[Federal Register Volume 81, Number 189 (Thursday, September 29, 2016)]
[Rules and Regulations]
[Pages 66815-66821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23360]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP57


Repayment by VA of Educational Loans for Certain Psychiatrists

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is adding to its 
medical regulations a program for the repayment of educational loans 
for certain psychiatrists who agree to a period of obligated service 
with VA. This program is intended to increase the pool of qualified VA 
psychiatrists and increase veterans' access to mental health care.

DATES: Effective Date: This rule is effective on September 29, 2016, 
except for Sec.  17.644 which contains information collection 
requirements that have not been approved by OMB. VA will publish a 
document in the Federal Register announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Crystal Cruz, Deputy Director, 
Healthcare Talent Management (10A2A4), Veterans Health Administration, 
Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 
20420; (405) 552-4346. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Public Law 114-2, the Clay Hunt Suicide 
Prevention for American Veterans Act (Clay Hunt SAV Act), was enacted 
on February 12, 2015. Section 4 of this Act establishes a pilot program 
for the repayment of educational loans for certain psychiatrists 
seeking employment in VA, which will be referred to as the Program for 
the Repayment of Educational Loans (PREL) in this rulemaking. VA is in 
need of qualified psychiatrists to treat veterans who suffer from 
mental health disorders. This rulemaking is intended to increase the 
pool of qualified mental health specialists and, in turn, increase 
veterans' access to needed mental health care. The Clay Hunt SAV Act 
authorizes VA to repay educational loans to physicians who pursued a 
program of study leading to a certification in psychiatry. In order to 
assure that applicants are committed to VA employment, the statute 
provides that an individual who is participating in any other program 
of the Federal Government that repays educational loans is not eligible 
for the PREL. The Clay Hunt SAV Act also states that an individual who 
breaches his or her period of obligated service is liable to the United 
States, in lieu of such obligated service, for the amount that has been 
paid or is payable to or on behalf of the individual, reduced by the 
proportion of the number of days of the total obligation that the 
individual has already served. Under the Clay Hunt SAV Act, the PREL 
may continue for three years after the effective date of this 
rulemaking.
    The purpose of section 4 of the Clay Hunt SAV Act is substantively 
similar to the purpose of the statutory authority for the Educational 
Debt Reduction Program (EDRP), which is codified at 38 U.S.C. 7681, and 
section 4 of the Clay Hunt SAV Act appears as a Note to section 7681. 
Both programs are designed to assist VA in the recruitment and 
retention of qualified health care professionals and the repayment of 
educational loans to such individuals. VA did not promulgate 
regulations for the EDRP because there is no statutory requirement to 
establish regulations for an employee retention program. 5 U.S.C. 
553(a)(2). However, subsection (h) of section 4 of the Clay Hunt SAV 
Act specifically requires VA to prescribe regulations to carry out the 
program. We have designed the regulations for the PREL in the Clay Hunt 
SAV Act to be as similar as possible to the VA policies for the EDRP 
except in specific identified circumstances unique to the PREL as 
stated in this rulemaking. Similarities between these two programs will 
facilitate their administration by VA.
    We are adding a new center heading immediately after Sec.  17.636 
to read, ``Program for Repayment of Educational Loans for Certain VA 
Psychiatrists,'' and to add new Sec. Sec.  17.640 through 17.647.

17.640 Purpose

    New Sec.  17.640 is the purpose section for the PREL. This section 
states that Sec. Sec.  17.640 through 17.647 establish the requirements 
for the PREL ``obtained by physician residents pursuing a certification 
in psychiatry.''

17.641 Definitions

    New Sec.  17.641 is the definitions section applicable to 
Sec. Sec.  17.640 through 17.647. The definitions are in alphabetical 
order in accordance with current writing convention.
    We are defining the term ``acceptance of conditions'' to mean ``a 
signed document between VA and a participant of the PREL, in which the 
participant must agree to a period of obligated service, to maintain an 
acceptable level of performance determined by supervisory review in the 
position to which VA appoints the participant, terms and amount of 
payment, and to relocate, if required, to a location determined by VA 
at the participant's expense in exchange for educational loan 
repayments under the PREL.'' The participant in the PREL is required to 
agree to all of the terms and conditions in the acceptance of 
conditions. The acceptance of conditions is consistent with the 
acceptance of conditions for the EDRP, with the added requirement of a 
mobility agreement. This additional requirement alerts the participant 
to the possibility of relocating to a geographical area that is not in 
the vicinity of the participant's residence and that such relocation is 
at the participant's expense. The requirement for relocation allows VA 
to better address employment needs for

[[Page 66816]]

psychiatrists within its VA medical facilities. We will, therefore, 
provide a list of available VA medical facilities that have 
availability for psychiatrists in the acceptance of conditions, at the 
time the acceptance of conditions is signed. The applicant will choose 
a preferred location, in rank ordering, for the completion of his or 
her obligated period of service from the locations listed on the 
acceptance of conditions. However, VA will ultimately make the final 
determination as to where the applicant will perform his or her period 
of obligated service. We will also state that a ``participant of the 
PREL must agree that he or she is willing to accept the location and 
position to which VA appoints the participant.''
    The Clay Hunt SAV Act requires VA to establish in regulation 
standards for qualified loans. We are defining ``educational loan'' to 
mean ``a loan, government or commercial, made for educational purposes 
by institutions which are subject to examination and supervision in 
their capacity as lending institutions by an agency of the United 
States or of the state in which the lender has its principal place of 
business.'' We are also stating ``[l]oans must be for the actual costs 
paid for tuition, and other reasonable educational expenses such as 
living expenses, fees, books, supplies, educational equipment and 
materials, and laboratory expenses.'' This definition will clarify that 
VA will only repay educational loans, not other types of loans that the 
participant incurred while the participant was completing his or her 
education. We are stating that loans must be obtained from a government 
entity, a private financial institution, a school, or any other 
authorized entity stated in this definition, as required by section 
4(a)(2) of the Clay Hunt SAV Act. For this reason, we are also listing 
the types of loans that would not qualify for the repayment of 
educational loans; for example, loans made by family or friends, home 
equity loans, or other non-educational loans. The definition of 
educational loan will help ensure that debts repaid under this program 
are truly unpaid educational debt from legitimate educational 
institutions; represent debt related specifically to the specialty for 
which VA is recruiting the participant; and minimize opportunities for 
fraud or misuse of repayment funds. The definition will be consistent 
with the definition of educational loans for the EDRP program, and is 
based on our experience administering that program.
    We are defining the term ``obligated service'' to mean the period 
described in Sec.  17.646. We are including this definition for 
convenience, but are setting forth the substantive requirements for 
obligated service in a separate section.
    We are stating that the PREL means the program for the repayment of 
educational loans for certain VA psychiatrists established in 
Sec. Sec.  17.640 through 17.647. This shorter term will be used 
throughout Sec. Sec.  17.640 through 17.647.

17.642 Eligibility

    New Sec.  17.642(a) will state the eligibility criteria for the 
PREL. The first criterion, Sec.  17.642(a)(1), is that the applicant be 
a U.S. citizen. We are stating that the applicant must be a U.S. 
citizen or permanent resident because the purpose of the program is to 
increase the supply of qualified psychiatrists. The obligated service 
requirement could be harder to meet in the case of non-U.S. citizens or 
permanent residents whose ability to remain in this country is 
contingent on factors beyond VA's control.
    The Clay Hunt SAV Act describes eligible individuals as either 
licensed or eligible for licensure to practice psychiatric medicine in 
VA or enrolled in the final year of residency program leading to a 
specialty qualification in psychiatric medicine that is approved by the 
Accreditation Council for Graduate Medical Education. Although the Clay 
Hunt SAV Act provides for two different categories of eligible 
individuals, for this pilot program, we are only considering those that 
are enrolled in the final year of residency program leading to a 
specialty qualification in psychiatric medicine to allow VA to draw 
from a new pipeline of applicants by securing their commitment to VA 
service while still in residency. Based on past VA recruitment 
initiatives, VA has encountered a high yield of qualified applicants 
among those individuals who are in their final year of residency. 
Nearly two-thirds of all U.S. medical students train in VA medical 
facilities. We have encountered a greater success rate for VA 
employment among these students. Under the EDRP, however, VA cannot 
recruit from the pool of individuals who are in their final year of 
residency because the EDRP is solely for individuals who are permanent 
VA employees. VA will use this new, limited authority, in the pilot to 
focus solely on applicants still in a residency program. This temporary 
exclusion for the pilot program is intended for discovery purposes and 
will be assessed as part of the reporting requirements to determine 
impact and expansion feasibility.
    Individuals who are licensed or eligible for licensure would be 
considered under the EDRP. Therefore, the second eligibility criteria, 
in Sec.  17.642(a)(2), is that the applicant be ``enrolled in the final 
year of a post-graduate physician residency program leading to either a 
specialty qualification in psychiatric medicine or a subspecialty 
qualification of psychiatry; the program must be accredited by the 
Accreditation Council for Graduate Medical Education or the American 
Osteopathic Association.'' Although the Clay Hunt SAV Act only includes 
programs accredited by the Accreditation Council for Graduate Medical 
Education, we are expanding the eligibility to include programs 
accredited by the American Osteopathic Association to increase the pool 
of qualified candidates. This expansion also makes the PREL consistent 
with program accreditation requirements for all other VA medical 
professionals.
    The applicant also has to meet other requirements at the time of 
employment. Specifically, the applicant must have completed all 
psychiatry residency training, received a completion certificate from 
the Program Director confirming successful completion of the residency 
program, and certify intention to apply for board certification in the 
specialty of psychiatry (through the American Board of Medical 
Specialties or the American Osteopathic Association) within two years 
of completion of the residency.
    VA's statute requires applicants be licensed or eligible for 
licensure to practice psychiatric medicine at the time of VA 
employment. Licensure criteria is listed in Sec.  17.642(a)(3) and 
consists of having ``at least one full, active, current, and 
unrestricted license that authorizes the licensee to practice in any 
State, Territories, and possessions of the United States, the District 
of Columbia, or the Commonwealth of Puerto Rico'' and documentation of 
``graduation from a school of medicine accredited by the Liaison 
Committee on Medical Education or the American Osteopathic Association; 
or, if an international medical graduate, verify that requirements for 
certification by the Educational Commission for Foreign Medical 
Graduates have been met.'' These criteria are consistent with the 
employment requirements for all VA medical professionals.
    New Sec.  17.642(b) stipulates that if the applicant is 
simultaneously participating in any other program of the Federal 
Government that repays educational loans, the individual is not 
eligible to participate in the PREL. This

[[Page 66817]]

prohibition on simultaneous eligibility is stated in the Clay Hunt SAV 
Act. See Public Law 114-2, sec. 4(b)(2).

17.643 Application for the PREL

    New Sec.  17.643 states what constitutes a complete application for 
the PREL. New Sec.  17.643(a) states that the complete application for 
the PREL consists of a completed application form, letters of 
reference, and personal statement. The letters of reference and 
personal statement requested from the applicant are consistent with the 
information requested from individuals who are applying for a medical 
position in VA.
    The types of letters of reference that an applicant for the PREL 
would need to submit as part of the complete application package are 
specified in Sec.  17.643(b). These letters of reference attest to the 
applicant's knowledge and expertise in the field of psychiatric 
medicine, and will assist VA in selecting the best qualified 
applicants.
    New Sec.  17.643(c) states what constitutes a personal statement. 
The personal statement provides VA with the applicant's employment 
history, training, accomplishments, clinical areas of interest, as well 
as the reasons why the applicant would like to be employed in VA. The 
personal statement will help VA assess the applicant's strengths, which 
will assist in job placement within VA. We also request attestation 
that the applicant is not participating in any other loan payment 
program. The Clay Hunt SAV Act specifically excludes individuals from 
participating in the program if they are participating in any other 
program of the Federal Government that repays educational loans. The 
applicant must submit a summary of his or her educational debt, 
including the total amount of the debt, when the debt was acquired, and 
the name of the lending agency that provided the loan. New Sec.  
17.643(c) states that the loan must be specific to education that was 
required, used, and qualified the applicant for appointment as a 
psychiatrist. VA understands that there is a high cost associated with 
attending medical school and this program will ease the financial 
burden of the applicants. Lastly, the personal statement must include a 
full curriculum vitae of the applicant. The information that is 
requested from the applicants as part of their personal statement is 
the same information that VA requests from applicants of the EDRP 
program.

17.644 Selection of Participants

    New Sec.  17.644 establishes the selection criteria for applicants 
to the PREL. VA has an increasing need for qualified physicians who are 
certified in the field of psychiatry. As such, VA wants to make certain 
that the applicants who are selected for the PREL are highly qualified 
in their field as well as demonstrate a long term commitment to 
employment in VA. The selection criteria in Sec.  17.644(a) is 
consistent with the selection criteria for physicians seeking 
employment in VA. VA will try to appoint participants of the PREL to 
the location desired by the participant and suited to the participant's 
personal goals; however, VA reserves the right to appoint a participant 
to a VA medical facility with the greatest need for additional staff 
psychiatrists. The selection criteria will also include meeting all of 
the eligibility criteria in Sec.  17.642, strong references from peers 
and faculty supervisors, and good to excellent standing in the 
residency program, as determined from the Program Director letter. The 
participant must not have any identifiable past issues that will 
adversely affect the participant's credentialing process. If the 
participant is unable to be credentialed by VA, the participant will 
fail to comply with terms and conditions of participation in the PREL. 
The documentation provided by the participant under Sec.  17.642 will 
alert VA of any past issues before the participant is selected and will 
enable VA to select a participant who would be better suited for VA's 
needs.
    The Clay Hunt SAV Act establishes a minimum number of individuals 
who VA would select for each year that VA carries out the PREL. New 
Sec.  17.644(b) includes this requirement by stating that VA will 
select not less than ten individuals to participate in the program for 
each year that VA carries out the program.
    New Sec.  17.644(c) states that ``VA will notify applicants that 
they have been selected in writing.'' Even though the participant may 
still be completing his or her residency requirement, we state that the 
applicant ``becomes a participant in the program once the participant 
submits and VA signs the acceptance of conditions.'' This will ensure 
the participant's commitment to the program.

17.645 Award Procedures

    The Clay Hunt SAV Act establishes a maximum annual amount that VA 
may pay to a participant of the PREL. Public Law 114-2, sec. 4(e)(2). 
VA may pay no more than $30,000 in educational loan repayment for each 
year of obligated service. This payment restriction is stated in Sec.  
17.645(a)(1). New Sec.  17.645(a)(2) further limits the amount paid to 
the participant by stating that ``[a]n educational loan repayment may 
not exceed the actual amount of principal and interest on an 
educational loan or loans.'' VA will add this restriction to alert the 
participant that once the loan has been repaid, VA will not issue 
further payments on this loan. VA reserves the right to issue payment 
in the manner that is most beneficial to VA. We are, therefore, stating 
in Sec.  17.645(b) that VA will issue payments to the applicant or to 
the ``lending institution, on behalf of the participant, for the 
principal and interest on approved loans.'' We are also stating that 
the payments will be issued on a monthly or annual basis for each 
applicable service period depending on the terms of the acceptance of 
conditions. In order to verify that the participant is properly 
allocating the funds awarded to him or her, VA will require that the 
participant provide documentation that shows the amounts that were paid 
or were credited to reduce the principal and interest on the 
participant's educational loans during an obligated service period. The 
PREL is an incentive for recruitment of individuals whose education 
leads to a degree of doctor of medicine or doctor of osteopathy with a 
certification in psychiatry. As such, we state that payments issued to 
the participant for the PREL are exempt from Federal taxation.

17.646 Obligated Service

    New Sec.  17.646 provides the requirements for the obligated 
service for the PREL. New Sec.  17.646(a) states that ``[a] 
participant's obligated service will begin on the date on which the 
participant begins full-time, permanent employment with VA in the field 
of psychiatric medicine in a location determined by VA.'' We further 
add that the ``obligated service must be full-time, permanent 
employment and does not include any period of temporary or contractual 
employment.'' VA needs to establish a commencement date for the 
participant's obligated service in the event that there is a breach in 
the service agreement. The Clay Hunt SAV Act states that a participant 
of the PREL must serve for a period of two or more calendar years. This 
requirement is stated in Sec.  17.646(b). In order to make the best use 
of available resources, VA reserves the right to make the final 
decision on where the participant is assigned to complete his or her 
obligated service. VA will make every effort to take into consideration 
the participant's preference; however, if there is no immediate need 
for a clinical employee in psychiatric medicine in the participant's 
preferred location, VA will

[[Page 66818]]

assign the participant to a VA medical facility that is in need of the 
participant's field of expertise. This requirement is stated in Sec.  
17.646(c).

17.647 Failure To Comply With Terms and Conditions of Participation

    If a participant fails to commence or complete his or her period of 
obligated service, such participant is found in breach of the obligated 
service agreement. Section 4(f) of the Clay Hunt SAV Act provides a 
liability clause in case of a breach in the participant's obligated 
service. We will state the participant's liability in Sec.  17.647(a). 
The amount that a participant would be liable to the United States 
would be ``the full amount of benefit they expected to receive in the 
agreement, pro-rated for completed service days.'' Each participant 
will have a multi-year service agreement. VA interprets this provision 
to mean that in the event of a breach, at whatever point that breach 
occurs during the participants' commitment to the program, a 
participant will be liable to VA for the entire amount that was payable 
to the participant during the period to which they have committed to 
the program, minus the prorated amount for the service the participant 
rendered. VA believes the PREL's authority is intended to allow VA to 
collect the full amount of loan payments payable to the participant 
over the entire term of the individual's service agreement, in a 
proportion that adequately represents the harm to the agency of being 
without one of these practitioners for the period of the breach. 
Participants who fail to begin or complete their obligation will become 
liable to the United States for the full amount of benefit they 
expected to receive in the agreement, pro-rated for completed service 
days for any service year initiated but not completed, and $30,000 or 
the yearly amount agreed to in the acceptance of conditions for any 
full service year agreed to but not initiated.
    The intent of the Clay Hunt SAV Act is to increase the pool of 
qualified psychiatrists in VA and the participant's liability will 
deter a participant from leaving VA employment or, alternatively, will 
ensure that VA has authority to recover damages. New Sec.  17.647(b) 
establishes the repayment period for the amount of damages due to the 
United States. We state that the participant will be required to repay 
the amount of damages owed no later than one year after the date of the 
breach of the acceptance of conditions.

Administrative Procedure Act

    This final rule prescribes regulations that govern VA employment 
and are, therefore, exempt from the notice-and-comment requirements of 
the Administrative Procedure Act under 5 U.S.C. 553(a)(2).
    In addition, we note that the number of veterans receiving VA 
mental health care has greatly increased in the past years. VA provided 
mental health treatment to more than 1.6 million Veterans in FY 2015. 
Between FY 2005 and 2015, the number of Veterans who received mental 
health care from VA grew by 80 percent from ~.9M to ~1.6M. In 2005, 19% 
of VA users received mental health services, in 2015, the figure was 
28%. VA Mental Health Care Fact Sheet July, 8, 2016. This increase is 
due to improved screening, awareness, and understanding of post-
traumatic stress disorder, as well as other mental health disorders. 
Without qualified psychiatrists to assist veterans in overcoming mental 
health disorders, this number could increase in the coming years. 
Veterans have voiced their concerns regarding the lack of qualified 
mental health specialists within VA, a deficiency that has increased 
the wait time for VA mental health care. VA Mental Health Care Fact 
Sheet July, 8, 2016. According to the VA Office of Mental Health 
Services, VA currently tracks the average number of days from the 
Veteran's preferred appointment date to the completed appointment date 
for both new and established patients in mental health treatment. On 
average, new patients currently have a 4.6-day wait for an appointment 
and established patients have a 3-day wait. Overall, appointment wait 
times increased gradually from approximately 2 days at the beginning of 
FY 2014 to about 3 days in FY 2015 and into FY 2016.
    This rulemaking will increase the pool of qualified VA 
psychiatrists, which will greatly alleviate the shortage of mental 
health physicians. The Secretary finds that it is 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.
    The Secretary finds good cause to issue this rule as a final rule.

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 includes a provision constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) that requires approval by the Office of Management and Budget 
(OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of 
this rulemaking to OMB for review. OMB assigns control numbers to 
collections of information it approves. VA may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number. Proposed Sec.  
17.643 contains a collection of information under the Paperwork 
Reduction Act of 1995. Except for emergency approvals under 44 U.S.C. 
3507(j), VA may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number. We have requested that OMB approve the 
collection of information on an emergency basis, for up to a maximum of 
180 days. If OMB does not approve the collection of information as 
requested, we will immediately remove Sec.  17.643 or take such other 
action as is directed by OMB.
    We are also seeking an approval of the information collection on a 
nonemergency basis, to authorize the collection of information after 
the 180 day maximum emergency approval period, by requesting comments 
on the collection of information provisions contained in Sec.  17.643. 
Comments must be submitted by November 28, 2016. Comments on the 
collection of information contained in this final rule should be 
submitted to the Office of Management and Budget, Attention: Desk 
Officer for the Department of Veterans Affairs, Office of Information 
and Regulatory Affairs, Washington, DC 20503, with copies sent by mail 
or hand delivery to the Director, Regulations Management (02REG), 
Department of Veterans Affairs, 810 Vermont Avenue NW., Room 1068, 
Washington, DC 20420; fax to (202) 273-9026; or through 
www.Regulations.gov. Comments should indicate that they are submitted 
in response to ``RIN 2900-AP57 Repayment by VA of Educational Loans for 
Certain Psychiatrists.''
    OMB is required to make a decision concerning the collections of 
information contained in this final rule

[[Page 66819]]

between 30 and 60 days after publication of this document in the 
Federal Register. Therefore, a comment to OMB is best assured of having 
its full effect if OMB receives it within 30 days of publication.
    VA considers comments by the public on collections of information 
in--
     Evaluating whether the collections of information are 
necessary for the proper performance of the functions of VA, including 
whether the information will have practical utility;
     Evaluating the accuracy of VA's estimate of the burden of 
the collections of information, including the validity of the 
methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The collections of information contained in Sec.  17.643 are 
described immediately following this paragraph, under their respective 
titles.
    Title: Repayment by VA of Educational Loans for Certain 
Psychiatrists.
    Summary of collection of information: The information required 
determines the eligibility or suitability of an applicant desiring to 
participate in the PREL under the provisions of 38 U.S.C. 7681 Note. 
The purpose of the PREL would be to repay educational loans to 
individuals who pursued a program of study leading to a degree in 
psychiatric medicine and who are seeking employment in VA. VA considers 
this program as a hiring incentive for physicians with a degree in 
psychiatric medicine, which will help alleviate the shortage of mental 
health specialists in VA.
    Description of the need for information and proposed use of 
information: The information is needed to apply for the PREL. VA will 
use this information to select qualified candidates to participate in 
this program.
    Description of likely respondents: Potential participants of the 
PREL.
    Estimated number of respondents per month/year: 100 per year.
    Estimated frequency of responses per month/year: 1 per year.
    Estimated average burden per response: 8 hours per year.
    Estimated total annual reporting and recordkeeping burden: 800 
hours per year.

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 directly affects only individuals and will not 
directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), 
this amendment is exempt from the initial and final regulatory 
flexibility analysis requirements of 5 U.S.C. 603 and 604.

Executive Order 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,'' requiring 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.''
    VA has examined the economic, interagency, budgetary, legal, and 
policy implications of this regulatory action, and it has been 
determined to be a significant regulatory action under Executive Order 
12866 because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this Executive Order. VA's 
impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking 
document is published. Additionally, a copy of the rulemaking and its 
impact analysis are available on VA's Web site at http://www.va.gov/orpm/, by following the link for ``VA Regulations Published From FY 
2004 Through Fiscal Year to Date.''

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

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 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; 64.018, 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. Robert D. 
Snyder, Chief of Staff, Department of Veterans Affairs, approved this 
document on May 23, 2016, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Government contracts, 
Grant programs-health, Grant programs-veterans, Health care, Health 
facilities,

[[Page 66820]]

Health professions, Health records, Homeless, Medical and Dental 
schools, Medical devices, Medical research, Mental health programs, 
Nursing homes, Reporting and recordkeeping requirements, Travel and 
transportation expenses, Veterans.

    Dated: May 23, 2016.
Jeffrey Martin,
Office Program Manager, Office of Regulation Policy & Management, 
Office of the Secretary, Department of Veterans Affairs.


    Editorial note:  This document was received at the Office of the 
Federal Register on September 23, 2016.

    For the reasons set out in the preamble, VA is amending 38 CFR part 
17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 is revised to read as follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.
    Sections 17.640 and 17.647 also issued under Pub. L. 114-2, sec. 
4.
    Sections 17.641 through 17.646 also issued under 38 U.S.C. 
501(a) and Pub. L. 114-2, sec. 4.


0
2. Add an undesignated center heading immediately following Sec.  
17.636 and new Sec. Sec.  17.640 through 17.647 to read as follows:
Sec.

Program for Repayment of Educational Loans for Certain VA Psychiatrists

17.640 Purpose.
17.641 Definitions.
17.642 Eligibility.
17.643 Application for the program for the repayment of educational 
loans.
17.644 Selection of participants.
17.645 Award procedures.
17.646 Obligated service.
17.647 Failure to comply with terms and conditions of participation.

Program for Repayment of Educational Loans for Certain VA Psychiatrists


Sec.  17.640  Purpose.

    The purpose of Sec. Sec.  17.640 through 17.647 is to establish the 
requirements for the program for the repayment of educational loans 
(PREL) obtained by physician residents pursuing a certification in 
psychiatry.


Sec.  17.641  Definitions.

    The following definitions apply to Sec. Sec.  17.640 through 
17.647.
    Acceptance of conditions means a signed document between VA and a 
participant of the PREL, in which the participant must agree to a 
period of obligated service, to maintain an acceptable level of 
performance determined by supervisory review in the position to which 
VA appoints the participant, to terms and amount of payment, and to 
relocate, if required, to a location determined by VA at the 
participant's expense in exchange for educational loan repayments under 
the PREL. VA will provide a list of available locations for the period 
of obligated service in the acceptance of conditions. The applicant 
will choose the preferred location, in ranking order, for the 
completion of his or her obligated service from the locations on this 
list. However, VA will ultimately make the final determination as to 
where the applicant will perform his or her period of obligated 
service. A participant of the PREL must agree that he or she is willing 
to accept the location and position to which VA appoints the 
participant.
    Educational loan means a loan, government or commercial, made for 
educational purposes by institutions that are subject to examination 
and supervision in their capacity as lending institutions by an agency 
of the United States or of the state in which the lender has its 
principal place of business. Loans must be for the actual costs paid 
for tuition, and other reasonable educational expenses such as living 
expenses, fees, books, supplies, educational equipment and materials, 
and laboratory expenses. Loans must be obtained from a government 
entity, a private financial institution, a school, or any other 
authorized entity stated in this definition. The following loans do not 
qualify for the PREL:
    (1) Loans obtained from family members, relatives, or friends;
    (2) Loans made prior to, or after, the individual's qualifying 
education;
    (3) Any portion of a consolidated loan that is not specifically 
identified with the education and purposes for which the PREL may be 
authorized, such as home or auto loans merged with educational loans;
    (4) Loans for which an individual incurred a service obligation for 
repayment or agreed to service for future cancellation;
    (5) Credit card debt;
    (6) Parent Plus Loans;
    (7) Loans that have been paid in full;
    (8) Loans that are in default, delinquent, not in a current payment 
status, or have been assumed by a collection agency;
    (9) Loans not obtained from a bank, credit union, savings and loan 
association, not-for-profit organization, insurance company, school, 
and other financial or credit institution which is subject to 
examination and supervision in its capacity as a lending institution by 
an agency of the United States or of the state in which the lender has 
its principal place of business;
    (10) Loans for which supporting documentation is not available;
    (11) Loans that have been consolidated with loans of other 
individuals, such as spouses, children, friends, or other family 
member; or
    (12) Home equity loans or other non-educational loans.
    PREL means the program for the repayment of educational loans for 
certain VA psychiatrists established in Sec. Sec.  17.640 through 
17.647.


Sec.  17.642  Eligibility.

    (a) General. To be eligible for the PREL, an applicant must meet 
all of the following requirements:
    (1) Be a U.S. citizen or permanent resident.
    (2) Be enrolled in the final year of a post-graduate physician 
residency program leading to either a specialty qualification in 
psychiatric medicine or a subspecialty qualification of psychiatry (the 
program must be accredited by the Accreditation Council for Graduate 
Medical Education or the American Osteopathic Association, and, by the 
time of VA employment, must:
    (i) Have completed all psychiatry residency training;
    (ii) Have received a completion certificate from the Program 
Director confirming successful completion of the residency program; and
    (iii) Certify intention to apply for board certification in the 
specialty of psychiatry (through the American Board of Medical 
Specialties or the American Osteopathic Association) within two years 
after completion of residency.
    (3) Be licensed or eligible for licensure to practice medicine by 
meeting the following requirements by the time of VA employment:
    (i) Have at least one full, active, current, and unrestricted 
license that authorizes the licensee to practice in any State, 
Territory, or possession of the United States, the District of 
Columbia, or the Commonwealth of Puerto Rico;
    (ii) Document graduation from a school of medicine accredited by 
the Liaison Committee on Medical Education or the American Osteopathic 
Association; or, if an international medical graduate, verify that 
requirements for certification by the Educational Commission for 
Foreign Medical Graduates have been met.
    (b) Simultaneous participation in another repayment program. Any 
applicant who, at the time of application, is participating in any 
other program of the Federal Government that repays the educational 
loans of the applicant is not eligible to participate in the PREL.

[[Page 66821]]

Sec.  17.643  Application for the PREL.

    (a) General. A complete application for the PREL consists of a 
completed application form, letters of reference, and personal 
statement.
    (b) References. The applicant must provide the following letters of 
reference and sign a release of information form for VA to contact such 
references. The letters of reference should include the following:
    (1) One letter of reference from the Program Director of the core 
psychiatry program in which the applicant trained or is training, or 
the Program Director of any psychiatry subspecialty program in which 
the applicant is training, which indicates that the applicant is in 
good to excellent standing;
    (2) One or more letters of reference from faculty members under 
which the applicant trained;
    (3) One letter of reference from a peer colleague who is familiar 
with the psychiatry practice and character of the applicant.
    (c) Personal statement. The personal statement must include the 
following documentation:
    (1) A cover letter that provides the following information:
    (i) Why the applicant is interested in VA employment;
    (ii) The applicant's interest in working at a particular VA medical 
facility;
    (iii) Likely career goals, including career goals in VA; and
    (iv) A brief summary of past employment or training and 
accomplishments, including any particular clinical areas of interest 
(e.g., substance abuse).
    (2) The following information must be provided on a VA form or 
online collection system and is subject to VA verification:
    (i) Attestation that the applicant is not participating in any 
other loan repayment program.
    (ii) A summary of the applicant's educational debt, which includes 
the total debt amount and when the debt was acquired. The health 
professional debt covered the loan must be specific to education that 
was required, used, and qualified the applicant for appointment as a 
psychiatrist.
    (ii) The name of the lending agency that provided the educational 
loan.
    (3) A full curriculum vitae.


Sec.  17.644  Selection of participants.

    (a) Selection criteria. In evaluating and selecting participants, 
VA will consider the following factors:
    (1) The applicant meets all of the eligibility criteria in Sec.  
17.642 and has submitted a complete application under Sec.  17.643;
    (2) The strength of the applicant's letters of reference;
    (4) The applicant is in good to excellent standing in the residency 
program, as determined from the Program Director letter of reference;
    (5) The applicant demonstrates a strong commitment to VA's mission 
and core values;
    (6) The applicant has personal career goals that match VA needs 
(i.e., to work with patients suffering from traumatic brain injury, 
substance abuse, or post-traumatic stress disorder);
    (7) The applicant's expresses a desire to work at a location that 
matches with VA needs; and
    (8) The applicant does not have any identifiable circumstances 
relating to education, training, licensure, certification and review of 
health status, previous experience, clinical privileges, professional 
references, malpractice history and adverse actions, or criminal 
violations that would adversely affect the applicant's credentialing 
process.
    (b) Selection. VA will select not less than 10 individuals who meet 
the requirements of this section to participate in the program for the 
repayment of educational loans for each year in which VA carries out 
the program.
    (c) Notification of selection. VA will notify applicants that they 
have been selected in writing. An individual becomes a participant in 
the PREL once the participant submits and VA signs the acceptance of 
conditions.


Sec.  17.645  Award procedures.

    (a) Repayment amount. (1) VA may pay not more than $30,000 in 
educational loan repayment for each year of obligated service.
    (2) An educational loan repayment may not exceed the actual amount 
of principal and interest on an educational loan or loans.
    (b) Payment. VA will pay the participant, or the lending 
institution on behalf of the participant, directly for the principal 
and interest on the participant's educational loans. Payments will be 
made monthly or annually for each applicable service period, depending 
on the terms of the acceptance of conditions. Participants must provide 
VA documentation that shows the amounts that were credited or posted by 
the lending institution to a participant's educational loan during an 
obligated service period. VA will issue payments after the participant 
commences the period of obligated service. Payments are exempt from 
Federal taxation.


Sec.  17.646  Obligated service.

    (a) General provision. A participant's obligated service will begin 
on the date on which the participant begins full-time, permanent 
employment with VA in the field of psychiatric medicine in a location 
determined by VA. Obligated service must be full-time, permanent 
employment and does not include any period of temporary or contractual 
employment.
    (b) Duration of service. The participant will agree in the 
acceptance of conditions to serve for an obligated service period of 2 
or more calendar years.
    (c) Location and position of obligated service. VA reserves the 
right to make final decisions on the location and position of the 
obligated service.


Sec.  17.647  Failure to comply with terms and conditions of 
participation.

    (a) Participant fails to satisfy obligated service. A participant 
of the PREL who fails to satisfy the period of obligated service will 
be liable to the United States, in lieu of such obligated service, for 
the full amount of benefit they expected to receive in the agreement, 
pro-rated for completed service days.
    (b) Repayment period. The participant will pay the amount of 
damages that the United States is entitled to recover under this 
section in full to the United States no later than 1 year after the 
date of the breach of the agreement.

[FR Doc. 2016-23360 Filed 9-28-16; 8:45 am]
 BILLING CODE 8320-01-P