[Federal Register Volume 85, Number 215 (Thursday, November 5, 2020)]
[Proposed Rules]
[Pages 70551-70554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24261]


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

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 70

RIN 2900-AP89


Change in Rates VA Pays for Special Modes of Transportation

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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

SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations concerning beneficiary travel. The revisions would amend 
the Veterans Health Administration's (VHA) beneficiary travel 
regulations to establish a new payment methodology for special modes of 
transportation. The new payment methodology would apply in the absence 
of a contract between VA and a vendor of the special mode of 
transportation. For transport by ambulance, VA proposes to pay the 
lesser of the actual charge or the amount determined by the Medicare 
Part B Ambulance Fee Schedule (AFS) established by the Centers for 
Medicare & Medicaid Services (CMS). For travel by modes other than 
ambulance, VA proposes to establish a payment methodology based on 
states' posted rates or the actual charge. VA would replace this 
payment methodology for travel by modes other than ambulance at

[[Page 70552]]

some time in the future, once VA has collected enough data to develop a 
new methodology.

DATES: Comments must be received on or before January 4, 2021.

ADDRESSES: Comments may be submitted through www.Regulations.gov. 
Comments received will be available at regulations.gov for public 
viewing, inspection or copies.

FOR FURTHER INFORMATION CONTACT: Paul Perry, Deputy Director, Veterans 
Transportation Program (10NB2G), Veterans Health Administration, 
Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 
20420, (404) 828-5691 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION: Pursuant to 38 U.S.C. 111, VA provides 
beneficiary travel benefits to eligible veterans who need to travel in 
connection with vocational rehabilitation, counseling required by the 
Secretary pursuant to chapter 34 or 35 of Title 38, U.S.C., or for the 
purpose of examination, treatment, or care. Regulations governing 
beneficiary travel benefits provided by the Veterans Health 
Administration (VHA) are in part 70 of title 38, CFR. See also 
Executive Order 11302. Under part 70, VA pays for a ``special mode of 
transportation'' when that travel is medically required, the 
beneficiary is unable to defray the cost of that transportation, and 
VHA approved the travel in advance or the travel was undertaken in 
connection with a medical emergency. See 38 CFR 70.2 (defining the term 
``[s]pecial mode of transportation''), and 38 CFR 70.4(d) (establishing 
criteria for approval of special mode travel). We propose to amend 
these regulations to implement the discretionary authority in 38 U.S.C. 
111(b)(3)(C), which permits VA to pay the lesser of the actual charge 
for ambulance transportation or the amount determined by the Medicare 
Part B AFS established under section 1834(l) of the Social Security Act 
(42 U.S.C. 1395m(l)), unless VA has entered into a contract for that 
transportation. Additionally, VA proposes to establish a payment 
methodology for other types of special modes of transportation, 
including wheelchair and stretcher van services. VA would use this 
payment methodology while VA collects data for the purpose of 
developing a new payment methodology. In doing so, VA would establish 
two (2) categories of special modes of transportation for purposes of 
determining the payment rate: Travel by ambulance, which would be 
defined in 38 CFR 70.2, and travel by modes other than ambulance. We 
believe that these changes would reduce improper payments and help 
eliminate payment error, waste, and abuse in line with the goals of 
Executive Order 13520.

Sec. 70.2 Definitions

    We propose to add a definition of ``ambulance'' that would be 
necessary in administering payments for special mode transportation. VA 
would define ambulance by cross-referencing the CMS regulations related 
to coverage and payment for ambulance services. See 42 CFR 410.40, 
410.41, and Part 414, Subpart H. VA proposes to define ambulance to 
mean advanced life support, level 1 (ALS1); advanced life support, 
level 2 (ALS2); basic life support (BLS); fixed wing air ambulance 
(FW); rotary wing air ambulance (RW); and specialty care transport 
(SCT), as those services are defined in 42 CFR 414.605. Consistent with 
42 CFR 414.605, the definitions of these terms would apply to ground 
(both land and water) ambulance services and to air ambulance services 
unless otherwise specified. Currently Medicare Part B covers these 
levels of ambulance services under 42 CFR 410.40(c), as well as 
paramedic ALS intercept, when applicable criteria are met. VA would 
exclude paramedic ALS intercept (PI) because this service involves 
arriving on scene, providing initial care, and intermittent 
accompaniment of a person on an ambulance. Paramedic ALS intercept does 
not involve actual transport of the person, and the vendor may charge 
for mere arrival on scene rather than providing care during transport. 
VA would not pay for this charge because PI does not involve active 
care during transportation from the point of emergency to the final 
location. CMS regulations are an appropriate reference source in our 
proposed definition of ``ambulance'' because VA is proposing to rely on 
the Medicare Part B AFS payment rates in its new ambulance payment 
methodology as authorized by 38 U.S.C. 111(b)(3)(C). VA would make this 
change in an effort to maintain uniformity with CMS and eliminate 
confusion for vendors.

Sec. 70.30 Payment Principles

    Under current 38 CFR 70.30(a)(4), VA pays the ``actual cost of a 
special mode of transportation.'' Current 38 CFR 70.30(a)(4) has not 
been revised to reflect VA's payment authority for travel by ambulance 
in 38 U.S.C. 111(b)(3)(C), and this proposed rule would implement that 
authority in 38 CFR 70.30(a)(4). Moreover, VA would revise 38 CFR 
70.30(a)(4) to prescribe a payment methodology for travel by modes 
other than ambulance while VA collects data for the purpose of 
developing a new payment methodology. The new payment methodology would 
be the subject of a separate and later rulemaking.
    We would restructure the current language in 38 CFR 70.30(a)(4) to 
distinguish between travel by ambulance and travel by modes other than 
ambulance in new 38 CFR 70.30(a)(4)(i) and 70.30(a)(4)(ii), 
respectively. Additionally, VA would state that the proposed payment 
methodologies for special modes of transportation would apply 
notwithstanding 38 CFR 17.55 and 17.56 for purposes of 38 CFR 17.120, 
which relates to payment or reimbursement of the expenses of emergency 
treatment under 38 U.S.C. 1728. Proposed 70.30(a)(4) would also specify 
that the payment methodologies for travel by ambulance and travel by 
modes other than ambulance would not apply when VA has entered into a 
contract with the vendor. When VA has entered into a contract with the 
vendor, the terms of the contract would govern VA's payments. Finally, 
proposed 70.30(a)(4) would define the term ``posted rate'' for purposes 
of the payment methodology for travel by modes other than ambulance, 
discussed further below.
    Proposed 38 CFR 70.30(a)(4)(i) would establish in regulation a new 
payment methodology for travel by ambulance. VA would adopt the 
Medicare Part B AFS for transport by ambulance, and we would pay for 
ambulance services based on the lesser of either the AFS payment amount 
or the actual charge, unless (as would be stated in 38 CFR 70.30(a)(4)) 
VA has executed a contract for ambulance services from the vendor in 
which case the terms of the contract would govern VA payments. For ALS1 
and BLS, the AFS includes rates for emergency and nonemergency 
transportation. For purposes of proposed section 70.30(a)(4)(i), VA 
would apply the applicable CMS rate based on the vendor's coded 
invoice. New 38 CFR 70.30(a)(4)(i) would read as follows: ``Travel by 
ambulance: VA will pay the lesser of the actual charge for ambulance 
transportation or the amount determined by the fee schedule established 
under section 1834(l) of the Social Security Act (42 U.S.C. 
1395m(l)).''
    Proposed 38 CFR 70.30(a)(4)(ii) would establish in regulation a 
payment methodology for travel by modes other than ambulance. Unlike 
travel by ambulance, there are no existing Medicare Part B payment 
rates for transport by modes other than

[[Page 70553]]

ambulance to include wheelchair and stretcher van services. While 
Medicare Part B does not currently cover these services, there are 
Healthcare Common Procedure Coding System (HCPCS) codes for them, and 
CMS makes reference to the published Medicaid rates in each respective 
state. In this proposed rule, we refer to the published Medicaid rates 
in each respective state as ``posted rates.'' If a state has a posted 
rate, then VA would be able to access it. Relying on posted rates 
alone, however, would present two challenges: (1) VA cannot direct 
vendors to one source to obtain the posted rate for these services, and 
(2) not every state has posted rates for these services or makes them 
available. Because of this, VA proposes to establish a payment 
methodology for these other types of special mode of transportation 
services, while VA collects data for the purpose of developing a new 
payment methodology, which would be the subject of a separate and later 
rulemaking.
    Proposed 38 CFR 70.30(a)(4) would define the term ``posted rate'' 
for purposes of section 70.30(a)(4)(ii) to mean ``the applicable 
Medicaid rate for the special mode transport in the state or states 
where the vendor is domiciled or where transport occurred (``involved 
states'').'' Proposed 38 CFR 70.30(a)(4)(ii)(A)-(C) would create a 
payment methodology to pay the lesser of either: (1) A state's posted 
rate for these services, or (2) the vendor's actual charge. VA would 
undertake this action as stated above to comport with Executive Order 
13520. By paying the lowest rate between a state's posted rate or the 
vendor's actual charge, VA would actively reduce the possibility of 
waste and abuse in a major VA program.
    VA recognizes that some vendors provide services only in states 
where they are domiciled or are domiciled in states other than the ones 
in which they provide services. VA would attempt to account for both 
singular and multi-jurisdictional vendors. VA also recognizes that 
transport can occur across state lines, and we would account for this 
in the payment methodology. For situations where the vendor provides 
services in a state or states other than where the vendor is domiciled, 
or where special mode transport occurs across state lines, VA would pay 
the lowest posted rate among the states involved or the actual charge, 
whichever is lowest. If the states involved have no posted rate, then 
VA would pay the vendor's actual charge. We would make this change in 
an effort to control costs where we work with regional or national 
vendors who provide services in multiple jurisdictions, and the posted 
rates in the areas where they deliver services are lower or higher than 
the vendor's state or states of domicile. In the absence of a posted 
rate for an involved state, VA would pay the lowest among the posted 
rates of the other state or states or the vendor's actual charge. 
Proposed 70.30(a)(4)(ii) would read as follows: ``Travel by modes other 
than ambulance: VA will pay the lesser of: (A) The vendor's actual 
charge. (B) The posted rate in the state where the vendor is domiciled. 
If the vendor is domiciled in more than one state, the lowest posted 
rate among all involved states. (C) The posted rate in the state where 
transport occurred. If transport occurred in more than one state, the 
lowest posted rate among all involved states. NOTE TO PARAGRAPH 
(a)(4)(ii): In the absence of a posted rate for an involved state, VA 
will pay the lowest among the available posted rates or the vendor's 
actual charge.''
    After utilizing this methodology for an initial 90 calendar day 
period after this rule becomes final in the Federal Register, VA would 
analyze the payments made to vendors for travel by modes other than 
ambulance and determine whether we have enough payment data (e.g., 
arithmetic average of actual charges, locality rates, or posted rates) 
to develop a new methodology. If VA determines that it has enough 
payment data, then VA would develop a payment methodology using the 
lowest possible rate. If VA does not have enough payment data to create 
a methodology after the initial 90 calendar day period, then VA would 
continue to collect data for as many 90 calendar day intervals as VA 
would deem necessary to gather sufficient payment data, which we do not 
anticipate exceeding 18 months from the effective date of the final 
rule. Subsequently, VA would propose a new methodology for travel by 
modes other than ambulance in a separate rulemaking in the Federal 
Register.

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 proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

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

Executive Orders 12866, 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 Fiscal Year to Date.''
    This proposed rule is expected to be an E.O. 13771 deregulatory 
action. Details on the estimated cost savings of this proposed rule can 
be found in the rule's economic analysis.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. VA estimates that this proposed rule would potentially 
impact 2,979 small entities within NAICS Code 621910 (Ambulance 
Services), which represents 97 percent of the total entities covered by 
NAICS Code 621910. However, VA assumes that all entities within NAICS 
Code 621910 would bear VA's cost avoidance equally. The per entity 
burden is estimated to be less than 1% of preliminary receipts for all 
entities in NAICS Code 621910. VA does not believe the impact on 
vendors within NAICS Code 621999 (All Other Miscellaneous Ambulatory 
Health Care

[[Page 70554]]

Services) or NAICS Code 485991 (Special Needs Transportation) will be 
significant because we do not typically pay for non-contract wheelchair 
or stretcher van services. Because VA estimates that over 99% of its 
payments to vendors potentially covered within NAICS Codes 621999 and 
485991 are made pursuant to a contract, less than 1% of small entities 
within these NAICS Codes are estimated to be impacted by this proposed 
rule. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do 
not apply.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.008--Veterans Domiciliary 
Care; 64.012--Veterans Prescription Service; 64.013--Veterans 
Prosthetic Appliances; 64.014--Veterans State Domiciliary Care; 
64.015--Veterans State Nursing Home Care; 64.026--Veterans State Adult 
Day Health Care; 64.029--Purchase Care Program; 64.035--Veterans 
Transportation Program; 64.040--VHA Inpatient Medicine; 64.041--VHA 
Outpatient Specialty Care; 64.042--VHA Inpatient Surgery; 64.043--VHA 
Mental Health Residential; 64.044--VHA Home Care; 64.045--VHA 
Outpatient Ancillary Services; 64.046--VHA Inpatient Psychiatry; 
64.047--VHA Primary Care; 64.048--VHA Mental Health clinics; 64.049--
VHA Community Living Center; 64.050--VHA Diagnostic Care.

List of Subjects in 38 CFR Part 70

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

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. Brooks D. 
Tucker, Assistant Secretary for Congressional and Legislative Affairs, 
Performing the Delegable Duties of the Chief of Staff, Department of 
Veterans Affairs, approved this document on October 28, 2020, for 
publication.

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

    For the reasons set forth in the preamble, the Department of 
Veterans Affairs proposes to amend 38 CFR part 70 as follows:

PART 70--VETERANS TRANSPORTATION PROGRAMS

0
1. The authority citation for part 70 is revised to read as follows:

    Authority: 38 U.S.C. 101, 111, 111A, 501, 1701, 1714, 1720, 
1728, 1782, 1783, E.O. 11302, and E.O. 13520.

0
2. Amend Sec.  70.2, by adding in alphabetical order the definition 
``Ambulance'' to read as follows:
    Ambulance for this subpart, means advanced life support, level 1 
(ALS1); advanced life support, level 2 (ALS2); basic life support 
(BLS); fixed wing air ambulance (FW); rotary wing air ambulance (RW); 
and specialty care transport (SCT), as those terms are defined in 42 
CFR 414.605.
* * * * *
0
3. In Sec.  70.30 amend paragraph (a)(4) to read as follows:


Sec.  70.30  Payment principles.

    (a) * * *
    (4) VA payments for special modes of transportation will be made in 
accordance with this section, unless VA has entered into a contract 
with the vendor in which case the terms of the contract will govern VA 
payments. This section applies notwithstanding 38 CFR 17.55 and 17.56 
for purposes of 38 CFR 17.120. For purposes of paragraph (ii), the term 
``posted rate'' refers to the applicable Medicaid rate for the special 
mode transport in the state or states where the vendor is domiciled or 
where transport occurred (``involved states'').
    (i) Travel by ambulance: VA will pay the lesser of the actual 
charge for ambulance transportation or the amount determined by the fee 
schedule established under section 1834(l) of the Social Security Act 
(42 U.S.C. 1395m(l)).
    (ii) Travel by modes other than ambulance: VA will pay the lesser 
of:
    (A) The vendor's actual charge.
    (B) The posted rate in the state where the vendor is domiciled. If 
the vendor is domiciled in more than one state, the lowest posted rate 
among all involved states.
    (C) The posted rate in the state where transport occurred. If 
transport occurred in more than one state, the lowest posted rate among 
all involved states.

    Note to paragraph (a)(4)(ii) of this section: In the absence of 
a posted rate for an involved state, VA will pay the lowest among 
the available posted rates or the vendor's actual charge.

* * * * *
[FR Doc. 2020-24261 Filed 11-4-20; 8:45 am]
BILLING CODE 8320-01-P