[Federal Register Volume 86, Number 114 (Wednesday, June 16, 2021)]
[Proposed Rules]
[Pages 32008-32011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12545]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 51c

RIN 0906-AB25


Proposed Rescission of Executive Order 13937, ``Executive Order 
on Access to Affordable Life-Saving Medications''

AGENCY: Health Resources and Services Administration (HRSA), Department 
of Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: The Department of Health and Human Services (HHS) proposes to 
rescind the final rule entitled ``Implementation of Executive Order on 
Access to Affordable Life-Saving Medications,'' published in the 
December 23, 2020, Federal Register. HHS is proposing the rescission 
due to undue administrative costs and burdens that implementation would 
impose on health centers. In particular, the final rule would require 
health centers to create and sustain new practices necessary to 
determine patients' eligibility to receive certain drugs at or below 
the discounted price paid by the health center or subgrantees under the 
340B Program, resulting in reduced resources available to support 
critical services to their patients--including those who use insulin 
and injectable epinephrine. These challenges would be significantly 
exacerbated by the multitude of demands on health centers related to 
the COVID-19 pandemic. HHS is seeking public comment on this notice of 
proposed rulemaking (NPRM). As Executive Order 13937 remains in effect, 
should the final rule be rescinded, other implementation approaches 
will be considered to effectuate the Executive Order.

DATES: Written comments and related material to this proposed rule must 
be received to the online docket via https://www.regulations.gov on or 
before July 16, 2021.

ADDRESSES: Comments must be identified by HHS Docket No. HRSA-2021-0003 
and submitted electronically to the Federal eRulemaking Portal at 
https://www.regulations.gov. Follow the instructions for submitting 
comments. Comments and attachments will be posted to the docket 
unchanged. Because your comments will be made public, you are solely 
responsible for ensuring that your comments do not include any 
confidential information that you or a third party may not wish to be 
posted, such as medical information, your or anyone else's Social 
Security number, or confidential business information. Additionally, if 
you include your name, contact information, or other information that 
identifies you in the body of your comments, that information will be 
posted.

FOR FURTHER INFORMATION CONTACT: Jennifer Joseph, Director, Office of 
Policy and Program Development, Bureau of Primary Health Care, Health 
Resources and Services Administration, 5600 Fishers Lane, Rockville, 
Maryland 20857; email: [email protected]; telephone: 301-594-4300; fax: 
301-594-4997.

SUPPLEMENTARY INFORMATION:

I. Background

    HHS published a notice of proposed rulemaking (NPRM) in the Federal 
Register on September 28, 2020 (85 FR 60748), and a final rule on 
December 23, 2020 (85 FR 83822) entitled, ``Implementation of Executive 
Order on Access to Affordable Life-Saving Medications.'' This rule 
established a new requirement directing all health centers receiving 
grants under section 330(e) of the Public Health Service (PHS) Act (42 
U.S.C. 254b(e)) that participate in the 340B Program (42 U.S.C. 256b), 
to the extent that they plan to make insulin and/or injectable 
epinephrine available to their patients, to provide assurances that 
they have established practices to provide these drugs at or below the 
discounted price paid by the health center or subgrantees under the 
340B Program (plus a minimal administration fee) to health center 
patients with low incomes, as determined by the Secretary, who have a 
high cost sharing requirement for either insulin or injectable 
epinephrine; have a high unmet deductible; or who have no health 
insurance.
    Pursuant to the January 20, 2021, memorandum from the Assistant to 
the President and Chief of Staff, entitled ``Regulatory Freeze Pending 
Review,'' and OMB Memorandum M-21-14, the effective date of the 
``Implementation of Executive Order on Access to Affordable Life-Saving 
Medications'' rule, published in the December 23, 2020, Federal 
Register (85 FR 83822), was delayed from January 22, 2021, to March 22, 
2021 (86 FR 7069), to give HHS officials the opportunity for further 
review and consideration of the rule.
    On March 11, 2021 (86 FR 13872), HHS published a proposed rule to 
further delay the effective date of the ``Implementation of Executive 
Order on Access to Affordable Life-Saving Medications'' rule. On March 
22, 2021, the effective date of the

[[Page 32009]]

``Implementation of Executive Order on Access to Affordable Life-Saving 
Medications'' rule was delayed to July 20, 2021 (86 FR 15423), to allow 
HHS an additional opportunity to review and consider further questions 
of fact, law, and policy that may be raised by the rule, including 
whether revision or withdrawal of the rule may be warranted.
    After a careful reassessment of the comments submitted in response 
to the proposed rule published at 85 FR 60748 (September 28, 2020) and 
consideration of the comments received on the proposed rule published 
at 86 FR 13872 (March 11, 2021), HHS is proposing in this NRPM to 
rescind the ``Implementation of Executive Order on Access to Affordable 
Life-Saving Medications'' rule. As set forth more specifically below, 
HHS has significant concerns regarding health centers needing to divert 
vital resources to implement this rule, as the administrative burden 
and cost necessary to comply with the rule and thus maintain 
eligibility for future grants has the potential to constrain health 
centers' ability to provide ongoing primary care services to medically 
underserved and vulnerable populations. HHS has reconsidered previously 
submitted comments regarding the administrative burdens associated with 
the rule in light of the significantly increased, long-term reliance on 
health centers in responding to the COVID-19 pandemic, particularly 
related to health centers' role in addressing health equity and vaccine 
delivery for hard-to-reach and disproportionately affected populations 
that were not readily apparent at the time the rule was finalized in 
December 2020. Moreover, this rule will result in a loss of revenue 
from 340B savings for health centers participating in the 340B Program 
and this loss, along with increased administrative costs and 
administrative burden, will result in reduced resources being available 
to support services to health center patients. In addition, most 
commenters noted that, in many cases, these health centers already 
provide medications at reduced prices to their patients.
    HHS has considered comments submitted by commenters prior to the 
final rule's promulgation and in response to the proposed rule 
published at 86 FR 13872 (March 11, 2021) in the development of this 
NPRM and will consider new comments submitted in response to this NPRM.

II. Statutory Authority

    The statement of authority for 42 CFR part 51c continues to read 
section 330 of the Public Health Service Act (``PHS Act'' or ``the 
Act'') (42 U.S.C. 254b) and section 215 of the PHS Act, (42 U.S.C. 
216).

III. Discussion of Proposed Rule

    HHS is proposing to rescind the ``Implementation of Executive Order 
on Access to Affordable Life-Saving Medications'' rule. As the final 
rule has not become effective, this NPRM proposes that the existing 
regulation remain unchanged. In particular, this NPRM proposes to 
rescind the final rule and retract the related requirement for awarding 
new grants under section 330(e) of the PHS Act (42 U.S.C. 254b) that 
the awardee offering insulin and injectable epinephrine to its patients 
have established written practices to make insulin and injectable 
epinephrine available at or below the discounted price paid by the 
health center grantee or subgrantee under the 340B Program (plus a 
minimal administration fee) to health center patients with low incomes 
who: (a) Have a high cost sharing requirement for either insulin or 
injectable epinephrine, (b) have a high unmet deductible, or (c) have 
no health insurance.
    This NPRM proposes to rescind the rule that amended 42 CFR 51c.303, 
by deleting paragraph (w). This NPRM also proposes that the Program 
Term established by the ``Implementation of Executive Order on Access 
to Affordable Life-Saving Medications'' rule not be included on any 
Notices of Award issued to health centers receiving grant funds under 
section 330(e) of the Act.
    HHS is proposing to rescind this rule because, although certain 
health center patients might benefit from it, the additional costs and 
burden the rule would place on health centers could harm the program 
and the patients it serves as a whole. Allowing this final rule to 
become effective would increase the burden on health centers and divert 
necessary resources from patient care to the administration of new 
processes. In order to implement this new requirement, health centers 
would need to absorb significant additional cost, time, and ongoing 
support staff to create and maintain new reporting, monitoring, 
technical and administrative re-engineering, staff training, and 
workflow re-designs to assess eligibility for patients to receive 
insulin and injectable epinephrine consistent with the final rule.
    Other more specific administrative burdens and costs imposed by the 
final rule that were shared by commenters included the need for health 
center staff to track patients' eligibility for the pricing described 
in the rule as it relates to: (1) Whether patients are receiving 
insulin or injectable epinephrine through a 340B pharmacy, (2) whether 
patients' incomes meet the threshold in the rule (which is different 
from that used for the Health Center Program sliding fee discount 
schedule and therefore has to be calculated separately), and (3) 
whether patients have a high unmet deductible each time they fill their 
prescriptions--which may be further complicated due to the delay in 
medical billing and claims processing--or whether they have a high 
deductible or high cost-sharing requirement as part of their insurance 
plan. These burdens would also extend to ensuring that all relevant 
information is transmitted to contract pharmacies. HHS has concerns 
that under the final rule, health centers and pharmacies with whom they 
contract may find it challenging to ascertain a patient's eligibility 
for pricing under this rule based on whether or not that patient 
continues to have a high unmet deductible in real time, particularly 
due to delays in medical billing and claims processing.
    HHS is also concerned that the final rule creates a new required 
definition, applicable only to these two classes of drugs, of 
``individuals with low income,'' to include those individuals with 
incomes at or below 350 percent of the amount identified in the Federal 
Poverty Guidelines (FPG). This new required definition is in contrast 
with the Health Center Program's required use of a sliding fee discount 
schedule standard for Health Center Program grantees applicable to 
individuals with incomes at or below 200 percent of the FPG, pursuant 
to 42 CFR 51c.303(f). Health centers must currently establish a sliding 
fee discount schedule for services provided to patients with incomes 
between 100 and 200 percent of the FPG, with a full discount to 
individuals and families with annual incomes at or below 100 percent of 
those set forth in the FPG. Health centers also may collect nominal 
fees for services from individuals and families at or below 100 percent 
of the FPG, and no sliding fee discount may be provided to individuals 
and families with annual incomes greater than 200 percent of the FPG. 
Health centers must also demonstrate to HHS that they maintain and 
apply such sliding fee discount schedules to the provision of health 
services, which requires them to establish and maintain processes for 
identifying patient income levels for billing purposes consistent with 
these requirements. Therefore, given the differences between these 
standards,

[[Page 32010]]

HHS agrees with the concerns expressed by a substantial majority of 
commenters that describing ``low income'' as 350 percent of FPG for the 
purpose of the rule would require the establishment of a new, distinct, 
and higher ``low income'' threshold applicable to these two classes of 
drugs, and that applying this distinct standard for purposes of billing 
for these drugs would create significant administrative challenges for 
health centers. HHS shares commenters' concerns regarding the undue 
administrative burden and costs of the rule and the resulting diversion 
of resources from needed patient care, especially during the COVID-19 
pandemic, in order to cover such increased administrative costs.
    HHS also shares commenters' concerns that defining ``individuals 
with low incomes'' at 350 percent of FPG imposes the additional burden 
and cost of creating and operating two different eligibility systems. 
This definition of ``low income'' is inconsistent with standards 
applied in other comparable federal programs. Commenters noted that 
every federal program with an income eligibility threshold defines 
``low income'' as 250 percent of the FPG or less. Commenters further 
noted that, while the Patient Protection and Affordable Care Act uses a 
ceiling of 400 percent of the FPG to identify those eligible for 
premium tax credits on the Exchanges, this is not a definition of ``low 
income,'' as premium tax credits are designed for both lower and middle 
income individuals. 26 U.S.C. 36B(b)(3)(A)(i).
    Finally, commenters expressed concerns that the rule was based on a 
fundamental misunderstanding of the 340B Program since health centers 
are already required by the Health Center Program to use any savings to 
benefit their patient population (42 U.S.C. 254b(e)(5)(D)). HHS shares 
their concerns that this rule will result in a loss of 340B revenue for 
health centers participating in the 340B Program, and that this loss, 
along with increased administrative costs and administrative burden, 
will result in reduced resources available to support critical services 
to health center patients, including those who use insulin or 
injectable epinephrine and who receive other services from health 
centers. HHS is undertaking this unusual step of issuing this NPRM to 
understand more about these concerns and to propose a potential 
rescission of this rule.
    HHS invites comment on this NPRM proposing to rescind the final 
rule ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications.''

IV. Regulatory Impact Analysis (RIA)

    HHS has examined the effects of this NPRM as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 8, 2011), the Regulatory Flexibility Act (Pub. L. 96-354, 
September 19, 1980), the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), and Executive Order 13132 on Federalism (August 4, 1999).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 is supplemental to and reaffirms the principles, 
structures, and definitions governing regulatory review as established 
in Executive Order 12866, emphasizing the importance of quantifying 
both costs and benefits, of reducing costs, of harmonizing rules, and 
of promoting flexibility. Section 3(f) of Executive Order 12866 defines 
a ``significant regulatory action'' as an action that is likely to 
result in a rule: (1) Having an annual effect on the economy of $100 
million or more in any 1 year, or adversely and materially affecting a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or Tribal 
governments or communities (also referred to as ``economically 
significant''); (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raising novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in the Executive Order. A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more in any 1 year), and a ``significant'' regulatory action 
is subject to review by the Office of Management and Budget (OMB). HRSA 
estimates that, on average, each health center would need one 
additional full-time equivalent (FTE) eligibility assistance worker at 
approximately $50,000 to support necessary additional administrative 
processes, totaling approximately $68,750,000 across health centers.
    As stated in the RIA for the final rule published December 23, 
2020, HRSA determined that the rule is not economically significant, 
given that the administrative burden of $68.7 million described above 
falls below the ``economically significant'' threshold of $100 million. 
HRSA relies on that same analysis now, finding that rescission of that 
rule will have an economic impact of the same amount, $68,750,000, in 
administrative savings to health centers, and that such amount is below 
the ``economically significant'' threshold of $100 million. Also, as 
stated in the December 23, 2020 final rule, a number of patients served 
at health centers and covered by that final rule may already receive 
these two medications at reduced prices, further reducing the economic 
significance of this proposed rescission. In order to determine whether 
the proposed rescission of the rule is a ``significant regulatory 
action'' under Section 3(f) of Executive Order 12866, HHS welcomes 
comments concerning the economic impact of this proposed rescission of 
the ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications'' rule or implementation of the proposed rescission 
on the economy, productivity, competition, jobs, the environment, 
public health or safety, or state, local, or tribal governments or 
communities.

The Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) and the 
Small Business Regulatory Enforcement and Fairness Act of 1996, which 
amended the RFA, require HHS to analyze options for regulatory relief 
of small businesses. If a rule has a significant economic effect on a 
substantial number of small entities, the Secretary must specifically 
consider the economic effect of the rule on small entities and analyze 
regulatory options that could lessen the impact of the rule. As we did 
in the ``Implementation of Executive Order on Access to Affordable 
Life-Saving Medications'' final rule, HHS will use an RFA threshold of 
at least a 3 percent impact on at least 5 percent of small entities.
    For purposes of the RFA, HHS considers all health care providers to 
be small entities either by meeting the Small Business Administration 
(SBA) size standard for a small business, or by being a nonprofit 
organization that is not dominant in its market. The current SBA size 
standard for health care providers ranges from annual receipts of

[[Page 32011]]

$8 million to $41.5 million. As of August 8, 2020, the Health Center 
Program provides grant funding under section 330(e) of the PHS Act to 
1,310 organizations to provide health care to medically underserved 
communities. HHS has determined, and the Secretary certifies, that this 
NPRM would not have a significant impact on the operations of a 
substantial number of small health centers; therefore, we are not 
preparing an analysis of impact for purposes of the RFA. HHS estimates 
the economic impact on small entities as a result of rescinding the 
``Implementation of Executive Order on Access to Affordable Life-Saving 
Medications'' final rule would be minimal. HHS welcomes comments 
concerning the economic impact of this NPRM on health centers.

Unfunded Mandates Reform Act

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year.'' In 2019, that threshold level was 
approximately $164 million. HHS does not expect this NPRM to exceed the 
threshold.

Executive Order 13132--Federalism

    HHS has reviewed this NPRM in accordance with Executive Order 13132 
regarding federalism, and has determined that it does not have 
``federalism implications.'' This NPRM would not ``have substantial 
direct effects on the States, or on the relationship between the 
national government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' This NPRM 
would not adversely affect the following family elements: Family 
safety, family stability, marital commitment; parental rights in the 
education, nurture, and supervision of their children; family 
functioning, disposable income or poverty; or the behavior and personal 
responsibility of youth, as determined under section 654(c) of the 
Treasury and General Government Appropriations Act of 1999.

Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that OMB approve all collections of information by a federal agency 
from the public before they can be implemented. This NPRM is projected 
to have no impact on current reporting and recordkeeping burden for 
health centers. This NPRM would result in no new reporting burdens. 
Comments are welcome on the accuracy of this statement.

List of Subjects in 42 CFR Part 51c

    Grant programs--Health, Health care, Health facilities, Reporting 
and recordkeeping requirements.

    Dated: June 10, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.

    Accordingly, by the authority vested in me as the Secretary of 
Health and Human Services, and for the reasons set forth in the 
preamble, 42 Code of Federal Regulations Part 51c is amended as 
follows:

PART 51c--GRANTS FOR COMMUNITY HEALTH CENTERS

0
1. The authority citation for part 51c is revised to read as follows:

    Authority: Sec. 330, Public Health Service Act, 89 Stat. 342, 
(42 U.S.C. 254b); sec. 215, Public Health Service Act, 58 Stat. 690, 
(42 U.S.C. 216).


Sec.  51c.303  [Amended]

0
2. Amend Sec.  51c.303 by removing paragraph (w).

[FR Doc. 2021-12545 Filed 6-15-21; 8:45 am]
BILLING CODE 4165-15-P