[Federal Register Volume 84, Number 239 (Thursday, December 12, 2019)]
[Rules and Regulations]
[Pages 67868-67873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26501]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 51

RIN 2900-AO57


Contracts and State Home Care Agreements for State Home Nursing 
Home Care

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This rulemaking adopts as final, with minor changes, an 
interim final rule amending the Department of Veterans Affairs (VA) 
regulations governing payments under contracts or State home care 
agreements between VA and State homes for the nursing home care of 
certain disabled veterans. The minor changes include revising the 
authority citation to be consistent with the John S. McCain III, Daniel 
K. Akaka, and Samuel R. Johnson VA Maintaining Internal Systems and 
Strengthening Integrated Outside Networks (VA MISSION) Act of 2018.

DATES: This rule is effective on January 13, 2020.

FOR FURTHER INFORMATION CONTACT: Joseph Duran, Director of Policy and 
Planning, Office of Community Care (10D), Veterans Health 
Administration, Department of Veterans Affairs, Ptarmigan at Cherry 
Creek, Denver, CO 80209, (303) 372-4629. (This is not a toll-free 
number.)

SUPPLEMENTARY INFORMATION: On December 6, 2012, VA published an interim 
final rule in the Federal Register, 77 FR 72738, implementing VA's 
authority to use contracts and provider agreements to pay for certain 
State nursing home care under section 105 of the Honoring America's 
Veterans and Caring for Camp Lejeune Families Act of 2012 (the Act), 
Public Law 112-154, 126 Stat. 1165, which was enacted on August 6, 
2012. The interim final rule became effective on February 2, 2013, in 
accordance with the statutory deadline to implement this authority. 
Interested persons were invited to submit comments on or before 
February 4, 2013. VA received 13 comments.
    Subsequently, section 103 of the VA MISSION Act of 2018, Public Law 
115-182 (conforming amendments for State veterans homes), amended 38 
U.S.C. 1745(a), which authorizes VA agreements for State home nursing 
home care. The amendments require non-substantive changes to Sec.  
51.41.
    In addition to finalizing the interim final rule and implementing 
section 103 of the VA MISSION Act of 2018, we are also correcting a 
patent error in paragraph (e) and making other non-substantive changes 
to bring the section current with amendments to 38 CFR part 51 since 
publication of the interim final rule, to include updating a United 
States Code citation in paragraph (g). We are also renaming the 
agreements VA enters with State homes to ensure the name is not 
confused with the name of another type of agreement VA may enter under 
the authority of a different section of title 38 United States Code. We 
discuss these below, following the responses to the public comments.

[[Page 67869]]

    Based on the rationale set forth in the interim final rule and in 
this document, VA is adopting the interim final rule as final with 
minor changes described below.
    VA pays State veterans homes for providing nursing home care to 
eligible veterans under 38 U.S.C. 1741 and 1745. Prior to the Act, VA 
paid State homes for this care on a per diem basis under a grant 
program. The revised regulation at 38 CFR 51.41 authorized VA to use 
contracts or provider agreements (hereafter State home care agreements) 
to pay for the nursing home care of certain veterans in State homes: 
Those who need nursing home care for a service-connected disability, 
and those who need nursing home care and have either a singular or 
combined service-connected disability rating of 70 percent or more or a 
rating of total disability based on individual unemployability.
    The Act required VA to consult with State homes to develop the 
payment methodology for contracts and State home care agreements. To 
accomplish that requirement, VA met with groups representing the State 
homes and with representatives of individual State veterans homes 
during the development of the interim final rule.
    In the interim final rule, VA adopted a ``prevailing rate'' to 
determine the daily payments that VA will make to State homes that 
provide care for veterans under State home care agreements. The 
prevailing rate is a daily payment rate VA calculates for each State 
home. It incorporates, among other things, Centers for Medicare and 
Medicaid Services (CMS) payment rates, CMS case-level data for the 
geographic area, local labor costs, and physicians' fees.
    During the comment period for the interim final rule, VA received 
several comments from State veterans homes and groups representing 
them. A consideration of these comments follows. Some of the issues 
raised by the commenters can be grouped together by similar topics, and 
we have organized our discussion of the comments accordingly.
    Several commenters raised concerns about high-cost drugs and 
medications. Some stated that State homes have experienced 
extraordinarily high costs for drugs and medications provided to the 
veterans whose care would be eligible for payment by contract or State 
home care agreement under Sec.  51.41. These commenters have requested 
that VA amend its regulations to allow State homes to negotiate with VA 
on a case-by-case basis for additional payments to cover the costs of 
high-cost drugs and medications required for a veteran's care.
    By law, VA payment to a State home for care of a veteran is payment 
in full for care the State home provided that veteran under Sec.  
51.41. 38 U.S.C. 1745(a)(3). VA was required by statute to develop a 
payment methodology to adequately reimburse State homes for the care 
provided under the agreements with VA. 38 U.S.C. 1745(a)(2). With 
consultation of the State homes, as discussed above, VA established two 
methods of payment in Sec.  51.41, one each for State home care 
agreements and contracts respectively. State home care agreements 
compensate State homes using the prevailing rate, which is calculated 
to compensate State homes for the average cost of providing nursing 
home care to the veterans whose care is covered in Sec.  51.41, 
including, as indicated in Sec.  51.41(c)(2), the cost of drugs and 
medicines. State homes that enter into contracts, on the other hand, 
will be compensated at the rate negotiated in the contract. State home 
care agreements are not individually negotiated; if a State home cannot 
accept the prevailing rate that VA offers (per request by the State 
homes) in a State home care agreement, that State home has the option 
to request a contract under Sec.  51.41 and would then be able to 
negotiate with VA specific rates for payments for drugs and 
medications. VA, as required by the statute, consulted with State homes 
to establish the prevailing rate, and the availability of contracts 
allows for separate rates to be negotiated when necessary. VA believes 
that by creating both options it ensures that adequate compensation can 
be available to State homes in all situations.
    Finally, there is no clear indication that State homes are being 
inadequately compensated for this care, even when drugs and medications 
must be supplied. VA received a comment from an organization 
representing State homes that expressed uncertainty as to whether the 
expenses associated with supplying high-cost drugs and medications 
negatively affect the State homes that receive the prevailing rate 
under State home care agreements. The organization proposed to study 
its members' drug costs after implementation of the contracting and 
State home care agreement authority in Sec.  51.41 to see whether State 
homes are being adequately reimbursed for the costs of drugs and 
medications or whether State homes experience consistent hardships from 
providing high-cost medications. We thank the commenter for undertaking 
this effort and will review the results when provided. VA makes no 
changes to the regulation based on these comments.
    Several commenters requested that VA allow State homes receiving 
payments under State home care agreements to opt out of receiving the 
physician fee component of the prevailing rate. The physician fee 
component is a set dollar figure that represents the average cost to a 
State home of providing certain physician services to veterans that are 
required by 38 CFR 51.150. Typically, this care is provided by 
physicians who are on the staff of the State home. The commenters 
explained that some State homes do not retain salaried physicians on 
their staffs to provide physician services to veterans; these State 
homes instead arrange for outside physicians to provide care. State 
homes allow these outside physicians to bill third parties, including 
Medicare. By accepting payment under Sec.  51.41, State homes must use 
the VA payments to pay the outside physicians and cannot permit these 
outside physician services to be reimbursed by other payers.
    VA recognizes that some State homes may not have physicians on 
staff, but the law requires VA to adequately reimburse State homes for 
nursing home care (38 U.S.C. 1745(a)(2)), and we have determined by 
regulation that certain physician services are part of nursing home 
care. Moreover, the law provides that VA payment made under the 
authority of 38 U.S.C. 1745 to a State home for nursing home care 
constitutes payment in full to the State home for the nursing home care 
furnished to that veteran. VA thus cannot make an exception for these 
State homes in this case. VA therefore makes no changes based on these 
comments.
    Some commenters requested that VA provide additional payments for 
therapy services. One commenter specified, ``VA should reimburse the 
full costs of therapy services in the State [h]omes . . . to ensure 
residents receive the same high level of services provided in private 
nursing homes.'' The commenter explained that State home residents 
typically receive 50 percent of the therapy that residents of private 
nursing homes would receive because State homes can only bill for 
Medicare Part B services in accordance with Medicare Part B 
requirements for the level of services provided. If veterans in State 
home nursing homes need therapy, State homes are required by Sec.  
51.160 to provide it to receive per diem. For veterans in State home 
nursing homes on whose behalf VA pays basic per diem under Sec.  51.40, 
State homes cannot cut back on providing therapy just because they do 
not obtain reimbursement from

[[Page 67870]]

an outside source in addition to the VA per diem. For veterans covered 
by this rulemaking, however, payments under State home care agreements 
are computed to include reimbursement for necessary therapy. State 
homes that believe this payment fails to cover the full cost of therapy 
have the option to request a contract under Sec.  51.41 and to 
negotiate specific rates for therapy. VA makes no changes based on 
these comments.
    One commenter urged VA to ``reimburse the full cost of emergency 
ambulance transportation to the VA hospital (or closest acute care 
facility in an emergent situation)'' for emergency treatment of 
veterans whose care is paid under Sec.  51.41. The commenter stated: 
``An ambulance is required to take [residents] to the `nearest 
facility' which may not be a VA hospital. Currently, for emergency 
ambulance transfers, the VA hospital will bill Medicare Part A and bill 
the remainder to the State [h]ome. If a resident is transported to the 
hospital for a service-connected disability or secondary service-
connected disability by association the VA should pay for this transfer 
consistent with the `total cost of care' reimbursement provision of the 
law.'' This comment does not accurately describe the law or VA's 
current policies and practices.
    VA has no authority to bill Medicare or State homes for a veteran's 
transportation in an ambulance, as suggested by the commenter. The 
ambulance service provider would typically be the party seeking payment 
for the services it provides. Moreover, in most circumstances, VA could 
pay for an ambulance to a VA facility for a veteran for whom VA pays 
per diem under Sec.  51.41.
    Whether a veteran's ambulance transportation to a VA facility is 
paid for by VA is dependent on that Veteran's eligibility to receive 
special mode transportation under VA's beneficiary travel authority, 38 
U.S.C. 111, 38 CFR part 70. An ambulance is considered a special mode 
of transportation under this authority. VA pays for special modes of 
transportation if three criteria set forth in 38 CFR 70.4(d) are met: 
The beneficiary is unable to defray the cost of transportation under 38 
CFR 70.10(c), the travel is medically required, and VHA approves the 
travel in advance or the travel was undertaken in connection with a 
medical emergency. By regulation, all veterans who have a service-
connected disability rated at least 30 percent disabling and all 
veterans traveling in connection with treatment of a service-connected 
disability are considered ``unable to defray'' the expenses of travel. 
38 CFR 70.10(c)(3) and 38 CFR 70.10(c)(4). VA makes case-specific 
determinations regarding the clinical necessity of the special mode of 
transportation.
    Whether a veteran's ambulance transportation to a non-VA facility 
is paid for by VA is dependent on the nature of the treatment provided 
and the service-connected disability status of the Veteran. When 
emergency treatment can be reimbursed by VA under 38 U.S.C. 1728, the 
ambulance transportation will be paid for in accordance with the same 
rules relating to beneficiary travel that are described above. 
Reimbursement is authorized under 38 U.S.C. 1728 when the emergency 
treatment provided is for: An adjudicated service-connected disability; 
a non-service-connected disability associated with and held to be 
aggravating a service-connected disability; any disability of a veteran 
if the veteran has a total disability permanent in nature from a 
service-connected disability; or any illness, injury, or dental 
condition of a veteran who is a participant in a vocational 
rehabilitation program, and is medically determined to have been in 
need of care or treatment to make possible the veteran's entrance into 
a course of training, or prevent interruption of a course of training, 
or hasten the return to a course of training which was interrupted 
because of such illness, injury or dental condition.
    When the treatment provided does not meet the criteria of 38 U.S.C. 
1728, it may be reimbursed in accordance with the requirements of 38 
U.S.C.1725. When the treatment provided meets the requirements for 
reimbursement under 38 U.S.C. 1725, ambulance transportation is paid 
for in accordance with the payment limitations regulated at 38 CFR 
17.1005. Generally speaking, this authority is used to reimburse 
emergency treatment that is for a non-service-connected condition.
    Regardless of which authority is being relied upon for 
reimbursement of the cost of ambulance transportation, the rates paid 
are determined by existing regulations. In many instances VA pays the 
actual cost of the transportation, and in other circumstances, when 
payment is accepted by vendors, regulations state that it will serve as 
payment in full. VA therefore makes no changes to the regulations based 
on this comment.
    The same commenter stated that ``VA should reimburse the full cost 
of any service'' required by a veteran who has been rated by VA as 100 
percent disabled due to a service-connected disability. The commenter 
said that when such veterans are ``non-ambulatory due to `patient 
safety' '' and are transported to a VA medical facility for treatment 
of a non-service-connected disability, the resident or the State must 
pay for the care. The commenter further advised that while the option 
for a case-by-case agreement between the VA medical facility and the 
resident or State home exists for this gap in covered care, if an 
agreement is not reached or accepted, the cost is borne by the veteran 
with a rating of 100 percent disabled due to service-connected 
disability, which is inconsistent with the ``total cost of care'' 
reimbursement provision in the law.
    This comment does not accurately reflect the State home and VA's 
responsibilities to provide care to these veterans. A veteran who is 
rated as 100 percent disabled due to a service-connected disability 
would not be responsible for the costs of any care provided at a VA 
facility under the circumstances described in this comment, including 
care for a non-service-connected condition. If the care needed is care 
that the State home is required to provide in accordance with the State 
home's contract or State home care agreement with VA entered into 
pursuant to Sec.  51.41, the State home can choose to use the funds it 
receives under that contract or agreement to obtain that care from VA. 
VA makes no changes to the regulation based on this comment.
    Several commenters requested that VA include a statement in the 
State home care agreement that veterans whose care is eligible for 
payment under a State home care agreement ``do not forfeit their 
eligibility for VA benefits and programs.'' VA emphasizes that veterans 
residing in a State home retain their eligibility for all other VA care 
and services. VA will work with State homes by way of national 
organizational meetings and through local VA medical center staff to 
provide clarification or education that may be needed to ensure 
veterans in State homes receive the care and services for which they 
are eligible. These comments, however, refer to the content of the 
State home care agreements and not the regulation, and VA therefore 
makes no changes to the regulation based on these comments.
    Regarding minor changes this final rulemaking makes to the interim 
final rule, we are removing the authority citation following Sec.  
51.41. Prior to the VA MISSION Act of 2018, section 1745(a) required 
that an agreement, other than a contract, between VA and a State home 
for nursing care be under section 1720(c)(1) of title 38. The VA 
MISSION Act of 2018 removed this requirement. Public Law 115-182, sec.

[[Page 67871]]

103(a). 38 U.S.C. 1720(c)(1)(B) allowed VA to use procedures for 
entering into provider agreements under section 1866(a) of the Social 
Security Act (codified at 42 U.S.C. 1395cc). By removing the reference 
to 38 U.S.C. 1720 from 38 U.S.C. 1745, the MISSION Act makes clear that 
VA's authority to enter into contracts and agreements with State homes 
for nursing home care derives solely from 38 U.S.C. 1745 and not from 
38 U.S.C. 1720 or from 42 U.S.C. 1395cc, as was cited in the interim 
final rule.
    We are removing, rather than revising the authority citation to be 
consistent with the requirements of the Office of the Federal Register, 
which publishes all federal regulations, for placement of authority 
citations in the Code of Federal Regulations. The authority for a part 
of a title of the Code of Federal Regulations immediately follows the 
heading of the part, in this case title 38 CFR part 51. Unique 
authority for a section immediately follows the general authority 
citation of the part. Without citation to 38 U.S.C. 1720 and 42 U.S.C. 
1395cc, Sec.  51.41 does not rely on authority unique to that section. 
The general authority citation of part 51 includes the authority for 
Sec.  51.41. No additional authority citation is required.
    We are revising the heading of paragraph (a) to name agreements 
between VA and State homes under this section ``State home care 
agreements.'' We are replacing the terms ``VA provider agreement(s)'', 
``provider agreement(s)'', and ``agreement(s)'' with ``State home care 
agreement(s)'' throughout the section. This change ensures agreements 
under authority of 38 U.S.C. 1745 are not confused with ``Veterans Care 
Agreements'' under authority of 38 U.S.C. 1703A. Changing the name 
Sec.  51.41 uses for agreements under this section does not affect the 
agreements in any other way.
    In addition, we are correcting an error in Sec.  51.41(e) as 
amended in the interim final rule. Paragraph (e) required State homes 
to submit forms ``in accordance with paragraph (a) of this section.'' 
However, paragraph (a) of Sec.  51.41 does not mention or otherwise 
pertain to forms. The preamble to the interim final rule reveals 
paragraph (e) of that section should have referred to 51.43(a). 77 FR 
72738, 72742 (Dec. 6, 2012). VA has since amended 38 CFR part 51, 83 FR 
61250 (Nov. 28, 2018), and the reference to the procedures for 
submitting forms are now in Sec.  51.42. We revise Sec.  51.41(e) 
accordingly.
    Additionally, in the interim final rule, we amended Sec.  51.41(e) 
to state the forms cited in that paragraph are set forth in full in one 
or another of two sections of 38 CFR part 58. VA removed part 58 from 
title 38 CFR in August 2013. 78 FR 51673 (Aug. 21, 2013). Copies of VA 
forms can be obtained from any VA Medical Center and are available on 
our website at www.va.gov/vaforms. We are revising Sec.  51.41(e) to 
direct readers to VA forms.
    Section 51.41(f)(2), as amended in the interim final rule, states 
that VA provider agreements will terminate on the date of a final 
decision that the home is no longer recognized by VA under Sec.  51.30. 
VA has since amended part 51 to regulate recognition and denial of 
recognition of State homes in Sec.  51.20, certification and denial of 
certification in Sec.  51.30, and termination of recognition in Sec.  
51.32. Currently, 51.41(f)(2) only refences recognition and refers to 
recognition as under Sec.  51.30. Because our regulations already 
require recognition and certification to receive per diem payments, we 
are revising Sec.  51.42(f) to also refer to certification. For 
consistency with part 51's recognition, certification, and termination 
sections, we are revising Sec.  51.41(f)(2) by inserting ``or 
certified'' following ``recognized'', removing ``under Sec.  51.30.'', 
and in its place inserting ``under part 51.''.
    In paragraph (g), we are revising the citation, ``41 U.S.C. 351 et 
seq.'', to read, ``41 U.S.C. 7601 et seq.'', consistent with a 
redesignation of section numbers in title 41 United States Code after 
VA's publication of the interim final rule amending Sec.  51.41.
    Based on the rationale set forth in the interim final rule and in 
this document, VA is adopting the interim final rule as a final rule 
with the changes described above.

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

    Although this action contains a provision at 38 CFR 51.41(e) 
constituting a collection of information under the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised 
collections of information are associated with this final rule. The 
information collection requirements for Sec.  51.41(e) are currently 
approved by the Office of Management and Budget (OMB) and have been 
assigned OMB control numbers 2900-0091 and 2900-0160.

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable 
to this rulemaking because notice of proposed rulemaking is not 
required. 5 U.S.C. 601(2), 603(a), 604(a).

Executive Orders 12866, 13563, and 13771

    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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. 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 website at 
http://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published from FY 2004 through FYTD.''
    This rule is not an E.O. 13771 regulatory action because it is not 
significant under E.O. 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in 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.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

[[Page 67872]]

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; 64.010, Veterans Nursing 
Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription 
Service; 64.013, Veterans Prosthetic Appliances; 64.015, Veterans State 
Nursing Home Care; 64.018, Sharing Specialized Medical Resources; 
64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 
64.022, Veterans Home Based Primary Care.

List of Subjects in 38 CFR Part 51

    Administrative practice and procedure; Claims; Day care; Dental 
health; Government contracts; Grant programs-health; Grant programs-
veterans; Health care; Health facilities; Health professions; Health 
records; Mental health programs; Nursing homes; Reporting and 
recordkeeping requirements; Travel and transportation expenses; 
Veterans.

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. Pamela 
Powers, Chief of Staff, Department of Veterans Affairs, approved this 
document on December 4, 2019, for publication.

Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set out in the preamble, the interim final rule 
amending 38 CFR part 51, published December 6, 2012, at 77 FR 72738, is 
adopted as final with the following changes:

PART 51--PER DIEM FOR NURSING HOME, DOMICILIARY, OR ADULT DAY 
HEALTH CARE OF VETERANS IN STATE HOMES

0
1. The general authority citation for part 51 continues to read as 
follows:

    Authority:  38 U.S.C. 101, 501, 1710, 1720, 1741-1743, 1745, and 
as follows.
* * * * *

0
2. Amend Sec.  51.41 by revising the section heading and paragraphs (a) 
introductory text, (c), (d), (e), the paragraph (f) subject heading, 
and paragraphs (f)(2) and (g) and removing the authority citation at 
the end of the section.
    The revisions read as follows:


Sec.  51.41  Contracts and State home care agreements for certain 
veterans with service-connected disabilities.

    (a) Contract or State home care agreement required. VA and State 
homes may enter into both contracts and State home care agreements. VA 
will pay for each eligible veteran's care through either a contract or 
a ``State home care agreement.'' Eligible veterans are those who:
* * * * *
    (c) Payments under State home care agreements. (1) State homes must 
sign an agreement to receive payment from VA for providing care to 
certain eligible veterans under a State home care agreement. State home 
care agreements under this section will provide for payments at the 
rate determined by the following formula. For State homes in a 
metropolitan statistical area, use the most recently published CMS 
Resource Utilization Groups (RUG) case-mix levels for the applicable 
metropolitan statistical area. For State homes in a rural area, use the 
most recently published CMS Skilled Nursing Prospective Payment System 
case-mix levels for the applicable rural area. To compute the daily 
rate for each State home, multiply the labor component by the State 
home wage index for each of the applicable case-mix levels; then add to 
that amount the non-labor component. Divide the sum of the results of 
these calculations by the number of applicable case-mix levels. 
Finally, add to this quotient the amount based on the CMS payment 
schedule for physician services. The amount for physician services, 
based on information published by CMS, is the average hourly rate for 
all physicians, with the rate modified by the applicable urban or rural 
geographic index for physician work, then multiplied by 12, then 
divided by the number of days in the year.
    Note to paragraph (c)(1): The amount calculated under this formula 
reflects the prevailing rate payable in the geographic area in which 
the State home is located for nursing home care furnished in a non-
Department nursing home (a public or private institution not under the 
direct jurisdiction of VA which furnishes nursing home care). Further, 
the formula for establishing these rates includes CMS information that 
is published in the Federal Register every year and is effective 
beginning October 1 for the entire fiscal year. Accordingly, VA will 
adjust the rates annually.
    (2) The State home shall not charge any individual, insurer, or 
entity (other than VA) for the nursing home care paid for by VA under a 
State home care agreement. Also, as a condition of receiving payments 
under paragraph (c), the State home must agree not to accept drugs and 
medicines from VA provided under 38 U.S.C. 1712(d) on behalf of 
veterans covered by this section and corresponding VA regulations 
(payment under this paragraph (c) includes payment for drugs and 
medicines).
    (3) Agreements under this paragraph (c) will be subject to this 
part, except to the extent that this part conflicts with this section. 
For purposes of this section, the term ``per diem'' in part 51 includes 
payments under State home care agreements.
    (4) If a veteran receives a retroactive VA service-connected 
disability rating and becomes a veteran identified in paragraph (a) of 
this section, the State home may request payment under the State home 
care agreement for nursing home care back to the retroactive effective 
date of the rating or February 2, 2013, whichever is later. For care 
provided after the effective date but before February 2, 2013, the 
State home may request payment at the special per diem rate that was in 
effect at the time that the care was rendered.
    (d) VA signing official. State home care agreements must be signed 
by the Director of the VA medical center of jurisdiction or designee.
    (e) Forms. Prior to entering into a State home care agreement, 
State homes must submit to the VA medical center of jurisdiction a 
completed VA Form 10-10EZ, Application for Medical Benefits (or VA Form 
10-10EZR, Health Benefits Renewal Form, if a completed VA Form 10-10EZ 
is already on file at VA), and a completed VA Form 10-10SH, State Home 
Program Application for Care--Medical Certification, for the veterans 
for whom the State home will seek payment under the State home care 
agreement. After VA and the State home have entered into a State home 
care agreement, forms for payment must be submitted in accordance with 
Sec.  51.42. Copies of VA Forms can be obtained from any VA Medical 
Center and are available on our website at www.va.gov/vaforms.

(The Office of Management and Budget has approved the information 
collection requirements in this section under control numbers 2900-
0091 and 2900-0160.)


    (f) Termination of State home care agreements.
    (2) State home care agreements will terminate on the date of a 
final decision

[[Page 67873]]

that the home is no longer recognized or certified by VA under part 51.
    (g) Compliance with Federal laws. Under State home care agreements 
entered into under this section, State homes are not required to comply 
with reporting and auditing requirements imposed under the Service 
Contract Act of 1965, as amended (41 U.S.C. 6701, et seq.); however, 
State homes must comply with all other applicable Federal laws 
concerning employment and hiring practices including the Fair Labor 
Standards Act, National Labor Relations Act, the Civil Rights Acts, the 
Age Discrimination in Employment Act of 1967, the Vocational 
Rehabilitation Act of 1973, Worker Adjustment and Retraining 
Notification Act, Sarbanes-Oxley Act of 2002, Occupational Health and 
Safety Act of 1970, Immigration Reform and Control Act of 1986, 
Consolidated Omnibus Reconciliation Act, the Family and Medical Leave 
Act, the Americans with Disabilities Act, the Uniformed Services 
Employment and Reemployment Rights Act, the Immigration and Nationality 
Act, the Consumer Credit Protection Act, the Employee Polygraph 
Protection Act, and the Employee Retirement Income Security Act.

[FR Doc. 2019-26501 Filed 12-11-19; 8:45 am]
 BILLING CODE 8320-01-P