohwirth L, Contraceptive Needs and 
Services, 2010, New York: Guttmacher Institute, 2013, <http://www.guttmacher.org/pubs/win/contraceptive-needs-2010.pdf>.
---------------------------------------------------------------------------

2. Costs to the Federal Government Associated With Disseminating 
Information About the Rule and Evaluating Grant Applications for 
Conformance With Policy
    Following publication of a final rule that builds upon this 
proposal and public comments, OPA will work to educate Title X program 
recipients and applicants about the requirement to not prohibit a 
potential subrecipient from participating for reasons unrelated to its 
ability to provide services effectively. OPA will send a letter 
summarizing the change to current recipients of Title X funds and post 
the letter to its Web site. OPA will also add conforming language to 
its related forthcoming funding opportunity announcements (FOAs). OPA 
has existing channels for disseminating information to stakeholders. 
Therefore, based on previous experience, the Department estimates that 
preparing and disseminating these materials will require approximately 
one to three percent of a full-time equivalent OPA employee at the GS-
12 step 5 level. Based on federal wage schedule for 2016 in the 
Washington, DC area, GS-12 step 5 level corresponds to an annual salary 
of $87,821. We double this salary cost to account for overhead and 
benefits. As a result, we estimate a cost of approximately $1,800--
$5,300 to disseminate information following publication of the final 
rule.
3. Grant Recipient Costs To Evaluate and Implement the Policy Change
    We expect that, if this proposed rule is finalized, stakeholders 
including grant applicants and recipients potentially affected by this 
proposed policy change will process the information and decide how to 
respond. This change will not affect the majority of current 
recipients, and as a result the majority of current recipients will 
spend very little time reviewing these changes before deciding that no 
change in behavior is required. For the states that currently hold 
Title X grants and have laws or policies restricting Title X 
subrecipients, the final rule would implicate state law or policy. 
State agencies that currently restrict subawards would need to 
carefully revise their current practices in order to comply with these 
changes.
    We estimate that current and potential recipients will spend an 
average of one to two hours processing the information and deciding 
what action to take. We note that individual responses are likely to 
vary, as many parties unaffected by these changes will spend a 
negligible amount of time in response to these changes. According to 
the U.S. Bureau of Labor Statistics,\1\ the average hourly wage for a 
chief executive in state government is $54.26, which we believe is a 
good proxy for the individuals who will spend time on these activities. 
After adjusting upward by 100 percent to account for overhead and 
benefits, we estimate that the per-hour cost of a state government 
executive's time is $108.52. Thus, the average cost per current or 
potential grant recipient to process this information and decide upon a 
course of action is estimated to be $108.52-$217.04. OPA will 
disseminate information to an estimated 89 Title X grant recipients. As 
a result, we estimate that dissemination will result in a total cost of 
approximately $9,700-$19,300.
4. Summary of Impacts
    Public funding for family planning services is likely to shift to 
providers that see a higher number of patients and provide higher 
quality services. Increases in the quantity and quality of Title X 
service utilization will lead to fewer unintended pregnancies, improved 
health outcomes, reduced Medicaid costs, and increased quality of life 
for many individuals and families. The proposed rule's impacts will 
take place over a long period of time, as it will allow for the 
continued flow of

[[Page 61646]]

funding to provide family planning services for those most in need, and 
it will prevent future attempts to provide Title X funding to 
subrecipients for reasons other than their ability to best meet the 
objectives of the Title X program.
    We estimate costs of $11,400-$24,600 in the first year following 
publication of the final rule, and suggest that this rule is beneficial 
to society in increasing access to and quality of care. We note that 
the estimates provided here are uncertain.

E. Analysis of Regulatory Alternatives

    We carefully considered the option of not pursuing regulatory 
action. However, as discussed previously, not pursuing regulatory 
action means allowing the continued provision of Title X funds to 
subrecipients for reasons other than their ability to provide high 
quality family planning services. This, in turn, means accepting 
reductions in access to and quality of services to populations who rely 
on Title X. As a result, we chose to pursue regulatory action.

F. Executive Order 13132 Federalism Review

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a final rule that imposes 
substantial direct requirement costs on state and local governments, 
preempts state law, or otherwise has federalism implications. The 
Department particularly invites comments from states and local 
governments, and will consult with them as needed in promulgating the 
final rule. While we do not believe this rule will cause substantial 
economic impact on the states, it will implicate some state laws if 
states wish to apply for federal Title X funds. Therefore, the 
following federalism impact statement is provided.
    E.O. 13132 establishes the need for Federal agency deference and 
restraint in taking action that would curtail the policy-making 
discretion of the states or otherwise have a substantial impact on the 
expenditure of state funds. The proposed rule simply sets the 
conditions to be eligible for federal funding for both public and 
private entities. The proposed rule will not have a significant impact 
on state funds as, by law, project grants must be funded with at least 
90 percent federal funds. 42 U.S.C. 300a-4(a). Furthermore, states that 
are the project recipients of Title X grants are not required to issue 
subawards at all. However, those that choose to do so would be required 
to do so in a manner that considers only the ability of the 
subrecipients to meet the statutory objectives.
    States remain entirely free to set their policies and funding 
preferences as to family planning services paid for with state funds. 
While this proposed rule will eliminate the ability of states to 
restrict subawards with Title X funds for reasons unrelated to the 
statutory objectives of Title X, they remain free to set their own 
preferences in providing state-funded family planning services. The 
rule does not impose any additional requirements on states in their 
performance under the Title X grant, other than to avoid discrimination 
in making subawards, should they choose to make such subawards. And 
states remain free to apply for federal program funds, subject to the 
eligibility conditions. For the reasons outlined above, the proposed 
rule is designed to achieve the objectives of Title X related to 
providing effective family planning services to program beneficiaries 
with the minimal intrusion on the ability of project recipients to 
select their subrecipients.

G. Paperwork Reduction Act of 1995

    The amendments proposed in this rule will not impose any additional 
data collection requirements beyond those already imposed under the 
current information collection requirements which have been approved by 
the Office of Management and Budget.

List of Subjects in 42 CFR Part 59

    Birth control, Family planning, Grant programs.

    Dated: August 31, 2016.
Sylvia M. Burwell,
Secretary.

    Therefore, under the authority of section 1006 of the Public Health 
Service Act as amended, and for the reasons stated in the preamble, the 
Department proposes to amend 42 CFR part 59 as follows:

PART 59--GRANTS FOR FAMILY PLANNING SERVICES

Subpart A--Project Grants for Family Planning Services

0
1. The authority citation for subpart A continues to read as follows:

    Authority: 42 U.S.C. 300a-4.

0
2. Section 59.3 is revised to read as follows:


Sec.  59.3  Who is eligible to apply for a family planning services 
grant or to participate as a subrecipient as part of a family planning 
project?

    (a) Any public or nonprofit private entity in a State may apply for 
a grant under this subpart.
    (b) No recipient making subawards for the provision of services as 
part of its Title X project may prohibit an entity from participating 
for reasons unrelated to its ability to provide services effectively.

[FR Doc. 2016-21359 Filed 9-2-16; 4:15 pm]
 BILLING CODE 5140-34-P