[Federal Register Volume 86, Number 188 (Friday, October 1, 2021)]
[Rules and Regulations]
[Pages 54390-54396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21457]


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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 51c

RIN 0906-AB30


Implementation of Executive Order on Access to Affordable Life-
Saving Medications; Rescission of Regulation

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

ACTION: Final rule; rescission of regulations.

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

SUMMARY: HHS is rescinding the final rule entitled ``Implementation of 
Executive Order on Access to Affordable Life-Saving Medications,'' 
published in the December 23, 2020, Federal Register (2020 Rule). HHS 
is rescinding the 2020 Rule due to the excessive administrative costs 
and burdens that implementation would have imposed on health centers. 
In particular, the 2020 Rule required health centers to create and 
maintain new practices necessary to determine patients' eligibility to 
receive certain drugs at or below the discounted price paid by the 
health center or subgrantees plus a minimal administration fee. HHS 
finds the 2020 Rule's implementation would have resulted in reduced 
resources available to support critical services to health center 
patients--including those who use insulin and injectable epinephrine. 
HHS's consideration of the 2020 Rule's impact was informed, in part, by 
the demands on health centers resulting from the COVID-19 pandemic. As 
Executive Order 13937 remains in effect, HHS is exploring non-
regulatory options to implement the Executive Order.

DATES: This rule is effective November 1, 2021.

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. Public Participation

    On June 16, 2021, HHS published a Notice of Proposed Rulemaking 
(2021 NPRM) in the Federal Register (86 FR 32008) to rescind the 
``Implementation of Executive Order on Access to Affordable Life-Saving 
Medications'' rule. The 2021 NPRM provided for a 30-day comment period, 
and HHS received 332 comments. HHS carefully considered all comments in 
developing this rule, as outlined in Section VI below, and presents a 
summary of all significant comments and HHS responses.

II. Background

    HHS published the subject NPRM in the Federal Register on September 
28, 2020 (85 FR 60748), and the 2020 Rule on December 23, 2020 (85 FR 
83822). The 2020 Rule established a new requirement directing all 
health centers receiving grants under section 330(e) of the Public 
Health Service 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.
    On June 16, 2021, 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 to delay the effective date published at 86 FR 13872 
(March 11, 2021), HHS published the 2021 NPRM to rescind the 2020 Rule. 
The 2021 NPRM cited significant concerns regarding health centers 
needing to divert vital resources to implement the 2020 Rule. The 2021 
NPRM requested comment on the administrative burden and costs to comply 
with the 2020 Rule and thus maintain eligibility for future Health 
Center Program grants. The 2021 NPRM also requested comment on whether 
a rescission would assist health centers in continuing to provide 
primary care services to medically underserved and vulnerable 
populations. HHS noted the administrative burdens associated with the 
2020 Rule, particularly in light of health centers' continuing role in 
ensuring equitable access to COVID-19 vaccination and maintaining the 
capacity to provide primary and preventive care that addresses the 
ongoing and evolving needs of hard-to-reach and disproportionately 
affected populations. HHS also noted that the 2020 Rule would carry 
increased administrative costs and administrative burden and would 
result in reduced resources being available to support services to 
health center patients. In addition, most comments submitted previously 
noted that, in many cases, health centers already voluntarily provided 
medications at reduced prices to their patients.
    The 2021 NPRM comment period ended on July 16, 2021. After review 
and consideration of all submitted comments, HHS has concluded that the 
2020 Rule created excessive administrative burden for health centers, 
which in turn would have resulted in reduced resources for health 
center patient services. HHS has determined that the overall impacts of 
the administrative burden outweigh benefits to patients from the 
reduction in prices of insulin and injectable epinephrine. Therefore, 
HHS is issuing this final rule rescinding the 2020 Rule, which was 
published at 85 FR 83822.
    The 2020 Rule became effective on July 20, 2021, prior to 
publication of this rescission. Due to the timing of Health Center 
Program funding, grants awarded in Fiscal Year 2022 would be the first 
opportunity for HRSA to impose the requirements of the ``Implementation 
of Executive Order on Access to Affordable Life-Saving Medications'' 
rule, and so the requirements have not yet been implemented.

III. Statutory Authority

    The statement of authority for 42 CFR part 51c cites to sections 
330 (42 U.S.C. 254b) and 215 of the Public Health Service Act, (42 
U.S.C. 216), respectively.

IV. Overview of This Rule

    HHS is rescinding the 2020 Rule and therefore deleting the 
associated revision to the regulations codified at 42 CFR 51c.303(w). 
42 CFR 51c.303(w) stated: ``To the extent that an applicant for funding 
under Section 330(e) of the Public Health Service Act (42 U.S.C. 
254b(e)) has indicated that it plans to distribute, either directly, or 
through a written agreement, drugs purchased through the 340B Drug 
Pricing Program (42 U.S.C. 256b), and to the extent that such applicant 
plans to make insulin and/or injectable epinephrine available to its 
patients, the applicant shall provide an assurance that it has 
established practices to provide insulin and injectable epinephrine at 
or below the discounted price paid by the health center grantee or 
subgrantee under the 340B Drug Pricing Program (plus a

[[Page 54391]]

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 have no health insurance.''
    This final rule also states that the program term established by 
the ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications'' rule will not be included on any Notices of Award 
issued to health centers receiving grant funds under section 330(e) of 
the Public Health Service Act. Due to the timing of Health Center 
Program funding, placement of that program term on health center awards 
would have first been applied to funds awarded in Fiscal Year 2022. As 
HHS has issued this final rule prior to the issuance of such awards, 
this program term has not been placed on Health Center Program awards.
    This final rule does not revoke Executive Order 13937, which may 
only be revoked by executive order. As Executive Order 13937 remains in 
effect, HHS is exploring non-regulatory options to implement the 
Executive Order.

V. Rationale for Rescission

    HHS is rescinding the 2020 Rule because the overall impact of the 
additional administrative costs and burden that the 2020 Rule would 
have placed on health centers would have harmed health centers and the 
patients they serve.
    In implementing the requirement of the 2020 Rule, health centers 
would have had to absorb significant additional costs in financial 
resources, 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 based on 
the numerous different categories set forth in the 2020 Rule for 
patients to receive insulin and injectable epinephrine.
    The 2020 Rule would have significantly increased the administrative 
burden on health centers because it would have required health centers 
to track and monitor in real time: (1) Whether patients were receiving 
insulin or injectable epinephrine through a 340B pharmacy, (2) whether 
patients' incomes met the threshold in the 2020 Rule (which is 
different from the standard used for the Health Center Program sliding 
fee discount schedule and therefore would have had to be calculated 
separately), and (3) whether patients had a high unmet deductible each 
time they filled their prescriptions--which may have been further 
complicated due to medical billing and claims processing delays or 
whether they had a high deductible or high cost-sharing requirement as 
part of their insurance plan. These burdens would have also required 
that health centers work with their contract pharmacies to implement 
these new requirements, which would have created extra administrative 
costs. HHS has determined that, under the 2020 Rule, health centers and 
pharmacies would have found it challenging to ascertain in real time a 
patient's eligibility for discounted pricing under the 2020 Rule based 
on whether or not that patient continued to have a high unmet 
deductible, as defined in the 2020 Rule, particularly due to delays in 
medical billing and claims processing.
    HHS also notes that the 2020 Rule codified a new definition, 
applicable only to these two classes of drugs, for ``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 definition contrasted with the Health Center Program's 
sliding fee discount schedule requirement 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). Under this subsection, 
health centers must 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.
    In its decision to rescind the 2020 Rule, HHS notes the concerns 
expressed by the vast majority of commenters that the ``low income'' 
definition of 350 percent of the FPG, applicable to patients receiving 
these two classes of drugs, would have created significant 
administrative challenges for health centers. HHS is issuing this rule 
in recognition that the 2020 Rule would have resulted in additional 
administrative burden and costs, resulting in a diversion of resources 
from needed patient care, especially during the COVID-19 pandemic, in 
order to cover such increased administrative costs.
    As commenters have noted, the rule would have forced health centers 
to construct two different eligibility systems. As the 2020 Rule's 
definition of ``low income'' is inconsistent with standards applied in 
the Health Center Program and in other comparable federal programs with 
an income eligibility threshold, this would have imposed new 
administrative burdens on health centers to implement. Furthermore, the 
2020 Rule would require health center staff, who are not clinicians, to 
ask patients at the time of screening if they use insulin or injectable 
epinephrine, which may raise concerns related to the sharing of 
protected health information if not conducted in a confidential 
setting.
    Rescinding the 2020 Rule prevents unnecessary costs to health 
centers that are on the front lines of fighting COVID-19 and providing 
care to millions of Americans. The 2020 Rule would have resulted in 
increased administrative costs and administrative burden and 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.

VI. Public Comments and Responses

    HRSA received a total of 332 comments from the public, including: 
Health centers, associations and organizations representing health 
centers, a health center controlled network, individual health center 
staff and clinical professionals, individuals and organizations 
concerned with the high cost of insulin or injectable epinephrine, an 
association representing pharmacies, an association representing 
hospitals participating in the 340B Program, a health insurance issuer, 
a health innovation and research non-profit organization, a 
pharmaceutical manufacturer, and an association representing 
pharmaceutical manufacturers.
    The vast majority of comments (318) favored rescission of the 2020 
Rule. There were 12 comments opposing rescission of the 2020 Rule and 
supporting its implementation. Two remaining comments did not 
explicitly support or oppose the rescission of the 2020 Rule.
    All comments were considered in developing this final rule. This 
section

[[Page 54392]]

presents a summary of all major issues raised by commenters, grouped by 
subject, as well as responses to the comments. Commenters used the 
terms ``Federally Qualified Health Centers (FQHCs)'' and ``health 
centers'' interchangeably. This final rule only applies to health 
centers funded under Section 330(e) of the Public Health Service Act, 
and not to other FQHCs. For consistency, this final rule uses ``health 
center'' throughout.

1. Support for Rescission

    Approximately 318 commenters supported rescission of the 2020 Rule. 
Commenters cited a number of reasons for their support, which are 
summarized below.
    Comment: Approximately 316 commenters expressed concern that the 
net impact of implementing the 2020 Rule would be a reduction in access 
to care for underserved populations. These commenters described the 
anticipated administrative burden and cost for health centers to 
implement the rule and noted that these costs would reduce resources 
available to provide essential primary care services to patients.
    A subset of these commenters (61) detailed the specific 
administrative burdens and costs that would result if the 2020 Rule 
were implemented, including:
     Determining in real time whether a patient has a high 
remaining deductible. The remaining deductible amount can be inaccurate 
as it may change as a result of pending and delayed medical bills;
     Adjusting the charge for qualifying patients for every 
form of insulin and injectable epinephrine every quarter, when the 340B 
price changes; and
     Keeping pharmacy partners/contractors informed and 
ensuring their compliance with new charges and eligibility rules.
    Another subset of commenters (59) also noted that HRSA estimated it 
would require one full-time equivalent (FTE) staff member per health 
center to implement the 2020 Rule, resources the commenters stated 
would be better spent increasing access in other ways. For example, 
commenters stated that one FTE would have greater impact on patient 
pharmaceutical access by focusing efforts such as helping patients 
apply to pharmaceutical manufacturers' Patient Assistance Programs and 
for enabling services to connect patients to other services in the 
community.
    Response: HHS agrees with these commenters' concerns regarding 
reduced access to care resulting from the additional burden required of 
health centers to implement the 2020 Rule. Specifically, the 2020 Rule 
would necessitate some health centers redirecting resources that might 
have otherwise gone to support patient care to support additional staff 
to ascertain whether a high unmet deductible has been met in real time.
    Comment: Approximately 305 commenters noted that the 2020 Rule's 
definition of ``low income'' as persons below 350 percent of the FPG 
was inconsistent with other federal programs. These commenters further 
stated that having different definitions across programs increases 
administrative burden of implementing the 2020 Rule.
    A subset of these commenters (58) outlined specific issues that 
these differing ``low income'' definitions would cause for health 
centers implementing the 2020 Rule:
     Health centers would need to establish new policies and 
procedures for eligibility determinations;
     Eligibility workers would need to ask all patients if they 
use insulin or injectable epinephrine to appropriately screen them, 
which would require patients to share protected health information with 
non-clinicians;
     The higher income threshold would reduce health center 
savings on these medications, reducing revenue that could be used to 
support patient services for all patients; and
     A higher income threshold would reduce the cost that 
health centers could charge insurers for insulin and injectable 
epinephrine, effectively transferring savings from the health centers 
to insurers. The commenters explained that this is because insurance 
contracts generally prohibit health centers from billing insurers more 
than their ``usual and customary'' rate for each specific drug, and if 
the 2020 Rule were not rescinded, it would be very difficult for health 
centers to argue that the 340B price is not their usual and customary, 
as very few cash patients would not qualify for the 340B price.
    Response: HHS agrees with these commenters' concerns that the 
definition of ``low income'' in the 2020 Rule increases the 
administrative burden of implementing this rule. For example, the 2020 
Rule's inconsistency with current health center requirements would 
require health centers to create new policies, procedures, and 
workflows to ensure that eligible patients would be charged the 340B 
price or less for insulin and injectable epinephrine. Additionally, HHS 
shares commenters' concerns regarding the sharing of protected health 
information with non-clinicians.
    Comment: Approximately 300 commenters expressed concern that 
implementation of the 2020 Rule would divert health center resources 
away from the COVID-19 pandemic response.
    A subset of these commenters (57) further noted that health centers 
are making meaningful contributions to COVID-19 testing, treatment, and 
vaccination, and that these contributions are very resource-intensive. 
These commenters stated that reducing burden by rescinding the 2020 
Rule would allow this vital work to continue.
    Response: HHS appreciates the role health centers continue to play 
in the response to the COVID-19 pandemic. HHS shares commenters' 
concerns about the potential for implementation of the 2020 Rule to 
divert resources away from health centers' ongoing critical role in the 
COVID-19 pandemic response, stabilization, and recovery.
    Comment: Approximately 301 commenters stated that implementing the 
2020 Rule would only improve medication access for a small population 
of patients, and health center services would be drastically reduced 
for all health center patients given the increase in administrative 
costs and loss of 340B savings.
    A subset of these commenters (59) noted that the 2020 Rule would 
have no impact on the overall price of the covered medications outside 
of the 340B Program; those prices are set by manufacturers and would 
not be changed by this rule. Further, these commenters stated that 90 
percent of diabetic patients in the United States are not health center 
patients, and therefore the 2020 Rule would not impact what the 
majority of diabetic patients pay for insulin. Commenters also stated 
that health center patients with diabetes are already likely to qualify 
for discounted pricing through health centers.
    Response: HHS appreciates the detail provided by commenters in 
support of their conclusion that the 2020 Rule would not meaningfully 
impact medication access for health center patients or individuals who 
are not health center patients. HHS agrees that the 2020 Rule would be 
unlikely to impact the underlying price of these two medications. HHS 
also agrees that the 2020 Rule would likely improve medication access 
for only a small population of health center patients.
    Comment: One commenter, an association of chain drug stores, stated 
that the 2020 Rule would place undue burdens on 340B-covered entities 
as well as their contract pharmacies. The commenter also stated that 
the 2020 Rule had not sufficiently resolved

[[Page 54393]]

several concerns, including concerns regarding the need for specific 
guidance to 340B-covered entities for determining the patient's 
deductible at the pharmacy point-of-sale and communicating patient 
eligibility to contract pharmacies and additional clarity with respect 
to administration fees. The commenter argued that because these 
concerns were not addressed in the 2020 Rule, the proper course of 
action would be for HRSA to rescind the 2020 Rule.
    Response: HHS acknowledges that the 2020 Rule would result in 
significant administrative burden on health centers, which may be 
passed on to the pharmacies with which they contract to provide access 
to medications.
    Comment: One commenter, a health insurance issuer, stated support 
for rescinding the 2020 Rule. The commenter also stated that as HHS 
considers alternative approaches to implementation of Executive Order 
13937, it should prioritize options that can be implemented with 
minimal administrative burden to the parties involved in the 340B 
Program, including health centers, their private sector partners, and 
patients served. The commenter further stated that any alternative 
approaches should ensure that HRSA maintains a regularly updated 
directory of health centers, require health centers to adjudicate 340B 
claims of patients who have health insurance, and require pharmacy 
providers to adhere to 340B claim stamping using the National Council 
for Prescription Drugs Programs submission clarification code.
    Response: HHS acknowledges the comment and support for minimizing 
administrative burden. Alternative methods for implementation of 
Executive Order 13937 are beyond the scope of this rulemaking.

2. Opposition to Proposed Rescission

    Twelve commenters opposed the proposed rescission of the 2020 Rule. 
Commenters cited a number of reasons for their opposition, which are 
summarized below.
    Comment: Six commenters opposed HHS's proposed rescission of the 
2020 Rule noting the importance of insulin and the additional costs 
that could be imposed on the health system if patients were not taking 
the necessary amounts of insulin to avoid additional complications.
    Response: HHS shares commenters' concerns about the additional 
health care costs that can result from a lack of access to timely and 
appropriate primary health care. The fundamental purpose of the Health 
Center Program is to ensure access to care for underserved and 
vulnerable populations; Section 330 of the Public Health Service Act 
requires health centers to provide comprehensive primary health care to 
patients without regard to the patient's ability to pay. HHS is 
concerned that the increased costs due to the extra administrative 
burden placed on health centers to comply with the 2020 Rule would lead 
to fewer resources available to help provide comprehensive primary 
health care to as many health center patients as possible and that 
decrease in resources would result in the cost of the 2020 Rule 
outweighing its benefit.
    Comment: Five commenters opposed HHS's proposed rescission of the 
2020 Rule noting that the cost of monthly medications poses a financial 
burden to patients which can be life-threatening, especially for 
underserved populations who depend on lower medication costs. These 
commenters further stated that HHS should consider the cost to patients 
and not just the financial burden on healthcare systems. A subset of 
these commenters (3) stated that if medication costs increase, these 
patients will likely stop taking their medication or be forced to 
choose between food, rent, or medication. Another subset of these 
commenters (2) opposed HHS's proposed rescission of the 2020 Rule 
noting that human life is of greater value than costs to institutions, 
and that the increased burden on health centers does not justify taking 
away affordable medications from underserved populations.
    Response: HHS is concerned that the increased costs due to the 
extra administrative burden placed on health centers to comply with the 
2020 Rule would lead to the availability of fewer resources to help 
provide comprehensive primary health care to as many health center 
patients as possible and that decrease in resources would result in the 
cost of the 2020 Rule outweighing its benefit. HHS believes the 2020 
Rule would improve medication access for only a small percentage of 
health center patients while not meaningfully impacting medication 
access for the majority of health center patients.
    Comment: Four commenters opposed HHS's proposed rescission of the 
2020 Rule noting that they disagree with HHS's reasoning for rescinding 
the 2020 Rule. The commenters stated that administrative burden and 
administrative costs do not justify limiting access to lifesaving 
medications to low income patients who do not have insurance or 
otherwise cannot afford their medications.
    Response: HHS is concerned that the increased costs due to the 
extra administrative burden placed on health centers to comply with the 
2020 Rule would lead to fewer resources available to help provide 
comprehensive primary health care to as many health center patients as 
possible and that decreased resources would result in the cost of the 
2020 Rule outweighing its benefit. Executive Order 13937 remains in 
effect and HHS is exploring alternative approaches to address the high 
costs of prescription drugs, such as insulin or injectable epinephrine.
    Comment: Two commenters opposed HHS's proposed rescission of the 
2020 Rule noting that health care institutions (including health 
centers) can address increasing costs of providing essential programs, 
including during the COVID-19 pandemic, without HHS rescinding this 
rule. Comments included suggested alternative health center cost 
cutting methods such as allocating resources, improving workflows, and 
using employee retention strategies.
    Response: HHS is rescinding the 2020 Rule to maximize resources 
health centers have to provide access to high quality, comprehensive 
primary health care in the most efficient way and to as many health 
center patients as possible. HHS believes the 2020 Rule would improve 
medication access for only a small percentage of health center 
patients. Examining other cost cutting measures to decrease the burden 
on health centers is beyond the scope of this proposed rulemaking.
    Comment: Two commenters opposed HHS's proposed rescission of the 
2020 Rule noting that it would benefit numerous health center patients 
through greater access to affordable insulin and it should be kept for 
that reason. One of those commenters further noted that, unlike 
patients under 200 percent of the FPG who already receive significant 
discounts from health centers and would be less impacted by the 2020 
Rule, patients between 200 and 350 percent of the FPG would greatly 
benefit from this rule going into effect.
    Response: While the 2020 Rule would likely provide benefits to a 
small number of health center patients with diabetes and severe 
allergic reactions, HHS is concerned that the increased costs due to 
the extra administrative burden placed on health centers to comply with 
the 2020 Rule would lead to fewer resources available to provide 
comprehensive primary health care to as many health center patients as 
possible. As Executive Order 13937 remains in effect, HHS is exploring 
non-regulatory options to implement the Executive Order.
    Comment: One commenter opposed HHS's proposed rescission of the 
2020

[[Page 54394]]

Rule noting that HHS should not place a charge on American families to 
pay for administrative costs at health centers, nor administrative 
costs caused by the COVID-19 pandemic.
    Response: HHS appreciates this comment and is committed to 
maximizing resources for health centers to provide comprehensive 
primary health care to health center patients without regard for 
patients' ability to pay.
    Comment: One commenter opposed HHS's proposed rescission of the 
2020 Rule noting that it would allow health centers to divert resources 
to other services at the expense of the community's health needs during 
the COVID-19 pandemic, specifically, access to the lifesaving 
medications of insulin and injectable epinephrine.
    Response: HHS is concerned that the increased costs due to the 
extra administrative burden placed on health centers to comply with the 
2020 Rule would lead to fewer resources available to provide 
comprehensive primary health care to as many health center patients as 
possible, including those who use insulin or injectable epinephrine, 
and that decrease in resources would result in the cost of the 2020 
Rule outweighing its benefit. In addition, as noted in the 2020 Rule, 
in many cases, health centers already voluntarily provide medications, 
including insulin and injectable epinephrine, to their patients at 
reduced prices.
    Comment: One commenter, a pharmaceutical manufacturer, opposed 
HHS's proposed rescission of the 2020 Rule noting that most of its 
insulin products are available to covered entities for pennies and 
rescinding the 2020 Rule would make covered entity patients pay more 
for the medications. The commenter also noted that covered entity 
patients in most cases could receive larger discounts from the 
company's own discount programs for medications.
    Response: Nothing in this rule rescinding the 2020 Rule prohibits 
health center patients from accessing pharmaceutical company and 
charity discount programs to find the most affordable medications, 
including for insulin or injectable epinephrine.
    Comment: One commenter, a pharmaceutical manufacturer, opposed 
HHS's proposed rescission of the 2020 Rule, noting that it provides 
insulin to several charitable organizations including its own 
foundation, which provide insulin for free for qualifying patients at 
or below 400 percent of FPG and covered entities should be held to the 
same standard. Additionally, this commenter noted that it participates 
in a number of programs that allow patients, regardless of their 
income, to purchase insulin at no more than $35 a month.
    Response: HHS commends those who are working to ensure underserved 
patients are able to access discounted medications. As noted above, HHS 
is concerned that the increased costs due to the extra administrative 
burden placed on health centers to comply with the 2020 Rule would lead 
to fewer resources available to provide comprehensive primary health 
care to as many health center patients as possible, including those who 
use insulin or injectable epinephrine.
    Comment: One commenter, a pharmaceutical manufacturer, opposed 
HHS's proposed rescission of the 2020 Rule, noting that grantees that 
are covered entities under the 340B Program should not be able to 
charge large markups on drugs purchased through the 340B Program to 
uninsured or underinsured individuals to fund their operations.
    Response: With regard to the commenter's concern regarding the 
general requirements of the 340B Program, those requirements, including 
charges for drugs purchased through the 340B Program by covered 
entities, are beyond the scope of this rulemaking.
    Comment: One commenter, a pharmaceutical manufacturer, opposed 
HHS's proposed rescission of the 2020 Rule, noting that the commenter 
is able to verify income and insurance information with minimal burden 
and that six covered entities have worked with the commenter to provide 
insulin to their patients for pennies, demonstrating that the 2020 Rule 
would not be overly burdensome.
    Response: HHS has concerns that under the 2020 Rule's definition of 
``high unmet deductible,'' health centers and pharmacies with which 
they contract may find it challenging to ascertain in real time a 
patient's eligibility for pricing based on whether or not the patient 
continues to have a ``high unmet deductible'' that meets the 2020 
Rule's definition of the term. The 2020 Rule defined ``high unmet 
deductible'' as ``the amount a patient owes toward their high 
deductible at any time during a plan year in which the portion of the 
patient's high deductible for the plan year that has not yet been met 
exceeds 20 percent of the deductible.'' Determining whether a patient's 
plan year spending toward their deductible meets this definition has 
the potential to be particularly challenging due to medical billing and 
claims processing delays. For these and other reasons, HHS believes the 
administrative burden and costs the 2020 Rule places on health centers 
outweigh the benefits.

3. General Comments

    Comment: One commenter, an association of pharmaceutical 
manufacturers, while not opposing rescission of the 2020 Rule, noted 
that the 340B Program has grown exponentially in recent years without a 
commensurate benefit to the underserved patients.
    Response: The growth of the 340B Program is beyond the scope of 
this rulemaking.
    Comment: One commenter stated that the 340B Program is essential to 
the well-being of all patients that receive care at health centers and 
asked that the 340B Program be kept in place.
    Response: HHS acknowledges the importance of the 340B Program to 
patients served by health centers. This rulemaking does not change the 
340B Program.

4. Request To Revoke Executive Order 13937

    Comment: Approximately 300 commenters urged revocation of the 
``Executive Order on Access to Affordable Lifesaving Medications,'' on 
which the 2020 Rule was based. These commenters expressed many concerns 
with the underlying Executive Order and requested that it be revoked.
    Response: Revoking Executive Order 13937, ``Access to Affordable 
Lifesaving Medications'' is beyond the authority of HHS and outside the 
scope of this final rule.

5. Miscellaneous

    Other commenters raised a variety of issues that HHS determined did 
not pertain to the rescission of the 2020 Rule. This rulemaking does 
not address those issues as they are outside of its scope.

VII. Regulatory Impact Analysis (RIA)

    HHS has examined the effects of this rule 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

[[Page 54395]]

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 have needed to hire 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 2020 Rule, HRSA determined that the 
2020 Rule was not economically significant, given that the 
administrative burden of $68.7 million described above fell 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. As Executive 
Order 13937 remains in effect, HHS is exploring non-regulatory options 
for implementation.
    HHS welcomed but did not receive comments on whether the proposed 
rescission of the 2020 Rule is a ``significant regulatory action'' 
under Section 3(f) of Executive Order 12866.
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'' 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 $8 
million to $41.5 million. As of September 31, 2020, the Health Center 
Program provides grant funding under section 330(e) of the Public 
Health Service Act to 1,315 organizations to provide health care to 
medically underserved communities. HHS has determined, and the 
Secretary certifies, that this rule will 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 2020 Rule will be minimal. HHS welcomed but 
did not receive comments concerning the economic impact of the proposed 
rescission of the ``Implementation of Executive Order on Access to 
Affordable Life-Saving Medications'' rule on health centers for the 
purposes of the RFA.
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.'' The current threshold after adjustment 
for inflation is $158 million, using the most current (2020) Implicit 
Price Deflator for the Gross Domestic Product. As stated in the RIA for 
the 2020 Rule, HRSA determined that the administrative burden of $68.75 
million described above fell below the Unfunded Mandates Reform Act's 
threshold of $158 million. HRSA relies on that same analysis now, 
finding that rescission of that rule will have an economic impact of 
the same amount, $68.75 million in administrative savings to health 
centers, and that such amount is below the threshold of $158 million.
Executive Order 13132--Federalism
    HHS has reviewed this rule in accordance with Executive Order 13132 
regarding federalism and has determined that it does not have 
``federalism implications.'' This rule will 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 rule 
will 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 rule is projected 
to have no impact on current reporting and recordkeeping burden for 
health centers. This rule will result in no new reporting burdens. HHS 
welcomed but did not receive comments that this rule would result in 
new reporting burdens for health centers.

    Dated: September 28, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.

List of Subjects in 42 CFR Part 51c

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


[[Page 54396]]


    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. 2021-21457 Filed 9-30-21; 8:45 am]
BILLING CODE 4165-15-P