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Agricultural Marketing Service, USDA.
Final rule.
This rule implements a recommendation from the Texas Valley Citrus Committee to increase the assessment rate established for the 2021-22 and subsequent fiscal periods. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Effective May 16, 2022.
Abigail Campos, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email:
This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Agreement No. 121 and Marketing Order No. 906, both as amended (7 CFR part 906), regulating the handling of oranges and grapefruit grown in the Lower Rio Grande Valley in Texas. Part 906, (referred to as “the Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Texas Valley Citrus Committee (Committee) locally administers the Order and is comprised of producers and handlers of oranges and grapefruit operating within the area of production.
The Department of Agriculture (USDA) is issuing this rule in conformance with 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 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. USDA has determined this rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, Texas citrus handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate will be applicable to all assessable oranges and grapefruit for the 2021-22 fiscal year, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
This rule increases the assessment rate from $0.01 per 7/10-bushel carton or equivalent, the rate that was established for the 2018-19 and subsequent fiscal periods, to $0.05 per 7/10-bushel carton or equivalent of oranges and grapefruit handled for the 2021-22 and subsequent fiscal periods.
The Order authorizes the Committee, with the approval of AMS, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. Members are familiar with the Committee's needs and with the costs for goods and services in their local area and are in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.
For the 2018-19 and subsequent fiscal periods, the Committee recommended, and AMS approved, an assessment rate $.01 per 7/10-bushel carton or equivalent of oranges and grapefruit handled. That assessment rate continues to be in effect unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available to AMS.
The Committee met on July 14, 2021, and recommended 2021-22 expenditures of $43,900 and an assessment rate of $0.05 per 7/10-bushel carton or equivalent. In comparison, the previous fiscal period's budgeted expenditures were $155,720. The assessment rate of $0.05 is $0.04 higher than the rate currently in effect. The Committee unanimously voted to increase the assessment rate due to the
Major expenditures recommended by the Committee for the 2021-22 fiscal period include $20,000 for management expenses, $13,900 for administrative expenses, and $10,000 for compliance. Budgeted expenses for these items in the 2020-21 fiscal period were $79,220, $26,500, and $50,000, respectively.
The Committee derived the recommended assessment rate by considering anticipated expenses and expected shipments of Texas oranges and grapefruit. Orange and grapefruit shipments for the 2021-22 year are estimated at 1,000,000 7/10-bushel cartons or equivalents, which should provide $50,000 in assessment income (1,000,000 cartons × $0.05). Income derived from handler assessments at the new rate, along with interest income, should be adequate to cover estimated program expenses of $43,900. Funds in the reserve (currently about $43,000) would be kept within the maximum permitted by § 906.35 of the Order (approximately one fiscal period's expenses).
The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. Dates and times of Committee meetings are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2021-22 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by AMS.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 119 producers of oranges and grapefruit in the production area and 14 handlers subject to regulation under the Order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to data from the National Agricultural Statistics Service (NASS), the industry, and the Committee, the weighted average free-on board price for Texas citrus for the 2019-20 season was approximately $16.20 per carton, with total shipments of around 8.2 million cartons. Based on this information, total annual receipts of Texas citrus handlers in the 2019-20 fiscal period were approximately $132,840,000 ($16.20 multiplied by 8.2 million cartons equals $132,840,000). Dividing by the number of citrus handlers infers average annual receipts of less than $30 million ($132,840,000 divided by 14 handlers equals $9.5 million).
In addition, based on NASS data, the weighted average producer price for the 2019-20 fiscal period was around $5.65 per carton of Texas citrus. Based on producer price, shipment data, and the total number of Texas citrus producers, the average annual producer revenue is below $1,000,0000 ($5.65 multiplied by 8.2 million cartons equals $46,330,000 divided by 119 producers equals approximately $389,328). Thus, the majority of Texas citrus handlers and producers are classified as small entities.
This rule increases the assessment rate established and collected from handlers for the 2021-22 and subsequent fiscal periods from $0.01 per 7/10-bushel carton or equivalent to $0.05 per 7/10-bushel carton or equivalent of oranges and grapefruit grown in the Lower Rio Grande Valley in Texas. The Committee recommended 2021-22 expenditures of $43,900 and an assessment rate of $0.05 per 7/10-bushel carton. The assessment rate of $0.05 is $0.04 higher than the previous rate. The quantity of assessable Texas Citrus for the 2021-22 season is estimated at 1,000,000 7/10-bushel cartons. Thus, the $0.05 rate should provide $50,000 in assessment income ($0.05 multiplied by 1,000,000 cartons), which should be adequate to cover budgeted expenses for the 2021-22 season.
Major expenditures recommended by the Committee for the 2021-22 fiscal period include $20,000 for management expenses, $13,900 for administrative expenses, and $10,000 for compliance. Budgeted expenses for these items in 2020-21 were $79,220, $26,500, and $50,000, respectively.
The Committee recommended increasing the assessment rate because of the extensive tree damage from the freeze in February 2021. At the current assessment rate of $0.01 and with the 2021-22 crop estimated to be 1,000,000 7/10-bushel cartons, assessment income would equal $10,000 ($0.01 multiplied by 1,000,000 cartons), an amount insufficient to cover the Committee's anticipated expenditures of $43,900. By increasing the assessment rate by $0.04, assessment income would be approximately $50,000 ($0.05 multiplied by 1,000,000 cartons). This amount should provide sufficient funds to meet 2021-22 anticipated expenses.
Prior to arriving at this budget and assessment rate, the Committee considered maintaining the current assessment rate of $0.01. However, leaving the assessment unchanged would not generate sufficient revenue to meet the Committee's expenses for the 2021-22 budget of $43,900 and would diminish reserves. Therefore, the alternative was rejected.
A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the producer price for the 2021-22 season should be approximately $5.42 per 7/10-bushel carton or equivalent of oranges and grapefruit. Therefore, the estimated assessment revenue for the 2021-22 fiscal period as a percentage of
This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, costs are minimal and uniform on all handlers, and some portion of the additional costs may be passed on to producers. However, these costs are expected to be offset by benefits derived by the operation of the Order.
The Committee's meeting was widely publicized throughout the Texas citrus industry. All interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the July 14, 2021, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0189 Fruit Crops. No changes in those requirements are necessary as a result of this rule. Should any changes become necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping requirements on either small or large Texas orange and grapefruit handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. As noted in the initial regulatory flexibility analysis, AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.
AMS is committed to complying with the E-Government Act, promoting the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
A proposed rule concerning this action was published in the
No comments were received. Accordingly, no changes will be made to the rule as proposed.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule will tend to effectuate the declared policy of the Act.
Grapefruit, Marketing agreements, Oranges, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 906 as follows:
7 U.S.C. 601-674.
On and after August 1, 2021, an assessment rate of $0.05 per 7/10-bushel carton or equivalent is established for oranges and grapefruit grown in the Lower Rio Grande Valley in Texas.
Agricultural Marketing Service, USDA.
Final rule.
This rule implements a recommendation from the Administrative Committee for Pistachios (Committee) to increase the assessment rate established for the 2021-22 and subsequent production years. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Effective May 16, 2022.
Peter Sommers, Marketing Specialist, or Gary Olson, Regional Director, West Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724 or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order No. 983, as amended (7 CFR part 983), regulating the handling of pistachios grown in California, Arizona, and New Mexico. Part 983 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers of pistachios operating within the production area, and a public member.
The Department of Agriculture (USDA) is issuing this rule in conformance with 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 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. Agricultural Marketing Service (AMS) has determined this rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, pistachio handlers are subject to assessments. Funds to administer the Order are derived from such assessments. The assessment rate established herein is applicable to all assessable pistachios for the 2021-22 and subsequent production years and will continue until amended, suspended, or terminated. The production year runs from September 1 to August 31. This rule is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of the entry of the ruling.
This rule increases the assessment rate from $0.00015 per pound of pistachios, the rate established for the 2020-21 and subsequent production years, to $0.0007 per pound of pistachios for the 2021-22 and subsequent production years.
The Order authorizes the Committee, with the approval of AMS, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. Members are familiar with the Committee's needs and with costs of goods and services in their local area and are in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.
For the 2020-21 and subsequent production years, the Committee recommended, and AMS approved, an assessment rate of $0.00015 per pound of pistachios. That assessment rate continued in effect from production year to production year until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available to AMS.
The Committee met on July 20, 2021, and unanimously recommended expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled for the 2021-22 and subsequent production years. In comparison, the prior year's budgeted expenditures were $679,800. The assessment rate of $0.0007 is $0.00055 higher than the rate previously in effect. The Committee recommended increasing the assessment rate to pay for additional Committee staff in preparation for the retirement of key staff positions (manager and administrative assistant) and to provide adequate income to cover all of the Committee's budgeted expenses for the 2021-22 production year.
Major expenditures recommended by the Committee for the 2021-22 production year include $462,500 for personnel expenses, $125,000 for research, $100,000 for a contingency fund, $82,700 for administration, and $57,800 for office expenses. Budgeted expenses for these items in the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, and $57,600, respectively.
The Committee derived the recommended assessment rate by considering anticipated expenses, an estimated crop of 975 million pounds of pistachios, and the amount of funds available in the authorized reserve. Income derived from handler assessments, calculated at $682,500 (975,000,000 pounds multiplied by $0.0007 assessment rate), along with other income ($220,200), will be adequate to cover budgeted expenses of $828,000. Excess assessment revenue would be added to the Committee's reserve fund. Funds in the Committee's financial reserve are expected to be approximately $385,157 at the end of the 2021-22 production year, which would be within the Order's requirement of no more than approximately two production years' budgeted expenses.
The assessment rate established by this rule will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each production year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. Dates and times of Committee meetings are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2022-23 production year budget, and those for subsequent production years, will be reviewed and, as appropriate, approved by AMS.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the AMS has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 19 handlers subject to regulation under the Order, and approximately 1,624 producers of pistachios in the production area. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts of less than $1,000,000, and small agricultural service firms have been defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS), the national average producer price for pistachios for the 2019-20 production year was $2.75 per pound. Committee data indicates 2019-20 production year total pistachio production was 582,111,271 pounds. The total 2019-20 production year value of the pistachio crop was calculated as $1,600,805,995
According to AMS Market News data, the reported terminal price for 2021 for pistachios ranged between $150.00 to $250.00 per 25-pound carton. The average of this range is $200.00 ($150.00 plus $250.00 divided by 2 equals $200.00). Dividing the average value by the 25-pound carton yields an estimated average price per pound of $8.00 ($200.00 average value for 25-pound carton divided by 25). Multiplying the 2019-20 production year total pistachio production of 582,111,271 pounds by the estimated average price per pound of $8.00 equals $4,656,890,168. Dividing this figure by 19 regulated handlers yields estimated average annual handler receipts of $245,099,483, which is well above the SBA threshold for small agriculture service firms.
Therefore, using the above data, and assuming a normal distribution, the majority of pistachio producers may be classified as small entities and the majority of handlers of pistachios may be classified as large entities.
The assessment rate of $0.0007 that the Committee recommended complies with § 983.71(b) of the Order which states that any assessment rate must not exceed one-half of one percent of the average price received by producers in the preceding production year. The average price received by producers in the preceding production year was $2.75 per pound of pistachios. Thus, $2.75 times 0.5 percent equals $0.01375, which is greater than the assessment rate of $0.0007.
This rule increases the assessment rate collected from handlers for the 2021-22 and subsequent production years from $0.00015 to $0.0007 per pound of pistachios. The Committee unanimously recommended 2021-22 production year expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled. The assessment rate of $0.0007 per pound of pistachios is $0.00055 higher than the current rate. The volume of assessable pistachios for the 2021-22 production year is estimated to be 975 million pounds. Thus, the $0.0007 per pound assessment rate should provide $682,500 in assessment income (975,000,000 multiplied by $0.0007). Income derived from handler assessments, along with an estimated $220,000 of other income, will be adequate to cover budgeted expenses for the 2021-22 production year.
Major expenditures recommended by the Committee for the 2021-22 production year include $462,500 for personnel expenses, $125,000 for research, $100,000 for a contingency fund, $82,700 for administration, and $57,800 for office expenses. Budgeted expenses for these items in the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, and $57,600, respectively.
The Committee recommended increasing the assessment rate to cover the Committee's budgeted expenses for the 2021-22 production year and maintain its financial reserve. Additionally, the Committee has approved a hiring search for both the Manager and Administrative Assistant, as both are expected to retire in the near future. The increased assessment income will accommodate the hiring of additional staff to aid in the transition.
Prior to arriving at this budget and assessment rate recommendation, the Committee discussed an alternative that considered the timing of when the additional staff salaries would be required to assist the management transition. However, the Committee determined that the recommended assessment rate will fully fund budgeted expenses, avoid utilizing reserves, and permit the Committee to hire the needed staff to facilitate the replacement of the key management positions.
This rule increases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs are offset by the benefits derived by the operation of the Order.
The Committee's meeting was widely publicized throughout the pistachio industry. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the July 20, 2021, meeting was a public meeting, and all entities, both large and small, were able to express views on this issue. Interested persons were invited to submit comments on this rule, including regulatory and information collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0215, Pistachios Grown in California, Arizona, and New Mexico. No changes in those requirements are necessary as a result of this rule. Should any changes become necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping requirements on either small or large pistachio handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services.
AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.
A proposed rule concerning this action was published in the
No comments were received. Accordingly, no changes were made to the rule as proposed.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule will tend to effectuate the declared policy of the Act.
Marketing agreements, Nuts, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service is amending 7 CFR part 983 as follows:
7 U.S.C. 601-674.
On and after September 1, 2021, an assessment rate of $0.0007 per pound is established for California, Arizona, and New Mexico pistachios.
Agricultural Marketing Service, Department of Agriculture (USDA).
Final rule.
This rule decreases the assessment rate established for the 2021-22 fiscal year and subsequent fiscal years. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Effective May 16, 2022.
Abigail Campos, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Agreement and Marketing Order No. 986, as amended (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986, (referred to as “the Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Council locally administers the Order and is comprised of growers and handlers of pecans operating within the production area, and one accumulator and one public member.
The Department of Agriculture (USDA) is issuing this rule in conformance with 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 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. USDA has determined this rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, pecan handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rates will be applicable to all assessable pecans for the 2021-22 fiscal year, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
The Order provides that based on the recommendation of the Council or other available data, the Secretary shall fix three base rates of assessments for inshell pecans handled during each fiscal year. This rule decreases the assessment rates from $0.03 per pound for improved varieties and $0.02 per pound for native and seedling varieties and for substandard pecans, the rates that were established for the 2016-17 and subsequent fiscal years, to $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans handled for the 2021-22 and subsequent fiscal years.
The Order authorizes the Council, with the approval of Agricultural Marketing Service (AMS), to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Council are familiar with the Council's needs and with the costs of goods and services in their local area and can formulate an appropriate budget and assessment rates. The assessment rates are formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.
For the 2016-17 and subsequent fiscal years, the Council recommended, and AMS approved, assessment rates of $0.03 per pound for improved varieties and $0.02 per pound for native and seedling varieties and for substandard pecans handled. The assessment rates continue in effect from fiscal year to fiscal year unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Council or other information available to AMS.
The Council held a virtual meeting on September 22, 2021, and recommended 2021-22 expenditures of $9,002,508, and a decreased assessment rate of $0.01 per pound of improved varieties, and $0.00 per pound for native and seedling varieties and for substandard pecans. In comparison, the previous fiscal year's budget expenditures were $11,741,400. The assessment rate for improved varieties of $0.01 and the assessment rate of $0.00 for native and seedling varieties and for substandard pecans are
On February 12, 2021, USDA established the Pecan Promotion, Research and Information Order, a new research and promotion program. Under the new program, research and promotion activities for pecans are funded through the collection of assessments from U.S. growers and foreign importers.
With the new program in effect, the Council recommended reducing expenditures for research and promotion under the Order. With these reductions, total budgeted expenditures for 2021-22 are estimated at $9,002,508 which is $2,738,892 less than the $11,741,400 budgeted for 2020-21. The Council unanimously voted to decrease the assessment rates to reflect the reduction in expenditures, and to offset the assessments collected under the new program so the assessment burden on the industry does not increase.
The major expenditures for the Council for the 2021-22 year include $2,510,000 for international relations, $2,180,000 for marketing, and $1,447,066 for general administration. Budgeted expenses for these items in 2020-21 were $1,968,000, $6,715,000, and $1,425,000, respectively.
The Council derived the recommended assessment rates by considering anticipated expenses, expected shipments of pecans, Market Access Program (MAP) funds, and the amount of funds available in the authorized reserve. Assessable shipments for the year are an estimated 315 million pounds of improved varieties, which should provide approximately $3,150,000 in assessment income (315,000,000 pounds multiplied by $0.01). Income derived from handler assessments calculated at the new rate, along with interest income, MAP funds, and funds from the Council's authorized reserve, should be adequate to cover projected budgeted expenses of $9,002,508. Funds in the reserve are estimated to be $2,800,000 at the end of the 2021-22 fiscal year, which is within the maximum permitted by § 986.64 of the Order (approximately three fiscal years' expenses).
The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Council or other available information.
Although these assessment rates will be in effect for an indefinite period, the Council will continue to meet prior to or during each fiscal year to recommend a budget of expenses and consider recommendations for modification of the assessment rates. The dates and times of Council meetings are available from the Council or AMS. Council meetings are open to the public and interested persons may express their views at these meetings. AMS will evaluate Council recommendations and other available information to determine whether modification of the assessment rates is needed. Further rulemaking would be undertaken as necessary. The Council's 2021-22 budget and those for subsequent fiscal years will be reviewed and, as appropriate, approved by AMS.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 4,500 growers of pecans in the production area and approximately 150 handlers subject to regulation under the Order. Small agricultural growers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS), the 2020-21 crop value was $435.28 million. With a crop size of 305.36 million pounds, the season average grower price was $1.43 per pound. Dividing the $435.28 million crop value by the estimated number of pecan growers (4,500) yields an annual average receipts per grower estimate of $96,729. This is well below the SBA threshold for small growers.
Evidence presented at the pecan marketing order promulgation hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $1.43 per pound for in-shell pecans yields an estimated annual handler price of $2.01 per pound. With a total 2020-21 utilization of 305.36 million pounds, the total estimated value of production at the handler level for the fiscal year was $613.77 million ($2.01 per pound multiplied by 305.36 million pounds). Dividing this $613.77 million figure by the number of handlers (150) yields an average annual receipts per handler estimate of $4.09 million. This is well below the SBA threshold for small agricultural service firms. Assuming a normal distribution, the majority of pecan growers and handlers may be classified as small entities.
This action decreases the assessment rates collected from handlers for the 2021-22 and subsequent fiscal years from $0.03 to $0.01 per pound of improved varieties and from $0.02 to $0.00 per pound of native and seedling varieties and for substandard pecans handled. The Council recommended 2021-22 fiscal year expenditures of $9,002,508 and assessment rates of $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans. The assessment rates are $0.02 per pound lower than 2016-17 rates. The quantity of assessable pecans for the 2021-22 fiscal year is estimated at 315 million pounds. Thus, the $0.01 per pound for improved varieties and $0.00 per pound for native and seedling varieties and for substandard pecans rate should provide $3,150,000 in assessment income. Income derived from handler assessments, along with interest income, MAP funds, and funds from the Council's authorized reserve, will be adequate to cover budgeted expenses.
The major expenditures projected by the Council for the 2021-22 year include $2,510,000 for international relations, $2,180,000 for marketing, and $1,447,066 for general administration. Budgeted expenses for these items in 2020-21 were $2,510,000, $6,285,000, and $1,447,066, respectively.
The Council recommended decreasing the assessment rates to reflect a reduction in research and promotion expenditures as these activities will be carried out by the new USDA research and promotion program also funded by the industry. Consequently, the Council recommended a corresponding decrease in the assessment rates to reflect the decrease in research and promotion expenditures.
Prior to arriving at the estimated expenditures and assessment rates, the Council considered information from various sources, such as the Council's Governance Committee. Alternative expenditure levels were discussed by this Committee, based upon the relative value of various activities to the pecan industry and the impact of the new research and promotion program. The Council determined that based on the information currently available,
Using NASS data, a weighted average grower price for the past 3 seasons (2018-19 through 2020-21) is $1.66 per pound. This provides a reasonable forecast of the average grower price for 2021-22 season. The new assessment rate of $0.01 per pound for improved varieties represents 0.6 percent of the $1.66 weighted average price (six tenths of one percent; $0.01 divided by $1.66 × 100).
This action will decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to growers. However, decreasing the assessment rates reduces the burden on handlers and may also reduce the burden on growers.
The September 22, 2021, Council meeting was widely publicized throughout the pecan industry. Meetings are held virtually or in a hybrid style. Participants have a choice whether to attend in person or virtually and can participate in the Council's deliberations on all issues. Like all Council meetings, the September 22, 2021, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by the OMB and assigned OMB No. 0581-0291 Federal Marketing Order for Pecans. No changes in those requirements are necessary as a result of this rule. Should any changes become necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping requirements on either small or large pecan handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. As noted in the initial regulatory flexibility analysis, AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
A proposed rule concerning this action was published in the
No comments were received. Accordingly, no changes will be made to the rule as proposed.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendations submitted by the Council and other available information, AMS has determined that this rule will tend to effectuate the declared policy of the Act.
Marketing agreements, Nuts, Pecans, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service is amending 7 CFR part 986 as follows:
7 U.S.C. 601-674.
On and after October 1, 2021, assessment rates of $0.01 per pound for pecans classified as improved, $0.00 per pound for pecans classified as native and seedling, and $0.00 per pound for pecans classified as substandard pecans are established.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Dassault Aviation (Dassault) Model Falcon 6X airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is multiple-occupant side-facing seats with inflatable restraints. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Dassault on April 14, 2022. Send comments on or before May 31, 2022.
Send comments identified by Docket No. FAA-2022-0127 using any of the following methods:
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•
•
•
Shannon Lennon, Human Machine Interface, AIR-626, Technical Innovation Policy Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone and fax 206-231-3209; email
The substance of these special conditions has been published in the
The FAA invites interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
The FAA will consider all comments received by the closing date for comments. The FAA may change these special conditions based on the comments received.
On July 1, 2012, Dassault Aviation applied for a type certificate for its new Model Falcon 5X airplane. However, Dassault has decided not to release an airplane under the model designation Falcon 5X, instead choosing to change that model designation to Falcon 6X.
In February of 2018, due to engine supplier issues, Dassault extended the type certificate application date for its Model Falcon 5X airplane under new Model Falcon 6X. This airplane is a twin-engine business jet with seating for 19 passengers, and has a maximum takeoff weight of 77,460 pounds.
Under the provisions of 14 CFR 21.17, Dassault must show that the Model Falcon 6X airplane meets the applicable provisions of part 25, as amended by amendments 25-1 through 25-146.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Dassault Model Falcon 6X airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.17(a)(2).
The Dassault Model Falcon 6X airplane will incorporate the following novel or unusual design features:
Multiple-occupant side-facing seats that include an airbag system in the shoulder belt.
Side-facing seats are considered a novel design for transport-category airplanes that include §§ 25.562 and 25.785 at amendment 25-64 in their certification basis, and were not considered when those airworthiness standards were issued. The FAA has determined that the existing regulations do not provide adequate or appropriate safety standards for occupants of side-facing seats. To provide a level of safety that is equivalent to that afforded to occupants of forward- and aft-facing seats, additional airworthiness standards in the form of special conditions are necessary.
On June 16, 1988, 14 CFR part 25 was amended by amendment 25-64 to revise the emergency-landing conditions that must be considered in the design of transport-category airplanes. Amendment 25-64 revised the static-load conditions in § 25.561, and added a new § 25.562 that required dynamic testing for all seats approved for occupancy during takeoff and landing. The intent of amendment 25-64 was to provide an improved level of safety for occupants on transport-category airplanes. However, because most seating on transport-category airplanes is forward-facing, the pass/fail criteria developed in amendment 25-64 focused primarily on these seats. For some time, the FAA granted exemptions for the multiple-place side-facing-seat installations because the existing test methods and acceptance criteria did not produce a level of safety equivalent to the level of safety provided for forward- and aft-facing seats. These exemptions were subject to many conditions that reflected the injury-evaluation criteria and mitigation strategies available at the time of the exemption issuance.
The FAA also issued special conditions to address single-place side-facing seats based on the data available at the time the FAA issued those special conditions. Continuing concerns regarding the safety of side-facing seats prompted the FAA to conduct research
One particular concern that was identified during the FAA's research program, but not addressed in the previous special conditions, was the significant leg injuries that can occur to occupants of both single- and multiple-place side-facing seats. Because this type of injury does not occur on forward- and aft-facing seats, the FAA determined that, to achieve the level of safety envisioned in amendment 25-64, additional requirements would be needed as compared to previously issued special conditions. Nonetheless, the research has now allowed the development of a single set of special conditions that is applicable to all fully side-facing seats.
On November 5, 2012, the FAA released policy statement PS-ANM-25-03-R1, “Technical Criteria for Approving Side-Facing Seats,” to update existing FAA certification policy on §§ 25.562 and 25.785(a) at amendment 25-64 for single- and multiple-place side-facing seats. This policy addresses both the technical criteria for approving side-facing seats and the implementation of those criteria. The FAA methodology detailed in PS-ANM-25-03-R1 has been used in establishing a new set of proposed special conditions. Some of the conditions issued for previous exemptions are still relevant and are included in these new special conditions. However, others have been replaced by different criteria that reflect current research findings.
In Policy Statement PS-ANM-25-03-R1, conditions 1 and 2 are applicable to all side-facing seat installations, whereas conditions 3 through 16 represent additional requirements applicable to side-facing seats equipped with an airbag system in the shoulder belt. These special conditions follow those conditions found in Policy Statement PS-ANM-25-03-R1.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Dassault Model Falcon 6X airplane. Should Dassault apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only a certain novel or unusual design feature on one model of airplane. It is not a rule of general applicability.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Dassault Model Falcon 6X airplane.
(a) Additional requirements applicable to tests or rational analysis conducted to show compliance with §§ 25.562 and 25.785 for side-facing seats:
(1) The longitudinal test(s) conducted in accordance with § 25.562(b)(2), to show compliance with the seat-strength requirements of § 25.562(c)(7) and (8) and these special conditions, must have an ES-2re anthropomorphic test dummy (ATD) (49 CFR part 572, subpart U) or equivalent, or a Hybrid II ATD (49 CFR part 572, subpart B as specified in § 25.562) or equivalent, occupying each seat position and including all items (
(2) The longitudinal test(s) conducted in accordance with § 25.562(b)(2), to show compliance with the injury assessments required by § 25.562(c) and these special conditions, may be conducted separately from the test(s) to show structural integrity. In this case, structural-assessment tests must be conducted as specified in paragraph (a)(1), above, and the injury-assessment test must be conducted without yaw or floor misalignment. Injury assessments may be accomplished by testing with ES-2re ATD (49 CFR part 572, subpart U) or equivalent at all places. Alternatively, these assessments may be accomplished by multiple tests that use an ES-2re ATD at the seat place being evaluated, and a Hybrid II ATD (49 CFR part 572, subpart B, as specified in § 25.562) or equivalent used in all seat places forward of the one being assessed, to evaluate occupant interaction. In this case, seat places aft of the one being assessed may be unoccupied. If a seat installation includes adjacent items that are contactable by the occupant, the injury potential of that contact must be assessed. To make this assessment, tests may be conducted that include the actual item, located and attached in a representative fashion. Alternatively, the injury potential may be assessed by a combination of tests with items having the same geometry as the actual item, but having stiffness characteristics that would create the worst case for injury (injuries due to both contact with the item and lack of support from the item).
(3) If a seat is installed aft of structure (
(4) To accommodate a range of occupant heights (5th percentile female to 95th percentile male), the surface of items contactable by the occupant must be homogenous 7.3 in. (185 mm) above and 7.9 in. (200 mm) below the point (center of area) that is contacted by the 50th percentile male size ATD's head during the longitudinal test(s) conducted in accordance with paragraphs (a)(1), (2), and (3), above. Otherwise, additional head-injury criteria (HIC) assessment tests may be necessary. Any surface (inflatable or otherwise) that provides support for the occupant of any seat place must provide that support in a consistent manner regardless of occupant stature. For example, if an inflatable shoulder belt is used to mitigate injury risk, then it must be demonstrated by inspection to bear against the range of occupants in a similar manner before and after inflation. Likewise, the means of limiting lower-leg flail must be demonstrated by inspection to provide protection for the range of occupants in a similar manner.
(5) For longitudinal test(s) conducted in accordance with § 25.562(b)(2) and these special conditions, the ATDs must be positioned, clothed, and have lateral instrumentation configured as follows:
(i) ATD positioning: Lower the ATD vertically into the seat while simultaneously (see Figure 2):
(A) Aligning the midsagittal plane (a vertical plane through the midline of the body; dividing the body into right and left halves) with approximately the middle of the seat place.
(B) Applying a horizontal x-axis direction (in the ATD coordinate system) force of about 20 lb (89 N) to the torso at approximately the intersection of the midsagittal plane and the bottom rib of the ES-2re or lower sternum of the Hybrid II at the midsagittal plane, to compress the seat back cushion.
(C) Keeping the upper legs nearly horizontal by supporting them just behind the knees.
(D) After all lifting devices have been removed from the ATD:
(ii) ATD clothing: Clothe each ATD in form-fitting, mid-calf-length (minimum) pants and shoes (size 11E) weighing about 2.5 lb (1.1 Kg) total. The color of the clothing should be in contrast to the color of the restraint system. The ES-2re jacket is sufficient for torso clothing, although a form-fitting shirt may be used in addition if desired.
(iii) ES-2re ATD lateral instrumentation: The rib-module linear slides are directional,
(6) The combined horizontal/vertical test, required by § 25.562(b)(1) and these special conditions, must be conducted with a Hybrid II ATD (49 CFR part 572, subpart B, as specified in § 25.562), or equivalent, occupying each seat position.
(7) Restraint systems:
(i) If inflatable restraint systems are used, they must be active during all dynamic tests conducted to show compliance with § 25.562.
(ii) The design and installation of seatbelt buckles must prevent unbuckling due to applied inertial forces, or impact of the hands or arms
(b) Additional performance measures applicable to tests and rational analysis conducted to show compliance with §§ 25.562 and 25.785 for side-facing seats:
(1) Body-to-body contact: Contact between the head, pelvis, torso, or shoulder area of one ATD with the adjacent-seated ATD's head, pelvis, torso, or shoulder area is not allowed. Contact during rebound is allowed.
(2) Thoracic: The deflection of any of the ES-2re ATD upper, middle, and lower ribs must not exceed 1.73 in. (44 mm). Data must be processed as defined in Federal Motor Vehicle Safety Standards (FMVSS) 571.214.
(3) Abdominal: The sum of the measured ES-2re ATD front, middle, and rear abdominal forces must not exceed 562 lb (2,500 N). Data must be processed as defined in FMVSS 571.214.
(4) Pelvic: The pubic symphysis force measured by the ES-2re ATD must not exceed 1,350 lb (6,000 N). Data must be processed as defined in FMVSS 571.214.
(5) Leg: Axial rotation of the upper-leg (femur) must be limited to 35 degrees in either direction from the nominal seated position.
(6) Neck: As measured by the ES-2re ATD and filtered at Channel Frequency Class 600 as defined in SAE J211, “Instrumentation for Impact Test—Part 1—Electronic Instrumentation.”
(i) The upper-neck tension force at the occipital condyle (O.C.) location must be less than 405 lb (1,800 N).
(ii) The upper-neck compression force at the O.C. location must be less than 405 lb (1,800 N).
(iii) The upper-neck bending torque about the ATD x-axis at the O.C. location must be less than 1,018 in-lb (115 Nm).
(iv) The upper-neck resultant shear force at the O.C. location must be less than 186 lb (825 N).
(2) Occupant (ES-2re ATD) retention: The pelvic restraint must remain on the ES-2re ATD's pelvis during the impact and rebound phases of the test. The upper-torso restraint straps (if present) must remain on the ATD's shoulder during the impact.
(3) Occupant (ES-2re ATD) support:
(i) Pelvis excursion: The load-bearing portion of the bottom of the ATD pelvis must not translate beyond the edges of its seat's bottom seat-cushion supporting structure.
(ii) Upper-torso support: The lateral flexion of the ATD torso must not exceed 40 degrees from the normal upright position during the impact.
(c) For seats with an airbag system in the shoulder belts:
(1) Show that the airbag system in the shoulder belt will deploy and provide protection under crash conditions where it is necessary to prevent serious injury. The means of protection must take into consideration a range of stature from a 2-year-old child to a 95th percentile male. The airbag system in the shoulder belt must provide a consistent approach to energy absorption throughout that range of occupants. When the seat system includes an airbag system, that system must be included in each of the certification tests as it would be installed in the airplane. In addition, the following situations must be considered:
(i) The seat occupant is holding an infant.
(ii) The seat occupant is a pregnant woman.
(2) The airbag system in the shoulder belt must provide adequate protection for each occupant regardless of the number of occupants of the seat assembly, considering that unoccupied seats may have an active airbag system in the shoulder belt.
(3) The design must prevent the airbag system in the shoulder belt from being either incorrectly buckled or incorrectly installed, such that the airbag system in the shoulder belt would not properly deploy. Alternatively, it must be shown that such deployment is not hazardous to the occupant, and will provide the required injury protection.
(4) It must be shown that the airbag system in the shoulder belt is not susceptible to inadvertent deployment as a result of wear and tear, or inertial loads resulting from in-flight or ground maneuvers (including gusts and hard landings), and other operating and environmental conditions (vibrations, moisture, etc.) likely to occur in service.
(5) Deployment of the airbag system in the shoulder belt must not introduce injury mechanisms to the seated occupant, or result in injuries that could impede rapid egress. This assessment should include an occupant whose belt is loosely fastened.
(6) It must be shown that inadvertent deployment of the airbag system in the shoulder belt, during the most critical part of the flight, will either meet the requirement of § 25.1309(b) or not cause a hazard to the airplane or its occupants.
(7) It must be shown that the airbag system in the shoulder belt will not impede rapid egress of occupants 10 seconds after airbag deployment.
(8) The airbag system must be protected from lightning and high-intensity radiated fields (HIRF). The threats to the airplane specified in existing regulations regarding lighting, § 25.1316, and HIRF, § 25.1317, are incorporated by reference for the purpose of measuring lightning and HIRF protection.
(9) The airbag system in the shoulder belt must function properly after loss of normal aircraft electrical power, and after a transverse separation of the fuselage at the most critical location. A separation at the location of the airbag system in the shoulder belt does not have to be considered.
(10) It must be shown that the airbag system in the shoulder belt will not release hazardous quantities of gas or particulate matter into the cabin.
(11) The airbag system in the shoulder-belt installation must be protected from the effects of fire such that no hazard to occupants will result.
(12) A means must be available for a crewmember to verify the integrity of the airbag system in the shoulder-belt activation system prior to each flight, or it must be demonstrated to reliably operate between inspection intervals. The FAA considers that the loss of the airbag-system deployment function alone (
(13) The inflatable material may not have an average burn rate of greater than 2.5 inches/minute when tested using the horizontal flammability test defined in part 25, appendix F, part I, paragraph (b)(5).
(14) The airbag system in the shoulder belt, once deployed, must not adversely affect the emergency-lighting system (
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Dassault Aviation (Dassault) Model Falcon 6X airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. This design feature is an Electronic Flight Control System (EFCS) that limits pitch and roll functions to prevent the airplane from attaining certain pitch attitudes and roll angles. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Dassault on April 14, 2022. Send comments on or before May 31, 2022.
Send comments identified by Docket No. FAA-2022-0125 using any of the following methods:
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•
•
•
Troy Brown, Performance and Environment Section, AIR-625, Technical Innovation Policy Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 1801 S Airport Rd., Wichita, KS 67209-2190; telephone and fax 405-666-1050; email
The substance of these special conditions has been published in the
The FAA invites interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
The FAA will consider all comments received by the closing date for comments. The FAA may change these special conditions based on the comments received.
On July 1, 2012, Dassault Aviation applied for a type certificate for its new Model Falcon 5X airplane. However, Dassault has decided not to release an airplane under the model designation Falcon 5X, instead choosing to change that model designation to Falcon 6X.
In February of 2018, due to engine supplier issues, Dassault extended the type certificate application date for its Model Falcon 5X airplane under new Model Falcon 6X. This airplane is a twin-engine business jet with seating for 19 passengers, and has a maximum takeoff weight of 77,460 pounds.
Under the provisions of 14 CFR 21.17, Dassault must show that the Model Falcon 6X airplane meets the applicable provisions of 14 CFR part 25, as amended by amendments 25-1 through 25-146.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Dassault Model Falcon 6X airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.17(a)(2).
The Dassault Aviation Model Falcon 6X airplane will incorporate the following novel or unusual design features:
An Electronic Flight Control System (EFCS) that limits pitch and roll functions to prevent the airplane from attaining certain pitch attitudes and roll angles.
Part 25 of 14 CFR does not specifically relate to flight characteristics associated with fixed-attitude limits. The Dassault Aviation Model Falcon 6X airplane will incorporate pitch and roll attitude-limiting functions, via the Electronic Flight Control System (EFCS) normal modes, to prevent airplane pitch attitudes greater than +30 degrees and less than −15 degrees, and roll angles greater than plus or minus 67 degrees. In addition, positive spiral stability is introduced for roll angles greater than 35 degrees at speeds below V
The installed attitude-limiting functions are designed such that, at V
The basic envelope-protection requirement, historically applied, is to not unduly limit the maneuver capability of the airplane, nor interfere with its ability to perform maneuvers required for normal and emergency operations. The design details for the Dassault Model Falcon 6X support the objective of not unduly limiting the maneuver capability, while also protecting the airplane from adverse attitudes.
These special conditions are in addition to the requirements of 14 CFR 25.143. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Dassault Model Falcon 6X airplane. Should Dassault apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only a certain novel or unusual design feature on one model of airplane. It is not a rule of general applicability.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Dassault Aviation Model Falcon 6X airplanes.
In addition to § 25.143, the following requirements apply:
1. The pitch-limiting function must not impede normal maneuvering for pitch angles up to the maximum required for normal maneuvering, including a normal all-engines-operating takeoff, plus a suitable margin to allow for satisfactory speed control.
2. The pitch- and roll-limiting functions must not restrict, or prevent attaining pitch attitudes necessary for, emergency maneuvering, or roll angles up to 66 degrees with flaps up, or 60 degrees with flaps down. Spiral stability, which is introduced above 35 degrees roll angle, must not require excessive pilot strength to achieve these roll angles. Other protections, which further limit the roll capability under certain extreme angle-of-attack, attitude, or high-speed conditions, are acceptable, if they allow at least 45 degrees of roll capability.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
The FAA is superseding Airworthiness Directive (AD) 2016-17-12, which applied to all Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. AD 2016-17-12 required inspecting certain trimmable horizontal stabilizer actuators (THSAs) to determine the number of total flight cycles the THSA has accumulated, and replacing the THSA if necessary. Since the FAA issued AD 2016-17-12, the FAA has determined that a more restrictive airworthiness limitations is necessary for carbon friction disks on the no-back brake (NBB) of the THSA. This AD continues to require the inspections of the THSAs and replacement if necessary. This AD also requires revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations; as specified in a European Union Aviation Safety Agency (EASA) AD, which is incorporated by reference. This AD also limits the installation of affected parts under certain conditions. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective May 19, 2022.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of May 19, 2022.
The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of September 30, 2016 (81 FR 58823, August 26, 2016).
For EASA material incorporated by reference (IBR) in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket at
Sanjay Ralhan, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0270, dated December 7, 2020 (EASA AD 2020-0270) (also referred to as the MCAI), to correct an unsafe condition for all Airbus SAS Model A318-111, -112, -121, and -122 airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, -133, -151N, -153N, and -171N airplanes; Model A320-211, -212, -214, -215, -216, -231, -232, -233, -251N, -252N, -253N, -271N, -272N, and -273N airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -251NX, -252N, -252NX, -253N, -253NX, -271N, -271NX, -272N, and -272NX airplanes. Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability.
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2016-17-12, Amendment 39-18625 (81 FR 58823, August 26, 2016) (AD 2016-17-12). AD 2016-17-12 applied to all Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, 231, and -232 airplanes. The NPRM published in the
The NPRM was prompted by a determination that a more restrictive airworthiness limitations is necessary for the carbon friction disks on the NBB of the THSA. The NPRM proposed to retain the requirements of AD 2016-17-12; and also require revising the existing maintenance or inspection program, as applicable, to incorporate a more restrictive airworthiness limitations, as specified in EASA AD 2020-0270. The NPRM also proposed to limit the installation of affected parts under certain conditions.
The NPRM also specified that revising the existing maintenance or inspection program, as applicable, to incorporate the more restrictive airworthiness limitation would terminate the ALS limitation task 274000-00004-1-E for the THSA, as required by paragraph (i) of AD 2020-21-10, Amendment 39-21283 (85 FR 65190, October 15, 2020) (AD 2020-21-10). The new airworthiness limitation for ALS limitation task 274000-00004-1-E specified in the NPRM reduces the compliance times and expands the applicability for the task.
The FAA is issuing this AD to address premature wear of the carbon friction disks on the no-back brake (NBB) of the THSA, which could lead to reduced braking efficiency in certain load conditions, and, in conjunction with the inability of the power gear train to keep the ball screw in its last commanded position, could result in uncommanded movements of the trimmable horizontal stabilizer and loss of control of the airplane. See the MCAI for additional background information.
The FAA received comments from two commenters, including Air Line Pilots Association, International (ALPA) and United Airlines, who supported the NPRM without change.
The FAA received additional comments from two commenters, including Alaska Airlines (Alaska) and Delta Air Lines (Delta). The following presents the comments received on the NPRM and the FAA's response to each comment.
Alaska and Delta requested removal of paragraph (m)(7) of the proposed AD. Alaska stated that removing paragraph (m)(7) of the proposed AD would alleviate any confusion that would result from the FAA's exception to the EASA AD, and would also address any burden on U.S. operators having leased airplanes that have a return condition that those airplanes are in compliance with both the FAA and EASA's AD. Alaska noted that the vendor service bulletin, UTC Service Bulletin 47145-27-17, must be used for the NBB carbon disk replacement on a THSA assembly and referred to the Accomplishment Instructions of Airbus Service Bulletin A320-27-1242, which states to “send to the supplier the THSA (FIN 9CE) for modification in accordance with” the vendor service bulletin. Delta added that the airworthiness limitations section (ALS) variation references the UTC service information. Delta noted that a similar exception was not included in AD 2020-21-10, Amendment 39-21283 (85 FR 65190, October 15, 2020) (AD 2020-21-10), so it should not be added now. Delta also stated that paragraph (l)(2) of the proposed AD could be affected if
The FAA disagrees. ALS limitation task 274000-00004-1-E specifies that the replacement can be done using “SB A320-27-1242 or VSB [vendor service bulletin] 47145-27-17.” The exception stated in paragraph (m)(7) of this AD removes the allowance in ALS limitation task 274000-00004-1-E to use only the UTC service information (“VSB 47145-27-17”) as a means to show compliance with the requirements of this AD. The UTC service information referred to certain information on testing and fault isolation as a source of information, but did not require doing those tests, which would have led to compliance being voluntary for those actions. The Airbus service information (“SB A320-27-1242”) contains more complete instructions for operators to comply with as previously required in AD 2016-17-12. Although a similar exception was not included in AD 2020-21-10 for ALS limitation task 274000-00004-1-E, the FAA has determined that this exception is necessary and must be included for the purposes of enforcing the AD requirements for U.S.-registered operators. As part of the rulemaking process for FAA ADs that correspond to ADs issued by other States of Design, the FAA determines if the MCAI ADs adequately address the identified unsafe condition or if exceptions are needed in order to address the unsafe condition. The FAA has not changed this AD in this regard.
Delta requested that paragraph (b) of the proposed AD be revised from replacing AD 2016-17-12 to affecting AD 2016-17-12, and subsequently remove paragraphs (g) through (k) of the proposed AD that would retain AD 2016-17-12 requirements and then revise the terminating action paragraph to state that doing the actions of the proposed AD would terminate all requirements of AD 2016-17-12. Delta believed the changes would simplify the AD and clarify how to comply with the proposed requirements.
The FAA disagrees. In this case, the FAA determined that the supersedure method used in this AD would be the most effective for AD 2016-17-12 because the existing actions and the new changes related to those actions are within the same AD. The FAA has not changed this AD in this regard.
Delta requested that the applicability specified in paragraph (c) of the proposed AD be revised to affect only airplanes that have an original airworthiness certificate or original export airworthiness certificate issued on or before the date of the airworthiness limitations publication required. Delta pointed out that the FAA has published ADs with the requested language because airplanes with a later date are delivered with the required publication. Delta stated that for compliance with AD 2016-17-12, it needed to request an alternative method of compliance (AMOC) to use later revisions of the referenced airworthiness limitation documents because that AD did not have a cut-off date. Delta also stated that if its request for paragraph (c) of the proposed AD is granted, then the wording for paragraph (l) of the proposed AD would also be affected.
The FAA agrees that in most ADs that affect airworthiness limitations and reference airworthiness publications, the publication's date is used as a means of defining or limiting the group of airplanes based on its latest type design requirements. However, in this case, changing paragraph (c) of this AD would conflict with the requirements of AD 2016-17-12, which applied to all airplanes. Paragraph (c) of this AD has not been changed in this regard. However, the FAA has added paragraph (p)(1)(ii) to this AD to clarify the previously approved AMOCs for AD 2016-17-12 are approved as AMOCs to the corresponding retained requirements of this AD.
Delta stated that the terminating action statement in paragraph (o) of the proposed AD should be deleted because paragraph (k) of the affected AD, AD 2020-21-10, contains a provision to allow alternative actions and intervals if approved by certain provisions in EASA AD 2020-0034, dated February 25, 2020. Delta also pointed out that the task specified in paragraph (o) of the proposed AD is only for certain airplanes, so those airplanes should be listed in paragraph (o) of the proposed AD.
The FAA disagrees with the statement that paragraph (o) of this AD should be deleted. The terminating action statement in paragraph (o) of this AD provides relief to operators, and avoids duplication and possible conflicting requirements. If paragraph (o) of this AD is removed, there would be two FAA ADs in effect that would require the same task and operators would be required to show compliance with both ADs for the same task with variable requirements. Paragraph (k) of AD 2020-21-10 provides provisions for alternative actions and intervals for paragraph (i) of AD 2020-21-10, but does not mandate the alternative method. The FAA has changed paragraph (o) of this AD to remove reference to the models and to the issuance date of original airworthiness certificate or original export certificate of airworthiness as not all models referenced in paragraph (o) of the proposed AD are in AD 2020-21-10. The models and the issuance date of the original airworthiness certificate or original export certificate of airworthiness specified in AD 2020-21-10 do not need to be referenced in paragraph (o) of this AD.
Delta suggested that the FAA consider revising FAA regulations to incorporate a requirement for commercial operators to incorporate and use new revisions of airworthiness limitation (AWL) or ALS documents within a certain time after those revisions are published. Delta believed that this change to the regulations would eliminate the need to issue ADs, simplify airworthiness limitations requirements for operators, and reduce operator taskloads in determining if they are in compliance with ADs or need to request an AMOC. Delta stated that there are usually two or three ADs a year that are published on ALS tasks for Model A320 airplanes.
While the FAA understands the commenter's concern, current FAA regulations require incorporating the latest ALS included in the type design of the airplane, such as 14 CFR 91.403(c) and 91.409(e). ADs are the only viable method to mitigate risk identified in a product when its type design did not require incorporation of the latest ALS document, as applicable, by mandating subsequent ALS revisions or variations at the applicable thresholds. The FAA's regulatory requirements are promulgated via notice-and-comment rulemaking as required by the Administrative Procedure Act (APA), and the public can petition for rulemaking pursuant to 14 CFR part 11.
The FAA has revised paragraph (m)(7) of this AD to clarify the location of the Note and to revise the format.
The FAA reviewed the relevant data, considered the comments received, and determined that air safety requires
EASA AD 2020-0270 describes new or more restrictive airworthiness limitations for airplane structures and safe life limits.
This AD also requires Airbus Service Bulletin A320-27-1242, Revision 01, dated February 4, 2016, which the Director of the Federal Register approved for incorporation by reference as of September 30, 2016 (81 FR 58823, August 26, 2016).
This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 1,630 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate.
The FAA estimates the total cost per operator for the new actions to be $7,650 (90 work-hours × $85 per work-hour).
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need this on-condition action:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
: 49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective May 19, 2022.
(1) This AD replaces AD 2016-17-12, Amendment 39-18625 (81 FR 58823, August 26, 2016) (AD 2016-17-12).
(2) This AD affects AD 2020-21-10, Amendment 39-21283 (85 FR 65190, October 15, 2020) (AD 2020-21-10).
This AD applies to all Airbus SAS airplanes, certificated in any category, identified in paragraphs (c)(1) through (7) of this AD.
(1) Model A318-111, -112, -121, and -122 airplanes.
(2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes.
(4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
(5) Model A319-151N, -153N, and -171N airplanes.
(6) Model A320-251N, -252N, -253N, -271N, -272N, and -273N airplanes.
(7) Model A321-251N, -251NX, -252N, -252NX, -253N, -253NX, -271N, -271NX, -272N, and -272NX airplanes.
Air Transport Association (ATA) of America Code 05, Time Limits/Maintenance Checks; 27, Flight Controls.
This AD was prompted by a determination that a more restrictive airworthiness limitation is necessary for the carbon friction disks on the no-back brake (NBB) of the trimmable horizontal stabilizer actuator (THSA). The FAA is issuing this AD to address premature wear of the carbon friction disks on the NBB of the THSA, which could lead to reduced braking efficiency in certain load conditions, and, in conjunction with the inability of the power gear train to keep the ball screw in its last commanded position, could result in uncommanded movements of the trimmable horizontal stabilizer and loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2016-17-12, with no changes. For airplanes identified in paragraphs (c)(1) through (4) of this AD: No later than each date specified in paragraphs (g)(1) through (5) of this AD, inspect the THSA to determine if it has a part number (P/N) 47145-(XXX), and, if any THSA P/N 47145-(XXX) is found, determine the total number of flight cycles accumulated since the THSA's first installation on an airplane, or since the most recent NBB replacement, whichever is later. A review of airplane delivery or maintenance records is acceptable in lieu of this inspection if the part number of the THSA can be conclusively determined from that review. In case maintenance records concerning the most recent NBB disk replacement are unavailable or incomplete, the total flight cycles accumulated since first installation of the THSA on an airplane apply. Accomplishing the maintenance or inspection program revision required by paragraph (l) of this AD terminates the requirements of this paragraph.
(1)
(2)
(3)
(4)
(5)
This paragraph restates the requirements of paragraph (h) of AD 2016-17-12, with no changes. For airplanes identified in paragraphs (c)(1) through (4) of this AD: For airplanes with any THSA P/N 47145-(XXX), do the replacements required by paragraphs (h)(1) and (2) of this AD. Accomplishing the maintenance or inspection program revision required by paragraph (l) of this AD terminates the requirements of this paragraph.
(1) No later than each date specified in paragraphs (g)(1) through (5) of this AD, replace all THSA that have reached or exceeded on each date the corresponding number of flight cycles specified in paragraphs (g)(1) through (5) of this AD. Do the replacement in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-27-1242, Revision 01, dated February 4, 2016. Affected THSAs must be replaced with serviceable THSAs.
(2) As of each date specified in paragraphs (g)(1) through (5) of this AD, and before exceeding the flight cycle limit corresponding to each date, as applicable: Replace each THSA with a serviceable THSA, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-27-1242, Revision 01, dated February 4, 2016.
This paragraph restates the definition of paragraph (i) of AD 2016-17-12, with no changes. For airplanes identified in paragraphs (c)(1) through (4) of this AD: For the purposes of this AD, a serviceable THSA is a THSA that has not exceeded the applicable flight-cycle limits, as specified paragraphs (g)(1) through (5) of this AD, since first installation of the THSA on an airplane or since last NBB replacement, whichever is later.
Guidance for NBB disk replacement can be found in UTC Aerospace Systems Service Bulletin 47145-27-17, Revision 1, dated July 21, 2015.
This paragraph restates the provisions of paragraph (j) of AD 2016-17-12, with no changes. For airplanes identified in paragraphs (c)(1) through (4) of this AD: As of each date specified in paragraphs (g)(1) through (5) of this AD, as applicable, only installation of a serviceable THSA P/N 47145-(XXX) is allowed on an airplane. Accomplishing the maintenance or inspection program revision required by paragraph (l) of this AD terminates the requirements of this paragraph.
This paragraph restates the requirements of paragraph (k) of AD 2016-17-12, with no changes. For airplanes identified in paragraphs (c)(1) through (4) of this AD: This paragraph provides credit for actions required by paragraph (h) of this AD, if those actions were performed before September 30, 2016 (the effective date of AD 2016-17-12), using Airbus Service Bulletin A320-27-1242, dated February 9, 2015.
(1) For the airplanes identified in paragraph (c) of this AD with an original airworthiness certificate or original export certificate of airworthiness issued on or before October 5, 2020, except as specified in paragraph (m) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2020-0270, dated December 7, 2020 (EASA AD 2020-0270). Accomplishing the maintenance or inspection program revision required by this paragraph terminates the requirements of paragraphs (g), (h), and (j) of this AD.
(2) For the airplanes identified in paragraph (c) of this AD with an original airworthiness certificate or original export certificate of airworthiness issued after October 5, 2020, revise the existing maintenance or inspection program, as applicable, to incorporate the provision specified in paragraph (m)(7) of this AD.
(1) Where EASA AD 2020-0270 refers to its effective date, this AD requires using the effective date of this AD.
(2) The requirements specified in paragraphs (1) and (2) of EASA AD 2020-0270 do not apply to this AD.
(3) Paragraph (3) of EASA AD 2020-0270 specifies revising “the approved AMP” within 12 months after its effective date, but this AD requires revising the existing maintenance or inspection program, as applicable, within 90 days after the effective date of this AD.
(4) The initial compliance time for doing the tasks specified in paragraph (3) of EASA AD 2020-0270 is at the applicable “limitations” as incorporated by the requirements of paragraph (3) of EASA AD
(5) The provisions specified in paragraph (4) of EASA AD 2020-0270 do not apply to this AD.
(6) The “Remarks” section of EASA AD 2020-0270 does not apply to this AD.
(7) For all airplanes identified in paragraph (c) of this AD: Where the Note for Item 274000-00004-1-E of Section 4-1 in the service information referenced in EASA AD 2020-0270 specifies “NBB carbon disc replacement” instructions, for this AD, replace the text “NBB carbon disc replacement can be accomplished in accordance with SB A320-27-1242 or VSB 47145-27-17,” with “NBB carbon disk replacement must be accomplished in accordance with SB A320-27-1242.”
After the existing maintenance or inspection program has been revised as required by paragraph (l) of this AD, no alternative actions (
Accomplishing the actions required by this AD terminates the airworthiness limitations section (ALS) limitation task 274000-00004-1-E for the THSA, as required by paragraph (i) of AD 2020-21-10.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(ii) AMOCs approved previously for AD 2016-17-12 are approved as AMOCs for the corresponding provisions of paragraphs (g) through (j) of this AD
(2)
(3)
(1) For more information about this AD, contact Sanjay Ralhan, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email
(2) For UTC Aerospace Systems service information identified in this AD that is not incorporated by reference, contact Collins Aerospace, Product Support Department 13, Avenue de L'Eguillette—Saint-Ouen L'Aumone, Boite Postale 7186 95056 Cergy Pontoise Cedex, France; telephone 1-877-808-7575; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on May 19, 2022.
(i) European Union Aviation Safety Agency (EASA) AD 2020-0270, dated December 7, 2020.
(ii) [Reserved]
(4) The following service information was approved for IBR on September 30, 2016 (81 FR 58823, August 26, 2016).
(i) Airbus Service Bulletin A320-27-1242, Revision 01, dated February 4, 2016.
(ii) [Reserved]
(5) For EASA AD 2020-0270, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(6) For Airbus service information, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(7) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(8) You may view this material that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
The FAA is adopting a new airworthiness directive (AD) for certain General Electric Company (GE) CF34-8C and CF34-8E model turbofan engines. This AD was prompted by an “Engine Degraded” message received in-flight from the Engine Indicating and Crew Alerting System (EICAS), and a subsequent investigation by the manufacturer that revealed corrosion of the variable geometry (VG) system actuator, which can cause the full authority digital engine control (FADEC) software to command and lock the engine at idle until it is restarted. This AD requires performing a rotational torque check on the actuating linkage assembly and, depending on the results of the rotational torque check, replacement of the compressor inlet guide vane (IGV) outer shroud bushing and vane spindle bushing with parts eligible for installation. This AD also requires reporting the results of the rotational torque check to GE. The FAA is issuing this AD to address the unsafe condition on these products.
AD is effective April 29, 2022.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of April 29, 2022.
The FAA must receive comments on this AD by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact General Electric Company, 1 Neumann Way, Cincinnati, OH 45215; phone: (513) 552-3272; email:
You may examine the AD docket at
Scott Stevenson, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: (781) 238-7132; email:
On August 11, 2021, a Bombardier CRJ1000 airplane, powered by GE CF34-8C5 model turbofan engines, experienced an in-flight engine shutdown that resulted in a diversion. The manufacturer's investigation found that this airplane was parked outdoors for extended lengths of time within 10 miles (16 km) from a saltwater coastline, causing corrosion to develop on the CF34-8C5 engines' compressor VG actuator rod, seizure of the rod end bearing, and fracture of the rod end. Based on the manufacturer's investigation, on November 4, 2021, the FAA issued Emergency AD 2021-23-51 (followed by publication in the
Since the FAA issued AD 2021-23-51, the manufacturer determined that two additional in-flight events occurred that were related to this unsafe condition. On September 7, 2021 and October 26, 2021, two Bombardier CRJ-900 airplanes powered by GE CF34-8C5 model turbofan engines received “Engine Degraded” messages from the EICAS during flight. A subsequent investigation by the manufacturer found that these engines were operated infrequently over the past 2 years, with one engine showing corrosion findings after being stored approximately 45 miles (72 km) from a saltwater coastline, and another engine showing corrosion findings after being installed on an airplane parked for over 250 days. The manufacturer's investigation concluded that engines stored outdoors for 250 or more days are at risk of the excessive corrosion build up, with the risk increasing if the engines were stored outdoors in close proximity to a saltwater coastline. These conditions caused corrosion to develop between the high-pressure compressor case and vane bushings, increasing the VG actuation loads and slowing the VG response. As a result, the VG command and actual positions exceeded acceptable disagreement parameters, triggering an EICAS “Engine Degraded” message. In response to the “Engine Degraded” message, all versions of the full authority digital engine control (FADEC) software on GE CF34-8E engines, and FADEC software earlier than Version 6.60 on GE CF34-8C engines automatically reduces the engine to idle and locks the throttle until the engine is shut down and restarted. This condition, if not addressed, could result in failure of one or more engines, loss of engine thrust control, and reduced control of the airplane. The FAA is issuing this AD to address the unsafe condition on these products.
The FAA is issuing this AD because the agency has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
The FAA reviewed GE CF34-8C Service Bulletin (SB) 72-0356 R00 and GE CF34-8E SB 72-0244 R00, both dated February 15, 2022. These SBs specify procedures for performing a one-time rotational torque check of the actuating linkage assembly, differentiated by engine model, to identify possible interface corrosion or seizure on the compressor case, compressor IGV outer shroud bushing, vane spindle bushing, compressor stator IGV variable vane, compressor stator stage 1 variable vane, compressor stator stage 2 variable vane, compressor stator stage 3 variable vane, and compressor stator stage 4 variable vane. These SBs also specify instructions for operators to report the rotational torque check results to GE. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
This AD requires performing a rotational torque check on the actuating linkage assembly and, depending on the results of the rotational torque check, replacement of the compressor IGV outer shroud bushing and vane spindle bushing with parts eligible for installation. This AD also requires reporting the results of the rotational torque check to GE.
The FAA considers this AD to be an interim action. The inspection reports that are required by this AD will enable the manufacturer to obtain better insight into the nature, cause, and extent of the corrosion, and eventually to develop final action to address the unsafe condition. Once final action has been identified, the FAA might consider further rulemaking.
Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies foregoing notice and comment prior to adoption of this rule. The FAA considers corrosion of the VG system actuator to be an urgent safety issue. Performance of a rotational torque check of the actuating linkage assembly will detect excessive corrosion build up on the VG system actuator. This rotational torque check is necessary to prevent failure of one or more engines, loss of engine thrust control, and reduced control of the airplane. Engines installed on airplanes parked outdoors for 250 or more days are at risk of excessive corrosion build up. The risk of the excessive corrosion build up increases if the engines are stored outdoors in close proximity to a saltwater coastline. For affected engines installed on airplanes that were parked outdoors within 10 miles of a saltwater coastline, a rotational torque check on the actuating linkage assembly must be accomplished within 30 flight hours or 5 calendar days after the effective date of this AD. For affected engines installed on airplanes that were parked outdoors within 50 miles of a saltwater coastline, a rotational torque check of the actuating linkage assembly must be accomplished within 200 FHs or 35 calendar days after the effective date of this AD. Additionally, for all other affected engines installed on airplanes that were parked outdoors, the rotational torque check on the actuating linkage assembly must be accomplished before exceeding 880 FHs. According to fleet data, 880 FHs is approximately 100 calendar days. For affected engines with an actuating linkage assembly that does not pass the rotational torque check, this AD requires replacement of the compressor IGV outer shroud bushing and vane spindle bushing before further flight. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).
In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forego notice and comment.
The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Scott Stevenson, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because FAA has determined that it has good cause to adopt this rule without prior notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects 617 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this AD:
The FAA estimates the following costs to do any necessary replacement that would be required based on the results of the rotational torque check. The agency has no way of determining the number of aircraft that might need these replacements:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective April 29, 2022.
None.
This AD applies to General Electric Company (GE) CF34-8C1, CF34-8C5, CF34-8C5A1, CF34-8C5A2, CF34-8C5A3, CF34-8C5B1, CF34-8E2, CF34-8E2A1, CF34-8E5, CF34-8E5A1, CF34-8E5A2, CF34-8E6, and CF34-8E6A1 model turbofan engines installed on an airplane that has accumulated 250 or more parked days outdoors within the 24 months prior to the effective date of this AD.
Joint Aircraft System Component (JASC) Code 7230, Turbine Engine Compression Section.
This AD was prompted by an “Engine Degraded” message received in-flight from the Engine Indicating and Crew Alerting System (EICAS), and a subsequent investigation by the manufacturer that revealed corrosion of the variable geometry (VG) system actuator. The FAA is issuing this AD to detect corrosion of the VG system actuator. The unsafe condition, if not addressed, could result in failure of one or more engines, loss of engine thrust control, and reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(i) If the affected engine is installed on an airplane that was parked less than or equal to 10 miles from a saltwater coastline for 250 or more parked days, within 30 flight hours (FHs) or 5 calendar days, whichever occurs first after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed while parked less than or equal to 10 miles from a saltwater coastline for 250 or more parked days, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine exceeds 440 FHs after the effective date of this AD.
(ii) For affected engines not requiring the performance of a rotational torque check by paragraph (g)(1)(i) of this AD, if the affected engine is installed on an airplane that was parked less than or equal to 50 miles from a saltwater coastline for 250 or more parked days, within 200 FHs or 35 calendar days, whichever occurs first after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed while parked less than or equal to 50 miles from a saltwater coastline for 250 or more parked days, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine exceeds 880 FHs after the effective date of this AD.
(iii) For affected engines not requiring the performance of a rotational torque check by paragraphs (g)(1)(i) or (g)(1)(ii) of this AD, before exceeding 880 FHs after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine exceeds 1,680 FHs after the effective date of this AD.
(i) If the affected engine is installed on an airplane that was parked less than or equal to 10 miles from a saltwater coastline for 250 or more parked days, within 200 FHs or 35 calendar days, whichever occurs first after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed while parked less than or equal to 10 miles from a saltwater coastline for 250 or more parked days, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine
(ii) For affected engines not requiring the performance of a rotational torque check by paragraph (g)(2)(i) of this AD, if the affected engine is installed on an airplane that was parked less than or equal to 50 miles from a saltwater coastline for 250 or more parked days, before exceeding 440 FHs after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed while parked less than or equal to 50 miles from a saltwater coastline for 250 or more parked days, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine exceeds 880 FHs after the effective date of this AD.
(iii) For affected engines not requiring the performance of a rotational torque check by paragraphs (g)(2)(i) or (g)(2)(ii) of this AD, before exceeding 880 FHs after the effective date of this AD, perform a rotational torque check of the actuating linkage assembly. If an airplane has two affected engines installed, operators may perform the rotational torque check of the actuating linkage assembly on the second engine before the second engine exceeds 1,680 FHs after the effective date of this AD.
If the affected engine is installed on an airplane that was parked outdoors for 250 or more parked days within the 24 months prior to re-entering service, or if the engine was off-wing and stored outdoors for 250 or more days within the 24 months prior to reentering service, before further flight, perform a rotational torque check of the actuating linkage assembly.
If the actuating linkage assembly does not pass any rotational torque check required by paragraphs (g)(1) through (3) of this AD, before further flight, remove the compressor IGV outer shroud bushing and vane spindle bushing and replace with a zero cycles since new compressor IGV outer shroud bushing and vane spindle bushing.
Use the Accomplishment Instructions, paragraph 3.A.(1)(c), of GE CF34-8C Service Bulletin (SB) 72-0356 R00 or GE CF34-8E SB 72-0244 R00, both dated February 15, 2022, as applicable to the engine model, to perform the actions required by paragraphs (g)(1) through (4) of this AD.
Within 10 days after performing the rotational torque check required by paragraphs (g)(1) through (3) of this AD, in accordance with paragraph 3.A.(1)(c), of GE CF34-8C SB 72-0356 or GE CF34-8E SB 72-0244, send your inspection report form, pictures, or report findings to GE at
(1) For the purpose of this AD, a “parked day” is 24 consecutive hours without engine operation.
(2) For the purpose of this AD, “outdoors” is any location that is not environmentally controlled, including any non-environmentally controlled facility.
Special flight permits are prohibited.
(1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (l) of this AD and email it to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Scott Stevenson, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: (781) 238-7132; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) GE CF34-8C Service Bulletin (SB) 72-0356 R00, dated February 15, 2022.
(ii) GE CF34-8E SB 72-0244 R00, dated February 15, 2022.
(3) For GE service information identified in this AD, contact General Electric Company, 1 Neumann Way, Cincinnati, OH 45215; phone: (513) 552-3272; email:
(4) You may view this service information at FAA, Airworthiness Products Section, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
The FAA is superseding Airworthiness Directive (AD) 2017-12-08, which applied to all BAE Systems (Operations) Limited Model BAe 146-100A, -200A, and -300A airplanes; and Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes. AD 2017-12-08 required revising the maintenance or inspection program, as applicable, to incorporate new or revised structural inspection requirements. This AD requires revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. This AD was prompted by a determination that new or more restrictive airworthiness limitations are necessary. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective May 19, 2022.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of May 19, 2022.
For service information identified in this final rule, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
You may examine the AD docket on the internet at
Todd Thompson, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228; email
The Civil Aviation Authority (CAA), which is the aviation authority for the United Kingdom, has issued CAA AD G-2021-0011, dated October 8, 2021 (CAA AD G-2021-0011) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all BAe 146 and AVRO 146-RJ airplanes. You may examine the MCAI in the AD docket on the internet at
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2017-12-08, Amendment 39-18923 (82 FR 27414, June 15, 2017) (AD 2017-12-08). AD 2017-12-08 applied to all BAE Systems (Operations) Limited Model BAe 146-100A, -200A, and -300A airplanes; and Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes. The NPRM published in the
The FAA gave the public the opportunity to participate in developing this final rule. The FAA has considered the comment received. An individual indicated their support for the NPRM.
The FAA reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. The FAA has determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
BAE Systems has issued Chapter 05, Time Limits/Maintenance Checks, of the BAe 146 Series/AVRO 146-RJ Series Aircraft Maintenance Manual, Revision 132, dated June 15, 2021. This service information describes airworthiness limitations, including life limits, maintenance tasks, and critical design configuration control limitations (CDCCLs).
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 30 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
The FAA estimates the total cost per operator for the retained actions from AD 2017-12-08 to be $7,650 (90 work-hours × $85 per work-hour).
The FAA has determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the agency estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).
The FAA estimates the total cost per operator for the new actions to be $7,650 (90 work-hours × $85 per work-hour).
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective May 19, 2022.
This AD replaces AD 2017-12-08, Amendment 39-18923 (82 FR 27414, June 15, 2017) (AD 2017-12-08).
This AD applies to all BAE Systems (Operations) Limited airplanes, certificated in any category, identified in paragraphs (c)(1) and (2) of this AD.
(1) Model BAe 146-100A, -200A, and -300A airplanes.
(2) Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes.
Air Transport Association (ATA) of America Code 05, Time Limits/Maintenance Checks.
This AD was prompted by a determination that new or more restrictive airworthiness limitations are necessary. The FAA is issuing this AD to address fatigue cracking of certain structural elements, which could adversely affect the structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (i) of AD 2017-12-08, with no changes. Within 90 days after July 20, 2017 (the effective date of AD 2017-12-08): Revise the maintenance or inspection program, as applicable, to incorporate new and revised limitations, tasks, thresholds, and intervals using a method approved by the Manager, Large Aircraft Section, International Validation Branch, FAA.
This paragraph restates the requirements of paragraph (j) of AD 2017-12-08, with no changes. Except as specified in paragraph (i) of this AD: After accomplishing the revision required by paragraph (g) of this AD, no alternative actions (
Within 90 days after the effective date of this AD, revise the existing maintenance or inspection program, as applicable, to incorporate the information specified in Chapter 05, Time Limits/Maintenance Checks, of the BAE Systems BAe 146 Series/AVRO 146-RJ Series Aircraft Maintenance Manual, Revision 132, dated June 15, 2021. The initial compliance time for doing the tasks is at the time specified in Chapter 05, Time Limits/Maintenance Checks, of the BAE Systems BAe 146 Series/AVRO 146-RJ Series Aircraft Maintenance Manual, Revision 132, dated June 15, 2021, or within 90 days after the effective date of this AD, whichever occurs later. Accomplishing the revision of the existing maintenance or inspections program required by this paragraph terminates the actions required by paragraph (g) of this AD.
After the existing maintenance or inspection program has been revised as required by paragraph (i) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(ii) AMOCs approved for AD 2017-12-08 are approved as AMOCs for the corresponding provisions of this AD.
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) CAA AD G-2021-0011, dated October 8, 2021, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Todd Thompson, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228; email
(3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (m)(3) and (4) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Chapter 05, Time Limits/Maintenance Checks, of the BAE Systems BAe 146 Series/AVRO 146-RJ Series Aircraft Maintenance Manual, Revision 132, dated June 15, 2021.
(ii) [Reserved]
(3) For service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
(4) You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends Class E surface airspace in Dyersburg, TN, as the Nally Dunston non-directional beacon (NDB) has been decommissioned, and associated approaches cancelled for Dyersburg Regional Airport. This action updates the airport's name and geographic coordinates. In addition, this action makes an editorial change replacing the term Airport/Facility Directory with the term Chart Supplement in the legal description of associated Class E airspace. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, GA 30337; Telephone (404) 305-6364.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E surface airspace in Dyersburg, TN, to support IFR operations in the area.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One comment supporting this action was received.
Class E airspace designations are published in Paragraph 6002 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is amending 14 CFR part 71 by amending the Class E surface airspace at Dyersburg Regional Airport, Dyersburg, TN, due the decommissioning of the Nally Dunston NDB and cancellation of associated approaches. This action increases the radius to 4.7-miles (previously 4.1-miles), and updates the airport's name (formerly Dyersburg Municipal Airport), and geographic coordinates to coincide with the FAA's database.
This action also replaces the outdated term Airport/Facility Directory with the term Chart Supplement in the airport description.
Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area.
Class E airspace designations are published in Paragraph 6002 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is minimal. Since this is a routine matter that only affects air traffic procedures an air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace upward from the surface within a 4.7-mile radius of the Dyersburg Regional Airport. This Class E airspace is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Chart Supplement.
Bureau of Industry and Security, Department of Commerce.
Final rule.
In response to the Russian Federation's (Russia) ongoing aggression in Ukraine following its further invasion of the country, as substantially enabled by Belarus, this rule expands license requirements for Russia and Belarus under the Export Administration Regulations (EAR) to all items on the Commerce Control List (CCL). It also removes license exception eligibility for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus.
This rule is effective on April 8, 2022.
For questions on this final rule, contact Eileen Albanese, Director, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-0092, Fax: (202) 482-482-3355, Email:
In response to Russia's February 2022 further invasion of Ukraine and Belarus's substantial enabling of this invasion by allowing it to proceed from Belarusian territory, the Bureau of Industry and Security (BIS) imposed extensive sanctions on Russia and Belarus by amending the Export Administration Regulations (15 CFR parts 730-774) (EAR). These sanctions reflected the U.S. Government's position that Russia's invasion of Ukraine, as substantially enabled by Belarus, flagrantly violated international law, was contrary to U.S. national security and foreign policy interests, and undermined global order, peace, and security, and therefore necessitated stringent and expansive sanctions. Since February 2022, BIS, in coordination with its allies and partners, has issued several rules that subject both countries to restrictions under the EAR. BIS has primarily targeted the Russian and Belarusian defense, aerospace, and maritime sectors with expanded export controls, including controls on the export from abroad of certain foreign-produced items that are subject to the EAR.
Stringent licensing restrictions under the EAR were initially imposed on Russia as part of the final rule,
This rule expands the license requirement that was previously imposed on Russia and Belarus to include items classified under any ECCN in Categories 0 through 2 of the CCL. Accordingly, the license requirement under § 746.8(a)(1) (Russia and Belarus sanctions) now applies to all items on the CCL. Additionally, consistent with this expanded license requirement, this rule revises the foreign “direct product” rule (FDP rule) in § 734.9(f) of the EAR that relates to both Russia and Belarus (the “Russia/Belarus FDP rule”) to apply to all items on the CCL. Therefore, foreign-produced items derived from ECCNs in Categories 0 through 9 of the CCL will now be subject to the EAR under the Russia/Belarus FDP rule as well as to the license requirement described in § 746.8(a)(2).
Additionally, as part of the U.S. Government's response to Belarus's actions in support of Russia's aggressive conduct in Ukraine, this rule limits the availability of two paragraphs of License Exception Aircraft, vessels and spacecraft (AVS) (§ 740.15(a) and (b)) for certain Belarus-related aircraft. Specifically, paragraph (c) (License Exceptions) specifies certain license exceptions that apply to § 746.8(a)(1) and (2) for transactions involving Russia or Belarus, and this rule revises paragraph (c)(5) to preclude the availability of paragraphs (a) and (b) of License Exception AVS for any aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. Thus, as revised by this rule, paragraphs (a) and (b) of License Exception AVS are not available for aircraft registered in, owned, or controlled by, or under charter or lease by, Belarus or Russia, or by a Belarusian or Russian national. As a conforming change, this rule revises footnote 6 to the Commerce Country Chart (supplement no. 1 to part 738) to reflect
For the expanded controls on Russia and Belarus under § 746.8(a)(2), shipments of items removed from eligibility for a License Exception or reexport or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on May 9, 2022, pursuant to actual orders for reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or reexport or transfer (in-country) without a license (NLR).
For all other changes being made in this final rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on April 8, 2022, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR).
On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (codified, as amended, at 50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. To the extent it applies to certain activities that are the subject of this rule, the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) (codified, as amended, at 22 U.S.C. 7201-7211) also serves as authority for this rule.
1. This final rule is not a “significant regulatory action” because it “pertain[s]” to a “military or foreign affairs function of the United States” under sec. 3(d)(2) of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
However, “Multi-Purpose Application (OMB control number 0694-0088) will exceed existing estimates currently associated with this collection as the respondent burden will increase the estimated number of submissions by 150 for license applications submitted annually to BIS. BIS estimates the burden hours associated with this collection would increase by 77 (
3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.
4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4821) (ECRA), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. While section 1762 of ECRA provides sufficient authority for such an exemption, this action is also independently exempt from these APA requirements because it involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)).
5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601,
Administrative practice and procedure, Exports, Inventions and patents, Research, Science and technology.
Exports.
Exports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, parts 734, 738, and 746 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows:
50 U.S.C. 4801-4852; 50 U.S.C. 4601
(f)
(1)
(i)
(ii)
(2)
50 U.S.C. 4801-4852; 50 U.S.C. 4601
50 U.S.C. 4801-4852; 50 U.S.C. 4601
(a) * * *
(1)
(c) * * *
(5) License Exception AVS, excluding any aircraft registered in, owned or controlled by, or under charter or lease by Russia or Belarus or a national of Russia or Belarus (§ 740.15(a) and (b) of the EAR).
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve a revision to the Bullhead City portion of the Arizona State Implementation Plan (SIP). These revisions concern the second 10-year maintenance plan for the Bullhead City area for the 1987 national ambient air quality standards (NAAQS or “standards”) for particulate matter less than 10 micrometers in diameter (PM
This rule will be effective on May 16, 2022.
The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2021-0819. All documents in the docket are listed on the
Panah Stauffer, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 972-3247 or by email at
Throughout this document, “we,” “us,” and “our” refer to the EPA.
The EPA has established health-based standards for PM
Under section 107(d) of the Clean Air Act (CAA or “Act”), the EPA is required to designate areas of the country, based on ambient air quality data, as attainment, unclassifiable, or nonattainment for each NAAQS. Under the CAA Amendments of 1990, the Bullhead City area was designated as part of a large “unclassifiable” area in Arizona for the PM
Under CAA section 175A, one of the criteria for an area to be redesignated from nonattainment to attainment is the approval of a maintenance plan. The maintenance plan must, among other requirements, ensure control measures are in place such that the area will continue to maintain the standard for the period extending 10 years after redesignation and include contingency provisions to assure that violations of the NAAQS will be promptly remedied.
In 2002, the Arizona Department of Environmental Quality (ADEQ) submitted a maintenance plan, titled “Bullhead City Moderate Area PM
CAA section 175A(b) requires states to submit an additional SIP revision to maintain the NAAQS for 10 years after the expiration of the 10-year period covered by the initial maintenance plan approved in connection with the redesignation of the area from nonattainment to attainment. On May 24, 2012, ADEQ submitted a second 10-year maintenance plan, titled “Limited Maintenance Plan Update for the Bullhead City PM
Consistent with the requirements at the time, the First 10-year LMP provided for maintenance of both the 24-hour average and annual average PM
On December 9, 2021, the EPA proposed to approve as a revision to the Arizona SIP the Second 10-Year LMP submitted by ADEQ on May 24, 2012, for the Bullhead City area.
The EPA's proposed action provided a 30-day public comment period. During this period, we received two comments. Both comments were supportive of our proposed action and do not require a response. The comments are available for viewing in the docket for this rulemaking.
No comments were submitted that change our assessment of the Second 10-Year LMP as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is taking final action to approve as a revision to the Arizona SIP the Second 10-Year LMP for the Bullhead City area for the PM
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 13, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
Chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C 7401
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve revisions to the Maricopa County Air Quality Department (MCAQD) portion of the Arizona State Implementation Plan (SIP). These revisions concern emissions of particulate matter (PM) from wood burning devices. We are approving local rules that regulate these emission sources under the Clean Air Act (CAA or the Act).
These rules will be effective on May 16, 2022.
The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2021-0773. All documents in the docket are listed on the
Christine Vineyard, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 947-4125 or by email at vineyard.christine
Throughout this document, “we,” “us” and “our” refer to the EPA.
On December 14, 2021 (86 FR 70994), the EPA proposed to approve the following rules into the Arizona SIP.
We proposed to approve these rules because we determined that they comply with the relevant CAA requirements. Our proposed action and Technical Support Document (TSD) contain more information on the rules and our evaluation.
The EPA's proposed action provided a 30-day public comment period. During this period, we received one comment from a private citizen.
The commenter ultimately “oppose[s] the conditional approval” from the EPA's proposal and requests that Maricopa County “further revise these provisions within their State Implementation Plan to meet the strongest of air quality standards regarding particulate matter.”
As we explained in our proposed action and TSD, during Maricopa County's implementation of earlier versions of Ordinance P-26 and Rule 314 (
Further, Rule 314 was revised to reduce emissions from outdoor fires for cooking by defining cooking, restricting the size of fires used for cooking, and requiring that fires ignited for cooking during a restricted burn period be extinguished once the food is suitable for human consumption. And to reduce total annual emissions from fireplaces, woodstoves, and chimineas at commercial and institutional establishments and outdoor fires, the rules were revised to require the use of seasoned wood, which contains no more than 20 percent moisture. These revisions will directly reduce particulate matter emissions and contribute to the area's compliance with the 2012 National Ambient Air Quality Standard for fine particulate matter.
Under the CAA, EPA is required to approve a SIP submission that complies with the provisions of the CAA and applicable federal regulations.
No comments were submitted that change our assessment of the rules as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is fully approving these rules into the Arizona SIP. The October 23, 2019 version of Ordinance P-26 and Rule 314 will replace the previously approved versions of these rules in the SIP.
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the MCAQD rules described in Section I. of this preamble and set forth below in the amendments to 40 CFR part 52. Therefore, these materials have been approved by the EPA for inclusion in the SIP, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 13, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
The revision and addition read as follows.
(c) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
We, NMFS, are issuing a final rule to remove Johnson's seagrass (
This final rule is effective on May 16, 2022.
Adam Brame, NMFS Southeast Regional Office,
In 1980, a small-statured seagrass species found within Florida's southeastern coastal lagoon system was identified as Johnson's seagrass (
Given the extremely limited geographical distribution of Johnson's seagrass (about 200 kilometers (km) of Florida's east coast), its limited reproductive potential (only asexual reproduction), and the variety of threats that could affect survival, we conducted a status review in 1993 to consider whether Johnson's seagrass should be added to the Federal List of Threatened and Endangered Species. We published a proposed rule to list the species as threatened on September 15, 1993 (58 FR 48326), and a proposed rule to designate critical habitat on August 4, 1994 (59 FR 39716). Additional research on the ecology of this species subsequently became available and was considered in an updated status review, which was completed in 1997. We published a final rule listing Johnson's seagrass as a threatened species in 1998 (63 FR 49035, September 14, 1998) and a final rule designating critical habitat in 2000 (65 FR 17786, April 5, 2000).
A peer reviewed manuscript published in October 2021 (Waycott et al. 2021), used a variety of genetic analyses to conclude that Johnson's seagrass is not a unique taxon but rather a clone of the Indo-Pacific species
Section 3 of the ESA defines the term “species” as any subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature 16 U.S.C. 1532(16). Pursuant to implementing regulations in 50 CFR 424.11(a), in determining whether a particular taxon or population is a species under the ESA, we rely on standard taxonomic distinctions as well as our biological expertise and that of the scientific community concerning the relevant taxonomic group.
Under section 4(c) of the ESA, the Secretary is required to periodically review and revise the Federal List of Endangered and Threatened Species and consider, among other things, whether a species' listing status should be changed, including whether the species should be removed from the list (16 U.S.C. 1533(c)). Pursuant to implementing regulations for the ESA at 50 CFR 424.11(e), the Secretary shall delist a species if, after conducting a status review based on the best scientific and commercial data available, the Secretary determines: (1) The species is extinct; (2) the species does not meet the definition of an endangered species or threatened species; or (3) the listed entity does not meet the statutory definition of a species. When conducting a status review, if we determine the entity under review does not meet the statutory definition of a species, the status review concludes without further evaluation, because we can only list entities that qualify as species under the ESA.
The entity described as Johnson's seagrass grows in a variety of conditions within Florida's intracoastal waters from Sebastian Inlet to Virginia Key in Biscayne Bay. This is the smallest geographic distribution of any seagrass worldwide. Within this range, it is among the least abundant seagrass. It grows in small, sparse patches and may disappear from areas for months or years before reappearing. It can co-occur with other seagrasses, but its short stature precludes it from occurring within dense stands of taller species because it is outcompeted for light resources. Johnson's seagrass has a broader tolerance range for light, temperature, and salinity than congeners and seems capable of growing in suboptimal conditions where other species cannot survive. Johnson's seagrass grows in the intertidal zone, on dynamic flood deltas inside ocean inlets, at the mouths of freshwater discharge canals, and subtidal waters to depths of approximately 3-4 meters.
Johnson's seagrass is dioecious, meaning each plant only contains the flowers of one sex (male or female). Interestingly, no individual Johnson's seagrass plants have been found with male flowers. Similarly, researchers have not found any seedlings. These observations suggest that Johnson's seagrass reproduces only through vegetative fragmentation (asexual reproduction) and not through the development and dispersal of seeds (sexual reproduction). This strategy likely hinders its ability to expand in range and may slow recolonization following disturbances.
At the time of listing, the best available data indicated Johnson's seagrass: (1) Had perhaps the smallest geographic range of any seagrass species worldwide; (2) had a sparse, patchy distribution throughout its range and an ability to survive in a variety of environmental conditions; (3) lacked male flowers necessary for sexual reproduction and therefore appeared to only reproduce asexually; and (4) was unique from other North American
A 1997 genetics study using randomly amplified primer DNA-polymerase chain reactions (RAPD-PCR) indicated that genetic diversity was higher than expected at one location within the range of Johnson's seagrass (Jewitt-Smith
A molecular phylogenetic analysis of the genus
NMFS began funding projects to resolve the taxonomic uncertainty of Johnson's seagrass in 2012. Waycott
NMFS provided support for a follow-up study in 2017, recently published as Waycott
Waycott
Collectively, the Waycott
Upon publication of the proposed rule, we solicited comments during a 60-day public comment period from all interested parties. We received nine comments, two of which were nearly identical. Summaries of the comments received and our responses are provided in the following paragraphs.
We agree with the importance of seagrasses to the environments in which they are found. Though delisting
We evaluated whether any pertinent scientific or commercial information became available since publication of the proposed rule. We reviewed the best available scientific and commercial information, including all public comments. Based on all available information, we have made no changes from the proposed rule.
As proposed on December 23, 2021 (86 FR 72908), and concluded with this final rule, we remove
Per the joint NMFS-U.S. Fish and Wildlife Service Post-Delisting Monitoring Plan Guidance (2008, updated in 2018), the post-delisting monitoring requirements of section 4(g) of the ESA apply without exception to all species delisted due to biological recovery, but do not pertain to species delisted for other reasons, such as taxonomic revision. Based on this reasoning, there is no need for a post-delisting monitoring plan for
The complete citations for the references used in this document can be obtained by contacting NMFS (See
In December 2004, the Office of Management and Budget (OMB) issued a Final Information Quality Bulletin for Peer Review establishing minimum peer review standards, a transparent process for public disclosure of peer review planning, and opportunities for public participation. The OMB Peer Review Bulletin, implemented under the Information Quality Act (Pub. L. 106-554), is intended to enhance the quality and credibility of the Federal Government's scientific information, and applies to influential or highly influential scientific information disseminated on or after June 16, 2005.
To satisfy the requirements under the OMB Peer Review Bulletin, the Waycott
The 1982 amendments to the ESA, in section 4(b)(1)(A), restrict the information that may be considered when assessing species for listing to the best scientific and commercial data available. Based on this limitation of criteria for a listing decision and the opinion in
As noted in the Conference Report on the 1982 amendments to the ESA, economic impacts cannot be considered when assessing the status of a species. Therefore, the economic analysis requirements of the Regulatory Flexibility Act are not applicable to the listing process. In addition, this final rule is exempt from review under Executive Order 12866. This final rule does not contain a collection of information requirement for the purposes of the Paperwork Reduction Act.
E.O. 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific consultation directives for situations where a regulation will preempt state and local law, or impose substantial direct compliance costs on state and local governments (unless required by statute). Neither of these circumstances is applicable to this final rule.
Endangered and threatened species.
Endangered and threatened species.
For the reasons set out in the preamble, 50 CFR parts 223 and 226 are amended as follows:
16 U.S.C. 1531 1543; subpart B, § 223.201-202 also issued under 16 U.S.C. 1361
16 U.S.C. 1533.
Agricultural Marketing Service, USDA.
Proposed rule.
This proposed rule would implement a recommendation from the California Olive Committee (Committee) to decrease the assessment rate established for the 2022 fiscal year and subsequent fiscal years. The proposed assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.
Comments must be received by June 13, 2022.
Interested persons are invited to submit written comments concerning this proposed rule. Comments must be sent to the Docket Clerk electronically by Email:
Kathie Notoro, Marketing Specialist, or Gary Olson, Regional Director, West Region Marketing Field Office, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 538-1672, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
This proposed action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Agreement and Order No. 932, as amended (7 CFR part 932), regulating the handling of olives grown in California. Part 932 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers of olives operating within the area of production, and one public member.
The Department of Agriculture (USDA) is issuing this proposed rule in conformance with 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 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This proposed action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.
This proposed rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have tribal implications. Agricultural Marketing Service (AMS) has determined that this proposed rule is unlikely to have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have retroactive effect. Under the Order now in effect, California olive handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate would be applicable to all assessable olives beginning on January 1, 2022, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
The Order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members are familiar with the Committee's needs and with the costs of goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.
This proposed rule would decrease the assessment rate from $30.00 per ton of assessed olives, the rate that was established for the 2021 and subsequent fiscal years, to $16.00 per ton of assessed olives for the 2022 and subsequent fiscal years. The proposed lower rate is the result of the
The Committee met on November 10, 2021, and unanimously recommended 2022 expenditures of $1,245,085 and an assessment rate of $16.00 per ton of assessed olives to fund necessary administrative expenses and to maintain a financial reserve within the limits prescribed under the Order. In comparison, last year's budgeted expenditures were $1,151,831. The proposed assessment rate of $16.00 is $14.00 lower than the rate currently in effect. Producer receipts show a yield of 43,336 tons of assessable olives from the 2021 crop year, which is more than double the quantity of olives harvested in 2020.
Olives harvested in 2021 will be marketed over the course of the 2022 fiscal year, which begins on January 1, 2022. The 43,336 tons of assessable olives from the 2021 crop would generate $693,376 in assessment revenue at the proposed assessment rate. The balance of funds needed to cover budgeted expenditures would come from interest income, Federal grants, and the Committee's financial reserve. The 2022 fiscal year assessment rate decrease would be appropriate to ensure the Committee has sufficient revenue to fund the recommended 2022 fiscal year budgeted expenditures while ensuring the funds in the financial reserve would be kept within the maximum permitted by § 932.40.
The Order has a fiscal year and a crop year that are independent of each other. The crop year is a 12-month period that begins on August 1 of each year and ends on July 31 of the following year. The fiscal year is the 12-month period that begins on January 1 and ends on December 31 of each year. Olives are an alternate-bearing crop, with a small crop followed by a large crop. The Committee used the actual 2021 crop year receipts, in part, to determine the proposed assessment rate for the 2022 fiscal year.
The major expenditures recommended by the Committee for the 2022 fiscal year includes $538,700 for program administration, $284,000 for marketing activities, $379,485 for research, and $42,900 for inspection. Budgeted expenses for these items during the 2021 fiscal year were $531,300, $238,000, $334,532, and $48,000, respectively.
The Committee derived the recommended assessment rate by considering anticipated fiscal year expenses, actual olive tonnage received by handlers during the 2021 crop year, and the amount in the Committee's financial reserve. Income derived from handler assessments and other revenue sources is expected to be adequate to cover budgeted expenses. The assessment rate proposed in this rule would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate would be in effect for an indefinite period, the Committee would continue to meet prior to or during each fiscal year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's budget for subsequent fiscal years would be reviewed and, as appropriate, approved by USDA.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 800 producers of olives in the production area and 2 handlers subject to regulation under the Order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
Because of the large year-to-year variation in California olive production it is helpful to use two-year averages of seasonal average grower price when undertaking calculations relating to average grower revenue. The National Agricultural Statistics Service (NASS) reported season average grower prices of olives utilized for canning for 2019 and 2020 of $1,040 and $1,060 per ton, respectively. The two-year average price is $1,050.
The appropriate quantities to consider are the annual assessable olive quantities, which were 20,020 tons in 2020 and 43,336 tons in 2021. The two-year average quantity was 31,678 tons. Multiplying 31,678 tons by the two-year average grower price of $1,050 yields a two-year average crop value of $33.262 million. Dividing the crop value by the number of olive producers (800) yields calculated annual average producer revenue of $41,577, much less than SBA's size standard of $1,000,000. Thus, the majority of olive producers may be classified as small entities.
Dividing the $33.262 million crop value by two equals $16.631 million, which is the annual average producer crop value processed by each of the two handlers over the two-year period. Dividing the $30 million annual sales SBA size threshold for a large handler by the $16.631 crop value per handler yields an estimate of an 80 percent manufacturing margin for the two canners, on average, to be considered large handlers. A key question is whether 80 percent is a reasonable estimate of a manufacturing margin for the olive canning process.
A review of economic literature on canned food manufacturing margins found no recent published estimates. A series of USDA, Economic Research Service reports on cost components of farm to retail price spreads, published in the late 1970s and early 1980s, found that margins above crop value for a canned vegetable product was in the range of 76 to 85 percent. Although the studies are not recent, a key observation is that canning technology has not changed significantly in that time period. Therefore, with the 80 percent margin estimate for the two olive handlers, the data indicates that they are right on the threshold of being large handlers ($30 million in annual sales), using two-year average data, and assuming that the two handlers are about the same size. In a large crop year, one or both handlers would be considered large handlers, depending on the proportion of the crop that each of the handlers processed.
This proposal would decrease the assessment rate collected from handlers for the 2022 and subsequent fiscal years from $30.00 to $16.00 per ton of assessable olives. The Committee unanimously recommended 2022 expenditures of $1,245,085 and an
The Committee's financial reserve is projected to be $1,990,000. The major expenditures recommended by the Committee for the 2022 fiscal year include $538,700 for program administration, $284,000 for marketing activities, $379,485 for research, and $42,900 for inspection. Budgeted expenses for these items during the 2021 fiscal year were $531,300, $238,000, $334,531, and $48,000, respectively. The Committee deliberated on many of the expenses, weighed the relative value of various programs or projects, and decreased their expenses for marketing and research activities while increasing program administration. Overall, the 2022 budget of $1,245,085 is $93,254 more than the $1,151,831 budgeted for the 2021 fiscal year.
Prior to arriving at this budget and assessment rate, the Committee considered information from various sources including the Committee's Executive, Marketing, Inspection, and Research Subcommittees. Alternate expenditure levels were discussed by these groups, based upon the relative value of various projects to the olive industry and the increased olive production. The assessment rate of $16.00 per ton of assessable olives was derived by considering anticipated expenses, the high volume of assessable olives, the current balance in the monetary reserve, and additional pertinent factors.
A review of NASS information indicates that the average producer price for the 2020 crop year was $1,060 per ton and the quantity of assessable olives harvested in the 2021 crop year is 43,336 tons, which makes total producer revenue $45,936,160 ($1,060 multiplied by 43,336 tons). Therefore, utilizing the assessment rate of $16.00 per ton, the assessment revenue for the 2022 fiscal year as a percentage of total producer revenue would be approximately 1.5 percent ($16.00 multiplied by 43,336 tons divided by $45,936,160 multiplied by 100).
This proposed action would decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate would reduce the burden on handlers and may also reduce the burden on producers.
The Committee's meetings are widely publicized throughout the production area. The olive industry and all interested persons are invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the November 10, 2021 meeting was public meeting and all entities, both large and small, were able to express views on this issue. In addition, interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.
This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large California olive handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, USDA has determined that this proposed rule is consistent with and will effectuate the purposes of the Act.
A 60-day comment period is provided to allow interested persons to respond to this proposed rule. All written comments timely received will be considered before a final determination is made on this proposed rule.
Marketing agreements, Olives, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service proposes to amend 7 CFR part 932 as follows:
7 U.S.C. 601-674.
On and after January 1, 2022, an assessment rate of $16.00 per ton is established for California olives.
Federal Aviation Administration (FAA), DOT.
Proposed rule; withdrawal.
The FAA is withdrawing a notice of proposed rulemaking (NPRM) that proposed to adopt a new airworthiness directive (AD) for all True Flight Holdings LLC Model AA-1, AA-1A, AA-1B, AA-1C, AA-5, AA-5A, and AA-5B airplanes. The NPRM was prompted by the report of an accident of an airplane with bondline corrosion and delamination of the horizontal stabilizers. The NPRM proposed to require inspecting the wings, fuselage,
As of April 14, 2022, the proposed rule, which published in the
You may examine the AD docket at
Fred Caplan, Aviation Safety Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, GA 30337; phone: (404) 474-5507; email:
The FAA issued AD 2021-14-12, Amendment 39-21639 (86 FR 36491, July 12, 2021) (AD 2021-14-12), for True Flight Holdings LLC Model AA-1, AA-1A, AA-1B, AA-1C, and AA-5 airplanes. AD 2021-14-12 was prompted by an accident involving a Model AA-5 airplane that occurred on January 19, 2021. During flight, the outboard elevator attach bracket on the horizontal stabilizer detached, causing loss of elevator control and significant damage to the airplane. An investigation identified corrosion and delamination of the airplane skin bondlines around the area of the horizontal stabilizer where the elevator attach bracket was attached. Multiple field reports identified additional instances of corrosion and delamination of skin bondlines around the horizontal stabilizer and other primary structures.
AD 2021-14-12 stated that Model AA-1, AA-1A, AA-1B, AA-1C, and AA-5 airplanes have horizontal stabilizers that are similar in design and use the same metal-to-metal bonding process. While the bond adhesive remains structurally sound throughout the aging process, factors such as corrosion and freezing moisture may compromise the structural integrity of some of the bond joints. This can lead to delamination of the skin from the primary structure. The FAA determined that a more thorough inspection was necessary to reliably identify corrosion and delamination of bondlines in these critical areas, including the horizontal stabilizer. As a result, AD 2021-14-12 requires a one-time inspection of the horizontal stabilizers, paying particular attention to the bondlines, for cracks, buckles, corrosion, delamination, rust, or previous repair.
The FAA issued an NPRM that proposed to amend 14 CFR part 39 by adding an AD for all True Flight Holdings LLC Model AA-1, AA-1A, AA-1B, AA-1C, AA-5, AA-5A, and AA-5B airplanes. The NPRM published in the
The original decision to pursue corrective action was based upon multiple field reports, including direct observation of two airplanes, of issues related to inspection of bonded structure. The first was the originating accident airplane, and the second was another same model airplane located in the same hangar as the first airplane. Both of these airplanes exhibited damage (bondline delamination) in an area believed to be the source of the accident, at the attachment of the elevator bearing to the horizontal stabilizer. The construction in this area is similar among the applicable models in AD 2021-14-12. The issue specific to this area was addressed in AD 2021-14-12.
The FAA proposed the NPRM to address inspection for bondline delamination on the entire airplane based on an understanding that standard maintenance actions were insufficient to detect an issue. Because more models than those covered by AD 2021-14-12 share a similar bonded construction for the airplane as a whole, the NPRM proposed to also apply to True Flight Holdings LLC Model AA-5A and AA-5B airplanes.
The FAA received comments from 41 commenters. The commenters were the Aircraft Owners and Pilots Association (AOPA), the Grumman Owners & Pilots Association (GOPA), Fortnight Aviation Maintenance, and many individual airplane owners and pilots.
All commenters opposed the NPRM. Most commenters stated that the actions proposed in the NPRM are already addressed by existing maintenance practices or included in maintenance documents such as the Grumman maintenance manual, the annual inspection checklist, service bulletins, and AD 2021-14-12. The commenters noted that the January 2021 accident resulted from poor maintenance practices and failure to adequately follow these existing procedures, not from any fault with the procedures themselves. For this reason, some commenters requested the FAA withdraw the NPRM due to lack of supporting data and issue a special airworthiness information bulletin (SAIB) instead.
Several commenters requested that the FAA remove Model AA-5, AA-5A, and AA-5B airplanes from the applicability because these models have a different design than the accident airplane. Many commenters noted that the proposed AD is overly broad because the delamination issue is limited to pre-1977 models manufactured with a “purple glue” for adhesive. AOPA, GOPA, and a few individuals stated the proposed requirement to tap test all bondlines on the airplane annually would damage the paint and lead to corrosion. Lastly, AOPA, GOPA, and two individuals requested the FAA increase its estimated labor rate of $85 per hour.
The FAA agrees that the instructions in the airplane maintenance manual are sufficient to detect the type of damage that is believed to have led to the originating accident, as well as similar damage on the rest of the airplane. The FAA further agrees that the original findings were not indicative of an unsafe condition, but instead indicative of incorrectly followed maintenance procedures. Based on this assessment, the proposed inspection in the NPRM would exceed what is sufficient to detect the main issue of bondline delamination. The FAA has determined that additional AD action is not warranted and the proposal should be withdrawn.
The FAA acknowledges the comments unrelated to whether there is an unsafe condition. However, because the FAA is withdrawing the NPRM, those commenters' requests are no longer necessary.
Withdrawal of the NPRM constitutes only such action and does not preclude the FAA from further rulemaking on this issue, nor does it commit the FAA to any course of action in the future.
Since this action only withdraws an NPRM, it is neither a proposed AD nor a final rule. This action, therefore, is not covered under Executive Order 12866 or the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Safety.
Accordingly, the notice of proposed rulemaking, Docket No. FAA-2021-1017; Project Identifier AD-2021-00495-A, published in the
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for Bell Textron Inc., Model 204B, 205A, 205A-1, 205B, 210, 212, 412, 412CF, and 412EP helicopters and various restricted category helicopters. This proposed AD was prompted by reports of cracks found on the main transmission support case. This proposed AD would require repetitive inspections of the main transmission housing assembly for cracks, pitting, and corrosion and depending on the results, corrective action. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For Bell Helicopter service information identified in this AD, contact Bell Textron, Inc., P.O. Box 482, Fort Worth, TX, 76101, United States; phone (450) 437-2862 or (800) 363-8023; fax (450) 433-0272; email
You may examine the AD docket at
Hye Yoon Jang, Aerospace Engineer, Delegation Oversight Section, DSCO Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5190; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Hye Yoon Jang, Aerospace Engineer, Delegation Oversight Section, DSCO Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5190; email
The FAA proposes to adopt a new AD for Bell Textron Inc., Model 204B, 205A, 205A-1, 205B, 210, 212, 412, 412CF, and 412EP helicopters and the following restricted category helicopters:
• Model HH-1K helicopters; current type certificate holders include but are not limited to Rotorcraft Development Corporation;
• Southwest Florida Aviation International, Inc., Model SW205A-1 helicopters;
• Model TH-1F helicopters; current type certificate holders include but are not limited to Robinson Air Crane Inc.; Rotorcraft Development Corporation; and Tamarack Helicopters, Inc.;
• Model TH-1L helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc. (type certificate previously held by JTBAM, Inc.); and Rotorcraft Development Corporation;
• Model UH-1A helicopters; current type certificate holders include but are not limited to Richards Heavylift Helo, Inc.;
• Model UH-1B helicopters; current type certificate holders include but are not limited to International Helicopters, Inc.; Overseas Aircraft Support, Inc.; Red Tail Flying Services, LLC; Richards Heavylift Helo, Inc.; Rotorcraft Development Corporation; Southwest Florida Aviation International, Inc. (helicopters with an SW204 or SW204HP designation are Southwest Florida Aviation International, Inc., Model UH-1B helicopters); and WSH, LLC (type certificate previously held by San Joaquin Helicopters);
• Model UH-1E helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc.; Rotorcraft Development Corporation; Smith Helicopters; and West Coast Fabrications;
• Model UH-1F helicopters; current type certificate holders include but are not limited to AST, Inc.; California Department of Forestry; Robinson Air Crane, Inc.; Rotorcraft Development Corporation; and Tamarack Helicopters, Inc.;
• Model UH-1H helicopters; current type certificate holders include but are not limited to Arrow Falcon Exporters Inc.; Global Helicopter Technology, Inc.; Hagglund Helicopters, LLC; JJASPP Engineering Services, LLC; Northwest Rotorcraft, LLC; Overseas Aircraft Support, Inc.; Richards Heavylift Helo, Inc.; Rotorcraft Development Corporation; Southwest Florida Aviation International, Inc. (helicopters with an SW205 designation are Southwest Florida Aviation International, Inc., Model UH-1H helicopters); and Tamarack Helicopters, Inc.;
• Model UH-1L helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc.; and Rotorcraft Development Corporation; and
• Model UH-1P helicopters; current type certificate holders include but are not limited to Robinson Air Crane, Inc.; and Rotorcraft Development Corporation.
This proposed AD would require repetitive inspections of the main transmission housing assembly. This proposed AD was prompted by reports of main transmission support cases found cracked at one of the lateral mounts. This condition, if not addressed, could result in cracking at the upper or lower surfaces of the lateral mounts, loss of load carrying capabilities of the main transmission, and subsequent loss of control of the helicopter.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed Fluorescent Penetrant Inspection Method (ASTM E1417) of Chapter 6—Non-Destructive Inspection, of Bell Helicopter, Standard Practices Manual BHT-ALL-SPM, Revision 8, dated August 30, 2021, and ASTM International Standard Practice for Liquid Penetrant Testing E1417/E1417M-21, dated September 1, 2021 (ASTM E1417). This service information specifies procedures for the fluorescent penetrant inspection.
This proposed AD would require, within 3,000 hours time-in-service (TIS) accumulated by the main transmission after the effective date of this proposed AD, and thereafter at intervals not to exceed 3,000 hours TIS accumulated by the main transmission, removing certain screws and washers and visually inspecting the upper and lower transmission support case lateral mount screws for corrosion and thread damage, washers for corrosion and pitting, bushings for corrosion and pitting, and lateral mount surfaces for corrosion and mechanical damage such as any crack or pitting. If there is any corrosion, thread damage, or mechanical damage, this proposed AD would require removing the affected parts from service before further flight.
This proposed AD would also require repetitive fluorescent penetrant inspections (FPIs) of all surfaces of the main transmission support case lateral mounts for a crack. For helicopters with a main transmission that has accumulated 6,000 or more total hours TIS, the initial FPI would be required before further flight after the effective date of this AD. For helicopters with a main transmission that has accumulated less than 6,000 total hours TIS, the initial FPI would be required before the main transmission accumulates 6,000 total hours TIS. For all helicopters, following the initial FPI, this proposed AD would require performing an FPI at intervals not to exceed 6,000 hours TIS accumulated by the main transmission. If there is any crack, this proposed AD would require removing the main transmission support case from service before further flight.
The FAA estimates that this proposed AD would affect up to 621 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this proposed AD.
Inspecting the main transmission mount assembly would take about 1 work-hour, for an estimated cost of $85 per helicopter and $52,785 for the U.S. fleet, per inspection cycle.
Inspecting the main transmission support case lateral mounts by fluorescent penetrant method would take about 1 work-hour for an estimated cost of $85 per helicopter, and $52,785 for the U.S. fleet, per inspection cycle.
If required, replacing the transmission support case assembly hardware parts including 8 washers, 8 screws, and 4 bushings would take about 1 work-hour and parts would cost up to $100 per part for an estimated cost of up to $2,000 per helicopter.
If required, replacing the main transmission support case assembly would take up to 60 work-hours and parts would cost up to $54,501 for an estimated cost of up to $59,601 per helicopter.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 31, 2022.
None.
This AD applies to the following:
(1) Bell Textron Inc., Model 204B, 205A, 205A-1, 205B, 210, 212, 412, 412CF, and 412EP helicopters, certificated in any category; and
(2) Various restricted category helicopters:
(i) Model HH-1K helicopters; current type certificate holders include but are not limited to Rotorcraft Development Corporation;
(ii) Southwest Florida Aviation International, Inc. Model SW205A-1 helicopters;
(iii) Model TH-1F helicopters; current type certificate holders include but are not limited to Robinson Air Crane Inc.; Rotorcraft Development Corporation; and Tamarack Helicopters, Inc.;
(iv) Model TH-1L helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc. (type certificate previously held by JTBAM, Inc.); and Rotorcraft Development Corporation;
(v) Model UH-1A helicopters; current type certificate holders include but are not limited to Richards Heavylift Helo, Inc.;
(vi) Model UH-1B helicopters; current type certificate holders include but are not limited to International Helicopters, Inc.; Overseas Aircraft Support, Inc.; Red Tail Flying Services, LLC; Richards Heavylift Helo, Inc.; Rotorcraft Development Corporation; Southwest Florida Aviation International, Inc.; and WSH, LLC (type certificate previously held by San Joaquin Helicopters);
(vii) Model UH-1E helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc.; Rotorcraft Development Corporation; Smith Helicopters; and West Coast Fabrications;
(viii) Model UH-1F helicopters; current type certificate holders include but are not limited to AST, Inc.; California Department of Forestry; Robinson Air Crane, Inc.; Rotorcraft Development Corporation; and Tamarack Helicopters, Inc.;
(ix) Model UH-1H helicopters; current type certificate holders include but are not limited to Arrow Falcon Exporters, Inc.; Global Helicopter Technology, Inc.; Hagglund Helicopters, LLC; JJASPP Engineering Services LLC; Northwest Rotorcraft, LLC; Overseas Aircraft Support, Inc.; Richards Heavylift Helo, Inc.; Rotorcraft Development Corporation; Southwest Florida Aviation International, Inc.; and Tamarack Helicopters, Inc.;
(x) Model UH-1L helicopters; current type certificate holders include but are not limited to Bell Textron Inc.; Overseas Aircraft Support, Inc.; and Rotorcraft Development Corporation; and
(xi) Model UH-1P helicopters; current type certificate holders include but are not limited to Robinson Air Crane, Inc.; and Rotorcraft Development Corporation.
Joint Aircraft System Component (JASC) Code 6320, Main Rotor Gearbox.
This AD was prompted by reports of cracks found in the main transmission support case possibly due to corrosion. The FAA is issuing this AD to detect and address corrosion and other mechanical damage of the main transmission support case assembly. The unsafe condition, if not addressed, could result in cracking at the upper or lower surfaces of the lateral mounts, loss of load carrying capabilities of the main transmission, and subsequent loss of control of the helicopter.
Comply with this AD within the compliance times specified, unless already done.
(1) Within 3,000 hours time-in-service (TIS) accumulated by the main transmission after the effective date of this AD, and thereafter at intervals not to exceed 3,000 hours TIS accumulated by the main transmission, remove the screws and washers from the upper and lower surfaces of the main transmission support case lateral mounts and accomplish the following:
(i) Visually inspect each screw for corrosion and thread damage. If there is any corrosion or thread damage, before further flight, remove the screw from service.
(ii) Visually inspect each upper and lower washer for corrosion and pitting. If there is any corrosion or pitting, before further fight, remove the washer from service.
(iii) Visually inspect each installed bushing for corrosion and pitting. If there is any corrosion or pitting, before further fight, remove the bushing from service.
(iv) Visually inspect each upper and lower main transmission support case lateral mount machined surface adjacent to each washer and each lateral mount threaded screw hole for corrosion and mechanical damage. For the purposes of this AD, mechanical damage may be indicated by a crack or pitting. If there is any corrosion or mechanical damage, before further flight, remove the main transmission support case assembly from service.
(2) Fluorescent penetrant inspect (FPI) all surfaces of the main transmission support case lateral mounts for a crack at the compliance times identified in paragraph (g)(2)(i) or (ii) of this AD.
(i) For helicopters with a main transmission that has accumulated 6,000 or more total hours TIS, before further flight after the effective date of this AD.
(ii) For helicopters with a main transmission that has accumulated less than 6,000 total hours TIS, before accumulating 6,000 total hours TIS on the main transmission after the effective date of this AD.
(iii) If there is any crack, before further flight, remove the main transmission support case assembly from service.
(3) Thereafter following paragraph (g)(2) of this AD, at intervals not to exceed 6,000 hours TIS accumulated by the main
(1) The Manager, DSCO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in Related Information. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Hye Yoon Jang, Aerospace Engineer, Delegation Oversight Section, DSCO Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5190; email
(2) For ASTM service information identified in this AD, you may purchase the ASTM standard from ASTM International at
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all GE Aviation Czech s.r.o. (GEAC) M601D-11 model turboprop engines. This proposed AD was prompted by the manufacturer revising the airworthiness limitation section (ALS) of the existing engine maintenance manual (EMM) to include a visual inspection of the centrifugal compressor case for cracks. This proposed AD would require revising the ALS of the existing EMM to incorporate a visual inspection of the centrifugal compressor case. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact GE Aviation Czech, Beranových 65, 199 02 Praha 9—Letňany, Czech Republic; phone: +420 222 538 999; email:
You may examine the AD docket at
Barbara Caufield, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: (781) 238-7146; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Barbara Caufield, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0060, dated March 3, 2021 (referred to after this as “the MCAI”), to address the unsafe condition on these products. The MCAI states:
The airworthiness limitations for certain M601 engine models, which are approved by
Failure to accomplish these instructions could result in an unsafe condition.
Recently, GEAC published the ALS, as defined in this [EASA] AD, introducing a visual inspection of the Centrifugal Compressor Case.
For the reason described above, this [EASA] AD requires accomplishment of the actions specified in the ALS.
You may obtain further information by examining the MCAI in the AD docket at
This product has been approved by EASA and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA of the unsafe condition described in the MCAI and service information. The FAA is proposing this AD because the agency evaluated all the relevant information provided by EASA and has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
The FAA reviewed GE Aviation Czech Airworthiness Limitations R18, Section 5. Mandatory Inspections, of the GE Aviation Czech EMM, Part No. 0982309, Revision No. 18, dated December 18, 2020 (Airworthiness Limitations R18, Section 5. Mandatory Inspections). Airworthiness Limitations R18, Section 5. Mandatory Inspections, of the EMM specifies procedures for performing a visual inspection of the centrifugal compressor case for cracks.
This proposed AD would require revising the ALS of the existing EMM to incorporate a visual inspection of the centrifugal compressor case for cracks. An owner/operator (pilot) holding at least at least a private pilot certificate may revise the ALS of the existing EMM, and the owner/operator must enter compliance with the applicable paragraphs of the AD into the aircraft records in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). This is an exception to the FAA's standard maintenance regulations.
The MCAI specifies replacing each component before exceeding the applicable life limit and accomplishing all the applicable maintenance tasks within the thresholds and intervals, as defined in the ALS. This proposed AD would require revising the ALS of the existing EMM to incorporate a visual inspection of the centrifugal compressor case. The MCAI specifies that if discrepancies are found during the accomplishment of the EASA AD, to accomplish corrective actions in accordance with existing GEAC instructions. The MCAI also specifies to contact GEAC for approved instructions if a detected discrepancy cannot be corrected using existing GEAC instruction. This proposed AD would not require performing corrective actions in accordance with existing GEAC instructions or contacting GEAC for approved instructions. The MCAI specifies revising the aircraft maintenance program within 12 months from its effective date. This proposed AD would require revising the ALS of the existing EMM to incorporate a visual inspection of the centrifugal compressor case within 90 days after the effective date of this proposed AD.
The MCAI and GE Aviation Czech Airworthiness Limitations R18, Section 5. Mandatory Inspections, apply to GEAC M601D-1, M601D-2, M601D-11, M601D-11NZ, and M601Z model turboprop engines. This proposed AD would not apply to GEAC M601D-1, M601D-2, M601D-11NZ, and M601Z model turboprop engines because these model turboprop engines do not have an FAA type certificate.
The FAA estimates that this AD, if adopted as proposed, would affect 7 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 31, 2022.
None.
This AD applies to GE Aviation Czech s.r.o. M601D-11 model turboprop engines.
Joint Aircraft System Component (JASC) Code 7230, Turbine Engine Compressor Section.
This AD was prompted by the manufacturer revising the airworthiness limitation section (ALS) of the existing engine maintenance manual (EMM) to include a visual inspection of the centrifugal compressor case for cracks. The FAA is issuing this AD to prevent failure of the centrifugal compressor case. The unsafe condition, if not addressed, could result in failure of the centrifugal compressor case, engine separation, and loss of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) Within 90 days after the effective date of this AD, revise the ALS of the existing EMM by incorporating Figure 1 to paragraph (g)(1) of this AD.
(2) After revising the ALS of the existing EMM required by paragraph (g)(1) of this AD, no alternative inspection intervals may be used unless they are approved as provided in paragraph (h) of this AD.
(3) The action required by paragraph (g)(1) of this AD may be performed by the owner/operator (pilot) holding at least a private pilot certificate and must be entered into the aircraft records showing compliance with this AD in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ECO Branch, send it to the attention of the person identified in paragraph (i)(1) of this AD and email:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Barbara Caufield, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: (781) 238-7146; email:
(2) Refer to European Union Aviation Safety Agency (EASA) AD 2021-0060, dated March 3, 2021, for more information. You may examine the EASA AD in the AD docket at
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (SNPRM).
The FAA is revising a notice of proposed rulemaking (NPRM) that applied to certain Williams International Co., L.L.C. (Williams) FJ44-2A, FJ44-2C, FJ44-3A, and FJ44-3A-24 model turbofan engines. This action revises the NPRM by expanding the applicability, updating the estimated costs information, updating the compliance time, and adding an installation prohibition. This action also revises the NPRM by updating the service information references. The FAA is proposing this airworthiness directive (AD) to address the unsafe condition on these products. Since these actions would impose an additional burden over those in the NPRM, the agency is requesting comments on this SNPRM.
The FAA must receive comments on this SNPRM by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this SNPRM, contact Williams International, Product Support, 2000 Centerpoint Parkway, Pontiac, MI 48341; phone: (800) 859-3544; website:
You may examine the AD docket at
Kyle Bush, Aviation Safety Engineer, Chicago ACO, FAA, 2300 East Devon Avenue, Des Plaines, IL 60018; phone: (847) 294-7870; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may again revise this proposal because of those comments.
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this SNPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this SNPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this SNPRM. Submissions containing CBI should be sent to Kyle Bush, Aviation Safety Engineer, Chicago ACO, FAA, 2300 East Devon Avenue, Des Plaines, IL 60018. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The FAA issued an NPRM to amend 14 CFR part 39 by adding an AD that would apply to Williams FJ44-2A, FJ44-2C, FJ44-3A, and FJ44-3A-24 model turbofan engines. The NPRM published in the
As a result of this investigation, Williams determined the root cause of this cracking was due to higher HPT disk post temperatures and a difference in manufacturing processes. Williams determined that these cracks have only occurred on HPT disks with part number (P/N) 67093 installed on FJ44-2A or FJ44-2C model turbofan engines. Williams subsequently published service information specifying procedures to remove the HPT disk, P/N 67093. In the NPRM, the FAA proposed to require removing the HPT disk, P/N 67093, from service before reaching its new life limit and replacing it with a part eligible for installation.
Since the FAA issued the NPRM, Williams notified the FAA that revised service information was available. The revised service information, Williams International Service Bulletin (SB) WISB-72-1032, Revision 2, dated June 4, 2020, adds additional serial-numbered FJ44-2A, FJ44-2C, and FJ44-3A model turbofan engines to the effectivity and updates the compliance time for replacing the HPT disk. The FAA determined that the additional
The FAA received a comment from one commenter on the NPRM, Williams. The following presents the comment received on the NPRM and the FAA's response to the comment.
Williams requested that the NPRM be revised to reflect the specified procedures of the current service document revisions, Williams International SB WISB-72-1032, Revision 2, dated June 4, 2020, and Williams International SB WISB-72-1034, Revision 3, dated July 2, 2021.
The FAA agrees. The FAA has revised this proposed AD to include Williams International SB WISB-72-1032, Revision 2, dated June 4, 2020, and Williams International SB WISB-72-1034, Revision 3, dated July 2, 2021.
In this SNPRM, the FAA has replaced the term “life limit” with “defined life cycles,” where appropriate. In this SNPRM, the FAA has replaced all instances of “resulting in the release of an HPT blade” to “resulting in the contained fracture of an HPT disk post and blade.”
The FAA is proposing this AD after determining the unsafe condition described previously is likely to exist or develop in other products of the same type design. Certain changes described above expand the scope of the NPRM. As a result, it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.
The FAA reviewed Williams International SB WISB-72-1032, Revision 2, dated June 4, 2020. This service information specifies procedures for removing and replacing the HPT rotor assemblies that include HPT disk, P/N 67093. The service information also provides instructions for incorporating the latest HPT combustor/fuel slinger module on FJ44-2A and FJ44-2C model turbofan engines. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
The FAA reviewed Williams International SB WISB-72-1034, Revision 3, dated July 2, 2021. This service information describes procedures for re-identifying the HPT rotor assembly and HPT disk.
This proposed AD would require removing the HPT disk, P/N 67093, from service before reaching defined cycle limits and replacing it with a part eligible for installation.
The Accomplishment Instructions, paragraph 2.D., of Williams International SB WISB-72-1032, Revision 2, dated June 4, 2020, specifies procedures for replacing or reworking the HPT combustor/fuel slinger module on FJ44-2A and FJ44-2C model turbofan engines, while this proposed AD would not mandate that action. The FAA has determined that replacement or rework of the HPT combustor/fuel slinger module is not necessary to resolve the unsafe condition in this proposed AD.
The Accomplishment Instructions, paragraphs 2.C. and E. and 3.C. and D., of Williams International SB WISB-72-1032, Revision 2, dated June 4, 2020, specify procedures for removing and replacing the HP turbine rotor assembly containing HPT disk, P/N 67093, whereas this proposed AD would mandate removing and replacing the HPT disk, P/N 67093. Although removing the HPT rotor assembly is a necessary step in the replacement of the HPT disk, this proposed AD only requires replacement of the HPT disk to resolve the unsafe condition addressed by this proposed AD.
The FAA estimates that this AD, if adopted as proposed, would affect 242 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected operators.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 31, 2022.
None.
This AD applies to Williams International Co., L.L.C. (Williams) FJ44-2A, FJ44-2C, FJ44-3A, and FJ44-3A-24 model turbofan engines with an engine serial number identified in paragraph 1.A., Effectivity, of Williams International Service Bulletin WISB-72-1032, Revision 2, dated June 4, 2020 (the SB), with an installed high-pressure turbine (HPT) disk, part number (P/N) 67093.
Joint Aircraft System Component (JASC) Code 7250, Turbine Section.
This AD was prompted by a report of cracks in the HPT disk posts and failure of an HPT disk post, resulting in the contained fracture of an HPT disk post and blade. The FAA is issuing this AD to prevent cracking and failure of the HPT disk posts. The unsafe condition, if not addressed, could result in release of the HPT blade, damage to the engine, and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For FJ44-2A and FJ44-2C model turbofan engines, within the compliance times specified in Table 1 to Paragraph (g) of this AD, remove the affected HPT disk from service and replace it with a part eligible for installation using paragraphs 2.C. and E., Accomplishment Instructions—FJ44-2A & FJ44-2C, of the SB.
(2) For FJ44-3A and FJ44-3A-24 model turbofan engines, within the compliance times specified in Table 1 to Paragraph (g) of this AD, remove the affected HPT disk from service and replace it with a part eligible for installation using paragraphs 3.C. and D., of the SB.
After the effective date of this AD, do not install onto any engine an HPT disk with P/N 67093.
(1) The Manager, Chicago ACO, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j)(1) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Kyle Bush, Aviation Safety Engineer, Chicago ACO, FAA, 2300 East Devon Avenue, Des Plaines, IL 60018; phone: (847) 294-7870; email:
(2) For service information identified in this AD, contact Williams International, Product Support, 2000 Centerpoint Parkway, Pontiac, MI 48341; phone: (800) 859-3544; website:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A318 series airplanes, Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. This proposed AD was prompted by a report that cracks were found on the web horizontal flange and inner cap on frame (FR) 68, left-hand (LH) and right-hand (RH) side, at stringer (STGR) 22. This proposed AD would require repetitive high frequency eddy current (HFEC) inspections for cracks on the web horizontal flange and inner cap on FR 68, LH and RH side at STGR 22, and applicable corrective actions, as specified in a European Union Aviation Safety Agency (EASA) AD, which is proposed for incorporation by reference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For material that will be incorporated by reference (IBR) in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket at
Dan Rodina, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone and fax 206-231-3225; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to should be sent to Dan Rodina, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone and fax 206-231-3225; email
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2022-0030, dated February 25, 2022 (EASA AD 2022-0030) (also referred to as the MCAI), to correct an unsafe condition for certain Airbus SAS Model A318-111, A318-112, A318-121, A318-122, A319-111, A319-112, A319-113, A319-114, A319-115, A319-131, A319-132, A319-133, A320-211, A320-212, A320-214, A320-215, A320-216, A320-231, A320-232, A320-233, A321-111, A321-112, A321-131, A321-211, A321-212, A321-213, A321-231 and A321-232 airplanes.
Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this proposed AD therefore does not include those airplanes in the applicability.
This proposed AD was prompted by a report that during the inspection for the door stop fitting holes at FR 66 and FR 68 required by EASA AD 2016-0238, dated December 2, 2016; corrected January 4, 2017 (which corresponds to FAA AD 2018-03-12, Amendment 39-19185 (83 FR 5906, February 12, 2018), cracks were found on web horizontal flange and inner cap on FR 68, LH and
EASA AD 2022-0030 specifies procedures for repetitive HFEC inspections for cracks at the web horizontal flange and inner cap on FR 68, LH and RH sides, at STGR 22, and applicable corrective actions (
These products have been approved by the aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of these same type designs.
This proposed AD would require accomplishing the actions specified in EASA AD 2022-0030 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2022-0030 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2022-0030 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2022-0030 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2022-0030. Service information required by EASA AD 2022-0030 for compliance will be available at
The FAA estimates that this proposed AD would affect 1,585 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA has received no definitive data on which to base the cost estimates for the on-condition actions specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 31, 2022.
None.
This AD applies to Airbus SAS airplanes specified in paragraphs (c)(1) through (4) of
(1) Model A318-111, -112, -121, and -122 airplanes.
(2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes.
(4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 53, fuselage.
This AD was prompted by a report that cracks were found on web horizontal flange and inner cap on frame (FR) 68, left-hand (LH) and right-hand (RH) sides, at stringer (STGR) 22. The FAA is issuing this AD to address the cracks on web horizontal flange and inner cap on FR 68, LH and RH sides, at STGR 22, which could result in reduced structural integrity of the fuselage.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2022-0030.
(1) Where EASA AD 2022-0030 refers to its effective date, this AD requires using the effective date of this AD.
(2) The “Remarks” section of EASA AD 2022-0030 does not apply to this AD.
(3) Where paragraph (2) of EASA AD 2022-0030 specifies “Accomplishment on an aeroplane of (repetitive) maintenance instructions, issued and approved by Airbus,” for this AD, those instructions must have been approved by the Manager, Large Aircraft Section, International Validation Branch, FAA; or EASA; Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.
(4) Where paragraph (3) of EASA AD 2022-0030 specifies if “discrepancies and/or cracks are detected, before next flight, contact Airbus for approved corrective action(s) instructions and, within the compliance time specified therein, accomplish those instructions accordingly,” for this AD, if cracks are detected, the cracks must be repaired before further flight using a method approved by the Manager, Large Aircraft Section, International Validation Branch, FAA; or EASA; or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.
(5) Where paragraph (4) of EASA AD 2022-0030 specifies “the instructions provided by Airbus,” for this AD, those instructions must be approved by the Manager, Large Aircraft Section, International Validation Branch, FAA; or EASA; Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) For EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(2) For more information about this AD, contact Dan Rodina, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone and fax 206-231-3225; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 787-8, 787-9, and 787-10 airplanes. This proposed AD was prompted by a report from Boeing that Rolls-Royce Deutschland Ltd & Co KG (RRD) discovered a design issue in the engine fuel feed system, which could result in fuel flow restrictions to both engines when ice that has accumulated in the airplane fuel feed system suddenly releases into the engines. This proposed AD would require revising the existing airplane flight manual (AFM) to update the limitations on minimum fuel temperatures. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 31, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
You may examine the AD docket at
Tak Kobayashi, Aerospace Engineer, Propulsion Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3553; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Takahisa Kobayashi, Aerospace Engineer, Propulsion Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3553; email:
The FAA has received a report from Boeing that affects certain Model 787-8, 787-9, and 787-10 airplanes, with RRD Model Trent 1000 engines installed. RRD discovered and reported to Boeing that a design issue in the engine fuel feed system could result in fuel flow restrictions to both engines when ice that has accumulated in the airplane fuel feed system suddenly releases into the engines. The sudden release of accumulated ice into the engine fuel feed system, in combination with low fuel temperatures, could cause freezing temperatures at the inlet of certain engine fuel feed system components. This condition, if not addressed, could result in fuel flow restrictions to both engines, causing a potential loss of dual engine thrust control and reduced controllability of the airplane.
The applicability of this proposed AD includes additional designations for RRD Model Trent 1000 engines not explicitly identified on the model list of the FAA Type Certificate Data Sheet (TCDS) Number E00076EN, but are identified on the EASA TCDS EASA.E.036. The parenthetical text included in paragraph (c) of this proposed AD is an additional identifier for RRD Model Trent 1000 engines that specifies certain build standards have been incorporated on the engine. The designation of “/01” identifies RRD Model Trent 1000 engines on which Service Bulletin 72-G319 has been incorporated, and “/01A” identifies RRD Model Trent 1000 engines on which Service Bulletin 72-G893 has been incorporated.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require revising the existing AFM to update the limitations on minimum fuel temperatures.
Section 91.9 prohibits any person from operating a civil aircraft without complying with the operating limitations specified in the AFM. FAA regulations also require operators to furnish pilots with any changes to the AFM (14 CFR 121.137) and pilots in command to be familiar with the AFM (14 CFR 91.505).
The FAA considers this proposed AD interim action. Boeing is currently working with RRD to develop updated electronic engine control (EEC) software, which will change the engine oil temperature amber line indicated in the engine indication and crew alerting system (EICAS). This change will ensure that, before takeoff, the engine oil temperature would be warm enough to operate the engine with cold fuel. The updated EEC software combined with the action required by this proposed AD will address the unsafe condition identified in this AD. Once this software is developed, approved, and available, the FAA might consider additional rulemaking.
The FAA estimates that this AD, if adopted as proposed, would affect 14 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 31, 2022.
None.
This AD applies to The Boeing Company Model 787-8, 787-9, and 787-10 airplanes, certificated in any category, with Rolls-Royce Deutschland Ltd & Co KG Model Trent 1000-A (including -A/01 and -A/01A), Trent 1000-A2, Trent 1000-AE (including -AE/01A), Trent 1000-AE2, Trent 1000-AE3, Trent 1000-C (including -C/01 and -C/01A), Trent 1000-C2, Trent 1000-CE (including -CE/01A), Trent 1000-CE2, Trent 1000-CE3, Trent 1000-D (including -D/01 and -D/01A), Trent 1000-D2, Trent 1000-D3, Trent 1000-E (including -E/01 and -E/01A), Trent 1000-E2, Trent 1000-G (including -G/01 and -G/01A), Trent 1000-G2, Trent 1000-G3, Trent 1000-H (including -H/01 and -H/01A), Trent 1000-H2, Trent 1000-H3, Trent 1000-J2, Trent 1000-J3, Trent 1000-K2, Trent 1000-K3, Trent 1000-L2, Trent 1000-L3, Trent 1000-M3, Trent 1000-N3, Trent 1000-P3, Trent 1000-Q3, or Trent 1000-R3 engines installed.
Air Transport Association (ATA) of America Code 28, Fuel.
This AD was prompted by a report from Boeing that Rolls-Royce Deutschland Ltd & Co KG discovered a design issue in the engine fuel feed system, which could result in fuel flow restrictions to both engines when ice that has accumulated in the airplane fuel feed system suddenly releases into the engines. The sudden release of accumulated ice into the engine fuel feed system, in combination with low fuel temperatures, could cause freezing temperatures at the inlet of certain engine fuel feed system components. The FAA is issuing this AD to address possible fuel flow restrictions to both engines, which could result in loss of dual engine thrust control and reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD, revise the existing AFM to incorporate the information specified in figure 1 to paragraph (g) of this AD into the “Certificate Limitations” chapter of the applicable Engine Appendix of the existing AFM.
(1) The Manager, Seattle ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (i) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by The Boeing Company Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
For more information about this AD, contact Tak Kobayashi, Aerospace Engineer, Propulsion Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3553; email:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to remove Class E airspace in Honesdale, PA, as Spring Hill Airport has been abandoned, and controlled airspace is no longer required. This action would also amend Class E airspace extending upward from 700 feet above the surface for Cherry Ridge Airport, and update the airport's geographic coordinates to coincide with the FAA's database. This action would enhance the safety and management of controlled airspace within the national airspace system.
Comments must be received on or before May 31, 2022.
Send comments on this proposal to: The U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590-0001; Telephone: (800) 647-5527, or (202) 366-9826. You must identify the Docket No. FAA-2022-0403; Airspace Docket No. 22-AEA-6, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, GA 30337; Telephone (404) 305-6364.
The FAA's authority to issue rules regarding aviation safety is found in
Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This proposed rulemaking is promulgated under the authority described in Subtitle VII, part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would remove Class E airspace extending upward from 700 feet above the surface at Spring Hill Airport, due to the closing of the airport, and amend Class E airspace extending upward from 700 feet above the surface at Cherry Ridge Airport, Honesdale, PA, to support IFR operations in the area.
Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket No. FAA-2021-0403 and Airspace Docket No. 22-AEA-6) and be submitted in triplicate to the DOT Docket Operations (see
Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2021-0403; Airspace Docket No. 22-AEA-6.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA proposes an amendment to 14 CFR 71 to remove Class E airspace extending upward from 700 feet above the surface at Spring Hill Airport, as the airport has closed. Therefore, the airspace is no longer necessary. This action would also amend Class E airspace extending upward from 700 feet above the surface at Cherry Ridge Airport, Honesdale, PA, by removing Wilkes-Barre VORTAC from the description, as it is no longer necessary. This action would also update the geographic coordinates of Cherry Ridge Airport to coincide with the FAA's database. This action would enhance the safety and management of controlled airspace within the national airspace system.
Class E airspace designations are published in Paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal would be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Cherry Ridge Airport, and that airspace within a 6-mile radius of the point in space coordinates serving the Honesdale Sports Complex Heliport.
Postal Service
Proposed rule; request for comments.
The Postal Service proposes to revise
We must receive your comments on or before May 16, 2022.
Mail or deliver comments to the manager, Product Classification, U.S. Postal Service®, 475 L'Enfant Plaza SW, RM 4446, Washington, DC 20260-5015. You may inspect and photocopy all written comments at USPS® Headquarters Library, 475 L'Enfant Plaza SW, 11th Floor N, Washington, DC by appointment only between the hours of 9 a.m. and 4 p.m., Monday through Friday by calling 1-202-268-2906 in advance. Email comments, containing the name and address of the commenter, to:
Kathy Frigo at 202-268-4178 or Dale Kennedy at 202-268-6592.
On April 6, 2022, the Postal Service filed a notice of mailing services price adjustments with the Postal Regulatory Commission (PRC), effective on July 10, 2022. The Postal Service proposes to revise Notice 123,
This proposed rule describes the price changes for the following market dominant international services:
• First-Class Mail International (FCMI) service.
• International extra services and fees.
The Postal Service plans to increase prices for single-piece FCMI postcards, letters, and flats by approximately 7.4%. The proposed price for a single-piece postcard will be $1.40 worldwide. The First-Class Mail International letter nonmachinable surcharge will increase to $0.39. The proposed FCMI single-piece letter and flat prices will be as follows:
The Postal Service plans to increase prices for certain market dominant international extra services including:
Fee: $18.25.
Fee: $5.05.
Fee: per piece $7.50.
Fee: Cards $1.90; Envelopes up to 2 ounces $2.40.
Following the completion of Docket No. R2022-1, the Postal Service will adjust the prices for products and services covered by the International Mail Manual. These prices will be on Postal Explorer at
Accordingly, although exempt from the notice and comment requirements of the Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites public comment on the proposed changes to
The Postal Service will publish an appropriate update to Notice 123,
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve three state implementation plan (SIP) revisions submitted by the State of California addressing the nonattainment new source review (NNSR) requirements for the 2015 8-hour ozone National Ambient Air Quality Standards
Comments must be received on or before May 16, 2022.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2021-0754, at
Amita Muralidharan, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 947-4140 or by email at
Throughout this document, “we,” “us,” and “our” refer to the EPA.
On October 26, 2015, the EPA promulgated a revised 8-hour ozone NAAQS of 0.070 parts per million (ppm).
Within the SCAQMD, the South Coast Air Basin was classified as an Extreme ozone nonattainment area and the Coachella Valley Air Basin was classified as a Severe ozone nonattainment area. Within the ICAPCD, Imperial County was classified as a Marginal ozone nonattainment area. Within the VCAPCD, the part of Ventura County excluding the Channel Islands of Anacapa and San Nicolas Islands was classified as a Serious nonattainment area.
On December 6, 2018, the EPA issued a final rule entitled “Implementation of the 2015 National Ambient Air Quality Standards for Ozone: Nonattainment Area State Implementation Plan Requirements” (“2015 SIP Requirements Rule”) that establishes the requirements and deadlines that state, tribal, and local air quality management agencies must meet as they develop implementation plans for areas where ozone concentrations exceed the 2015 8-hour ozone NAAQS.
Table 1 lists the dates the submitted 2015 Ozone Certification letters addressed by this proposal were adopted by each air district and submitted by the California Air Resources Board (CARB), the agency that serves as the governor's designee for California SIP submittals.
CARB's August 3, 2021, submittal of the SCAQMD, ICAPCD, and VCAPCD 2015 Certification letters were deemed by operation of law on February 3, 2022, to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.
The submittal from each district is intended to satisfy the 2015 SIP Requirement Rule that requires states to
NNSR is a preconstruction review permit program that applies to new major stationary sources or major modifications at existing sources within a nonattainment area and is required under CAA sections 172(c)(5) and 173.
As mentioned in Section I of this document, NNSR permit program requirements were adopted for the 2015 ozone NAAQS at 40 CFR 51.1314 by the implementation rule for the 2015 8-hour ozone NAAQS.
The SCAQMD's longstanding SIP-approved NNSR program,
The ICAPCD's SIP-approved NNSR program,
The VCAPCD's SIP-approved NNSR program,
The EPA is proposing to approve SIP revisions addressing the NNSR requirements for the 2015 8-hour ozone NAAQS for the SCAQMD, the ICAPCD, and the VCAPCD. In support of this proposed action, we have concluded that our approval of the submitted 2015 ozone certifications for each district would comply with section 110(l) of the Act because the submittals will not interfere with continued attainment of the NAAQS in each district. The EPA has concluded that the State's submission fulfills the 40 CFR 51.1314 revision requirement and meets the requirements of CAA sections 110, 172(c)(5), 173, and 182(a)(2)(C), and the minimum SIP requirements of 40 CFR
We will accept comments from the public on this proposal until May 16, 2022.
In this proposed rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the certifications listed in Table 1 of this preamble. The EPA has made, and will continue to make, these materials available electronically through
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Federal Communications Commission.
Proposed rule.
The Federal Communications Commission (Commission) has before it a petition for rulemaking filed by Gray Television Licensee, LLC (Petitioner), the licensee of WMC-TV, channel 5, Memphis, Tennessee. The Petitioner requests the substitution of channel 30 for channel 5 at Memphis in the Table of Allotments.
Comments must be filed on or before May 16, 2022 and reply comments on or before May 31, 2022.
Federal Communications Commission, Office of the Secretary, 45 L Street NE, Washington, DC 20554. In addition to filing comments with the FCC, interested parties should serve counsel for the Petitioner as follows: Joan Stewart, Esq., Wiley Rein LLP, 2050 M Street NW, Washington, DC 20036.
Joyce Bernstein, Media Bureau, at (202) 418-1647; or at
In support, the Petitioner states the proposed channel substitution serves the public interest because it will resolve significant over-the-air reception problems in WMC-TV's existing service area. The Petitioner further states that the Commission has recognized the deleterious effects manmade noise has on the reception of digital VHF signals, and that the propagation characteristics of these channels allow undesired signals and noise to be receivable at relatively farther distances compared to UHF channels, and nearby electrical devices can cause interference. According to the Petitioner, an analysis using the Commission's
This is a synopsis of the Commission's
This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
Members of the public should note that all
Television.
For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:
47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.
(j) * * *
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are required regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by May 16, 2022 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Failure to collect and maintain the data collected on the form will limit or eliminate USDA's ability to prepare for, respond to, and conduct emergency recovery actions because of an actual or impending hazard.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public of our preliminary concurrence with the World Organization for Animal Health's (OIE) bovine spongiform encephalopathy (BSE) risk designation for Ireland. The OIE recognizes Ireland as being of negligible risk for BSE. We are taking this action based on our review of information supporting the OIE's risk designation for Ireland.
We will consider all comments that we receive on or before June 13, 2022.
You may submit comments by either of the following methods:
•
•
Any comments we receive on this docket may be viewed at
Dr. Rebecca Gordon, Senior Staff Officer, Regionalization Evaluation Services, Veterinary Services, APHIS, 920 Main Campus Drive, Raleigh, NC 27606; (919) 855-7741; email:
The regulations in 9 CFR part 92 subpart B, “Importation of Animals and Animal Products; Procedures for Requesting BSE Risk Status Classification With Regard To Bovines” (referred to below as the regulations), set forth the process by which the Animal and Plant Health Inspection Service (APHIS) classifies regions for bovine spongiform encephalopathy (BSE) risk. Section 92.5 of the regulations provides that all countries of the world are considered by APHIS to be in one of three BSE risk categories: Negligible risk, controlled risk, or undetermined risk. These risk categories are defined in § 92.1. Any region that is not classified by APHIS as presenting either negligible risk or controlled risk for BSE is considered to present an undetermined risk. The list of those regions classified by APHIS as having either negligible risk or controlled risk can be accessed on the APHIS website at
Under the regulations, APHIS may classify a region for BSE in one of two ways. One way is for regions that have not received a risk classification from the World Organization for Animal Health (OIE) to request classification by APHIS. The other way is for APHIS to concur with the classification given to a country or region by the OIE.
If the OIE has classified a region as either BSE negligible risk or BSE controlled risk, APHIS will seek information to support concurrence with the OIE classification. This information may be publicly available information, or APHIS may request that regions supply the same information given to the OIE. APHIS will announce in the
In accordance with this process, we are giving notice in this document that APHIS intends to concur with the OIE risk classification of the country of Ireland as a region of negligible risk for BSE.
The OIE recommendation regarding Ireland can be viewed at
After reviewing any comments that we receive, we will announce our final determination regarding the BSE classification of Ireland in the
Food and Nutrition Service (FNS), USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on the proposed information collection. This is a new collection for the contract Rapid Cycle Evaluation of Operational Improvements in Supplemental Nutrition Assistance Program (SNAP) Employment & Training Programs (SNAP E&T RCE). The purpose of SNAP E&T RCE is to test small-scale interventions in SNAP E&T operations or service delivery using rapid cycle evaluation (RCE).
Written comments must be received on or before June 13, 2022.
Comments may be sent to: Mehreen Ismail, Food and Nutrition Service, U.S. Department of Agriculture, 1320 Braddock Place, 5th Floor, Alexandria, VA 22314. Comments may also be submitted via email to
Requests for additional information or copies of this information collection should be directed to Mehreen Ismail at 703-305-2960.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions that were used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The Rapid Cycle Evaluation of Operational Improvements in SNAP E&T Programs (SNAP E&T RCE) evaluation will use rapid cycle evaluation (RCE) to test small-scale interventions in SNAP E&T operations or service delivery to determine their effectiveness in improving program engagement and service take-up. RCE is an approach that involves cycles of identifying, testing, and refining small-scale, low-cost operational interventions to determine their effectiveness. SNAP E&T RCE has partnered with eight sites to identify the main challenges their SNAP E&T programs face: (1) Colorado Department of Human Services, (2) Connecticut: Community Colleges, (3) District of Columbia Department of Human Services, (4) Kansas Division of Children and Families, (5) Minnesota Department of Human Services, (6) Minnesota: Hennepin County Department of Human Services, (7) Massachusetts Department of Transitional Assistance, and (8) Rhode Island Department of Human Services. Objectives for this study include: (a) Describing how RCE can be used to improve SNAP E&T operations, service delivery and program outcomes; (b) designing and implementing RCEs to obtain impact estimates of small-scale interventions on SNAP E&T outcomes; (c) conducting an implementation evaluation; (d) assessing the scalability of small-scale interventions to SNAP E&T operations and services delivery to other SNAP E&T programs; and (e) determining and documenting the costs associated with implementing and maintaining small-scale interventions.
The SNAP E&T RCE team is using the
After identifying challenges in each site and designing interventions for addressing them, the SNAP E&T RCE team will work with each site to define operational plans for implementing the interventions and testing, refining, and retesting selected strategies in the Improve phase. Most interventions will be evaluated using randomized control trials in which individuals eligible for the intervention will be randomly assigned to a treatment group that receives the intervention or a control group that does not. The control group will be offered the existing approach to recruiting, outreach, and engagement, depending on the focus of intervention. Once interventions have been successfully piloted to ensure they operate smoothly for the site, the SNAP E&T RCE team will provide technical assistance to sites while they implement the intervention for a period of about three to four months.
The study will gather data from administrative records, State and local SNAP administrators, and SNAP participants to evaluate the interventions' effectiveness in improving recruitment and program engagement. Where appropriate, the study will create a system for enrollment into the evaluation and random assignment. Data collected in this system may include demographic and socioeconomic characteristics, contact information, and the collection of service use data. The study will conduct a 10-minute participant survey among a total of 4,000 participants in four of the eight sites. The participant survey will be used to collect information on barriers to engaging with services and seeking employment, program satisfaction, and reasons for engagement decisions for both individuals who engaged in the E&T program and those who either never engaged or disengaged.
The study will also collect data for the implementation evaluation across all eight sites using a combination of semi-structured interviews with administrators, focus groups with participants, and staff characteristics questionnaires with frontline intervention staff. In addition, the study will conduct in-depth interviews with participants in four of the eight sites. Data collected from administrators and staff will be used to describe how the interventions were implemented, assess the fidelity of the implementation and costs of the intervention, and identify implications for future application of similar types of changes. Additional data collected from participants will provide context to the administrative data and survey responses related to participant decisions, satisfaction, and barriers, as well as give a voice to participant backgrounds and experiences.
As part of data collection activities for the evaluation, FNS will contact approximately 4,000 SNAP participants to conduct the participant survey, 2,000 of whom will have also received the intervention offered to the treatment group and 2,000 in the control group who did not receive the intervention. We expect that 80 percent of the 4,000 individuals contacted will complete the participant survey (800 will be non-respondents). Among individuals participating in the site interventions, FNS will recontact a total of 800 individuals to participate in focus groups (160 will be focus group respondents and 640 will be considered non-respondents). Among individuals participating in the site interventions, 240 individuals will also be recontacted for in-depth-interviews (including 60 respondents and 180 non-respondents). FNS will also contact 382 SNAP program staff for administrative data requests, semi-structured interviews,
Rural Business-Cooperative Service, USDA.
Notice of Solicitation of Applications.
This notice announces that the Rural Business-Cooperative Service (Agency) is inviting fiscal year (FY) 2022 applications for the Socially Disadvantaged Groups Grant (SDGG) program, subject to the availability of funding. This notice is being issued in order to allow applicants sufficient time to leverage financing, prepare and submit their applications, and give the Agency time to process applications within FY 2022. The purpose of this program is to provide technical assistance to socially disadvantaged groups in rural areas. Eligible applicants include cooperatives, groups of cooperatives, and cooperative development centers. This program supports Rural Development's (RD) mission of improving the quality of life for rural Americans and commitment to directing resources to those who most need them. Detailed information can be found on the SDGG website located at
Completed applications for grants must be submitted electronically by no later than 11:59 p.m. Eastern Time June 13, 2022, through
You are encouraged to contact your USDA Rural Development State Office well in advance of the application deadline to discuss your project and ask any questions about the application process. Contact information for State Offices can be found at:
Program guidance as well as application templates may be obtained at
Arti Kshirsagar, Program Management Division, Rural Business-Cooperative Service, United States Department of Agriculture, 1400 Independence Avenue SW, Mail Stop-3226, Washington, DC 20250-3226, (202) 720-1400 or by email at:
(i)
• Assisting Rural communities recover economically from the impacts of the COVID-19 pandemic, particularly disadvantaged communities;
• Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects; and
• Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.
(ii)
(iii)
(iv)
(v)
1. Purpose of the Program. The primary objective of the SDGG program is to provide technical assistance to socially disadvantaged groups. Eligible applicants are cooperative development centers, individual cooperatives, or groups of cooperatives (i) that serve socially disadvantaged groups and (ii) of which a majority of the board of directors or governing board is comprised of individuals who are members of socially disadvantaged groups.
2. Statutory Authority. The SDGG program is authorized by the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)(11)).
3. Definitions. The definitions applicable to this notice are as follows:
Applicants must meet all the following eligibility requirements. Applications which fail to meet any of these requirements by the application deadline will be deemed ineligible and will not be evaluated further.
1.
(i) At the time of application, each applicant must have an active registration in the System for Award (SAM) before submitting its application in accordance with 2 CFR part 25. In order to register in SAM, entities will be required to create a Unique Entity Identifier (UEI). Instructions for obtaining the UEI are available at
(ii) An applicant is ineligible if it has been debarred or suspended or otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension.” The Agency will check the Do Not Pay (DNP) system to determine if the applicant has been debarred or suspended at the time of application and also prior to funding any grant award. In addition, an applicant will be considered ineligible for a grant due to an outstanding judgment obtained by the U.S. in a Federal Court (other than U.S. Tax Court), is delinquent on the payment of Federal income taxes, or is delinquent on Federal debt. The applicant must certify as part of the application that they do not have an outstanding judgment against them. Applicants are responsible for resolving any issues that are reported in the `Do Not Pay' System and if issues are not resolved by deadlines found in this Notice, the Agency may proceed to award funds to other eligible applicants.
(iii) Any corporation or cooperative (a) that has been convicted of a felony criminal violation under any Federal law within the past 24 months or (b) that has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, is not eligible for financial assistance provided with funds appropriated by the 2022 Appropriations Act, unless a Federal agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government. Certification of compliance with this provision is now completed during registration or annual recertification in the System for Awards Management (SAM) at
2.
3.
(i)
(ii)
(iii)
The Agency may approve requests to extend the grant period for up to an additional 12 months at its discretion. However, you may not have more than one SDGG award during the same grant period. If you extend the period of performance for your current award, you may be deemed ineligible to receive a SDGG in the next grant cycle. Further guidance on grant period extensions will be provided in the award document.
(iv)
(v)
(vi)
(vii)
1.
2.
You can locate the
When you enter the
You must submit all application documents electronically through
After applying electronically through
Your application must also contain the following required forms and proposal elements:
(i) Standard Form SF-424, “Application for Federal Assistance,” to include your UEI number. You must also provide your SAM Commercial and Government Entity (CAGE) Code and expiration date under the applicant eligibility discussion in your proposal narrative. If you do not include the CAGE code and expiration date and the UEI number in your application, it will not be considered for funding.
(ii) Form SF-424A, “Budget Information-Non-Construction Programs.” This form must be completed and submitted as part of the application package. You no longer must complete the Form SF 424B, “Assurances—Non-Construction Programs” as a part of your application. This information is now collected through your registration or annual recertification in
(iii) Federal Debt and Judgement Certification. You must certify that there are no current outstanding Federal judgments against your property and that you will not use grant funds to pay for any judgment obtained by the United States. You must also certify that you are not delinquent on the payment of Federal income taxes, or any Federal debt. There is no standard form to complete, but to satisfy the certification requirement, you should include this statement in your application: “[INSERT NAME OF APPLICANT] certifies that the United States has not obtained an unsatisfied judgment against its property, is not delinquent on the payment of Federal income taxes, or any Federal debt, and will not use grant funds to pay any judgments obtained by the United States.” A separate signature is not required.
(iv) Table of Contents. Your application must contain a detailed Table of Contents (TOC). The TOC must include page numbers for each part of the application. Page numbers should begin immediately following the TOC.
(v) Executive Summary. A summary of the proposal, not to exceed one page, must briefly describe the project, tasks to be completed, and other relevant information that provides a general overview of the project.
(vi) Eligibility Discussion. A detailed discussion, not to exceed four pages, must describe how you meet the following requirements:
(a) Applicant Eligibility. You must describe how you meet the definition of a cooperative, group of cooperatives, or cooperative development center. Your application must also show that your individual cooperative, group of cooperatives or cooperative development center has a majority of its board of directors or governing board comprised of individuals who are members of socially disadvantaged groups and that the applicant serves socially disadvantaged groups. Your application must include a list of your board of directors/governing board and the percentage of board of directors/governing board that are members of socially disadvantaged groups.
You must verify your incorporation and status in the state that you have applied by providing the state's or Tribe's Certificate of Good Standing and your Articles of Incorporation. You may also submit your Bylaws if they provide additional information not included in your Articles of Incorporation that will help verify your legal status. If applying as an institution of higher education, documentation verifying your legal status is not required; however, you must demonstrate that you qualify as an Institution of Higher Education as defined at 20 U.S.C. 1001. You must apply as only one type of applicant. The requested verification documents should be included in Appendix A of your application. If they are not included, your application will not be considered for funding.
(b) Use of Funds. You must provide a brief discussion on how the proposed project activities meet the definition of technical assistance and identify the socially disadvantaged groups that will be assisted.
(c) Project Area. You must provide specific information that details the
(d) Grant Period. You must provide a time frame for the proposed project and discuss how the project will be completed within that time frame. Your project must have a time frame of one year or less.
(e) Indirect Costs. Please indicate if you have a negotiated indirect cost rate agreement (NICRA), and if so, the rate. Your negotiated indirect cost rate approval does not need to be included in your application, but you will be required to provide it if a grant is awarded. Approval for indirect costs that are requested in an application without an approved indirect cost rate agreement is at the discretion of the Agency.
(vii) Scoring Criteria. Each of the scoring criteria in this notice must be addressed in narrative form, with a maximum of three pages for each individual scoring criterion, unless otherwise specified. Failure to address each scoring criteria will result in the application being determined ineligible.
(viii) The Agency has established annual performance evaluation measures to evaluate the SDGG program. You must provide estimates on the following performance evaluation measures as part of your narrative:
(a) Number of cooperatives assisted; and
(b) Number of socially disadvantaged groups assisted.
3.
(i) Applicants register in SAM at no cost at:
(ii) The SAM registration must remain active with current information at all times while the Agency is considering an application or while a Federal grant award or loan is active. To maintain the registration in the SAM database, the applicant must review and update the information in the SAM database annually from date of initial registration or from the date of the last update. The applicant must ensure that the information in the database is current, accurate, and complete. Applicants must ensure they complete the Financial Assistance General Certifications and Representations in SAM.
(iii) The Agency will not make an award until the applicant has complied with all applicable SAM and UEI requirements. If an applicant has not fully complied with the requirements by the time the Agency is ready to make an award, the Agency may determine that the applicant is not qualified to receive a Federal award and the Agency may use that determination as a basis for making an award to another applicant. Please refer to section F(2) (Administrative and national policy requirements) for additional submission requirements that apply to grantees selected for this program.
4.
5.
6.
(i) No funds made available under this notice shall be used to:
(a) Plan, repair, rehabilitate, acquire, or construct a building or facility, including a processing facility;
(b) Purchase, rent, or install fixed equipment, including processing equipment;
(c) Purchase vehicles, including boats;
(d) Pay for the preparation of the grant application;
(e) Pay expenses not directly related to the funded Project;
(f) Fund political or lobbying activities;
(g) Fund any activities considered unallowable by the applicable grant cost principles, including 2 CFR part 200, subpart E and the Federal Acquisition Regulation (48 CFR part 1);
(h) Fund architectural or engineering design work for a specific physical facility;
(i) Fund any direct expenses for the production of any commodity or product to which value will be added, including seed, rootstock, labor for harvesting the crop, and delivery of the commodity to a processing facility;
(j) Fund research and development;
(k) Purchase land;
(l) Duplicate current activities or activities paid for by other Federal grant programs;
(m) Pay costs of the project incurred prior to the date of grant approval;
(n) Pay for assistance to any private business enterprise that does not have at least 51 percent ownership by those who are either citizens of the United States or reside in the United States after being legally admitted for permanent residence;
(o) Pay any judgment or debt owed to the United States;
(p) Pay any operating costs of the cooperative, group of cooperatives, or cooperative development center not directly related to the project;
(q) Pay expenses for applicant employee training or professional development not directly related to the project;
(r) Pay for any goods or services from a person or entity who has a conflict of interest with the grantee; or
(s) Pay for technical assistance provided to a cooperative that does not have a membership that consists of a majority of members from socially disadvantaged groups.
(ii) Your application will not be considered for funding if it does any of the following:
(a) Requests more than the maximum grant amount;
(b) Proposes ineligible costs that equal more than 10 percent of total grant funds requested; or
(c) Proposes participant support costs that equal more than 10 percent of total grant funds requested.
(iii) We will consider your application for funding if it includes ineligible costs of 10 percent or less of total grant funds requested if it is determined eligible otherwise. However, if your application is successful, those ineligible costs must be removed and replaced with eligible costs before the Agency will make the grant award or the amount of the grant award will be reduced accordingly. If we cannot determine the percentage of ineligible costs, your application will not be considered for funding.
7.
The State Offices will review applications to determine if they are eligible for assistance based on requirements in this notice, and other applicable Federal regulations. If determined eligible, your application will be scored by a panel of USDA employees in accordance with the point allocation specified in this notice. A recommendation will be submitted to the Administrator to fund applications from highest ranking order. Applications that cannot be fully funded may be offered partial funding at the Agency's discretion.
1.
(i)
(a) Needs of the socially disadvantaged groups to be assisted and explain how those needs were determined,
(b) Proposed technical assistance to be provided to the socially disadvantaged groups; and
(c) Expected outcomes of the proposed technical assistance, including how socially disadvantaged groups will benefit from participating in the project. You will score higher on this criterion if you provide examples of past projects that demonstrate successful outcomes in identifying specific needs and providing technical assistance to socially disadvantaged groups.
(ii)
A panel of USDA employees will evaluate your work plan for detailed actions and an accompanying timetable for implementing the proposal. Clear, logical, realistic, and efficient plans that allocate costs to specific tasks using applicable budget object class categories provided on the Form SF-424A will result in a higher score. You must discuss at a minimum:
(a) Specific tasks to be completed using grant funds;
(b) How customers will be identified;
(c) Key personnel and what tasks they are undertaking; and
(d) The evaluation methods to be used to determine the success of specific tasks and overall project objectives.
Please provide qualitative methods of evaluation. For example, evaluation methods should go beyond quantitative measurements of completing surveys or number of evaluations, such as discussion of evaluation methods per task.
(iii)
Points will be awarded as follows:
(a) 0 points will be awarded if you do not substantively address the criterion.
(b) 1-9 points will be awarded if qualifications and experience of some, but not all, staff is addressed and, if necessary, qualifications of unfilled positions are not provided.
(c) 10-14 points will be awarded if (b) is met, plus all project personnel are identified but do not demonstrate qualifications or experience relevant to the project.
(d) 15-19 will be awarded if (b) and (c) are met, plus most, but not all, key personnel demonstrate strong credentials and/or experience, and availability indicating a reasonable likelihood of success.
(e) 20-25 points will be awarded if (b)-(d) are met, plus all personnel demonstrate strong, relevant credentials or experience and availability indicating a high likelihood of project success.
(iv)
(v)
Points will be awarded as follows:
(a) 0 points are awarded if you do not adequately address this criterion.
(b) A range of 1-5 points are awarded if you demonstrate support from
(c) Additional 1 point is awarded if you provide 2-3 support letters that show support from potential beneficiaries and/or support from local organizations.
(d) Additional 2 points are awarded if you provide 4-5 support letters that show support from potential beneficiaries and/or support from local organizations.
(e) Additional 3 points are awarded if you provide 6-7 support letters that show support from potential beneficiaries and/or support from local organizations.
(f) Additional 4 points are awarded if you provide 8-9 support letters that show support from potential beneficiaries and/or support from local organizations.
(g) Additional 5 points are awarded if you provide 10 support letters that show support from potential beneficiaries and/or support from local organizations.
You may submit a maximum of 10 letters of support. Support letters should be signed and dated after the publication date of this notice and should come from potential beneficiaries and other local organizations. Letters received from Congressional members and technical assistance providers will not be included in the count of support letters received. Additionally, identical form letters signed by multiple potential beneficiaries and/or local organizations will not be included in the count of support letters received. Support letters should be included as an attachment to the application in Appendix C and will not count against the maximum page total. Additional letters from industry groups, commodity groups, Congressional members, and similar organizations should be referenced, but not included in the application package. When referencing these letters, provide the name of the organization, date of the letter, the nature of the support, and the name and title of the person signing the letter.
(vi)
(a) Increase the geographic diversity of socially disadvantaged groups served by approved projects.
(b) Advance the key priorities addressed in the Supplemental Section of this notice. Data sources for the key priorities are found at:
2.
1.
If you are not selected for funding, you will be notified in writing via postal or electronic mail and informed of any review and appeal rights. Funding of successfully appealed applications will be limited to available FY 2022 funding.
2.
The following additional requirements apply to grantees selected for this program:
(i) Execution of an Agency approved Grant Agreement.
(ii) Acceptance of a written Letter of Conditions.
(iii) Submission of Form RD 1940-1, “Request for Obligation of Funds.”
(iv) Submission of Form RD 1942-46, “Letter of Intent to Meet Conditions.”
(v) Assurance Agreement. By signing the Financial Assistance General Certifications and Representations in SAM, grant recipients affirm that they will operate the program free from discrimination. The grant recipients will maintain the race and ethnic data on their board members and the beneficiaries of the program. The grant recipient will provide alternative forms of communication to persons with limited English proficiency. The Agency will conduct civil rights compliance reviews on grant recipients to identify the collection of racial and ethnic data on program beneficiaries. In addition, the compliance review will ensure that equal access to the program benefits and activities are provided for persons with disabilities and language barriers.
3.
(i) An SF-425, “Federal Financial Report,” and a project performance report will be required on a semiannual basis (due 30 calendar days after the end of the semiannual period). The project performance reports shall include a comparison of actual accomplishments to the objectives established for that period;
(ii) A statement providing reasons why established objectives were not met, if applicable;
(iii) A statement providing reasons for any problems, delays, or adverse conditions, if any, which have affected or will affect attainment of overall project objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular objectives during established time periods (This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation);
(iv) Objectives and timetable established for the next reporting period;
(v) A final project and financial status report within 90 days after the expiration or termination of the grant in accordance to 2 CFR 200.344; and
(vi) Outcome project performance reports and final deliverables.
For general questions about this announcement and for program technical assistance, please contact the appropriate State Office at
(1)
(2)
(3)
(4)
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD 3027,
(i)
(ii)
(iii)
Census Bureau, Department of Commerce.
Notice of public virtual meeting; correction.
The Census Bureau published a notice in the
Shana Banks, Advisory Committee Branch Chief, Office of Program, Performance and Stakeholder Integration (PPSI),
In the
For audio, please call the following number: 1-888-603-9745. When prompted, please use the following Password: Census#1 and Passcode: 8154908#.
Robert L. Santos, Director, Census Bureau, approved the publication of this Notice in the
Bureau of Economic Analysis, Department of Commerce.
Notice of public meeting.
Pursuant to the Federal Advisory Committee Act, the Bureau of Economic Analysis (BEA) announces a meeting of the Bureau of Economic Analysis Advisory Committee. The meeting will address proposed improvements, extensions, and research related to BEA's economic accounts. In addition, the meeting will include an update on recent statistical developments.
Friday, May 13, 2022. The meeting begins at 10:00 a.m. and adjourns at 2:30 p.m. (ET).
This meeting will be held virtually. Anyone planning to attend the meeting must contact Gianna Marrone at BEA (301) 278-9282 or
Gianna Marrone, Program Analyst, U.S. Department of Commerce, Bureau of Economic Analysis, Suitland, MD 20746; phone (301) 278-9282.
The Committee was established September 2, 1999. The Committee advises the Director of BEA on matters related to the development and improvement of BEA's national, regional, industry, and international economic accounts, with a focus on new and rapidly growing areas of the U.S. economy. The committee provides recommendations from the perspectives of the economics profession, business, and government.
This meeting is open to the public. The meeting is accessible to people with disabilities. Requests for foreign language interpretation or other auxiliary aids should be directed to Gianna Marrone at (301) 278-9282 or
Persons with extensive questions or statements must submit them in writing by May 6, 2022, to Gianna Marrone,
Bureau of Economic Analysis, Department of Commerce.
Notice of public meeting.
The Bureau of Economic Analysis (BEA) is giving notice of a meeting of the Federal Economic Statistics Advisory Committee (FESAC). The Committee advises the Under Secretary for Economic Affairs, the Directors of the Bureau of Economic Analysis and the Census Bureau, and the Commissioner of the U.S. Department of Labor's Bureau of Labor Statistics (BLS) on statistical methodology and other technical matters related to the collection, tabulation, and analysis of federal economic statistics. An agenda will be accessible prior to the meeting at
June 10, 2022. The meeting begins at 9 a.m. and adjourns at 2:10 p.m. (ET).
This meeting will be held virtually. Anyone planning to attend the meeting may contact Gianna Marrone at BEA (301) 278-9282 or
Gianna Marrone, Program Analyst, U.S. Department of Commerce, Bureau of Economic Analysis, 4600 Silver Hill Road (BE-64), Suitland, MD 20746; phone (301) 278-9282; email
FESAC members are appointed by the Secretary of Commerce. The Committee advises the Under Secretary for Economic Affairs, BEA and Census Bureau Directors, and the Commissioner of the Department of Labor's BLS on statistical methodology and other technical matters related to the collection, tabulation, and analysis of federal economic statistics. The Committee is established in accordance with the Federal Advisory Committee Act (5 U.S.C. App. 2).
This meeting is open to the public. The meeting is accessible to people with disabilities. Requests for foreign language interpretation or other auxiliary aids should be directed to Gianna Marrone at
Persons with extensive questions or statements must submit them in writing by June 3, 2022, to Gianna Marrone,
On December 10, 2021, LCY Electronic Materials Inc., submitted a notification of proposed production activity to the FTZ Board for its facility within FTZ 75, in Casa Grande, Arizona.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of raw honey from Argentina are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation, April 1, 2020, through March 31, 2021.
Applicable April 14, 2022.
Thomas Martin or Eva Kim, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3936 or (202) 482-8283, respectively.
On November 23, 2021, Commerce published its preliminary determination in the LTFV investigation of raw honey from Argentina, and also postponed the final determination until April 7, 2022.
The product covered by this investigation is raw honey from Argentina. For a complete description of the scope of this investigation,
No interested party commented on the scope of the investigation as it appeared in the
All issues raised in the case and rebuttal briefs that were submitted by parties in this investigation are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
The Issues and Decision Memorandum is a public document and is made available to the public via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Commerce was unable to conduct on-site verification of the information relied upon in making its final determination in this investigation. However, we took additional steps in lieu of an on-site verification to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act).
In accordance with section 733(e) of the Act and 19 CFR 351.206, Commerce preliminarily determined that critical circumstances existed with respect to imports of raw honey from Argentina produced and exported by Asociación de Cooperativas Argentinas Cooperativa Limitada (ACA), Industrias Haedo S.A. (Haedo), and Compañía Inversora Platense S.A. (CIPSA) and all other producers and exporters.
Based on the comments received from interested parties and record information, we made certain changes to our calculations of the dumping margins for ACA and NEXCO S.A. (NEXCO). For a discussion of these changes,
Both mandatory respondents, Haedo and CIPSA, notified Commerce that it would not participate in this investigation.
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding rates that are zero,
The final estimated weighted-average dumping margins are as follows:
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all appropriate entries of raw honey from Argentina, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after November 23, 2021, the date of publication in the
Section 735(c)(4) of the Act provides that if there is an affirmative determination of critical circumstances, any suspension of liquidation shall apply to unliquidated entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the later of: (a) The date which is 90 days before the date on which the suspension of liquidation was first ordered; or (b) the date on which notice of initiation of the investigation was published. As noted above, Commerce finds that critical circumstances exist for imports of subject merchandise produced and/or exported by ACA, Haedo, CIPSA, and all other producers and exporters. Therefore, in accordance with section 735(c)(4) of the Act, suspension of liquidation shall continue to apply to unliquidated entries of subject merchandise produced and/or exported by ACA, Haedo, CIPSA, and by all other producers and exporters that were entered, or withdrawn from warehouse, for consumption on or after the date which is 90 days before the date of publication of the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondent listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension-of-liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of this final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated, and all cash deposits posted will be refunded. If the ITC determines that material injury or threat of material injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.
This notice serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a violation which is subject to sanction.
This determination and notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The merchandise covered by this investigation is raw honey. Raw honey is honey as it exists in the beehive or as obtained by extraction, settling and skimming, or coarse straining. Raw honey has not been filtered to a level that results in the removal of most or all of the pollen,
Excluded from the scope is any honey that is packaged for retail sale (
The merchandise subject to this investigation is currently classifiable under statistical subheading 0409.00.0005, 0409.00.0035, 0409.00.0045, 0409.00.0056, and 0409.00.0065 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of raw honey from Brazil are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation April 1, 2020, through March 31, 2021.
Applicable April 14, 2022.
Genevieve Coen, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3251.
On November 23, 2021, Commerce published its preliminary determination in the LTFV investigation of raw honey from Brazil, in which we also postponed the final determination until April 7, 2022.
The product covered by this investigation is raw honey from Brazil. For a complete description of the scope of this investigation,
No interested party commented on the scope of the investigation as it appeared in the
All issues raised in the case and rebuttal briefs that were submitted by parties in this investigation are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce was unable to conduct on-site verification of the information relied upon in making its final determination in this investigation. However, we took additional steps in lieu of an on-site verification to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act).
Based on the comments received from interested parties and record information, we have relied on facts otherwise available with an adverse inference (AFA) for one of the mandatory respondents in this investigation, Supermel.
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
In this investigation, Commerce has determined a rate for Supermel based entirely on section 776 of the Act. Commerce calculated an individual estimated weighted-average dumping margin for Melbras that is not zero,
The final estimated weighted-average dumping margins are as follows:
Normally, Commerce discloses to the parties in a proceeding the calculations that it performed in connection with the final determination in accordance with 19 CFR 351.224(b). However, because we made no changes to our preliminary weighted-average dumping margin calculations for Melbras, there are no calculations to disclose for this final determination.
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all appropriate entries of raw honey from Brazil, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after November 23, 2021, the date of publication in the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above, but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension-of-liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of this final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of raw honey from Brazil no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated, and all cash deposits posted will be refunded and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.
This notice will serve as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a violation which is subject to sanction.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The merchandise covered by this investigation is raw honey. Raw honey is honey as it exists in the beehive or as obtained by extraction, settling and skimming, or coarse straining. Raw honey has not been filtered to a level that results in the removal of most or all of the pollen,
Excluded from the scope is any honey that is packaged for retail sale (
The merchandise subject to this investigation is currently classifiable under statistical subheading 0409.00.0005, 0409.00.0035, 0409.00.0045, 0409.00.0056, and 0409.00.0065 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of raw honey from the Socialist Republic of Vietnam (Vietnam) are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) October 1, 2020, through March 31, 2021.
Applicable April 14, 2022.
Jonathan Hill or Paola Aleman Ordaz, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3518 or (202) 482-4031, respectively.
On November 23, 2021, Commerce published the
The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
The product covered by this investigation is raw honey from Vietnam. For a full description of the scope of this investigation,
Commerce received no comments from interested parties regarding the scope of this investigation. Accordingly, Commerce has not modified the scope language from the
All issues raised in the case and rebuttal briefs that were submitted by parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice at Appendix II.
Commerce was unable to conduct on-site verification of the information relied upon in making its final determination in this investigation. However, we took additional steps in lieu of an on-site verification to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act).
Commerce conducted this investigation in accordance with section 731 of the Act. Export price was calculated in accordance with section 772(a) of the Act. Because Vietnam is a non-market economy within the meaning of section 771(18) of the Act, normal value was calculated in accordance with section 773(c) of the Act. For a full description of the methodology underlying Commerce's determination,
For the reasons explained in our
Based on our analysis of the comments received, we made certain changes to the margin calculations for Ban Me Thuot and DakHoney. In light of these changes to the margin calculations and the resulting revised estimated weighted-average dumping margin for Ban Me Thuot and DakHoney, we have also revised the rates assigned to companies eligible for a separate rate and to the Vietnam-wide entity. For a discussion of these changes,
Commerce preliminarily determined that critical circumstances did exist for Ban Me Thuot and DakHoney, the eligible separate rate companies, and the Vietnam-wide entity.
No party commented on our preliminary separate rate determinations with respect to the mandatory respondents and the non-individually examined companies. Thus, there is no basis to reconsider the
In the
Commerce determines that the final estimated weighted-average dumping margins are as follows:
Commerce intends to disclose to interested parties under Administrative Protective Order (APO), the calculations performed in connection with this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of publication of the notice of final determination in the
In accordance with section 735(c)(4)(A) of the Act, because we continue to find that critical circumstances exist, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all appropriate entries of raw honey from Vietnam, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption on or after August 25, 2021, which is 90 days prior to the date of publication of the affirmative
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), upon publication of this notice, Commerce will instruct CBP to require a cash deposit for estimated antidumping duties for such entries as follows: (1) For the exporter/producer combinations listed in the table above, the cash deposit rate is equal to the estimated weighted-average dumping margin listed for that combination in the table; (2) for all combinations of Vietnamese exporters/producers not listed in the above table, the cash deposit rate is equal to the estimated weighted-average dumping margin listed in the table for the Vietnam-wide entity; and (3) for all third-country exporters, the cash deposit rate is equal to the cash deposit rate applicable to the Vietnamese exporter/producer combination (or the Vietnam-wide entity) that supplied that third-country exporter. These suspension of liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, Commerce will notify the ITC of the final affirmative determination of sales at LTFV. Because the final determination is affirmative, in accordance with section 735(b)(2)(B) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, and all cash deposited will be refunded. If the ITC determines that material injury or threat of material injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.
This notice serves as a reminder to the parties subject to APO of their responsibility concerning the disposition of propriety information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or, alternatively, conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation that is subject to sanction.
This determination is issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The merchandise covered by this investigation is raw honey. Raw honey is honey as it exists in the beehive or as obtained by extraction, settling and skimming, or coarse straining. Raw honey has not been filtered to a level that results in the removal of most or all of the pollen,
Excluded from the scope is any honey that is packaged for retail sale (
The merchandise subject to this investigation is currently classifiable under statistical subheading 0409.00.0005, 0409.00.0035, 0409.00.0045, 0409.00.0056, and 0409.00.0065 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) finds that the producers/exporters of heavy walled rectangular welded carbon steel pipes and tubes (HWR pipes and tubes) from Mexico subject to this administrative review made sales of subject merchandise at less than normal value (NV) during the period of review (POR) September 1, 2019, through August 31, 2020.
Applicable April 14, 2022.
David Crespo, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3693.
Commerce selected two companies, Maquilacero S.A. de C.V. (Maquilacero) and Productos Laminados de Monterrey S.A. de C.V. (Prolamsa) (collectively, the
On October 12, 2021, Commerce published the
Commerce conducted this administrative review in accordance with section 751 of the Tariff Act of 1930, as amended (the Act).
The products covered by the order are heavy walled rectangular welded steel pipes and tubes from Mexico.
All issues raised in the case and rebuttal briefs are listed in the appendix to this notice and addressed in the Issues and Decision Memorandum. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on a review of the record and comments received from interested parties regarding our
We are assigning the following weighted-average dumping margins to the firms listed below for the period September 1, 2019, through August 31, 2020:
Commerce intends to disclose the calculations performed in connection with these final results to interested parties within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
Pursuant to section 751(a)(2)(C) of the Act, and 19 CFR 351.212(b)(1), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review.
Pursuant to 19 CFR 351.212(b)(1), where Maquilacero and Prolamsa reported the entered value of their U.S. sales, we calculated importer-specific ad valorem duty assessment rates based on the ratio of the total amount of dumping calculated for the examined sales to the total entered value of the sales for which entered value was reported. Because Prolamsa did not report the actual entered value for its sales, we calculated the entered value in order to calculate the assessment rate. Where either a respondent's weighted-average dumping margin is zero or
Commerce's “reseller policy” will apply to entries of subject merchandise during the POR produced by Maquilacero or Prolamsa for which the reviewed companies did not know that the merchandise they sold to the intermediary (
The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable.
We intend to issue liquidation instructions to CBP no earlier than 41 days after the date of publication of the final results of this review in the
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for the companies listed above will be equal to the weighted-average dumping margin established in the final results of this review, except if the rate is less than 0.50 percent and, therefore,
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of raw honey from India are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation April 1, 2020, through March 31, 2021.
Applicable April 14, 2022.
Brittany Bauer or Benito Ballesteros, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3860 or (202) 482-7425, respectively.
On November 23, 2021, Commerce published its preliminary determination in the LTFV investigation of raw honey from India, in which we also postponed the final determination until April 7, 2022.
The product covered by this investigation is raw honey from India. For a complete description of the scope of this investigation,
No interested party commented on the scope of the investigation as it appeared in the
All issues raised in the case and rebuttal briefs that were submitted by parties in this investigation are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce was unable to conduct on-site verification of the information relied upon in making its final determination in this investigation. However, we took additional steps in lieu of an on-site verification to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act).
Commerce preliminarily determined that critical circumstances do not exist for the two mandatory respondents in this investigation, Allied and Ambrosia, or with respect to all other producers/exporters. No parties submitted comments regarding our negative preliminary critical circumstances determination, and the factual basis for the preliminary negative finding remains unchanged for this final determination. Therefore, in accordance with section 735(a)(3) of the Act and 19 CFR 351.206, Commerce finds that critical circumstances do not exist for Allied, Ambrosia, and all other producers/exporters. For a full description of the methodology and results of Commerce's critical circumstances analysis,
Based on the comments received from interested parties and record information, we made certain changes to the weighted-average dumping margin calculations for Allied and Ambrosia. For a discussion of these changes,
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding rates that are zero,
In this investigation, Commerce calculated estimated weighted-average dumping margins for Allied and Ambrosia that are not zero,
The final estimated weighted-average dumping margins are as follows:
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all appropriate entries of raw honey from India, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after November 23, 2021, the date of publication in the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above, but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension-of-liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of this final affirmative determination of sales at LTFV. Because Commerce's final
This notice will serve as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a violation which is subject to sanction.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).
The merchandise covered by this investigation is raw honey. Raw honey is honey as it exists in the beehive or as obtained by extraction, settling and skimming, or coarse straining. Raw honey has not been filtered to a level that results in the removal of most or all of the pollen,
Excluded from the scope is any honey that is packaged for retail sale (
The merchandise subject to this investigation is currently classifiable under statistical subheading 0409.00.0005, 0409.00.0035, 0409.00.0045, 0409.00.0056, and 0409.00.0065 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC), Commerce is issuing an antidumping duty (AD) order on certain mobile access equipment and subassemblies thereof (mobile access equipment) from the People's Republic of China (China).
Applicable April 14, 2022.
Andre Gziryan, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2201.
On February 22, 2022, Commerce published in the
The products covered by this order are mobile access equipment from China. For a complete description of the scope of this order,
On April 8, 2022, in accordance with section 735(d) of the Act, the ITC notified Commerce of its final determination in this investigation, in which it found that an industry in the United States is threatened with material injury by reason of imports of mobile access equipment from China.
Therefore, in accordance with section 736(a)(1) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to assess, upon further instructions by Commerce, antidumping
Because the ITC's final determination is based on the threat of material injury, other than threat of material injury described in section 736(b)(1) of the Act, duties shall be assessed on subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the ITC's notice of final determination, pursuant to section 736(b)(2) of the Act. In addition, section 736(b)(2) of the Act requires CBP to release any bond or other security, and refund any cash deposit made of estimated antidumping duties posted since Commerce's preliminary antidumping duty determination.
Accordingly, Commerce will direct CBP to terminate the suspension of liquidation of entries of mobile access equipment from China entered, or withdrawn from warehouse, for consumption prior to the publication of the ITC final determination in the
Commerce will instruct CBP to reinstitute the suspension of liquidation of mobile access equipment from China, effective the date of publication of the ITC's final determination in the
Commerce also intends to instruct CBP to require cash deposits equal to the amount as indicated in the tables below. Accordingly, effective on the date of publication in the
The estimated weighted-average dumping margins are as follows:
On September 20, 2021, Commerce published the final rule titled “Regulations to Improve Administration and Enforcement of Antidumping and Countervailing Duty Laws” in the
In accordance with the
Interested parties who wish to be added to the annual inquiry service list for an order must submit an entry of appearance to the annual inquiry service list segment for the order in ACCESS within 30 days after the date of publication of the order. For ease of administration, Commerce requests that law firms with more than one attorney representing interested parties in an order designate a lead attorney to be included on the annual inquiry service list. Commerce will finalize the annual inquiry service list within five business days thereafter. As mentioned in the
Commerce may update an annual inquiry service list at any time as needed based on interested parties' amendments to their entries of appearance to remove or otherwise modify their list of members and representatives, or to update contact information. Any changes or announcements pertaining to these procedures will be posted to the ACCESS website at
In the
This notice constitutes the AD order with respect to mobile access equipment from China pursuant to section 736(a) of the Act. Interested parties can find a list of AD orders currently in effect at
This AD order is issued and published in accordance with section 736(a) of the Act and 19 CFR 351.211(b).
The merchandise covered by this order consists of certain mobile access equipment, which consists primarily of boom lifts, scissor lifts, and material telehandlers, and subassemblies thereof. Mobile access equipment combines a mobile (self-propelled or towed) chassis, with a lifting device (
Subject merchandise includes, but is not limited to, the following subassemblies:
• Scissor arm assemblies, or scissor arm sections, for connection to chassis and platform assemblies. These assemblies include: (1) Pin assemblies that connect sections to form scissor arm assemblies, and (2) actuators that power the arm assemblies to extend and retract. These assemblies may or may not also include blocks that allow sliding of end sections in relation to frame and platform, hydraulic hoses, electrical cables, and/or other components;
• boom assemblies, or boom sections, for connection to the boom turntable, or to the chassis assembly, or to a platform assembly or to a lifting device. Boom assemblies include telescoping sections where the smallest section (or tube) can be nested in the next larger section (or tube) and can slide out for extension and/or articulated sections joined by pins. These assemblies may or may not include pins, hydraulic cylinders, hydraulic hoses, electrical cables, and/or other components;
• chassis assemblies, for connection to scissor arm assemblies, or to boom assemblies, or to boom turntable assemblies. Chassis assemblies include: (1) Chassis frames, and/or (2) frame sections. Chassis assemblies may or may not include axles, wheel end components, steering cylinders, engine assembly, transmission, drive shafts, tires and wheels, crawler tracks and wheels, fuel tank, hydraulic oil tanks, battery assemblies, and/or other components;
• boom turntable assemblies, for connection to chassis assemblies, or to boom assemblies. Boom turntable assemblies include turntable frames. Boom turntable assemblies may or may not include engine assembly, slewing rings, fuel tank, hydraulic oil tank, battery assemblies, counterweights, hoods (enclosures), and/or other components.
Importation of any of these subassemblies, whether assembled or unassembled, constitutes unfinished mobile access equipment for purposes of this order.
Processing of finished and unfinished mobile access equipment and subassemblies such as trimming, cutting, grinding, notching, punching, slitting, drilling, welding, joining, bolting, bending, beveling, riveting, minor fabrication, galvanizing, painting, coating, finishing, assembly, or any other processing either in the country of manufacture of the in-scope product or in a third country does not remove the product from the scope. Inclusion of other components not identified as comprising the finished or unfinished mobile access equipment does not remove the product from the scope.
The scope excludes forklifts, vertical mast lifts, mobile self-propelled cranes and motor vehicles that incorporate a scissor arm assembly or boom assembly. Forklifts are material handling vehicles with a working attachment, usually a fork, lifted along a vertical guide rail with the operator seated or standing on the chassis behind the vertical mast. Vertical mast lifts are person and material lifting vehicles with a working attachment, usually a platform, lifted along a vertical guide rail with an operator standing on the platform. Mobile self-propelled cranes are material handling vehicles with a boom attachment for lifting loads of tools or materials that are suspended on ropes, cables, and/or chains, and which contain winches mounted on or near the base of the boom with ropes, cables, and/or chains managed along the boom structure. The scope also excludes motor vehicles (defined as a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways, but does not include a vehicle operated only on a rail line pursuant to 49 U.S.C. 30102(a)(7)) that incorporate a scissor arm assembly or boom assembly. The scope further excludes vehicles driven or drawn by mechanical power operated only on a rail line that incorporate a scissor arm assembly or boom assembly. The scope also excludes: (1) Rail line vehicles, defined as vehicles with hi-rail gear or track wheels, and a fixed (non-telescopic) main boom, which perform operations on rail lines, such as laying rails, setting ties, or other rail maintenance jobs; and (2) certain rail line vehicle subassemblies, defined as chassis subassemblies and boom turntable subassemblies for rail line vehicles with a fixed (non-telescopic) main boom.
Certain mobile access equipment subject to this order is typically classifiable under subheadings 8427.10.8020, 8427.10.8030, 8427.10.8070, 8427.10.8095, 8427.20.8020, 8427.20.8090, 8427.90.0020 and 8427.90.0090 of the Harmonized Tariff Schedule of the United States (HTSUS). Parts of certain mobile access equipment are typically classifiable under subheading 8431.20.0000 of the HTSUS. While the HTSUS subheadings are provided for convenience and customs purposes only, the written description of the merchandise under order is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of permits, permit amendments, and permit modifications.
Notice is hereby given that permits, permit amendments, and permit modifications have been issued to the following entities under the Marine Mammal Protection Act (MMPA) and the Endangered Species Act (ESA), as applicable.
The permits and related documents are available for review upon written request via email to
Erin Markin, Ph.D. (Permit No. 20528-03), Shasta McClenahan, Ph.D. (Permit No. 20523-01), and Amy Hapeman (Permit No. 25498-01); at (301) 427-8401.
Notices were published in the
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
As required by the ESA, as applicable, issuance of these permit was based on a finding that such permits: (1) Were applied for in good faith; (2) will not operate to the disadvantage of such endangered species; and (3) are consistent with the purposes and policies set forth in Section 2 of the ESA.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for information.
NMFS is seeking information regarding nations or entities whose vessels are engaged in illegal, unreported, or unregulated (IUU) fishing; fishing practices that result in the bycatch of protected living marine resources (PLMRs) without a regulatory program comparable in effectiveness to that of the United States; and/or fishing activities in waters beyond any national jurisdiction that target or incidentally catch sharks without a regulatory program comparable to that of the United States. Such information will be reviewed for the purposes of the identification of nations or entities pursuant to the High Seas Driftnet Fishing Moratorium Protection Act (Moratorium Protection Act).
Information should be received on or before December 31, 2022. However, we encourage submission of information as early as possible.
Information may be submitted either by mail to: NMFS Office of International Affairs, Trade, and Commerce, Attn.: Moratorium Protection Act Information, F/IATC 1315 East-West Highway, Silver Spring, MD 20910, or electronically to:
Ellie Bors, phone (240) 429-4461, or email
The Moratorium Protection Act requires the Secretary of Commerce (Secretary) to issue a Biennial Report to Congress that identifies nations and entities whose vessels are engaged in IUU fishing, bycatch of PLMRs, and/or fishing activities in waters beyond any national jurisdiction that target or incidentally catch sharks, in specific circumstances elaborated below. NMFS is soliciting information from the public regarding fishing activities by foreign fishing vessels in 2020, 2021, and/or 2022 that may support identification of those nations and entities in the Biennial Report.
The Shark Conservation Act of 2010 (Pub. L. 111-348) amended the Moratorium Protection Act by requiring action by the United States to strengthen shark conservation globally, including the potential identification of nations and entities with vessels fishing for sharks on the high seas (16 U.S.C. 1826k(a)(2)). In November 2015, the Illegal, Unreported, and Unregulated Fishing Enforcement Act of 2015 (Pub. L. 114-81) further amended the Moratorium Protection Act by, among other things, expanding the scope of information that can be used for the identification of nations and entities to three years for the IUU fishing and bycatch provisions (see 16 U.S.C. 1826j-1826k). In December 2016, the Ensuring Access to Pacific Fisheries Act (Pub. L. 114-327) amended the Moratorium Protection Act by also expanding the scope of information that can be used for the identification of nations and entities to three years for the shark provisions (see 16 U.S.C. 1826k).
The seventh biennial report to Congress was submitted in August 2021 and is available online at:
In fulfillment of its requirements under the Moratorium Protection Act, NMFS is preparing the eighth biennial report to Congress, and will consider whether information exists to support the identification of nations or entities whose vessels are engaged in IUU fishing; fishing practices that result in bycatch of PLMRs without a regulatory program comparable in effectiveness to that of the United States; and/or fishing activities in waters beyond any national jurisdiction that target or incidentally catch sharks without a regulatory program comparable to that of the United States.
The Moratorium Protection Act requires the Secretary to identify in a biennial report to Congress those nations and entities whose fishing vessels are engaged, or have been engaged at any point during the preceding three years, in IUU fishing. The definition of IUU fishing can be found at 50 CFR 300.201 and includes:
(1) Fishing activities that violate conservation and management measures required under an international fishery management agreement to which the United States is a party, including catch limits or quotas, capacity restrictions, bycatch reduction requirements, shark conservation measures, and data reporting;
(2) In the case of non-parties to an international fishery management agreement to which the United States is a party, fishing activities that would undermine the conservation of the resources managed under that agreement;
(3) Overfishing of fish stocks shared by the United States, for which there are no applicable international conservation or management measures or in areas with no applicable international fishery management organization or agreement, that has adverse impacts on such stocks;
(4) Fishing activity that has an adverse impact on vulnerable marine ecosystems such as seamounts, hydrothermal vents, cold water corals and other vulnerable marine ecosystems located beyond any national jurisdiction, for which there are no applicable conservation or management measures or in areas with no applicable international fishery management organization or agreement; and
(5) Fishing activities by foreign-flagged vessels in U.S. waters without authorization of the United States.
In addition, the Secretary must identify in the biennial report those nations and entities whose fishing vessels are engaged, or have been engaged at any point during the preceding three years in fishing activities in waters beyond any national jurisdiction that result in bycatch of a PLMR, or beyond the U.S. exclusive economic zone (EEZ) that result in bycatch of a PLMR shared by the United States, and that have not implemented measures to address that bycatch that are comparable in effectiveness to U.S. regulatory requirements. In this context, PLMRs are defined as non-target fish (including sharks), sea turtles, or marine mammals that are protected under U.S. law or international agreement, including the Marine Mammal Protection Act, the Endangered Species Act, the Shark Finning Prohibition Act, and the Convention on International Trade in Endangered Species of Wild Flora and Fauna. PLMRs do not include species, except sharks, managed under the Magnuson-Stevens Fishery Conservation and Management Act, the Atlantic Tunas Convention Act, or any international fishery management
Furthermore, the Moratorium Protection Act requires that the Secretary identify nations and entities in the biennial report to Congress whose fishing vessels are engaged, or have been engaged during the preceding three years in fishing activities or practices in waters beyond any national jurisdiction that target or incidentally catch sharks and when the nation has not adopted a regulatory program to provide for the conservation of sharks, including measures to prohibit removal of any of the fins of a shark (including the tail) and discarding the carcass of the shark at sea, that is comparable to that of the United States, taking into account different conditions. When determining whether to identify nations or entities for these activities, NMFS will take into account all relevant matters including, but not limited to, the history, nature, circumstances, duration, and gravity of the fishing activity of concern.
NMFS is soliciting information from the public that could be relevant to the identification of nations and entities engaged in activities that meet the criteria described above for IUU fishing, PLMR bycatch, or shark catch in waters beyond any national jurisdiction. Some types of information that may prove relevant to the process include:
• Documentation (photographs, verifiable catch data,
• Documentation (photographs,
• Documentation (photos, video, witness testimony, publicly available data,
• Reports from off-loading facilities, port-side government officials, enforcement agents, military personnel, port inspectors, transshipment vessel workers and fish importers;
• Sightings of vessels included on RFMO IUU vessel lists;
• RFMO catch documents and statistical document programs;
• Nations' domestic regulations for bycatch and shark conservation and management, including any regulations that prohibit the removal of any of the fins of a shark (including the tail) and discarding the carcass of the shark at sea;
• Action or inaction at the national level, resulting in non-compliance with RFMO conservation and management measures, such as exceeding quotas or catch limits, or failing to report or misreporting data of the nation's fishing activities; and
• Relevant reports from governments, international organizations, or nongovernmental organizations.
NMFS will consider all available information, as appropriate, when making a determination whether or not to identify a particular nation or entity in the biennial report to Congress. As stated previously, NMFS is limited in the time frame for data it may use as the basis of a nation's identification. Appropriate information includes IUU fishing activity, bycatch of PLMRs, and shark fishing activity in waters beyond any national jurisdiction that occurred in 2020, 2021, and 2022. Information should be as specific as possible as this will assist NMFS in its review. NMFS will consider several criteria when determining whether information is appropriate for use in making identifications, including but not limited to:
• Corroboration of information;
• Whether multiple sources have been able to provide information in support of an identification;
• The methodology used to collect the information;
• Specificity of the information provided;
• Susceptibility of the information to falsification and alteration;
• Credibility of the individuals or organization providing the information; and
• Ability to share the provided information with a nation or entity in the event that it is identified, so that the nation can take specific corrective actions.
More information regarding the identification process and how the information received will be used in that process can be found at 16 U.S.C. 1826j-1826k and in the regulations codified at 50 CFR 300.200
Department of the Air Force, Department of Defense.
Notice of intent.
The Department of the Air Force (DAF) is issuing this Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) to assess the potential social, economic, and environmental impacts associated with the KC-46A Main Operating Base #6 (MOB 6) Beddown. The DAF is proposing to beddown KC-46A tanker aircraft, personnel, and associated infrastructure in support of the MOB 6 mission at MacDill Air Force Base (AFB), Florida, or, as an alternative, Fairchild AFB in Washington State.
A public scoping period of 30 days will take place starting from the date of this NOI publication in the
Scoping comments may be submitted to Helen Kellogg, AFCEC/
Helen Kellogg, AFCEC/CZN; Attn: KC-46A MOB 6 EIS; 2261 Hughes Ave., Suite 155; JBSA Lackland, TX 78236-9853; Telephone: 210-925-7843; or Email:
The MOB 6 mission includes the beddown of 24 KC-46A aircraft in two squadrons of 12 at MacDill AFB in Florida under the Proposed Action or, as an alternative, at Fairchild AFB in Washington State. The KC-46A aircraft would recapitalize the aging KC-135 tanker fleet and would continue supporting the mission of providing worldwide refueling, cargo, and aeromedical evacuation support.
The purpose of the Proposed Action is to recapitalize aging tanker aircraft currently utilized by DAF with the KC-46A model to better address future mission requirements, offer expanded capability, and provide life-cycle cost savings in comparison to continued operation of existing KC-135 Stratotanker. The Proposed Action is needed because the KC-46A will provide capabilities currently lacking in the existing tanker fleet, resulting in a fully capable, combat operational tanker force to accomplish aerial refueling and related worldwide missions.
Resource areas being analyzed for impacts under the Proposed Action include: Noise, biological resources, cultural resources, socioeconomics, soils and geology, water resources, infrastructure and transportation, land use, hazardous materials and wastes, health and safety, air quality, and environmental justice and other sensitive receptors. Potential impacts under the Proposed Action at MacDill AFB or the Fairchild AFB alternative are anticipated to be less than significant or mitigatable to less than significant. Permits may be required for the Proposed Action at MacDill AFB, Florida or at Fairchild AFB, Washington. If so, the DAF will get all appropriate permits. In addition, the DAF will comply with the substantive requirements of the Florida Coastal Management Program. The DAF will also consult with appropriate resource agencies and Native American tribes to determine the potential for significant impacts. Consultation will be incorporated into the preparation of the EIS and will include, but not be limited to, consultation under Section 7 of the Endangered Species Act and consultation under Section 106 of the National Historic Preservation Act.
Concurrent with the publication of this notice of intent, public scoping notices will be announced locally. In accordance with DAF guidance, in-person public scoping meetings will not be held. Public scoping will instead be accomplished remotely, in accordance with the 2020 version of 40 CFR part 1506.6, via the project website at
U.S. Army Corps of Engineers, DoD.
Notice; request for comments.
The U.S. Army Corps of Engineers (USACE) Safety and Health Requirements Manual (EM 385-1-1) is the gold standard for Safety and Occupational Health regulations. The manual holds a long history dating back to 1941 and is designed to facilitate the standardization of all safety programs. The EM 385-1-1 prescribes the safety and health requirements for all Corps of Engineers activities and operations. The USACE is soliciting comments on the proposed revisions to EM 385-1-1. USACE intends to update the manual and periodically thereafter, to reflect such public input, experience, and innovation. The agency will address significant comments received in the next revision of this manual.
Consideration will be given to all comments received by June 13, 2022.
You may submit comments, identified by docket number COE-2019-0015, by any of the following methods:
William Eggleston, Headquarters, U.S. Army Corps of Engineers, Safety and Occupational Health Office, in Washington, DC at 202-909-9367.
Executive Order (E.O.) 12196, Occupational Safety and Health Programs for Federal Employees, Executive Order 11988, Floodplain Management, was issued in 1980 and directed agencies heads to (1) Furnish to employees places and conditions of employment that are free from recognized hazards that are causing or are likely to cause death or serious physical harm; (2) Operate an occupational safety and health program in accordance with the requirements of this order and basic program elements promulgated by the Secretary. DoDI 6055.1 was issued in 2014 (incorporated changes in 2018) and the DoD policy applies to all Military Departments to:
1. Protect DoD personnel from accidental death, injury, or occupational illness.
2. Apply this instruction to all personnel at all operations worldwide with certain limitations.
3. Apply risk management strategies to eliminate occupational injury or illness and loss of mission capability and resources both on and off duty.
4. Use SOH management systems across all military operations and activities, including acquisition, procurement, logistics, and facility management.
5. Apply this instruction to off-duty military personnel, except for OSHA standards.
Following issuance of DoD Safety and Occupational Health (SOH) Program DODI 6055.01; the AR-385-10, Army Safety Program implements the requirements of the Occupational Safety and Health Act of 1970 as implemented in E.O. 12196; 29 CFR 1960; DODI 6055.1; DoDI6055.4; and DoDI6055.7. It provides new policy on Army safety management procedures with special emphasis on responsibilities and organizational concepts. AR 385-10 is applicable to the Active Army, the Army National Guard/Army National Guard of the United States, and the U.S. Army Reserve, unless otherwise stated. It also applies to Army civilian employees and the U.S. Army.
Following the issuance of the AR-385-10; the EM 385-1-1 U.S. Army Corps of Engineers Safety and Health Requirements Manual prescribes the safety and health requirements for all Corps of Engineers activities and operations. The manual applies to Headquarters, U.S. Army Corps of Engineers (HQUSACE) elements, major subordinate commands, districts, centers, laboratories, and field operating activities (FOA), as well as USACE contracts and those administered on behalf of USACE. Applicability extends to occupational exposure for missions under the command of the Chief of Engineers, whether accomplished by military, civilian, or contractor personnel.
USACE is requesting assistance in the form of data, comments, literature references, or field experiences, to help clarify the policy requirements for implementing Safety and Occupational Health activities for both Corps and contractor personnel. The draft version of the Safety and Health Requirements Manual (EM 385-1-1, April 2022) is available for review on the USACE Publications website:
Feedback and comments provided through this notice will be considered and the draft version of the Safety and Health Requirements Manual (EM 385-1-1, April 2022) will be updated as appropriate. When the manual is finalized and published on the USACE Safety and Occupational Health Office website
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension without change of a currently approved collection.
Interested persons are invited to submit comments on or before June 13, 2022.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension without change of a currently approved collection.
Interested persons are invited to submit comments on or before June 13, 2022.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in
Office of Environmental Management, Department of Energy.
Notice of open virtual meeting.
This notice announces an online virtual meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Oak Ridge. The Federal Advisory Committee Act requires that public notice of this online meeting be announced in the
Wednesday, May 11, 2022; 6:00 p.m.-7:30 p.m.
Online Virtual Meeting. To attend, please send an email to:
Melyssa P. Noe, Alternate Deputy Designated Federal Officer, U.S. Department of Energy (DOE), Oak Ridge Office of Environmental Management (OREM), P.O. Box 2001, EM-942, Oak Ridge, TN 37831; Phone (865) 241-3315; or email:
Office of Environmental Management, Department of Energy.
Notice of open virtual meeting.
This notice announces an online virtual committee meeting of the whole of the Environmental Management Site-Specific Advisory Board (EM SSAB), Hanford. The Federal Advisory Committee Act requires that public notice of this online virtual meeting be announced in the
Tuesday, May 17, 2022; 9:00 a.m.-4:30 p.m.
Online Virtual Meeting. To receive the meeting access information and call-in number, please contact the Federal Coordinator, Gary Younger, at the telephone number or email listed below by five days prior to the meeting.
Gary Younger, Federal Coordinator, U.S. Department of Energy, Hanford Office of Communications, Richland Operations Office, P.O. Box 550, Richland, WA 99354; Phone: (509) 372-0923; or Email:
Take notice that on April 1, 2022, Tenaska Clear Creek Wind, LLC (Tenaska or Complainant) filed a protest to Southwest Power Pool, Inc.'s (SPP or Respondent) March 11, 2022 compliance filing in the above-captioned proceeding. Tenaska states that to the extent the Commission deems its protest to be raising issues or arguments outside the scope of its original complaint or SPP's compliance filing, it submits the pleading as an amendment to its complaint against SPP, pursuant to sections 206, 306, and 309 of the Federal Power Act, 16 U.S.C. 824e, 825e, and 825h and Rule 206 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.206.
The Complainant certifies that copies of the pleading were served on the contacts listed for Respondent in the Commission's list of Corporate Officials.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. The Respondent's answer and all interventions, or protests must be filed on or before the comment date. The Respondent's answer, motions to intervene, and protests must be served on the Complainant.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
In addition to publishing the full text of this document in the
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following Complaints and Compliance filings in EL Dockets:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
On March 10, 2022, Erie Boulevard Hydropower, L.P. submitted to the Federal Energy Regulatory Commission (Commission) evidence of its application for a Clean Water Act section 401(a)(1) water quality certification filed with New York State Department of Environmental Conservation (New York DEC), in conjunction with the above captioned project. Pursuant to section 401 of the Clean Water Act
If New York DEC fails or refuses to act on the water quality certification request on or before March 9, 2023, then the agency certifying authority is deemed waived pursuant to section 401(a)(1) of the Clean Water Act, 33 U.S.C. 1341(a)(1).
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
On March 11, 2022, the Power Authority of the State of New York submitted to the Federal Energy Regulatory Commission (Commission) evidence of its application for a Clean Water Act section 401(a)(1) water quality certification filed with New York State Department of Environmental Conservation (New York DEC), in conjunction with the above captioned project. Pursuant to section 401 of the Clean Water Act
If New York DEC fails or refuses to act on the water quality certification request on or before March 11, 2023, then the agency certifying authority is deemed waived pursuant to section 401(a)(1) of the Clean Water Act, 33 U.S.C. 1341(a)(1).
Federal Energy Regulatory Commission, Department of Energy.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on a renewal of currently approved information collection, (FERC-725A, FERC-725D, FERC-725G, FERC-725M and FERC-725Z) the proposed retirement of FAC-010-3, the proposed FAC-011-4, FAC-014-3, IRO-008-3, TOP-001-6 and proposed corresponding revisions to FAC-003-5, PRC-002-3, PRC-023-5 and PRC-026-2 Reliability Standards.
Comments on the collection of information are due June 13, 2022.
You may submit comments (identified by Docket No. RD22-2-000) by one of the following methods:
Electronic filing through
•
• For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery:
○
○
Ellen Brown may be reached by email at
The number of respondents below is based on an estimate of the NERC compliance registry for balancing authority, transmission operator, generator operator, generator owner and reliability coordinator. The Commission based its paperwork burden estimates on the NERC compliance registry as of January 7, 2022. According to the registry, there are 98 balancing authorities (BAs), 325 transmission owners (TOs), 168 transmission operators (TOPs), 204 transmission planners (TPs), 1,068 generator owners (GOs), 945 generator operators (GOPs), 302 distribution providers (DPs), 63 planning coordinators (PCs) and 12 reliability coordinators (RCs). The estimates are based on the change in burden from the current standards to the standards approved in this Order. The Commission based the burden estimates on staff experience, knowledge, and expertise.
The estimates are based combination on one-time (years 1 and 2) and ongoing execution (year 3) obligations to follow the revised Reliability Standards.
The Project 2015-09 Establish and Communicate System Operating Limits Standard Drafting Team (SDT): (1) Developed proposed revisions to Reliability Standards and their applicable functional entities: FAC-011-4 (RC), FAC-014-3 (PC, RC, TO, TP), IRO-008-3 (RC), and TOP-001-6 (BA, TO, GO, DP); (2) proposed the retirement of FAC-010-3 (PA/PC) and developed corresponding revisions to FAC-003-5 (TO, GO), PRC-002-3 (RC, TO, GO), PRC-023-5 (TO, GO, DP, PC), and PRC-026-2 (TO, GO, PC) Reliability Standards to remove or replace references to system operating limits
The developed proposed revisions to Reliability Standards are:
• FAC-011-4 is applicable to the RC and its purpose is to ensure that SOLs used in the reliable operation of the bulk electric system are determined based on an established RC methodology or methodologies. NERC clarified acceptable system performance criteria for the operations horizon and developed an SOL risk-based notification framework through the RC's SOL methodology.
• FAC-014-3 is applicable to the PC, RC, TOP and TP and its purpose is to ensure that SOLs used in the reliable operation of the bulk electric system are determined based on an established RC methodology or methodologies and that Planning Assessment performance criteria is coordinated with these methodologies. NERC removed references to planning horizon SOLs and IROLs and clearly delineate specific functional entity responsibility for determining and communicating each type of SOL used in operations.
• IRO-008-3 is applicable to the RC and requires RCs to perform analyses and assessments to prevent instability, uncontrolled separation, or cascading. NERC added a new requirement requiring a RC to use its SOL methodology when determining SOL exceedances for its analyses and assessments and further revised a requirement requiring the RC to use its SOL risk-based notification framework when communicating SOL or IROL exceedances.
• TOP-001-6 is applicable to the BA, TOP, GOP, and DP but the proposed revisions only impact the TOP. NERC added a new requirement requiring a TOP to use its RC SOL methodology when determining SOL exceedances and further revised a requirement requiring TOP notifications regarding SOL exceedances to be done according to the risk-based approach in the RC's SOL methodology.
NERC further proposes the retirement of currently effective Reliability Standard FAC-010-3 that requires PCs and TPs to establish SOLs for the planning horizon. The proposed retirement of FAC-010-3 is mainly due to its redundancy with currently effective TPL-001-4 Standard and new requirements in proposed FAC-014-3.
In addition, the proposed retirement of FAC-010-3 developed corresponding revisions to proposed Reliability Standards FAC-003-5, PRC-002-3, PRC-023-5, and PRC-026-2 as follows:
• FAC-003-5 is applicable to TOs and GOs and NERC proposes to modify Applicability Sections 4.2.2 and 4.3.1.2 of FAC-003-5 to replace references to “elements of an IROL under NERC Standard FAC-014 by the Planning Coordinator” with references to facilities:
• PRC-002-3 is applicable to the RC, TO and GO and NERC proposes to modify the applicability of the PRC-002-3 standard to remove PCs as a responsible entity subject to the standard and replace any references in the standard that would have included PCs with references to RCs. NERC concluded that the RC was the appropriate entity to carry out the duties that currently apply to PCs in certain interconnections, including the identification of BES elements that are part of an IROL or stability-related SOL.
• PRC-023-5 is applicable to the TO, GO, DP and PC and NERC proposes to modify Section B2 of Attachment B to PRC-023-5 as follows:
Attachment B sets the criteria used to determine the circuits in a Planning Coordinator area for which Transmission Owners, Generator Owners, and Distribution Providers must comply with certain requirements in the standard applicable to protective relays.
• PRC-026-2 is applicable to the GO, PC and TO and NERC proposes modification to the PRC-026-2 standard, Requirement R1, Criteria 1, 2, and 4 to replace references to planning horizon SOLs with references to the TPL-001-4 Planning Assessment.
The Commission estimates that the NERC proposal, which would retire FAC-010-3, moves impacted and revised Reliability Standards without adding new obligations on registered entities resulting in a change in burden for industry of 128 hours. The proposed retirement of FAC-010-3 is mainly due to its redundancy with currently effective TPL-001-4 Standard and new requirements in proposed FAC-014-3. The Commission based the change in burden estimates on staff experience, knowledge, and expertise.
Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown, email:
Comments concerning the information collections and requirements approved for retirement in this Final Rule and the associated
The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.
In addition to publishing the full text of this document in the
From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
By direction of the Commission.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a final environmental impact statement (EIS) for the Hackberry Storage Project (Project), proposed by LA Storage, LLC (LA Storage) in the above-referenced docket. LA Storage requests authorization to construct and operate natural gas storage and transmission facilities in Louisiana. The Project is designed to provide 20.03 billion cubic feet of working gas storage capacity and 1.5 billion cubic feet per day of gas deliverability and injectability, and interconnecting with the Cameron Interstate Pipeline (CIP) facilities operated by Cameron Interstate Pipeline, LLC and the Port Arthur Pipeline Louisiana Connector (PAPLC) facilities to be operated by Port Arthur Pipeline, LLC.
The final EIS assesses the potential environmental effects of the construction and operation of the Project in accordance with the requirements of the National Environmental Policy Act. FERC staff concludes that approval of the proposed Project, with the mitigation measures recommended in the EIS, would result in some adverse environmental impacts; however, with the exception of climate change impacts, those impacts would not be significant. The EIS does not characterize the Project's greenhouse gas emissions as significant or insignificant because the Commission is conducting a generic proceeding to determine whether and how the Commission will conduct climate change significance determinations going forward.
The final EIS addresses the potential environmental effects of the construction and operation of the following Project facilities: The Project would involve the conversion of three existing salt dome caverns to natural gas storage service and the development of one new salt dome cavern for additional natural gas storage service, all within a permanent natural gas storage facility on a 160-acre tract of land owned by LA Storage in Cameron Parish, Louisiana. In addition to the storage caverns, LA Storage would construct and operate on-site compression facilities (Pelican Compressor Station) and up to six solution mining water supply wells at the storage facility on LA Storage's property. LA Storage would also construct and operate the following natural gas facilities in Cameron and Calcasieu Parishes, Louisiana: The Hackberry Pipeline, consisting of approximately 11.1 miles of 42-inch-diameter natural gas pipeline connecting the certificated PAPLC pipeline (CP18-7) to the natural gas storage caverns; the CIP Lateral, an approximately 4.9-mile-long, 42-inch-diameter natural gas pipeline extending from the existing CIP to the planned natural gas storage caverns; metering and regulating at the CIP and PAPLC interconnects; and an approximately 6.2-mile-long, 16-inch-diameter brine disposal pipeline that would transport brine from the caverns to four saltwater disposal wells located on two new pads north of the facility.
The Commission mailed a copy of the
Additional information about the Project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC
In addition, the Commission offers a free service called eSubscription that allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
On February 8, 2022, Nevada Hydro Company, Inc. filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Lake Elsinore Advanced Pumped Storage Project to be located on Lake Elsinore and San Juan Creek near the city of Lake Elsinore in Riverside and San Diego Counties, California. The project would occupy about 845 acres of federal land administered by the U.S. Department of Agriculture, Forest Service.
The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would consist of: (1) A new upper reservoir (Decker Canyon) with a gross storage volume of 5,750 acre-feet and a surface area of approximately 70 acres at a normal reservoir surface elevation of 2,790 feet above mean sea level (msl); (2) a 262-foot-high main dam located on the southwest side of the upper reservoir; (3) a water conduit system consisting of a 1,248-foot-long, 25-foot-diameter concrete-lined power shaft and a 8,247-foot-long, 15-foot-diameter power tunnel transitioning to two, 250-foot-long, 12-foot-diameter steel penstocks; (4) an underground powerhouse with two, reversible Francis-type pump-turbine units with a total installed capacity of 500 megawatts; (5) the existing Lake Elsinore, to be used as a lower reservoir, with a surface area of about 3,412 acres at a normal reservoir surface elevation of 1,249 feet above msl; (6) two 2,450-foot-long, 25-foot-wide, and 25-foot-high concrete-lined tailrace tunnels; (7) about 32 miles of 500-kilovolt transmission line connecting the project to an existing transmission line owned by Southern California Edison that is located north of the proposed project and to an existing San Diego Gas and Electric Company transmission line located to the south; and (8) appurtenant facilities. The estimated annual generation of the project would be 1,560 gigawatt-hours.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed, or printed on the “eLibrary” link of the Commission's website at
Environmental Protection Agency (EPA).
Notice of availability.
The Environmental Protection Agency (EPA) is announcing the availability of a final document titled, “Supplement to the 2019 Integrated Science Assessment for Particulate Matter (Final)” ([EPA/600/R-22/028]). The document was prepared by the Center for Public Health and Environmental Assessment (CPHEA) within EPA's Office of Research and Development (ORD) as part of the reconsideration of the EPA's 2020 final action reviewing the National Ambient Air Quality Standard (NAAQS) for particulate matter (PM). The Supplement represents a targeted review of peer-reviewed studies published since the literature cutoff date (
The document will be available on or about May 13, 2022.
The “Supplement to the 2019 Integrated Science Assessment for Particulate Matter (Final)” will be available primarily via the internet on EPA's Integrated Science Assessment for Particulate Matter at the public docket at
For technical information, contact Jason Sacks; phone: 919-541-9729; or email:
Section 108(a) of the Clean Air Act directs the Administrator to identify certain air pollutants which, among other things, “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare”; and to issue air quality criteria for them. The air quality criteria are to “accurately reflect the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health or welfare which may be expected from the presence of [a] pollutant in the ambient air . . . .”. Under section 109 of the Act, EPA is then to establish NAAQS for each pollutant for which EPA has issued criteria. Section 109(d)(1) of the Act subsequently requires periodic review and, if appropriate, revision of existing air quality criteria to reflect advances in scientific knowledge on the effects of the pollutant on public health or welfare. EPA is also required to review and, if appropriate, revise the NAAQS, based on the revised air quality criteria (for more information on the NAAQS review process, see
EPA has established NAAQS for six criteria pollutants. In conducting periodic reviews of the air quality criteria and NAAQS, EPA reviews the scientific basis for these standards by preparing an Integrated Science Assessment (ISA; formerly called an Air Quality Criteria Document). The ISA provides the scientific basis for EPA's decisions, in conjunction with additional technical and policy assessments, on the adequacy of the current NAAQS and the appropriateness of possible alternative standards. The Clean Air Scientific Advisory Committee (CASAC), an independent science advisory committee whose review and advisory functions are mandated by Section 109(d)(2) of the Clean Air Act, is charged (among other things) with independent scientific review of the EPA's air quality criteria.
On June 10, 2021, the EPA announced its decision to reconsider the 2020 p.m. NAAQS final action, available at:
The CASAC PM panel met at a virtual public meeting on November 17-19, 2021, to review the draft Supplement to the 2019 p.m. ISA (86 FR 52673, September 22, 2021). A virtual public meeting was then held on February 25, 2022-March 4, 2022, and during this meeting on February 28, 2022, the chartered CASAC considered the CASAC PM Panel's draft letter to the Administrator on the draft Supplement to the 2019 p.m. ISA. This meeting was announced in the
Environmental Protection Agency (EPA).
Notice of public comment period.
The Environmental Protection Agency (EPA) is announcing a 60-day public comment period associated with release of the draft Integrated Risk Information System (IRIS) Toxicological Review of Formaldehyde (Inhalation). The draft document was prepared by the Center for Public Health and Environmental Assessment (CPHEA) within EPA's Office of Research and Development (ORD). EPA is releasing this draft IRIS assessment for public comment in advance of an external peer review conducted by the National Academy of Sciences, Engineering, and Medicine (NASEM). Public comments received will be provided to the external peer reviewers. NASEM, a contractor to EPA, will convene a public meeting to discuss the draft report with the public during Step 4 of the IRIS Process. The external peer reviewers will consider public comments submitted in response to this notice and provided at the public meeting when reviewing this document. EPA will consider all comments received when revising the document post-peer review. This draft assessment is not final as described in EPA's information quality guidelines, and it does not represent, and should not be construed to represent Agency policy or views.
The 60-day public comment period begins April 14, 2022 and ends June 13, 2022. Comments must be received on or before June 13, 2022.
The IRIS Toxicological Review of Formaldehyde (Inhalation) will be available via the internet on the IRIS website at
For information on the public comment period, contact the ORD Docket at the EPA Headquarters Docket Center; telephone: 202-566-1752; facsimile: 202-566-9744; or email:
For technical information on the IRIS Toxicological Review of Formaldehyde
For information about the peer review, please visit the NASEM Review of EPA's 2021 Draft Formaldehyde Assessment website:
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For information on visiting the EPA Docket Center Public Reading Room, visit
Federal Deposit Insurance Corporation (FDIC).
Notice of open meeting.
In accordance with the Federal Advisory Committee Act, notice is hereby given of a meeting of the FDIC Advisory Committee on Community Banking. The Advisory Committee will provide advice and recommendations on a broad range of policy issues that have particular impact on small community banks throughout the United States and the local communities they serve. The meeting is open to the public. Out of an abundance of caution related to current and potential coronavirus developments, the public's means to observe this meeting of the Advisory Committee on Community Banking will be via a Webcast live on the internet. In addition, the meeting will be recorded and subsequently made available on-demand approximately two weeks after the event. To view the live event, visit
Tuesday, May 3, 2022, from 1:00 p.m. to 5:00 p.m.
To view the recording, visit
Requests for further information concerning the meeting may be directed to Debra A. Decker, Committee Management Officer of the FDIC at (202) 898-8748.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting and request for comment.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC) announces the following meeting of the Advisory Committee on Immunization Practices (ACIP). This meeting is open to the public. Time will be available for public comment.
The meeting will be held on April 20, 2022, from 11:00 a.m. to 4:00 p.m., EDT (date and times subject to change). The meeting will be webcast live via the World Wide Web. Written comments must be received on or before April 27, 2022.
You may submit comments identified by Docket No. CDC-2022-0051 by either of the following methods:
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Stephanie Thomas, ACIP Committee Management Specialist, Centers for Disease Control and Prevention, 1600 Clifton Road NE, MS H24-8, Atlanta, Georgia 30329-4027; Telephone: (404) 639-8367; Email:
In accordance with 41 CFR 102-3.150(b), less than 15 calendar days' notice is being given for this meeting due to the exceptional circumstances of the COVID-19 pandemic and rapidly evolving COVID-19 vaccine development and regulatory processes. The Secretary of Health and Human Services has determined that COVID-19 is a Public Health Emergency. A notice of this ACIP meeting has also been posted on CDC's ACIP website at
The meeting will be webcast live via the World Wide Web; for more information on ACIP, please visit
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data. Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
If the number of persons requesting to speak is greater than can be reasonably accommodated during the scheduled time, CDC will conduct a lottery to determine the speakers for the scheduled public comment session. CDC staff will notify individuals regarding their request to speak by email by 12:00 p.m., EDT, April 19, 2022. To accommodate the significant interest in participation in the oral public comment session of ACIP meetings, each speaker will be limited to three minutes, and each speaker may only speak once per meeting.
The Director, Strategic Business Initiatives Unit, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Diversity Plans to Improve Enrollment of Participants from Underrepresented Racial and Ethnic Populations in Clinical Trials.” The purpose of this guidance is to provide recommendations to sponsors developing medical products on the approach for developing a Race and Ethnicity Diversity Plan (referred to as the “Plan”) to enroll adequate numbers of participants in clinical trials from underrepresented racial and ethnic populations in the United States.
Submit either electronic or written comments on the draft guidance by June 13, 2022 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002; or Office of the Center Director, Guidance and Policy Development, Center for Devices and Radiological Health, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Lola Fashoyin-Aje, Center for Drug Evaluation and Research (HFD-150), Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993-0002, 240-402-0205; or Office of Communication, Outreach and Development, Center of Biologics Evaluation and Research, 800-835-4709 or 240-402-8010; or Center for Devices and Radiological Health,
FDA is announcing the availability of a draft guidance for industry entitled “Diversity Plans to Improve Enrollment of Participants from Underrepresented Racial and Ethnic Populations in Clinical Trials.” The purpose of this guidance is to provide recommendations to sponsors developing medical products on the approach for developing a Race and Ethnicity Diversity Plan (referred to as the “Plan”) to help enroll adequate numbers of participants in clinical trials from underrepresented racial and ethnic
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Diversity Plans to Improve Enrollment of Participants from Unrepresented Racial and Ethnic Populations in Clinical Trials.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required for this guidance. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information in 21 CFR parts 50 and 56 have been approved under OMB control number 0910-0130; the collections of information in 21 CFR part 314 have been approved under OMB control number 0910-0001; the collections of information in 21 CFR part 312 have been approved under OMB control number 0910-0014; the collections of information in 21 CFR part 601 have been approved under OMB control number 0910-0338; the collections of information in 21 CFR part 800 have been approved under OMB control number 0910-0625; and the collections of information pertaining to submission of a biologics license application under section 351(k) of the Public Health Service Act have been approved under OMB control number 0910-0719.
Persons with access to the internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA, Agency, or we) is announcing the availability of a final guidance for industry (GFI) #256 entitled “Compounding Animal Drugs from Bulk Drug Substances.” This guidance describes FDA's current thinking about compounding animal drugs from bulk drug substances, identifies our enforcement priorities with respect to drugs compounded from bulk drug substances, and describes circumstances under which FDA generally does not intend to take action against veterinarians or pharmacists in either State-licensed pharmacies or Federal facilities, who compound animal drugs from bulk drug substances. We are also announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995 (PRA).
The announcement of the guidance is published in the
To ensure that comments on the information collection are received, OMB recommends that written comments be submitted to
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the guidance to the Policy and Regulations Staff (HFV-6), Center for Veterinary Medicine, Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Cindy Burnsteel, Office of Surveillance and Compliance (HFV-200), Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-402-7011.
In the
FDA received numerous comments on the draft guidance, which were considered as the guidance was finalized. Changes made in response to comments include identifying compliance with relevant State and local laws as the standard for compounding methods and eliminating references to United States Pharmacopeia and National Formulary Chapters <795> “Pharmaceutical Compounding—Nonsterile Preparations” and <797> “Pharmaceutical Compounding—Sterile Preparations.” We also revised the recommended label statement regarding reporting of adverse events to include reporting to the pharmacy as well as FDA.
We also made a number of changes related to recommendations for copies of approved products. We simplified the definition of “copy” used in the guidance and clarified that “clinical difference” includes issues affecting patient compliance and the safety of these who administer the drug, but excludes cost differences between approved and compounded products. The final guidance includes examples of how to briefly describe the medical rationale for making a copy, such as the compounding pharmacist contacting the prescribing veterinarian to obtain the rationale and noting it in the compounding records as an alternative to the veterinarian noting the rationale on the prescription. It also provides examples of rationales to explain why an approved drug cannot be used in a legal extralabel manner to compound a drug with the same active moiety.
We also made changes to lists of bulk drug substances for compounding office stock for nonfood-producing animals or antidotes for food-producing animals. As outlined in the Appendix to the final guidance,
In addition, editorial changes were made to improve clarity in the final guidance. The guidance announced in this notice finalizes the draft guidance dated November 2019. However, as explained in section II of this notice, the information collection recommendations footnoted with an asterisk are subject to OMB review and approval and are not for current implementation.
This level 1 guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on compounding animal drugs from bulk drug substances. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance. FDA is issuing this guidance as final, footnoting with an asterisk recommendation that include information collection subject to review and approval by OMB under the PRA. FDA will implement the information collection recommendations if OMB approves them. At that time, FDA will announce OMB approval in the
In the
Our exercise of discretion is dependent upon our ability to assess whether the circumstances under which FDA intends to exercise such discretion, as described in the guidance, exist. FDA staff may use pharmacy and veterinary records, among other things, to determine the circumstances surrounding the compounding activity. Except with regard to the recommendations that compounders document rationales for prescribing a compounded product from a bulk drug substance, routine business records kept by pharmacists who compound animal drugs from bulk drug substances and veterinarians who compound animal drugs from bulk drug substances, as well as veterinarians prescribing compounded animal drugs within a valid veterinarian-client-patient relationship, should be adequate to demonstrate that the circumstances described in the guidance exist. While we believe it is usual and customary business practice for veterinarians to document medical rationales for prescribing a compounded product as recommended in the guidance, we acknowledge that documenting this information by the pharmacist compounder, as well as documenting the rationale for using a bulk drug substance as the source of the active ingredient by the veterinarian/pharmacist compounder, may not be usual and customary practice. We have therefore included an estimate for recordkeeping to account for burden beyond that which may be usual and customary for respondents who follow the recommended documentation of rationales for compounding the drug product from bulk drug substance as discussed in the guidance.
We estimate the burden of the information collection as follows:
We have revised figures from our 60-day notice to reflect a more recent review of our experience with the information collection.
Sections III.A.5 and III.A.6 of the guidance describe circumstances under which FDA recommends veterinarian and pharmacist compounders document the prescribing veterinarian's medical rationale and the reason that a bulk drug substance is being used as the source of the active ingredient. Based on our evaluation, we believe it is usual and customary business practice for veterinarians to document the medical rationale, as recommended in the guidance. However, we believe pharmacist compounders may not document the information recommended in the guidance as a usual and customary business practice. According to the American Pharmacists Association, of the approximately 56,000 community-based pharmacies in the United States, about 7,500 pharmacies specialize in compounding services.
Under 5 CFR 1320.3(b)(2), the time, effort, and financial resources necessary to comply with a collection of information are excluded from the burden estimate if the reporting, recordkeeping, or disclosure activities needed to comply are usual and customary because they would occur in the normal course of activities. If the compounded drug is compounded for use as an antidote for food-producing animals or for use as a sedative or anesthetic for free-ranging wildlife species, section III.C.3 of the guidance recommends that the veterinarian establishes and documents a scientifically based withdrawal time that ensures residues of the: (1) Antidote and the underlying toxin or (2) sedative or anesthetic are not present in the animal at the time of slaughter or harvest or the veterinarian ensures the animal does not enter the food supply. We believe that it is usual and customary for veterinarians to establish and document a scientifically based withdrawal time as a matter of maintaining an adequate medical record in routine practice and, therefore, estimate no burden for the time it would take for a veterinarian to make this record. See 5 CFR 1320.3(b)(2).
In addition, the guidance makes a number of recommendations regarding the labeling of animal drugs compounded from bulk drug substances. In sections III.A.8, III.B.6, and III.C.6, the guidance recommends basic information that pharmacists and veterinarians should include on the label of the compounded drug, such as the name and strength of the drug and the name, address, and contact information for the compounding pharmacy or compounding veterinarian. We believe that it is usual and customary for pharmacists and veterinarians to include such information on the labels of compounded animal drugs in the normal course of their activities, and therefore, estimate no burden for the time it would take to prepare such labeling. See 5 CFR 1320.3(b)(2). Sections III.A.8, III.B.6, and III.C.6 of the guidance also recommend compounders (pharmacists and veterinarians) include several specific statements on the label of animal drugs compounded from bulk drug substances (
Persons with access to the internet may obtain the guidance at
Food and Drug Administration, HHS.
Notice; establishment of a public docket; request for comments.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Cellular, Tissue and Gene Therapies Advisory Committee. The general function of the committee is to provide advice and recommendations to FDA on scientific issues. The meeting will be open to the public. FDA is establishing a docket for public comment on this document.
The meeting will be held on June 9, 2022, from 10 a.m. to 6 p.m. and June 10, 2022, from 10 a.m. to 4 p.m. Eastern Time.
Please note that due to the impact of the COVID-19 pandemic, all meeting participants will be joining this advisory committee meeting via an online teleconferencing platform. Answers to commonly asked questions about FDA advisory committee meetings may be accessed at:
The online web conference meeting will be available at the following link on the day of the meeting: Day 1 June 9 link:
FDA is establishing a docket for public comment on this meeting. The docket number is FDA-2022-N-0470. The docket will close on June 8, 2022. Submit either electronic or written comments on this public meeting on or before June 8, 2022. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before June 8, 2022. The
Comments received on or before June 2, 2022, will be provided to the committee. Comments received after that date will be taken into consideration by FDA. In the event that the meeting is cancelled, FDA will continue to evaluate any relevant applications or information, and consider any comments submitted to the docket, as appropriate.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” FDA will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Christina Vert or Tonica Burke, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 1244, Silver Spring, MD 20993-0002,
The morning session of June 9, 2022, will include presentations of the effectiveness and product-specific safety results from the clinical trials in BLA 125755. The afternoon session will include presentations of safety concerns relevant to both products, followed by committee discussion of BLA 125755. On June 10, 2022, the morning session will include presentations of the effectiveness and product-specific safety results from the clinical trials in BLA 125717. The afternoon session will include committee discussion of BLA 125717.
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available on FDA's website at the time of the advisory committee meeting. Background material and the link to the online teleconference meeting room will be available at
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Christina Vert at
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Considerations for Waiver Requests for pH Adjusters in Generic Drug Products Intended for Parenteral, Ophthalmic, or Otic Use.” This guidance is intended to assist abbreviated new drug application (ANDA) applicants that reference a drug product intended for parenteral, ophthalmic, or otic use in seeking approval of a drug that is qualitatively (Q1) different or quantitatively (Q2) different from the reference listed drug (RLD) with respect to the pH adjuster(s). This draft guidance describes how FDA intends to evaluate a request for a waiver of Agency requirements for a Q1 or Q2 difference in pH adjuster, including recommendations on the type of information to provide in support of such a waiver request. This draft guidance also includes recommendations on the timing and process for submitting such waiver requests.
Submit either electronic or written comments on the draft guidance by June 13, 2022 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Melissa Mannion, Center for Drug
FDA is announcing the availability of a draft guidance for industry entitled “Considerations for Waiver Requests for pH Adjusters in Generic Drug Products Intended for Parenteral, Ophthalmic, or Otic Use.” This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Considerations for Waiver Requests for pH Adjusters in Generic Drug Products Intended for Parenteral, Ophthalmic, or Otic Use.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
The Federal Food, Drug, and Cosmetic Act (FD&C Act) does not require an ANDA to have the same inactive ingredients as the RLD.
The Agency has interpreted section 505(j)(4)(H) of the FD&C Act as permitting the Agency to deny approval of an ANDA “if there is a reasonable basis to conclude that its inactive ingredients or composition raise serious questions about the drug's safety.”
The regulations at § 314.94(a)(9)(iii) and (iv) (21 CFR 314.94(a)(9)(iii) and (iv)), with parallel provisions in the approval regulations at § 314.127(a)(8)(ii)(B) and (C) (21 CFR 314.127(a)(8)(ii)(B) and (C)), specify that FDA will consider an inactive ingredient in, or the composition of, a generic drug product intended for parenteral, ophthalmic, or otic use to be unsafe and will refuse to approve the ANDA unless the generic drug product contains the same inactive ingredients (with certain listed exceptions) in the same concentration as the RLD. These regulations also identify permissible differences in certain inactive ingredients for drug products intended for parenteral, ophthalmic, or otic use, commonly referred to as “exception excipients,” if the ANDA contains sufficient information to demonstrate that any such differences do not affect the safety or efficacy of the drug. The regulations do not, however, expressly identify pH adjusters as one of these “exception excipients,” and, as such, the inactive ingredient requirements in § 314.94(a)(9)(iii) and (iv) apply to pH adjusters.
Under § 314.99(b) (21 CFR 314.99(b)), however, an applicant may ask FDA to waive any requirement that applies to the applicant under §§ 314.92 through 314.99 (21 CFR 314.92 through 314.99). Such a request under § 314.99(b) must comply with the requirements at 21 CFR 314.90. FDA may grant a § 314.99(b) waiver if the Agency finds one of the following: (1) The applicant's compliance with the requirement is unnecessary for the Agency to evaluate the ANDA or compliance cannot be achieved; (2) the applicant's alternative submission satisfies the requirement; or (3) the applicant's submission otherwise justifies a waiver. Even if FDA grants a waiver of a requirement in §§ 314.92 through 314.99 in a particular application, the application still must meet all applicable statutory requirements for approval. If FDA grants the applicant's waiver request with respect to a requirement under §§ 314.92 through 314.99, the waived requirement will not constitute a basis for refusal to approve an ANDA under § 314.127. Thus, an ANDA applicant for a drug product intended for parenteral, ophthalmic, or otic use who seeks to use a pH adjuster(s) that is Q1 or Q2 different from the RLD may ask the Agency to waive the inactive ingredient requirements at § 314.94(a)(9)(iii) or (iv) for the pH adjuster(s). This draft guidance document provides recommendations on (1) the type of information that applicants should consider submitting with a § 314.99(b) waiver request when an ANDA applicant asks the Agency to waive the inactive ingredient requirements for pH adjusters and (2) the format and process for submitting such waiver requests.
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required for this guidance. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information in 21 CFR part 314 have been approved under OMB control number 0910-0001; the collections of information in 21 CFR part 320 been approved under OMB control numbers 0910-0014 and 0910-0291; and the collections of information for the submission of controlled correspondence related to generic drug development and FDA approval have been approved under OMB control number 0910-0797.
Persons with access to the internet may obtain the draft guidance at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) permanently debarring Lisett Raventos from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Lisett Raventos was convicted of a felony under Federal law for conduct that relates to the development or approval, including the process of development or approval, of a drug product under the FD&C Act. Ms. Raventos was given notice of the proposed permanent debarment and was given an opportunity to request a hearing to show why she should not be
This order is applicable April 14, 2022.
Submit applications for termination of debarment to the Dockets Management Staff, Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, or at
Jaime Espinosa, Division of Enforcement (ELEM-4029), Office of Strategic Planning and Operational Policy, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rockville, MD 20857, 240-402-8743, or at
Section 306(a)(2)(A) of the FD&C Act (21 U.S.C. 335a(a)(2)(A)) requires debarment of an individual from providing services in any capacity to a person that has an approved or pending drug product application if FDA finds that the individual has been convicted of a felony under Federal law for conduct relating to the development or approval, including the process of development or approval, of any drug product under the FD&C Act. On March 5, 2021, Ms. Raventos was convicted as defined in section 306(l)(1) of the FD&C Act when judgment was entered against her in the U.S. District Court for the Southern District of Florida, after her plea of guilty to one count of Conspiracy to Commit Wire Fraud in violation of 18 U.S.C. 1349.
The factual basis for this conviction is as follows: Ms. Raventos was a clinical study coordinator at Unlimited Medical Research, LLC. From about September 2013 through June 2016, Ms. Raventos conspired with others to unlawfully enrich herself by making materially false representations about clinical trials; fabricating data and the participation of subjects in those clinical trials; concealing from FDA, sponsors, and contract research organizations the fact that the data and participation of subjects had been fabricated; and inducing sponsors and contract research organizations to pay money for Ms. Raventos and her co-conspirators' own benefit. Specifically, one of Ms. Raventos's co-conspirators entered into a contract with a Contract Research Organization (CRO), retained by a drug manufacturer (Sponsor) to hire clinical investigators and to manage clinical trials. Ms. Raventos's co-conspirator entered into a contract with the CRO to conduct a clinical trial at Unlimited Medical Research site in return for payment. The clinical trial was for an investigational drug intended to treat pediatric asthma in children between the ages of 4 and 11 years.
Ms. Raventos represented herself to be the Site Director, Director of Clinical Operations, and the Study Coordinator for this clinical trial. In those roles, Ms. Raventos was responsible for complying with the study protocol, including administering the study drug to subjects in the study and preparing written records, known as case histories, which documented the participation of subjects in the clinical trial. Ms. Raventos participated in a scheme to defraud the Sponsor by fabricating the data and participation of subjects in the clinical trial in a variety of ways: Ms. Raventos and her co-conspirators falsified medical records to portray persons as legitimate study subjects when they were not. In addition, Ms. Raventos and her co-conspirators made it appear as though pediatric subjects made scheduled visits to Unlimited Medical Research when they had not, made it appear as though subjects had taken the study's drugs as required when they had not, and made it appear that the study subjects had received checks as payment when they had not.
As a result of this conviction, FDA sent Ms. Raventos by certified mail on November 19, 2021, a notice proposing to permanently debar her from providing services in any capacity to a person that has an approved or pending drug product application. The proposal was based on a finding, under section 306(a)(2)(A) of the FD&C Act, that Ms. Raventos was convicted of a felony under Federal law for conduct relating to the development or approval, including the process of development or approval, of any drug product under the FD&C Act. The proposal also offered Ms. Raventos an opportunity to request a hearing, providing her 30 days from the date of receipt of the letter in which to file the request, and advised her that failure to request a hearing constituted an election not to use the opportunity for a hearing and a waiver of any contentions concerning this action. Ms. Raventos received the proposal on November 29, 2021. She did not request a hearing within the timeframe prescribed by regulation and has, therefore, waived her opportunity for a hearing and any contentions concerning her debarment (21 CFR part 12).
Therefore, the Assistant Commissioner, Office of Human and Animal Food Operations, under section 306(a)(2)(A) of the FD&C Act, under authority delegated to the Assistant Commissioner, finds that Ms. Raventos has been convicted of a felony under Federal law for conduct relating to the development or approval, including the process of development or approval, of any drug product under the FD&C Act.
As a result of the foregoing finding, Ms. Raventos is permanently debarred from providing services in any capacity to a person with an approved or pending drug product application, effective (see
Any application by Ms. Raventos for special termination of debarment under section 306(d)(4) of the FD&C Act should be identified with Docket No. FDA-2021-N-0313 and sent to the Dockets Management Staff (see
Publicly available submissions will be placed in the docket and will be viewable at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the CDRH Patient Engagement Advisory Committee. The general function of the committee is to provide advice to the Commissioner of Food and Drugs, or designee, on complex scientific issues relating to medical devices, the regulation of devices, and their use by patients. The meeting will be open to the public.
The meeting will take place virtually on July 12, 2022, from 10 a.m. to 4 p.m. Eastern Time and on July 13, 2022, from 10 a.m. to 2 p.m. Eastern Time.
Please note that due to the impact of this COVID-19 pandemic, all meeting participants will be joining this advisory committee meeting via an online teleconferencing platform. Answers to commonly asked questions about FDA advisory committee meetings may be accessed at:
Letise Williams, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5441, Silver Spring, MD 20993-0002,
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available on FDA's website at the time of the advisory committee meeting, and the background material will be posted on FDA's website after the meeting. Background materials will be available at
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA, the Agency, or we) is announcing the availability of a final guidance for industry entitled “Reconditioning of Fish and Fishery Products by Segregation.” This guidance is intended to provide industry with an explanation of two potential approaches to recondition fish and fishery products by effectively segregating adulterated portions of an article from portions not containing the adulterant to ensure that only safe and wholesome product reaches consumers.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the guidance to Office of Food Safety, Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your request. See the
Steven Bloodgood, Division of Seafood Safety, Office of Food Safety, Center for Food Safety and Applied Nutrition (HFS-325), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-5316; or Lauren Kleinman, Office of Regulations and Policy (HFS-024), Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2378.
We are announcing the availability of a guidance for industry entitled “Reconditioning of Fish and Fishery Products by Segregation.” We are issuing the guidance consistent with our
This guidance is intended to help owners of fish and fishery products, or their representatives, interested in bringing adulterated products into compliance with the Federal Food, Drug, and Cosmetic Act by means of segregating non-violative product from adulterated product. Specifically, this document provides guidance on:
• Segregation based on a production-related rationale supported by production records or information identifying the cause of the adulteration along with sampling and testing to confirm that the segregation was successful; or
• Segregation based on the results of statistically significant sampling and testing.
In the
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required for this guidance. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information in 21 CFR 1.94(b) and 21 CFR 1.95(a) and (b) using Form FDA 766 have been approved under the OMB control number 0910-0025.
Persons with access to the internet may obtain the guidance at either
Food and Drug Administration, HHS.
Notice; request for nominations.
The Food and Drug Administration (FDA, the Agency, or we) is announcing updated information for interested parties to nominate bulk drug substances or renominate bulk drug substances that were previously nominated without adequate supporting information, for inclusion on a list of bulk drug substances for compounding certain animal drugs without a patient specific prescription (
You may submit either electronic or written nominations and comments at any time.
You may submit nominations and comments by any of the following methods.
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions in the following ways:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The
Cindy Burnsteel, Office of Surveillance and Compliance (HFV-200), Food and Drug Administration, 7519 Standish Pl., Rockville, Rockville, MD 20855, 240-402-7011,
Except with respect to the limited exemption provided by the Federal Food, Drug, and Cosmetic Act (FD&C Act) described in the following paragraph, statutory provisions applicable to manufactured animal drugs under the FD&C Act also apply to animal drugs compounded from bulk drug substances (also known as active pharmaceutical ingredients (APIs)).
Sections 512(a)(4) and (5) of the FD&C Act (21 U.S.C. 360b(a)(4) and (5)) provide a limited exemption from certain requirements for compounded animal drugs made from already FDA-approved animal or human drugs. Such use is considered an extralabel use. The FD&C Act provides that a compounded drug is exempt from the approval requirements in section 512(a) of the FD&C Act and requirements for adequate directions for use in section 502(f)(1) of the FD&C Act (21 U.S.C. 352(f)(1)) if it meets the conditions set out in the statute and the extralabel use regulations at 21 CFR part 530.
Elsewhere in this issue of the
In a
In conjunction with finalizing GFI #256, FDA is expanding nominations to include drugs compounded for use as sedatives or anesthetics for free-ranging wildlife species. We are also reorganizing the List into two separate Lists:
Interested parties can nominate bulk drug substances to either List, renominate bulk drug substances with adequate supporting information that were previously nominated without adequate supporting information, or comment on previously nominated bulk drug substances that have been added to a List. This docket will remain open indefinitely so that individuals may nominate and comment on bulk drug substances at any time.
FDA intends to include a bulk drug substance on either of the Lists when:
1. There is no marketed FDA-approved, conditionally approved, or indexed animal drug(s) that can be used as labeled to treat the condition;
2. There is no marketed FDA-approved, conditionally approved, or indexed animal or human drug(s) with the same active ingredient(s) that could be used in an extralabel manner to treat the condition; and
3. FDA has not identified a significant safety concern specific to the use of the bulk drug substance in animals.
For bulk drug substances used to compound drugs intended as office stock for nonfood-producing animals, in addition to 1 to 3 above:
4. Urgent treatment with the compounded drug is necessary to avoid animal suffering or death, or to protect public safety.
For bulk drug substances used to compound drugs intended for use as antidotes in food-producing animals or for use as sedatives or anesthetics for free-ranging wildlife species, in addition to 1 to 3 above:
5. There is sufficient scientific information for the prescribing veterinarian to determine appropriate withdrawal, withholding, or discard time(s) for meat, milk, eggs, or any food that might be derived from the treated animal(s).
You may submit nominations and comments to the docket through
You may submit written submissions to the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852. All submissions must include the Docket No. FDA-2018-N-4626 for “Lists of Bulk Drug Substances for Compounding: Office Stock Drugs for Use in Nonfood-Producing Animals or Drugs for Use in Food-Producing Animals or Free-Ranging Wildlife Species.”
You may nominate specific bulk drug substances for inclusion on either of the Lists. Each bulk drug substance should be submitted to the docket as its own, separate nomination. Submissions to the docket containing more than one bulk drug substance will not be considered an adequate nomination and will not be reviewed. Nominated substances that do not meet the definition of a bulk drug substance will not be evaluated for inclusion on a List.
For FDA to evaluate a bulk drug substance for inclusion on a List, you should submit the following information about the bulk drug substance and the compounded animal drug in the nomination:
1. Description of the Bulk Drug Substance:
(a) Chemical name(s);
(b) common name(s);
2. Description of the Animal Drugs That Will be Compounded with the Nominated Bulk Drug Substance:
(a) Dosage form(s) into which the bulk drug substance will be compounded (
(b) strength(s) of the compounded drug(s); and
(c) intended route(s) of administration of the compounded drug(s) (
3. Information Requested for FDA to Evaluate Bulk Drug Substances for Inclusion on a List:
(a) The species the drug to be compounded with the nominated bulk drug substance is intended to treat;
(b) The disease or condition(s) the drug to be compounded with the nominated bulk drug substance is intended to treat;
(c) If there is a marketed FDA-approved, conditionally approved, or indexed animal drug(s) that addresses the same condition(s) in the same species, an explanation of why a compounded drug is necessary (
(d) Confirmation that there is no marketed FDA-approved, conditionally approved, or indexed drug(s) that could be prescribed to treat the condition in the species that the drug compounded with the nominated substance is intended to address;
(e) If known by the nominator, if the bulk drug substance is an active ingredient in a marketed FDA-approved, conditionally approved, or indexed animal or human drug(s), an explanation of why the animal drug cannot be compounded from the marketed FDA-approved, conditionally approved, or indexed animal or human drug(s).
(f) If known by the nominator, a description of any human user or animal safety concerns associated with use of the nominated bulk drug substance or finished compounded drug for the condition(s) in the species that the compounded drug is intended to address. If there are concerns, an explanation of why the concerns should not preclude inclusion of that bulk drug substance on the List;
(g) For compounded drugs intended as office stock for nonfood-producing animals, an explanation of why the animal drug to be compounded with the nominated bulk drug substance is important to be available to the veterinarian for urgent treatment to avoid animal suffering or death,
(h) For compounded drugs intended for use as antidotes to treat toxicoses in food-producing animals, or as sedatives or anesthetics for free-ranging wildlife species, relevant scientific literature or other evidence that demonstrates that the prescribing veterinarian has a basis for determining appropriate withdrawal, withholding, or discard time(s) for meat, milk, eggs, or any food which might be derived from the treated animal(s).
4. Contact information for FDA should there be followup questions regarding the nomination.
FDA identifies those bulk drug substances that have been nominated and under review at “Bulk Drug Substances Currently Under Review.”
FDA intends to remove a bulk substance from a List if a finished drug containing that substance in the appropriate dosage form and strength is approved or indexed. Please see “Bulk Drug Substances Reviewed and Not Listed.”
Please see “Bulk Drug Substances Reviewed and Not Listed” for those bulk drug substances that have been reviewed by FDA but are not on either List.
In a
Although that draft guidance was subsequently withdrawn in November 2017, FDA received over 30 comments containing nominations for multiple bulk drug substances in response to the 2015 request for nominations notice. FDA's approach for determining whether to include a bulk drug substance on the list described in the 2015 request for nominations notice was substantially the same as the approach described above for including a bulk drug substance on the “List of Bulk Drug Substances for Compounding Office Stock Drugs for Use in Nonfood-Producing Animals” in accordance with GFI #256. Therefore, and in keeping with our intention as stated in the 2019 request for nomination notice, the Agency is including certain of these nominated bulk drug substances on this List. For other of these nominated bulk drug substances, finished drugs containing the bulk drug substances in the appropriate dosage form and strength have subsequently been approved; thus, these nominated bulk drug substances will not appear on the List.
Some bulk drug substances were nominated in response to the 2015 request for nominations notice with insufficient supporting information. FDA subsequently searched for additional supporting information for these bulk substances, conducted further review, and added those with sufficient supporting information to the “List of Bulk Drug Substances for Compounding Office Stock Drugs for Use in Nonfood-Producing Animals.”
In addition, on its own initiative, FDA has identified certain bulk drug substances that are used in minor species. Several have been evaluated and are included on the “List of Bulk Drug Substances for Compounding Office Stock Drugs for Use in Nonfood-Producing Animals.” Those identified bulk drug substances still under evaluation are included on “Bulk Drug Substances Currently Under Review.” As FDA continues to identify and evaluate bulk drug substances that are used in minor species, we also encourage outside nominations.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory Dental and Craniofacial Research Council.
The meeting will be held as a virtual meeting and is open to the public. Individuals who plan to view the virtual meeting and need special assistance or other reasonable accommodations to view the meeting, should notify the Contact Person listed below in advance of the meeting. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Holly A. Kelly, Congressional Grants Division, Department of Housing and Urban Development, 451 Seventh Street SW, Washington, DC 20410; telephone number 202-402-6324 ext. 6324 (this is not a toll-free number). Persons with hearing or speech impairments may access these numbers via TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number). Interested persons may also email:
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Fish and Wildlife Service, Interior.
Notice of availability; request for comment.
We, the U.S. Fish and Wildlife Service (Service), announce the availability of our Mexican Wolf (
We must receive written comments on or before May 16, 2022. Comments submitted electronically using the Federal eRulemaking Portal (see
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•
We request that you send written comments by only the methods described above.
For more information, see Public Availability of Comments under
Brady McGee, Mexican Wolf Recovery Coordinator, by telephone at 505-761-4704 or via email at
We, the U.S. Fish and Wildlife Service (Service), announce the availability of a draft revised recovery plan for the Mexican wolf (
Section 4(f) of the ESA requires the development of recovery plans for listed species, unless such a plan would not promote the conservation of a particular species. Also pursuant to section 4(f) of the ESA, a recovery plan must, to the maximum extent practicable, include:
1. A description of site-specific management actions as may be necessary to achieve the plan's goals for the conservation and survival of the species;
2. Objective, measurable criteria that, when met, would support a determination under section 4(a)(1) that the species should be removed from the List of Endangered and Threatened Species; and
3. Estimates of the time and costs required to carry out those measures needed to achieve the plan's goal and to achieve intermediate steps toward that goal.
In 2016, the Service revised its approach to recovery planning, and is now using a process termed recovery planning and implementation (RPI) (see
The original recovery plan for the Mexican wolf was finalized in 1982 (Service 1982). We revised the 1982 recovery plan in 2017 using the RPI process (82 FR 57288; December 4, 2017). The Mexican Wolf Recovery Plan, First Revision (2017 recovery plan), contains statutorily required elements, including measurable criteria, site-specific management actions, and estimates of time and costs, along with a concise introduction and our strategy for how we plan to recover the Mexican wolf. It specifies the establishment and maintenance of a demographically and genetically robust population of wolves in the United States, and a second population in Mexico. In the United States, Mexican wolves inhabit the Mexican Wolf Experimental Population Area (MWEPA) in Arizona and New Mexico (80 FR 2512; January 16, 2015). We began reintroducing Mexican wolves from captivity into the MWEPA in 1998 and continue to focus recovery efforts in the United States on this population.
On October 14, 2021, the District Court of Arizona remanded the 2017 recovery plan back to the Service to include site-specific management actions to address the threat of human-caused mortality, including illegal killing (No: 4:18-CV-00047-TUC-JGZ (Lead); No. 4:18-CV-00048-TUC-JGZ (Member)). The court order specified that the Service must produce a draft recovery plan for public comment within 6 months and a final plan no later than 6 months after the draft recovery plan. The draft revised recovery plan maintains the recovery strategy, criteria, and actions from the 2017 recovery plan and includes new recovery actions to alleviate the threat of human-caused mortality, including illegal killing. These new actions, as well as their time and cost estimates, are incorporated into the draft revised recovery plan implementation schedule. We provide the rationale for each action in a new section of the draft revised recovery plan (“Recovery Actions Added to the Implementation Schedule to Address Human-Caused Mortality”).
It is our intention that the actions we have added to the draft revised recovery plan will help alleviate the threat of excessive human-caused mortality, including illegal killing. We will adapt our implementation of recovery actions over time to address sources of human-caused mortality, as we assess population performance, the contribution of specific sources to overall mortality levels, the availability of resources needed for implementation of specific actions, and other considerations.
Currently, at least 74 percent of documented Mexican wolf mortalities in the MWEPA between 1998 and 2020 are attributed to human causes. Illegal killing has been the largest source of human-caused mortality in the MWEPA between 1998 and 2020 (119 of 216 total documented mortalities), followed by vehicle collision (27 mortalities) and other human-caused mortalities (14 mortalities) (Service files). Some of the mortalities that we attribute to “unknown” causes (24 mortalities) may also be human caused. Since the completion of the 2017 recovery plan, human-caused mortality in the MWEPA has been variable, with totals of 7, 15, 12, and 25 Mexican wolf mortalities each year, respectively, during the period 2017-2020 (Service files). In Mexico, mortalities of 7, 4, 1, 2, and 4 were documented respectively during the consecutive years 2017-2021; these included mortalities from poison (7 mortalities), unknown causes (6 mortalities), vehicular collision (3 mortalities), trapping (1 mortality), and firearm (1 mortality) (Universidad Autónoma de Querétaro/Comisión Nacional de Áreas pers. comm.).
As we described in our January 16, 2015, final rule to list the Mexican wolf as an endangered subspecies (80 FR 2488), different wolf populations can
Further, we recognize that multiple sources of mortality occurring in combination have a greater potential to affect the Mexican wolf than some single sources (80 FR 2488, p. 2508). Therefore, while one source of human-caused mortality, such as vehicular collision, may not occur at a level that hinders the recovery of the Mexican wolf independent of other sources of mortality, it may contribute to an overall level of mortality that is too high for the population performance necessary to achieve recovery. Because of this, recovery actions to address a specific source of human-caused mortality may contribute to the recovery effort even if that source is not independently hindering population growth.
The Mexican wolf is listed as an endangered subspecies throughout its range, without critical habitat, due to the individual and cumulative effects of excessive human-caused mortality, including illegal killing; genetic issues, including inbreeding, loss of heterozygosity, and loss of adaptive potential; and demographic stochasticity (decreases in survival or reproduction) associated with small population size (80 FR 2488, January 16, 2015). For detailed listing history, biological background, and additional information on recovery and reintroduction efforts, including previous Federal actions for the Mexican wolf subspecies and experimental population, see our final rule to list the Mexican wolf as an endangered subspecies on January 16, 2015 (80 FR 2488); our notice of availability of the 2017 recovery plan on December 4, 2017 (82 FR 57288); and our proposed rule to revise the nonessential experimental population of the Mexican wolf on October 29, 2021 (86 FR 59953).
The Service and our regional and binational partners continue to implement the recovery strategy and actions in the 2017 recovery plan to address threats to the Mexican wolf and achieve recovery in the United States and Mexico. Although the Mexican wolf remains critically endangered, population growth in the wild in recent years has improved the status of the species and the outlook for recovery. We and our partners are employing adaptive management to utilize new field techniques in the United States such as diversionary food caching to prevent depredations and cross-fostering to support the genetic needs of the expanding population in the MWEPA in Arizona and New Mexico (Service 2019). In addition, the captive population, numbering 55 facilities housing 369 wolves as of June 30, 2020, remains robust and capable of supporting the reintroduction and recovery efforts in both countries, while also enabling scientists to engage in reproductive and genetic research that may contribute to the ongoing genetic management of the captive and wild populations (Scott et al. 2020, entire).
Progress toward the demographic and genetic recovery criteria in the 2017 recovery plan is documented annually. Due to disparate timing and methods of data collection between the United States and Mexico, available information as of January 19, 2022, varies between the two countries. The minimum population count for the MWEPA at the end of 2020 was 186 wolves, with 7 released wolves (wolves born in captivity) surviving to breeding age in the spring of 2020. The MWEPA 2021 minimum population count and a report on the number of released wolves surviving to breeding age as of the spring of 2021 will be available in February and March 2022, respectively. In Mexico, the population was estimated at approximately 40 wolves at the end of 2021, with 4 released wolves surviving to breeding age as of the end of 2021 (Service files; UAQ/CONANP pers. comm.). In 2023, the Service will conduct an evaluation of progress toward recovery, using data from both countries' programs through 2022, as specified in the 2017 recovery plan (see Service 2017, p. 26).
Section 4(f) of the ESA requires us to provide public notice and an opportunity for public review and comment during recovery plan development. It is also our policy to request peer review of draft recovery plans (59 FR 34270, July 1, 1994). We will summarize and respond to the comments the public and peer reviewers provide and make our responses available to the public. Substantive comments may or may not result in changes to the recovery plan. Comments regarding recovery plan implementation will be forwarded as appropriate to Federal or other entities for consideration as the Service implements recovery actions. Pursuant to the court order, the Service must produce a final revised recovery plan by October 14, 2022.
We invite written comments on the draft revised recovery plan. In particular, we are interested in comments or additional information pertaining to the new recovery actions in the implementation schedule of the draft revised recovery plan, including:
1. Will these new actions reduce the threat of excessive human-caused mortality?
2. Do these actions support achieving the recovery criteria for the Mexican wolf?
3. Is there additional information pertaining to the time and cost estimates for the new actions we have recommended?
4. Are there additional actions that could reduce the threat of excessive human-caused mortality? Please provide a description of the action, your rationale, and any supporting data or literature.
We will accept comments about the Mexican wolf at any time, but due to the court-ordered deadline on this action, only comments received during the comment period that are germane to the remand will be taken into account as we develop the final revised recovery plan. We do not intend to revise any part of the recovery plan other than the recovery actions. Prior to final approval of the plan, we will consider all comments we receive by the date specified in
All comments received, including names and addresses, will become part of the administrative record and will be available to the public. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—will be publicly available. While you may request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
We developed our draft recovery plan and publish this notice under the authority of section 4(f) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of availability; request for comments; correction.
On April 8, 2022, we, the U.S. Fish and Wildlife Service, published a notice announcing the availability for public comment of a draft habitat conservation plan (HCP) and draft categorical exclusion (CatEx) for activities associated with an application for an incidental take permit. Our notice inadvertently did not give the correct web address for obtaining documents for review. In addition, it published with out-of-date telecommunications relay services information. In this notice, we correct those errors.
Written comments should be received on or before May 9, 2022.
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Kirby Bartlett, Fish and Wildlife Biologist, by email at
On April 8, 2022, we, the U.S. Fish and Wildlife Service, published a notice announcing the availability for public comment of a draft habitat conservation plan and draft categorical exclusion for activities associated with an application for an incidental take permit (87 FR 20881). Our notice inadvertently did not give the correct web address for obtaining documents in the
Bureau of Indian Affairs, Interior.
Notice.
This notice publishes the approval of the Amendment to the Gaming Compact (Amendment) between the Oglala Sioux Tribe (Tribe) and the State of South Dakota (State).
The Amendment takes effect on April 14, 2022.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Office of the Deputy Assistant Secretary—Policy and Economic Development, Washington, DC 20240,
Under section 11 of the Indian Gaming Regulatory Act (IGRA), Public Law 100-497, 25 U.S.C. 2701
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act and the Federal Advisory Committee Act, the U.S. Department of the Interior, Bureau of Land Management's (BLM) Central California Resource Advisory Council (RAC) will meet as follows.
The RAC will hold a virtual public meeting via Zoom on Wednesday, June 22, 2022, from 8:30 a.m. to 12:30 p.m. with public comments accepted at 12 p.m.
The RAC will hold a virtual public meeting via Zoom on Wednesday, Sept. 14, 2022, from 8:30 a.m. to 12:30 p.m., with public comments accepted at 12 p.m.
The RAC will hold both a virtual and in-person public meeting on Wednesday, Nov. 2, 2022, from 1 p.m. to 5 p.m. at the BLM Bishop Field Office with public comments accepted at 4:30 p.m. The RAC will conduct a field tour on Thursday, Nov. 3, 2022, from 8:30 a.m. to 12:30 p.m. to the Alabama Hills National Scenic Area.
The RAC will hold both a virtual and in-person public meeting on
The meetings and field tours are open to the public.
Meeting links and participation instructions will be made available to the public via news media, social media, the BLM California RAC web page at
• The June 22 meeting will be held virtually via Zoom.
• The Sept. 14 meeting will be held virtually via Zoom.
• The Nov. 2 meeting will be held virtually and at the BLM Bishop Field Office, 351 Pacu Lane, Suite 100, Bishop, CA 93514. On Nov. 3, participants will meet at the BLM Bishop Field Office for a field tour to the Alabama Hills National Scenic Area.
• The Feb. 22, 2023, meeting will be virtually and held at the BLM Ukiah Field Office, 2550 North State Street, Suite 2, Ukiah, CA 95482. On Feb. 23, participants will meet at the BLM Ukiah Field Office for a field tour to the South Cow Mountain OHV Management Area.
You may send written comments pertaining to any of the meetings to the BLM Central California District Office, 5152 Hillsdale Circle, El Dorado Hills, CA 95762, Attention: RAC meeting comments, or email comments can be submitted to Public Affairs Officer Serena Baker,
Public Affairs Officer Serena Baker, email:
The Central California RAC advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with BLM-managed public lands in central California. Topics for these meetings are as follows:
All meetings are open to the public. Each RAC meeting has time allocated for public comments. Depending on the number of persons wishing to speak and the time available, the amount of time for oral comments may be limited. Written public comments may be sent to the BLM Central California District Office listed in the
Members of the public are welcome on field tours but must provide their own transportation and meals. Individuals who plan to attend and need special assistance, such as sign language interpretation and other reasonable accommodations, should contact the BLM (see
Detailed minutes for the RAC meetings will be maintained in the BLM Central California District Office. Minutes will also be posted to the BLM California RAC web page at
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management (BLM) California Desert District Advisory Council (Council) will meet as follows.
The Council will hold virtual meetings on Saturday, May 14, 2022; Saturday, Aug. 27, 2022; and Saturday, Dec. 10, 2022. All meetings start at 9 a.m. and conclude at 4:30 p.m.
The meeting links and participation instructions will be made available to the public via a BLM news release, social media, on the Council's web page at
Written comments for the Council may be sent electronically in advance of the scheduled meetings to Public Affairs Officer Michelle Van Der Linden at
Michelle Van Der Linden, BLM California Desert District Office, telephone: (760) 833-7172, email:
The Council provides recommendations to the Secretary of the Interior concerning the planning and management of the public land resources located within the BLM's California Desert District and offers advice on the implementation of the comprehensive, long-range plan for management, use, development, and protection of the public lands within the California Desert Conservation Area. Agenda topics for the May meeting include presentations on Amargosa Vole Conservation efforts; the King of the Hammers off-road race and related Special Recreation Permit; the Fire and Fuels Program; abandoned mine lands; and overviews from the district and field offices. Agenda topics for the August meeting include presentations on the California Coastal National Monument; BLM landholdings and issues in the South Coast Area; threatened, endangered, and sensitive species relating to the Stephen's Kangaroo Rat; and overviews from the district and field offices. Agenda topics for the December meeting include an update on Castle Mountain Project; discussions on upcoming trail work and visitor impacts within the Amboy Crater National Natural Landmark; discussions on rockhounding within the Marble Mountain Fossil Bed; a presentation on resources within the California Desert District; and overviews from the district and field offices.
All Council meetings are open to the public and public comment periods will be offered at 2:45 p.m. at each meeting. While each of the Saturday meetings is scheduled from 9 a.m. to 4:30 p.m., they may end earlier or later depending on the needs of group members. Therefore, members of the public interested in a specific agenda item or discussion should schedule their arrival accordingly.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping and countervailing duty orders on certain coated paper suitable for high-quality print graphics using sheet-fed presses (“coated paper”) from China and Indonesia would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
March 7, 2022.
Caitlyn Hendricks (202-205-2058), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings at this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
60-Day notice.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Department of Justice (DOJ), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection (IC) is also being published to obtain comments from the public and affected agencies.
Comments are encouraged and will be accepted for 60 days until June 13, 2022.
If you have additional comments regarding the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions, or additional information, contact: Shawn Stevens, ATF National Services Center, Federal Explosives Licensing Center, by mail at 244 Needy Road, Martinsburg, WV 25405, email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
Primary: Individuals or households.
Other (if applicable): Business or other for-profit.
5.
6.
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, Mail Stop 3.E-405A, Washington, DC 20530.
Employment and Training Administration, Labor.
Final finding of no significant impact, Homestead Job Corps Center Proposed Disposal and Reuse, with a mailing address of 12350 SW 285th Street, Homestead, FL 33033 with the closest physical address at 470 Bougainville Boulevard, Homestead, FL.
The Department of Labor's (DOL) Employment and Training Administration, pursuant to the Council on Environmental Quality Regulations (40 CFR part 1500-08) implementing procedural provisions of the National Environmental Policy Act (NEPA), in accordance with 29 CFR 11.11(d), gives final notice of the proposed disposal of the Homestead Job Corps Center totaling 41 acres and that this project will not have a significant adverse impact on the environment.
These findings are effective as of April 14, 2022.
For further information contact Derrek Sanks, Department of Labor, 200 Constitution Avenue NW, Room N-4460, Washington, DC 20210; Telephone (202) 693-9972 (this is not a toll free number).
Derrek Sanks at (202) 693-9972 (this is not a toll free number).
A public notice of availability of the draft environmental assessment (EA) was published in the Miami Herald in Miami, Florida, on January 28, 2022. The review period extended for 30 days, ending on February 28, 2022. No public comments were received. No changes to the findings of the EA have been made.
Implementation of the proposed action alternative will not have significant impacts on the human environment. The determination is sustained by the analysis in the EA, agency, consultation, the inclusion and consideration of public review, and the capability of mitigations to reduce or avoid impacts. Any adverse environmental effects that could occur are no more than minor in intensity, duration and context and less-than-significant. As described in the EA, there are no highly uncertain or controversial impacts, unique or unknown risks, significant cumulative effects, or elements of precedence. There are no previous, planned, or implemented actions, which, in combination with the proposed action alternative, would have significant effects on the human environment. Requirements of NEPA have been satisfied, and preparation of an Environmental Impact Statement is not required.
Employment and Training Administration (ETA), Labor.
Notice of a public meeting.
Pursuant to the Federal Advisory Committee Act (FACA), notice is hereby given to announce a public meeting of the ACA to be held on Thursday, April 28, 2022. The meeting will be held in-person at the U.S. Department of Labor (DOL), Francis Perkins Building, 200 Constitution Avenue NW, Washington, DC 20210. All meetings of the ACA are open to the public.
The meeting will begin at approximately 9:30 a.m. Eastern Standard Time on Thursday, April 28, 2022, and adjourn at approximately 5:00 p.m. Due to COVID-19 safety protocols, and the need to limit the number of in-person participants, members of the public are asked to join the meeting virtually. The DOL can accommodate 3,000 virtual participants. For any member of the public unable to join the meeting virtually on April 28, 2022, please note that a meeting summary will be posted on the Office of Apprenticeship's website at:
The Designated Federal Officer, Mr. John V. Ladd, Administrator, Office of Apprenticeship, Employment and Training Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Room C-5321, Washington, DC 20210; Email:
The ACA is a discretionary committee reestablished by the Secretary of Labor on May 4, 2021, in accordance with FACA (5 U.S.C. app. 2 10), as amended in 5 U.S.C. app. 2, and its implementing regulations (41 CFR 101-6 and 102-3). The first meeting of the ACA was held on Wednesday, October 6, 2021, the second meeting of the ACA was held on Wednesday, January 26, 2022, the third meeting is being held on Thursday, April 28, 2022.
Any member of the public who wishes to file written data or comments pertaining to the agenda may do so by sending the data or comments to Mr. John V. Ladd via email at
The agenda and meeting logistics may need to be updated should priority items emerge between the time of this publication and the scheduled date of the ACA meeting. All meeting updates will be posted to the Office of Apprenticeship's website at:
Notice.
The Department of Labor's (DOL) Employment and Training Administration (ETA) is soliciting comments concerning a proposed extension for the authority to conduct the information collection request (ICR) titled, “Required Elements of an Unemployment Insurance (UI) Reemployment Services and Eligibility Assessments (RESEA) Grant State Plan.” This comment request is part of continuing Departmental efforts to reduce paperwork and respondent burden in accordance with the Paperwork Reduction Act of 1995 (PRA).
Consideration will be given to all written comments received by June 13, 2022.
A copy of this ICR with applicable supporting documentation, including a description of the likely respondents, proposed frequency of response, and estimated total burden, may be obtained free by contacting Ellen Wright by telephone at (202) 693-9995, TTY 1-877-889-5627 (this is not a toll-free number), or by email at
Submit written comments about, or requests for a copy of, this ICR by mail or courier to the U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance Room S-4524, 200 Constitution Avenue NW, Washington, DC 20210; by email:
Lawrence Burns by telephone at (202) 693-3141 (this is not a toll-free number) or by email at
DOL, as part of continuing efforts to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies an opportunity to comment on proposed and/or continuing collections of information before submitting them to the Office of Management and Budget (OMB) for final approval. This program helps to ensure requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements can be properly assessed.
The federal-state UI program is a required partner in the comprehensive, integrated workforce system. Individuals who have lost employment through no fault of their own and have earned sufficient wage credits may receive UI benefits if they meet initial and continuing eligibility requirements. Since 2005, one of the ways that the Department and participating state UI agencies have been addressing individual reemployment needs of UI claimants and working to prevent and detect UI improper payments is through the voluntary UI Reemployment and Eligibility Assessment (REA) program. Beginning in FY 2015, states transitioned from REA to the voluntary RESEA program.
The Bipartisan Budget Act of 2018, Public Law 115-123 (BBA), enacted on February 9, 2018, included amendments to the Social Security Act (SSA) creating a permanent authorization for the RESEA program. The RESEA provisions are contained in Section 30206 of the BBA, enacting new section 306 of the SSA. Section 306(e), SSA, provides the authorization and specific requirements for an annual RESEA state plan. To receive an RESEA grant, a state must submit an annual RESEA state plan that responds to all required elements and is approved by the Secretary of Labor. In 2019, ETA developed this state plan data collection to closely align with the statutory annual report requirements detailed in Section 306(3), SSA, and the essential administrative information necessary to complete the review, execution, and oversight of RESEA grants. ETA proposes to renew this data collection with several revisions intended to reflect recent changes to the RESEA program, to remove elements that are no longer routinely used to support grant management, and to provide states with the opportunity to include additional narrative descriptions that more fully reflect the state's planned RESEA activities and the economic or other factors that the state considered during the planning process. These proposed revisions include:
• Narrative boxes will be added to plan elements to allow states to provide additional information, clarifications, or other information relevant for the Department's wholistic review of planned RESEA activities;
• All response length limitations will be removed;
• Elements related to service delivery strategies will be revised to reflect recent program changes that allow for virtual and remote services;
• Information about administrative and staff-costs associated with specific RESEA services will no longer be collected; and
• To support the fiscal year 2023 implementation of section 303(c)(2), SSA, which requires states to devote a specific percentage of their RESEA funding to evidence-based components with a high or moderate causal rating that show a demonstrated capacity to improve employment and earnings outcomes for program participants, elements identifying planned evidence-based components will be revised to include funding-level information.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is
Interested parties are encouraged to provide comments to the contact shown in the
Submitted comments will also be a matter of public record for this ICR and posted on the internet, without redaction. DOL encourages commenters not to include personally identifiable information, confidential business data, or other sensitive statements/information in any comments.
DOL is particularly interested in comments that:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, (
Bureau of Labor Statistics, Department of Labor.
Notice of information collection; request for comment.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The Bureau of Labor Statistics (BLS) is soliciting comments concerning the proposed extension without change of the “American Time Use Survey.” A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the Addresses section of this notice on or before June 13, 2022.
Send comments to Erin Good, BLS Clearance Officer, Division of Management Systems, Bureau of Labor Statistics, Room 4080, 2 Massachusetts Avenue NE, Washington, DC 20212. Written comments also may be transmitted by email to
Erin Good, BLS Clearance Officer, at 202-691-7628 (this is not a toll free number). (See
The ATUS is the Nation's first federally administered, continuous survey on time use in the United States. It measures, for example, time spent with children, working, sleeping, or doing leisure activities. In the United States, several existing Federal surveys collect income and wage data for individuals and families, and analysts often use such measures of material prosperity as proxies for quality of life. Time-use data substantially augment these quality-of-life measures. The data also can be used in conjunction with wage data to evaluate the contribution of non-market work to national economies. This enables comparisons of production between nations that have different mixes of market and non-market activities.
The ATUS develops nationally representative estimates of how people spend their time. Respondents also report who was with them during activities, where they were, how long each activity lasted, and if they were paid. All of this information has numerous practical applications for sociologists, economists, educators, government policymakers, businesspersons, health researchers, and others, answering questions such as:
• Do the ways people use their time vary across demographic and labor force characteristics, such as age, sex, race, ethnicity, employment status, earnings, and education?
• How much time do parents spend in the company of their children, either actively providing care or being with them while socializing, relaxing, or doing other things? How has this changed over time?
• How are earnings related to leisure time—do those with higher earnings spend more or less time relaxing and socializing?
• How much time do people spend working at their workplaces and in their homes?
The ATUS data are collected on an ongoing basis nearly every day of the year, allowing analysts to identify changes in how people spend their time.
Office of Management and Budget clearance is being sought for the American Time Use Survey (ATUS). This survey collects information on how individuals in the United States use their time. Collection is done on a continuous basis with the sample drawn monthly. The survey sample is drawn from households completing their 8th month of interviews for the Current Population Survey (CPS). Households
Because the ATUS sample is a subset of households completing interviews for the CPS, the same demographic information collected from that survey is available for ATUS respondents. Comparisons of activity patterns across characteristics such as sex, race, age, disability status, and education of the respondent, as well as the presence of children and the number of adults living in the respondent's household, are possible.
The Bureau of Labor Statistics is particularly interested in comments that:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they also will become a matter of public record.
Office of Management and Budget.
Notice; request for comment.
The Office of Management and Budget (OMB) has under review the following proposed Information Collection Request “Improving Customer Experience (OMB Circular A-11, Section 280 Implementation)” for approval under the Paperwork Reduction Act (PRA).
Comments must be received by May 16, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Requests for additional information should be directed to Amira Boland, Office of Management and Budget, 725 17th St. NW, Washington, DC 20006, 202-395-0380, or via email to
Whether seeking a loan, Social Security benefits, veterans benefits, or other services provided by the Federal Government, individuals and businesses expect Government customer services to be efficient and intuitive, just like services from leading private-sector organizations. Yet on Forrester's 2020 CX Index, the Federal sector's average score is 10.7 points behind the private sector average and lower than any other industry or sector studied. Nearly half of the bottom 5% of the U.S. CX Index Rankings are Federal agencies.
The President's Management Agenda (
For these projects, OMB designers and staff, such as those on the Federal Customer Experience team or at the U.S. Digital Service, may lead and coordinate information collections in service of cross-agency life experience improvement efforts. These data collection efforts may be either qualitative or quantitative in nature or may consist of mixed methods. Additionally, data may be collected via a variety of means, including but not limited to electronic or social media, direct or indirect observation (
The data collected will be evaluated and used to improve the delivery of Federal services and programs and, in particular, those experiences that are more Government-wide in nature. It will include the creation of customer personas, customer journey maps (for definitions of—and more information
As a general matter, these information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
OMB will only submit collections if they meet the following criteria:
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are non-controversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information (PII) is collected only to the extent necessary and is not retained;
• Information gathered is intended to be used for general service improvement and program management purposes;
• Upon agreement between OMB and the agency all or a subset of information may be released as part of A-11, Section 280 requirements only on
• Summaries of customer research and user testing activities may be included in public-facing customer journey maps or summaries; and
• Additional release of data must be coordinated with OMB.
These responses will inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on services will be unavailable.
9:00 a.m. to 2:00 p.m. (PDT), Wednesday, April 27, 2022.
The University of Arizona President's Office Conference Room, Old Main, Room 200, 1200 East University Boulevard, Tucson, Arizona, 85721.
This meeting will be open to the public. Members of the public who would like to attend this meeting may request remote access by contacting Elizabeth Monroe at
(1) Call to Order and Chair's Remarks; (2) University of Arizona's Remarks and Welcome; (3) Council on Environmental Quality's Remarks; (4) Executive Director's Remarks; (5) Consent Agenda Approval (Minutes of the October 28, 2021, Board of Trustees Meeting; Board Reports submitted for Data and Information Technology, Education Programs, Finance and Internal Controls, John S. McCain III National Center for Environmental Conflict Resolution, and Udall Center for Studies in Public Policy-Native Nations Institute for Leadership, Management, and Policy-The University of Arizona Libraries, Special Collections; resolution regarding Amendment of Operating Procedures of the Board of Trustees of the Morris K. Udall and Stewart L. Udall Foundation; and Board takes notice of any new and updated personnel policies and internal control methodologies); (6) Update on Udall Foundation-University of Arizona Collaborations; (7) Grants, Gifts, and Donations Update; (8) Office Relocation of Udall Foundation Tucson, Arizona Headquarters; (9) Recognition of Former Trustee and Former Executive Director; (10) Recognition of Long-Serving Board Officers; and (11) Trustee Ethics Training.
David P. Brown, Executive Director, 130 South Scott Avenue, Tucson, AZ 85701, (520) 901-8560.
Dated: April 12, 2022.
The National Science Board's Committee on Strategy's Subcommittee on Technology, Innovation and Partnerships hereby gives notice of the scheduling of a teleconference for the transaction of National Science Board business pursuant to the NSF Act and the Government in the Sunshine Act.
Monday, April 18, 2022, from 11:15 a.m.-12:00 p.m. EDT.
This meeting will be held by teleconference through the National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314.
Closed.
The agenda is: Subcommittee Chair's Opening Remarks; Approval of Minutes from February 11, 2022; and Discussion of Technology, Innovation, and
Point of contact for this meeting is: Chris Blair,
The National Science Board hereby gives notice of the scheduling of a teleconference for the transaction of National Science Board business pursuant to the NSF Act and the Government in the Sunshine Act.
Monday, April 18, 2022, from 1:00 p.m.-2:00 p.m. EDT.
This meeting will be held by teleconference through the National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314.
Closed.
The agenda is: NSB Chair's Opening Remarks; Action Item—McMurdo Pier Project; Presentation and Discussion; and Vote.
Point of contact for this meeting is: Chris Blair,
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act” or “Act”),
This proposed rule change would amend the definitions of “weekly option” and “short term option” in Article I of OCC's By-Laws. The proposed rule change would amend these definitions to align with the rules of participant options exchanges by clarifying that weekly options and short term options may expire and/or be opened in accordance with the rules of the exchange on which they are traded. The proposed changes to OCC's By-Laws are included in Exhibit 5 of File No. SR-OCC-2022-006. Material proposed to be added to OCC's By-Laws as currently in effect is underlined and material proposed to be deleted is marked in strikethrough text. All capitalized terms not defined herein have the same meaning as set forth in the OCC By-Laws and Rules.
In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
The purpose of this proposed rule change is to more clearly align certain existing definitions in OCC's By-Laws for options products with Exchange Rules related to those products. OCC currently facilitates the clearance and settlement of weekly options and short term options on behalf of participant options exchanges. The term “weekly option” is currently defined in Article I of OCC's By-Laws as “an option of a series of stock options or index options that expires on any Friday of a calendar month other than the third Friday of such calendar month.”
Currently, participant options exchanges list and trade weekly options that expire on other days of the week, such as Monday or Wednesday,
Accordingly, OCC proposes to amend the definition of a weekly option to provide that a weekly option means “an option of a series of stock options or index options that has a weekly tenor and that expires on any day as provided in Exchange Rules. The term `weekly index option' means a weekly option on an index.” Similarly, OCC proposes to amend the definition of a short term option to provide that a short term option means “an option of a series of options that pursuant to Exchange Rules expires one week after it is opened for trading. Short term option series may be opened in any option class.” In both cases, OCC proposes to remove language specifying particular days of the week on which weekly options or short term options may expire and/or be opened and to instead reference the relevant options Exchange Rules for information on expirations and any opening conditions. OCC believes that the proposed amendments would promote clarity in OCC's By-Laws regarding when weekly options and short term options may be opened and/or expire and, as noted, promote greater consistency with options Exchange Rules.
Section 17A(b)(3)(F)
Section 17A(b)(3)(I) of the Act
Written comments on the proposed rule change were not and are not intended to be solicited with respect to the proposed rule change and none have been received.
Pursuant to Section 19(b)(3)(A)(ii)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Vanessa Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-OCC-2022-006 and should be submitted on or before May 5, 2022.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange is filing a proposal to amend the fee schedule (the “Fee Schedule”) applicable to MIAX Pearl Equities, an equities trading facility of the Exchange.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to amend the Exchange's Fee Schedule to (i) adopt a new Liquidity Code and associated rebate to the Liquidity Indicator Codes and Associated Fees table; (ii) adopt new Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers to improve market quality on the Exchange by offering an enhanced rebate for executions that Add Liquidity at the Midpoint of the PBBO
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues, to which market participants may direct their order flow. Based on publicly available information, no single registered equities exchange currently has more than approximately 17% of the total market share of executed volume of equities trading, and the Exchange currently represents approximately 1% of the overall market share.
Additionally, in response to the competitive environment, the Exchange also offers tiered pricing, which provides Equity Members
The Exchange is now proposing to introduce a new tiered pricing structure applicable to rebates provided for executions that add liquidity to the Exchange at the Midpoint of the PBBO using a Midpoint Peg Order (such orders, “Midpoint Peg Add Orders executed at the Midpoint”). Specifically, the Exchange proposes to adopt new volume-based tiers, referred to by the Exchange as, “Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers,” in which the Exchange will provide an enhanced rebate for executions of Midpoint Peg Add Orders executed at the Midpoint for Members that meet certain volume thresholds on the Exchange.
The Exchange currently provides a standard rebate of $0.0021 per share for executions of Added Non-Displayed Liquidity.
The purpose of the proposed enhanced rebate for executions of Midpoint Peg Add Orders executed at the Midpoint is to encourage Members that provide liquidity through non-displayed orders to strive for a higher Midpoint ADAV on the Exchange in order to qualify for the enhanced rebates for executions of Midpoint Peg Add Orders executed at the Midpoint, and as such, encourages Members to maintain or increase their order flow (particularly in the form of liquidity adding non-displayed Midpoint Peg Orders that execute at the Midpoint) to the Exchange, thereby contributing to a deeper and more liquid market to the benefit of all market participants.
The Exchange's pricing structure is generally designed to encourage the provision of liquidity, thus the proposed enhanced rebates for executions of Midpoint Peg Add Orders executed at the Midpoint is designed to encourage Members that use non-displayed orders to provide additional non-displayed liquidity through the use of orders that are designed to execute at the midpoint of the PBBO. The Exchange believes that providing enhanced rebates for executions of Midpoint Peg Add Orders executed at the Midpoint is a reasonable means to incentivize Members to provide additional liquidity at the midpoint of the PBBO, which in turn would increase the attractiveness of the Exchange as a destination venue, as Members seeking price improvement would be more motivated to direct their orders to the Exchange because they would have a heightened expectation of the availability of liquidity at the midpoint of the PBBO. The Exchange notes that the proposed enhanced rebate is comparable to, and competitive with, the rebate provided by at least one other exchange for executions of non-displayed orders in securities priced at or above $1.00 per share that are pegged to the midpoint.
In conjunction with the Exchange's proposal to (i) provide an enhanced, incremental rebate of $0.0004 per share for Midpoint Peg Orders that Add Liquidity and meet the Tier 1 requirements of the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers; and (ii) provide an enhanced, incremental rebate of $0.0006 per share for Midpoint Peg Orders that Add Liquidity and meet the Tier 2 requirements of the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers, the Exchange proposes to update the Liquidity Indicator Code and Associated Fees Table as follows:
• Add new liquidity indicator code Ap, Adds Liquidity and Executes at the Midpoint, Non-Displayed Midpoint Peg Order (All Tapes). The Liquidity Indicator Code and Associated Fees table would specify that orders that yield liquidity indicator code Ap would receive a rebate of $0.0021 per share in securities priced at or above $1.00 and 0.05% of the transaction's dollar value in securities priced below $1.00.
The Exchange also proposes to add the above liquidity indicator code to the Standard Rates table. Specifically, liquidity indicator code Ap would be added to the “Added Liquidity Non-Displayed Order” column.
Currently, the Exchange charges a standard fee of $0.0029 for all executions of Removed Volume.
The Exchange now proposes to increase the fees charged for Removed Volume in Tier 1 and Tier 2 to $0.0028 and $0.0027 respectively, an increase of $0.0001 and $0.00005 respectively. The purpose of increasing the fee for executions of Removed Volume is for business and competitive reasons. The requirements necessary to qualify for Tier 1 and Tier 2 will remain unchanged under this proposal. The Exchange notes that despite the proposed increase the proposed fee changes for Removed Volume Tiers remain comparable to, and competitive with, the fees charged for executions of liquidity-removing orders charged by other exchanges under similar volume-based tiers.
The Exchange proposes to implement the changes to the Fee Schedule pursuant to this proposal on April 1, 2022.
The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act
The Exchange operates in a highly fragmented and competitive market in which market participants can readily direct their order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of sixteen registered equities exchanges, and there are a number of alternative trading systems and other off-exchange venues, to which market participants may direct their order flow. Based on publicly available information, no single registered equities exchange currently has more than approximately 17% of the total market share of executed volume of equities trading.
The Exchange believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products, in response to new or different pricing structures being introduced into the market. Accordingly, competitive forces constrain the Exchange's transaction fees and rebates, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. The Exchange believes the proposal reflects a reasonable and competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance liquidity and market quality to the benefit of all Members and market participants.
The Exchange believes that the proposed Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers are reasonable because they would provide Members with an additional incentive to achieve certain volume thresholds on the Exchange. The Exchange notes that volume-based incentives and discounts have been widely adopted by exchanges,
Additionally, the Exchange believes that the proposed enhanced, incremental rebate for executions of Midpoint Peg Add Orders executed at the Midpoint under Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 1 (
The Exchange believes the proposed new criteria is equitable and non-discriminatory because all Members will continue to be eligible to qualify for Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers 1 and 2 and have the opportunity to receive the corresponding enhanced rebate if such criteria is achieved.
The Exchange further believes that the proposed new criteria for Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 1, and Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 2, are reasonable, in that the proposed new criteria for Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 2 is incrementally more difficult to achieve than that of Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 1, thus, Midpoint Peg Order Adding Liquidity at Midpoint Volume Tier 2 appropriately offers a higher rebate commensurate with the corresponding higher Midpoint ADAV requirement. Therefore, the Exchange believes the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers, as proposed, are consistent with an equitable allocation of fees and rebates, as the more stringent criteria correlates with the corresponding tier's higher rebate.
The Exchange further believes that the enhanced rebates provided under the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers, as proposed, (
The Exchange believes that providing an enhanced rebate for Midpoint Peg Add Orders executed at the Midpoint that is higher than the standard rebate for executions of other non-displayed orders in securities priced at or above $1.00 per share that add liquidity to the Exchange is reasonable, as the Exchange believes this would encourage Members that provide liquidity through non-displayed orders to do so, to a greater extent, through orders designed to execute at the midpoint of the PBBO. Because such orders provide price improvement to the benefit of other market participants, the Exchange believes it is reasonable and consistent with an equitable allocation of fees to provide an enhanced rebate to encourage their use, while still maintaining an overall pricing structure that places greater emphasis on the value of liquidity in advancing transparency and price discovery.
The Exchange believes its proposal to add new liquidity indicator code “Ap” to the Liquidity Indicator Codes and Associated Fees table and to add liquidity indicator code “Ap” to the “Adding Liquidity Non-Displayed Order” column, is reasonable and equitable because it will apply equally to all Members of the Exchange that submit Midpoint Peg Orders. This liquidity indicator code would be returned on the real-time trade reports sent to the Member that submitted the order. The use of liquidity indicator codes is not unique to the Exchange as liquidity indicator codes are currently utilized and described in the fee schedules of other equity exchanges.
The Exchange believes that the proposed fee change to the Remove Volume Tiers is reasonable, consistent with an equitable allocation of fees, and not unfairly discriminatory to provide a discounted fee for executions of Remove Volume for Members that satisfy the requirements associated with Tier 1 and Tier 2. The Exchange believes the proposed fee changes are reasonable because the magnitude of the increase is not unreasonably high and is also reasonably related to the enhanced market quality it is designed to achieve.
The Exchange believes the proposed increased fee for executions of Removed Volume for a qualifying Member (
The Exchange further believes the proposed Remove Volume Tier fees are fair, equitable and not unfairly discriminatory because they are available to all Members. Further, the proposed Remove Volume Tier fee changes are comparable to the fees charged for executions of liquidity-removing orders charged by Cboe EDGX and MEMX under similar volume based tiers.
For the reasons discussed above, the Exchange submits that the proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act in that it provides for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities and is not designed to unfairly discriminate between customers, issuers, brokers, or dealers. As described more fully below in the Exchange's statement regarding the burden on competition, the Exchange believes that its transaction pricing is subject to significant competitive forces, and that the proposed fees and rebates described herein are appropriate to address such forces.
The Exchange does not believe that the proposed change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposed change would encourage Members to maintain or increase their order flow to the Exchange, thereby contributing to a deeper and more liquid market to the benefit of all market participants and enhancing the attractiveness of the Exchange as a trading venue. As a
The Exchange believes that the proposal would incentivize Members to maintain or increase their order flow, thereby contributing to a deeper and more liquid market to the benefit of all market participants and enhance the attractiveness of the Exchange as a trading venue, and to provide price improvement through the use of orders that are designed to execute at the midpoint of the PBBO, which the Exchange believes, in turn, would continue to encourage participants to direct order flow to the Exchange. Greater liquidity benefits all Members by providing more trading opportunities and encourages Members to send orders to the Exchange, thereby contributing to robust levels of liquidity, which benefits all market participants. The opportunity to qualify for enhanced, incremental rebates under the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers would be available to all Members that meet the associated requirements in any month. The Exchange believes the requirements in the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers are reasonably related to the enhanced market quality that the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers are designed to promote. Similarly, the proposed enhanced rebate for executions of Midpoint Peg Orders would apply equally to all Members. As such, the Exchange believes the proposed changes would not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The opportunity to qualify for the Remove Volume Tier, and thus receive the proposed lower fee for executions of Removed Volume, would be available to all Members that meet the associated volume requirement in any month. The Exchange believes that meeting the volume requirement of the Remove Volume Tier is attainable for market participants, as the Exchange believes the thresholds are relatively low and reasonably related to the enhanced liquidity and market quality that the Remove Volume Tier is designed to promote. As such, the Exchange believes the proposed changes would not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes its proposal will benefit competition, and the Exchange notes that it operates in a highly competitive market. Members have numerous alternative venues they may participate on and direct their order flow to, including fifteen other equities exchanges and numerous alternative trading systems and other off-exchange venues. As noted above, no single registered equities exchange currently has more than 17% of the total market share of executed volume of equities trading.
As described above, the proposal is designed to enhance market quality on the Exchange and to encourage more Members to maintain or increase their order flow, thereby contributing to a deeper and more liquid market to the benefit of all market participants and enhancing the attractiveness of the Exchange as a trading venue, and to encourage Members to provide price improvement through the use of orders that are designed to execute at the midpoint of the PBBO. In turn, the Exchange believes that the proposed enhanced rebates for executions of Midpoint Peg Add Orders executed at the Midpoint that qualify for an enhanced rebate under the Midpoint Peg Order Adding Liquidity at Midpoint Volume Tiers would encourage the submission of additional order flow to the Exchange, particularly in the form of Midpoint Peg Add Orders executed at the Midpoint, thereby promoting market depth, enhanced execution opportunities, price improvement, and price discovery to the benefit of all Members and market participants. The opportunity to qualify for discounted fees for Removed Volume under the Exchange's Remove Volume Tiers continues to be available to all Members that meet the associated volume criteria. The Exchange believes the discounted fees provided under the Remove Volume Tiers are reasonably related to the enhanced market quality that such tiers are designed to promote.
As described above the Exchange's proposal is a competitive proposal designed to encourage additional order flow to the Exchange through a combination of volume based incentives and discounts, which have been widely adopted by exchanges, and standard pricing that is comparable to, and/or competitive with, pricing for similar executions in place at other exchanges.
Accordingly, the Exchange believes its proposal would not burden, but rather promote, intermarket competition by enabling it to better compete with other exchanges that offer similar standard pricing for Added Midpoint Volume and Removed Volume, as well as similar pricing incentives and discounts to market participants that achieves certain volume criteria and thresholds.
Additionally, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Vanessa Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend Rule 2360 (Options) to increase the position and exercise limits for conventional options on certain exchange-traded funds (“ETFs”).
The text of the proposed rule change is available on FINRA's website at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B,
FINRA Rule 2360(b)(3)(A) imposes a position limit on the number of equity options contracts in each class on the same side of the market that can be held or written by a member, a person associated with a member, or a customer or a group of customers acting in concert. Position limits are intended to prevent the establishment of options positions that can be used to manipulate or disrupt the underlying market or might create incentives to manipulate or disrupt the underlying market so as to benefit the options position. In addition, position limits serve to reduce the potential for disruption of the options market itself, especially in illiquid options classes.
Rule 2360(b)(3)(A)(i) does not independently establish a position limit for standardized equity options. Rather, the position limit established by the rules of an options exchange for a particular equity option is the applicable position limit for purposes of Rule 2360.
The proposed rule change would add to the table provided in Rule 2360(b)(3)(A)(iii)a.6. as follows, with the effect of each ETF being increased from the current position limit of 250,000 contracts:
• The position limit for options on LQD would be increased to 500,000 contracts.
• The position limit for options on GDX would be increased to 500,000 contracts.
FINRA notes the proposed position limits for options on LQD and GDX are consistent with current position limits for options on the iShares MSCI Brazil Capped ETF (“EWZ”), iShares 20+Year Treasury Bond Fund ETF (“TLT”), iShares MSCI Japan ETF (“EWJ”), and iShares iBoxx High Yield Corporate Bond Fund (“HYG”).
In support of the proposed rule change, as noted by Cboe, position limits are determined by the option exchange's rules.
In supporting the proposed position limit increases, FINRA considered the liquidity of the Underlying ETFs, the value of the underlying securities or index components and relevant marketplace, the share and option volume for the Underlying ETFs, and, where applicable, the availability or comparison of economically equivalent products to options on the Underlying ETFs.
FINRA notes that Cboe has compiled the following trading statistics regarding shares of and options on the Underlying ETFs and the values of the Underlying ETFs and their component securities or index components, as applicable:
FINRA
FINRA echoes the Cboe's belief that, overall, the liquidity in the shares of the Underlying ETFs and in their overlying options, the larger market capitalizations for each of the Underlying ETFs, and the overall market landscape relevant to each of the Underlying ETFs support the proposal to increase the position limits for each option class. Given the robust liquidity in and value of the Underlying ETFs and their component securities, FINRA does not anticipate that the proposed increase in position limits would create significant price movements as the relevant markets are large enough to adequately absorb potential price movements that may be caused by larger trades.
The following analyses for the Underlying ETFs, which FINRA agrees with in support of the proposed rule change, as well as the statistics presented in support thereof, were presented by Cboe in their rule filing, which was approved by the Commission.
LQD tracks the performance of the Markit iBoxx USD Liquid Investment Grade (“IBOXIG”) Index, which is an index designed as a subset of the broader U.S. dollar-denominated corporate bond market which can be used as a basis for tradable products, such as ETFs, and is comprised of over 8,000 bonds.
GDX seeks to replicate as closely as possible the price and yield performance of the NYSE Arca Gold Miners (“GDMNTR”) Index, which is intended to track the overall performance of companies involved in the gold mining industry.
ADV in GDX shares did not increase from 2019 to 2020. GDX options also experienced an ADV of approximately 287,800 option contracts in the first quarter of 2021. The ADV in GDX shares (39.4 million) and options on GDX (166,000 option contracts) are greater than the ADV in EWZ (29.2 million shares and 139,300 option contracts), TLT (11.5 million shares and 111,800 option contracts), EWJ (8.2 million shares and 15,500 option contracts) and HYG (30.5 million shares and 261,600 option contracts), each of which is currently subject to a position limit of 500,000 option contracts—the proposed limit for options on GDX. GDX also experiences a comparable, or higher, market capitalization (approximately $16.2 billion) than EWZ, TLT and EWJ. Cboe noted that many of the Brazil-based gold mining constituents included in GDX are also included in EWZ, which tracks the investment results of an index composed of Brazilian equities, and that there have been no identified issues with the continued listing and trading of EWZ options or any adverse market impact on EWZ in connection with the current 500,000 position limit in place for EWZ options. Additionally, like that of LDQ above, there is currently no index option analogue for the GDX ETF on the GDMNTR Index approved for options trading, however, the components of the GDMNTR Index, which can be used to create the GDX ETF, currently must each have a market capitalization greater than $750 million, an ADV of at least 50,000 shares, and an average daily value traded of at least $1 million in order to be eligible for inclusion in the GDMNTR Index. FINRA echoes Cboe's belief that the GDMNTR Index component inclusion requirements, as well as GDX's share and option volume and total market capitalization, indicate that the GDX market is sufficiently large and liquid enough to absorb price
FINRA believes that increasing the position limits for conventional options subject to the proposed rule change would lead to a more liquid and competitive market for these options, which will benefit customers interested in these products.
FINRA believes that the creation and redemption process for ETFs subject to this proposed rule change will lessen the potential for manipulative activity with options on the Underlying ETFs. Regarding ETFs, when an ETF provider wants to create more shares, it looks to an Authorized Participant (generally a market maker or other large financial institution) to acquire the securities the ETF is to hold. For instance, when an ETF is designed to track the performance of an index, the Authorized Participant can purchase all the constituent securities in the exact same weight as the index, then deliver those shares to the ETF provider. In exchange, the ETF provider gives the Authorized Participant a block of equally valued ETF shares, on a one-for-one fair value basis. The price is based on the net asset value, not the market value at which the ETF is trading. The creation of new ETF units can be conducted during an entire trading day, and is not subject to position limits. This process works in reverse where the ETF provider seeks to decrease the number of shares that are available to trade. The applicable creation and redemption processes for the Underlying ETFs creates a direct link to the underlying components of the ETF and serves to mitigate potential price impact of the ETF shares that might otherwise result from increased position limits for the options on the Underlying ETFs.
FINRA understands that the ETF creation and redemption process seeks to keep an ETF's share price trading in line with the product's underlying net asset value. Because an ETF trades like a stock, its share price will fluctuate during the trading day, due to simple supply and demand. If demand to buy an ETF is high, for instance, the ETF's share price might rise above the value of its underlying securities. When this happens, the Authorized Participant or issuer believes the ETF may now be overpriced, so it may buy shares of the component securities and then sell ETF shares in the open market. This may drive the ETF's share price back toward the underlying net asset value or indicative index value. Likewise, if the ETF share price starts trading at a discount to the securities it holds or its index components, the Authorized Participant or issuer can buy shares of the ETF and redeem them for the underlying securities or index component instruments. Buying undervalued ETF shares may drive the share price of the ETF back toward fair value. This arbitrage process helps to keep an ETF's share price in line with the value of its underlying portfolio or index components.
FINRA believes that the increased position limits provisions are appropriate in light of the existing surveillance procedures and reporting requirements at FINRA,
In addition, large stock holdings must be disclosed to the Commission by way of Schedules 13D or 13G.
Finally, FINRA believes that the current financial requirements imposed by FINRA and by the Commission adequately address financial responsibility concerns that a member or its customer will maintain an inordinately large unhedged position in any option with a higher position limit. Current margin and risk-based haircut methodologies serve to limit the size of positions maintained by any one account by increasing the margin or capital that a member must maintain for a large position. Under Rule 4210(f)(8)(A), FINRA also may impose a higher margin requirement upon a member when FINRA determines a higher requirement is warranted. In addition, the Commission's net capital rule
FINRA has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so FINRA can implement the proposed rule change immediately.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
In addition, FINRA believes that the structure of the Underlying ETFs, the considerable market capitalization of the funds, underlying component securities and indexed component securities, and the liquidity of the markets for the applicable options and underlying component securities will mitigate concerns regarding potential manipulation of the products or disruption of the underlying markets upon increasing the relevant position limits. As a general principle, increases in market capitalizations, active trading volume, and deep liquidity of securities tend to deter manipulation or disruption. This general principle applies to the recently observed increased levels of market capitalization, trading volume, and liquidity in shares of and options on the Underlying ETFs (as described above). FINRA does not believe that the options
Increased position limits for select actively traded options, such as those proposed herein, are not novel and have been previously approved by the Commission.
FINRA's existing surveillance and reporting safeguards are designed to deter and detect possible manipulative behavior that might arise from changing position and exercise limits.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
FINRA has undertaken an economic impact assessment, as set forth below, to analyze the potential economic impacts, including anticipated costs, benefits, and distributional and competitive effects, transfers of wealth, relative to the current baseline, and the alternatives FINRA considered in assessing how to best meet its regulatory objectives.
FINRA is proposing to amend Rule 2360 to harmonize FINRA's position limits for conventional options with the position limit for standardized options.
Per FINRA Rule 2360(b)(3)(A)(iii) conventional equity options are subject to a basic position limit of 25,000 contracts or higher for conventional option contracts on securities that underlie exchange-traded options qualifying for a higher tier as determined by option exchange rules. The existing position limits for conventional options on LQD and GDX are 250,000 contracts. Cboe has recently increased position limits for options on these ETFs.
As noted above, the proposed rule change would amend Rule 2360 to harmonize FINRA's position limits for conventional options with the position limits for standardized options.
For investors that trade conventional equity options, there is likely to be a natural size for an executed order that minimizes fixed and variable transaction costs, including but not limited to, the bid-ask spread, price impact, and transaction fees. If the existing position limits for conventional equity options on select ETFs constrains the order size such that fixed and variable transaction costs are higher than optimal, then investors may benefit if the new position limit is no less than the natural size. In such an event, the cost to hedge an ETF would decline, thereby making it less costly to manage downside risk.
In addition, if the existing position limits serve as a constraint, then an increase in the position limits for conventional options on select ETFs could permit investors to more easily find a counterparty. If the number of counterparties increases, then the cost of hedging should decline as the half-spread narrows, thereby making it less expensive to manage downside risk.
The extent of the constraint imposed by the current limit on conventional options is related to the ability of an investor to achieve similar economic exposure through other means. If there are other securities, such as an option on a closely related index, that exist and provide similar economic exposure less expensively, then the value of lessening the position limits on conventional options on ETFs is lower.
Members may rely on information and data feeds from the Options Clearing Corporation to assist in their monitoring position limits. Because position limits on the standardized and conventional side have traditionally been consistent, members have relied on this feed for both standardized and conventional options. If the position limits between standardized and conventional options are conformed, then the cost from monitoring position limits should decline for member firms. Having the same position limits on standardized and conventional options, reduces the potential for excess loss that may be incurred when different limits are applied to the standardized versus conventional options on the same ETF. The economic loss may arise from building and maintaining trading and compliance systems to support the different regimes. Furthermore, the harmonization of position limits on standardized and conventional options eliminates the potential risk and cost arising from regulatory arbitrage.
The proposed rule change may impose limited operational cost on member firms that trade conventional options on ETFs, as these same firms would need to revise position limits that are used in trading systems. However, the proposed rule change should not impose additional costs, because it is difficult to disrupt or manipulate the underlying market, create an incentive to disrupt or manipulate the underlying market for the purpose of profiting from the options position, or disrupt or manipulate the options market for conventional options on ETFs affected by this proposed rule. ETFs that underlie options subject to the proposed rule change are highly liquid and are based on a broad set of highly liquid securities, which makes the market difficult to manipulate or disrupt. In fact, options on certain broad-based security indexes have no position limits. Furthermore, the applicable creation and redemption process for these ETFs reduces the potential for disruptive or manipulative activity. New ETF units may be created at any time during the trading day and are not subject to position limits. Consequently, there is a direct link between the underlying components of the ETF, which keeps ETF's share prices trading in line with the ETF's underlying net asset value.
No further alternatives are under consideration.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of application for an order (“Order”) under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d-1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
Applicants request an Order to permit certain business development companies (“BDCs”) and certain closed-end management investment companies to co-invest in portfolio companies with each other and with affiliated investment entities.
Stellus Capital Investment Corporation (the “Company”); Stellus Private Credit BDC (the “SPBDC”); Stellus Credit Master Fund I, LLC, Stellus Credit VCOC Fund I, LLC, Stellus Credit Master Fund II, LLC, Stellus Credit VCOC Fund II, LLC, Stellus Credit VCOC Fund III, LLC, Stellus Credit Master Fund III, LLC, Stellus Senior Secured Loan Fund, LLC, Stellus Credit Funds Investor A, LLC, and Stellus Credit Funds Investor B, LP (collectively, “Existing Affiliated Funds”); Stellus Capital SBIC LP, Stellus Capital SBIC GP, LLC, SCIC-Consolidated Blocker 1, Inc., SCIC-CC Blocker 1, Inc., SCIC-ERC Blocker 1, Inc., SCIC-SKP Blocker 1, Inc., SCIC-APE Blocker 1, Inc., SCIC-HUF Blocker 1, Inc., SCIC-Hollander Blocker 1, Inc., Stellus Capital SBIC II, LP, SCIC-Invincible Blocker 1, Inc., SCIC-FBO Blocker 1, Inc., SCIC-ICD Blocker 1, Inc., SCIC-Venbrook Blocker 1, Inc., PBDC Consolidated Blocker, LLC
The application was filed on August 12, 2021 and amended on February 18, 2022, March 21, 2022, and April 6, 2022.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by emailing the Commission's Secretary at
The Commission:
Taylor Evenson, Senior Counsel, at (202) 551-6719, or Marc Mehrespand, Branch Chief, at (202) 551-6825 (Chief Counsel's Office, Division of Investment Management).
For Applicants' representations, legal analysis, and conditions, please refer to Applicants' third amended and restated application, dated April 6, 2022, which may be obtained via the Commission's website by searching for the file number at the top of this document, or for an Applicant using the Company name search field, on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
1. The Applicants request an Order of the Commission under sections 17(d) and 57(i) of the Act and rule 17d-1 under the Act to permit, subject to the terms and conditions set forth in the application (the “Conditions”), one or more Regulated Funds
2. The Order sought by the application would supersede the Prior Order (as defined below) issued by the Commission to Stellus Capital Investment Corporation, et al. on December 4, 2018,
3. The Company is a closed-end management investment company incorporated in Maryland that has elected to be regulated as a BDC under the Act.
4. SPBDC is a closed-end management investment company organized as a Delaware statutory trust that has elected to be regulated as a BDC under the Act. SPBDC's Board currently consists of five members, of which three members are Independent Directors.
5. SPBDC Advisor, a Delaware limited liability company that is registered under the Advisers Act, serves as the investment adviser to SPBDC pursuant to an investment advisory agreement.
6. SCM, a Delaware limited liability company that is registered under the Advisers Act, serves as the investment adviser to the Company pursuant to an investment advisory agreement. SCM
7. Applicants represent that each Existing Affiliated Fund is a separate and distinct legal entity and each would be an investment company but for section 3(c)(1), 3(c)(5)(C) or 3(c)(7) of the Act.
8. Applicants state that a Regulated Fund may, from time to time, form one or more Wholly-Owned Investment Subs.
9. Applicants represent that the Advisors have established processes for allocating initial investment opportunities, opportunities for subsequent investments in an issuer and dispositions of securities holdings reasonably designed to treat all clients fairly and equitably. Further, Applicants represent that these processes will be extended and modified in a manner reasonably designed to ensure that the additional transactions permitted under the Order will both (i) be fair and equitable to the Regulated Funds and the Affiliated Funds and (ii) comply with the Conditions.
10. If the requested Order is granted, the Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that when such opportunities arise, the Advisers to the relevant Regulated Funds are promptly notified and receive the same information about the opportunity as any other Adviser considering the opportunity for its clients. In particular, consistent with Condition 1, if a Potential Co-Investment Transaction falls within the then-current Objectives and Strategies
11. The Adviser to each applicable Regulated Fund will then make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund's then-current circumstances. If the Adviser to a Regulated Fund deems the Regulated Fund's participation in any Potential Co-Investment Transaction to be appropriate, it will formulate a recommendation regarding the proposed order amount for the Regulated Fund.
12. Applicants state that, for each Regulated Fund and Affiliated Fund whose Adviser recommends participating in a Potential Co-Investment Transaction, such Adviser's investment committee will approve an investment amount to be allocated to each Regulated Fund and/or Affiliated Fund participating in the Potential Co-Investment Transaction. Applicants state further that, each proposed order amount may be reviewed and adjusted, in accordance with the applicable Adviser's written allocation policies and procedures, by the applicable Adviser's investment committee.
13. If the aggregate Internal Orders for a Potential Co-Investment Transaction do not exceed the size of the investment opportunity immediately prior to the submission of the orders to the underwriter, broker, dealer or issuer, as applicable (the “External Submission”), then each Internal Order will be fulfilled as placed. If, on the other hand, the aggregate Internal Orders for a Potential Co-Investment Transaction exceed the size of the investment opportunity immediately prior to the External Submission, then the allocation of the opportunity will be made pro rata on the basis of the size of the Internal Orders.
14. Applicants state that from time to time the Regulated Funds and Affiliated Funds may have opportunities to make Follow-On Investments
15. Applicants propose that Follow-On Investments would be divided into two categories depending on whether the prior investment was a Co-Investment Transaction or a Pre-Boarding Investment.
16. A Regulated Fund would be permitted to invest in Standard Review Follow-Ons either with the approval of the Required Majority under Condition 8(c) or without Board approval under Condition 8(b) if it is (i) a Pro Rata Follow-On Investment
17. Applicants propose that Dispositions
18. A Regulated Fund may participate in a Standard Review Disposition either with the approval of the Required Majority under Condition 6(d) or without Board approval under Condition 6(c) if (i) the Disposition is a Pro Rata Disposition
19. Applicants represent that under the terms and Conditions of the application, all Regulated Funds and Affiliated Funds participating in a Co-Investment Transaction will invest at the same time, for the same price and with the same terms, conditions, class, registration rights and any other rights, so that none of them receives terms more favorable than any other. However, the settlement date for an Affiliated Fund in a Co-Investment Transaction may occur up to ten business days after the settlement date for the Regulated Fund, and vice versa. Nevertheless, in all cases, (i) the date on which the commitment of the Affiliated Funds and Regulated Funds is made will be the same even where the settlement date is not and (ii) the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other.
20. Under Condition 15, if an Adviser, its principals, or any person controlling, controlled by, or under common control with the Adviser or its principals, and the Affiliated Funds (collectively, the “Holders”) own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated Fund (the “Shares”), then the Holders will vote such Shares as directed by an independent third party when voting on matters specified in the Condition.
1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit participation by a registered investment company and an affiliated person in any “joint enterprise or other joint arrangement or profit-sharing plan,” as defined in the rule, without prior approval by the Commission by order upon application. Section 17(d) of the Act and rule 17d-1 under the Act are applicable to Regulated Funds that are registered closed-end investment companies.
2. Similarly, with regard to BDCs, section 57(a)(4) of the Act generally prohibits certain persons specified in section 57(b) from participating in joint transactions with the BDC or a company controlled by the BDC in contravention of rules as prescribed by the Commission. Section 57(i) of the Act provides that, until the Commission prescribes rules under section 57(a)(4), the Commission's rules under section 17(d) of the Act applicable to registered closed-end investment companies will be deemed to apply to transactions subject to section 57(a)(4). Because the Commission has not adopted any rules under section 57(a)(4), rule 17d-1 also applies to joint transactions with Regulated Funds that are BDCs.
3. Co-Investment Transactions are prohibited by either or both of rule 17d-1 and section 57(a)(4) without a prior exemptive order of the Commission to the extent that the Affiliated Funds and the Regulated Funds participating in such transactions fall within the category of persons described by rule 17d-1 and/or section 57(b), as applicable, vis-à-vis each participating Regulated Fund. Each of the participating Regulated Funds and Affiliated Funds may be deemed to be affiliated persons vis-à-vis a Regulated Fund within the meaning of section 2(a)(3) by reason of common control because (i) SCM manages and may be deemed to control the Existing Affiliated Funds, (ii) an Adviser will manage and may be deemed to control any Future Affiliated Fund, (iii) SCM manages and may be deemed to control the Company pursuant to its investment advisory agreement, (iv) SPBDC Advisor manages and may be deemed to control SPBDC pursuant to its investment advisory agreement (v) any future Regulated Fund will be managed by and may be deemed to be controlled by an Adviser, (vi) each BDC Downstream Fund will be deemed to be controlled by its BDC parent and/or its BDC parent's investment adviser and (vii) the Advisers are under common control. Thus, each of the Affiliated Funds could be deemed to be a person related to the Regulated Funds that are BDCs, including the Company and SPBDC and any BDC Downstream Fund, in a manner described by section 57(b) and related to Future Regulated Funds that are registered investment companies in a manner described by rule 17d-1; and therefore the prohibitions of rule 17d-1 and section 57(a)(4) would apply respectively to prohibit the Affiliated Funds from participating in Co-Investment Transactions with the Regulated Funds. Each Regulated Fund would also be related to each other Regulated Fund in a manner described by section 57(b) or rule 17d-1, as applicable, and thus prohibited from participating in Co-Investment Transactions with each other. Further, because the Wholly-Owned Investment Subs are controlled by the Regulated Funds, the Wholly-Owned Investment Subs are subject to section 57(a)(4) (or section 17(d) in the case of Wholly-Owned Investment Subs controlled by Regulated Funds that are registered under the Act), and thus also subject to the provisions of rule 17d-1, and therefore would be prohibited from participating in Co-Investment Transactions. In addition, because the Stellus Proprietary Accounts are or will be directly or indirectly controlled by an Adviser or its affiliates and, therefore, may be under common control with the Company, SPBDC, any future Advisers, and any Future Regulated Funds, the Stellus Proprietary Accounts could be deemed to be persons related to the Regulated Funds (or a company controlled by the Regulated Funds) in a manner described by section 57(b) and also prohibited from participating in the Co-Investment Program.
4. In passing upon applications under rule 17d-1, the Commission considers whether the company's participation in the joint transaction is consistent with the provisions, policies, and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.
5. Applicants state that in the absence of the requested relief, in many circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment opportunities. Applicants state that, as required by rule 17d-1(b), the Conditions ensure that the terms on which Co-Investment Transactions may be made will be consistent with the participation of the Regulated Funds being on a basis that it is neither different from nor less advantageous than other participants, thus protecting the equity holders of any participant from being disadvantaged. Applicants further state that the Conditions ensure that all Co-Investment Transactions are reasonable and fair to the Regulated Funds and their shareholders and do not involve overreaching by any person concerned, including the Advisers. Applicants state that the Regulated Funds' participation in the Co-Investment Transactions in accordance with the Conditions will be consistent
Applicants agree that the Order will be subject to the following Conditions:
1.
(a) The Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that each Adviser is promptly notified of all Potential Co-Investment Transactions that fall within the then-current Objectives and Strategies and Board-Established Criteria of any Regulated Fund the Adviser manages.
(b) When an Adviser to a Regulated Fund is notified of a Potential Co-Investment Transaction under Condition 1(a), the Adviser will make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund's then-current circumstances.
2.
(a) If the Adviser deems a Regulated Fund's participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Fund, it will then determine an appropriate level of investment for the Regulated Fund.
(b) If the aggregate amount recommended by the Advisers to be invested in the Potential Co-Investment Transaction by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity, the investment opportunity will be allocated among them pro rata based on the size of the Internal Orders, as described in section III.A.1.b. of the application. Each Adviser to a participating Regulated Fund will promptly notify and provide the Eligible Directors with information concerning the Affiliated Funds' and Regulated Funds' order sizes to assist the Eligible Directors with their review of the applicable Regulated Fund's investments for compliance with these Conditions.
(c) After making the determinations required in Condition 1(b) above, each Adviser to a participating Regulated Fund will distribute written information concerning the Potential Co-Investment Transaction (including the amount proposed to be invested by each participating Regulated Fund and each participating Affiliated Fund) to the Eligible Directors of its participating Regulated Fund(s) for their consideration. A Regulated Fund will enter into a Co-Investment Transaction with one or more other Regulated Funds or Affiliated Funds only if, prior to the Regulated Fund's participation in the Potential Co-Investment Transaction, a Required Majority concludes that:
(i) The terms of the transaction, including the consideration to be paid, are reasonable and fair to the Regulated Fund and its equity holders and do not involve overreaching in respect of the Regulated Fund or its equity holders on the part of any person concerned;
(ii) the transaction is consistent with:
(A) The interests of the Regulated Fund's equity holders; and
(B) the Regulated Fund's then-current Objectives and Strategies;
(iii) the investment by any other Regulated Fund(s) or Affiliated Fund(s) would not disadvantage the Regulated Fund, and participation by the Regulated Fund would not be on a basis different from, or less advantageous than, that of any other Regulated Fund(s) or Affiliated Fund(s) participating in the transaction; provided that the Required Majority shall not be prohibited from reaching the conclusions required by this Condition 2(c)(iii) if:
(A) The settlement date for another Regulated Fund or an Affiliated Fund in a Co-Investment Transaction is later than the settlement date for the Regulated Fund by no more than ten business days or earlier than the settlement date for the Regulated Fund by no more than ten business days, in either case, so long as: (x) The date on which the commitment of the Affiliated Funds and Regulated Funds is made is the same; and (y) the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other; or
(B) any other Regulated Fund or Affiliated Fund, but not the Regulated Fund itself, gains the right to nominate a director for election to a portfolio company's board of directors, the right to have a board observer or any similar right to participate in the governance or management of the portfolio company so long as: (x) The Eligible Directors will have the right to ratify the selection of such director or board observer, if any; (y) the Adviser agrees to, and does, provide periodic reports to the Regulated Fund's Board with respect to the actions of such director or the information received by such board observer or obtained through the exercise of any similar right to participate in the governance or management of the portfolio company; and (z) any fees or other compensation that any other Regulated Fund or Affiliated Fund or any affiliated person of any other Regulated Fund or Affiliated Fund receives in connection with the right of one or more Regulated Funds or Affiliated Funds to nominate a director or appoint a board observer or otherwise to participate in the governance or management of the portfolio company will be shared proportionately among any participating Affiliated Funds (who may, in turn, share their portion with their affiliated persons) and any participating Regulated Fund(s) in accordance with the amount of each such party's investment; and
(iv) the proposed investment by the Regulated Fund will not involve compensation, remuneration or a direct or indirect
3.
4.
5.
6.
(a)
(i) The Adviser to such Regulated Fund or Affiliated Fund
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition.
(b)
(c)
(i) (A) The participation of each Regulated Fund and Affiliated Fund in such Disposition is proportionate to its then-current holding of the security (or securities) of the issuer that is (or are) the subject of the Disposition;
(ii) each security is a Tradable Security and (A) the Disposition is not to the issuer or any affiliated person of the issuer; and (B) the security is sold for cash in a transaction in which the only term negotiated by or on behalf of the participating Regulated Funds and Affiliated Funds is price.
(d)
7.
(a)
(i) The Adviser to such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds an investment in the issuer of the proposed Disposition at the earliest practical time;
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition; and
(iii) the Advisers will provide to the Board of each Regulated Fund that holds an investment in the issuer all information relating to the existing investments in the issuer of the Regulated Funds and Affiliated Funds, including the terms of such investments and how they were made, that is necessary for the Required Majority to make the findings required by this Condition.
(b)
(i) The Disposition complies with Condition 2(c)(i), (ii), (iii)(A), and (iv); and
(ii) the making and holding of the Pre-Boarding Investments were not prohibited by section 57 or rule 17d-1, as applicable, and records the basis for the finding in the Board minutes.
(c)
(i)
(ii)
(iii)
(iv)
(v)
8.
(a)
(i) The Adviser to each such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed transaction at the earliest practical time; and
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to the proposed participation, including the amount of the proposed investment, by such Regulated Fund.
(b)
(i) (A) The proposed participation of each Regulated Fund and each Affiliated Fund in such investment is proportionate to its outstanding investments in the issuer or the security at issue, as appropriate,
(ii) it is a Non-Negotiated Follow-On Investment.
(c)
(d)
(i) The amount of the opportunity proposed to be made available to any Regulated Fund is not based on the Regulated Funds' and the Affiliated Funds' outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment; and
(ii) the aggregate amount recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity,
(e)
9.
(a)
(i) The Adviser to each such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed transaction at the earliest practical time;
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to the proposed participation, including the amount of the proposed investment, by such Regulated Fund; and
(iii) the Advisers will provide to the Board of each Regulated Fund that holds an investment in the issuer all information relating to the existing investments in the issuer of the Regulated Funds and Affiliated Funds, including the terms of such investments and how they were made, that is necessary for the Required Majority to make the findings required by this Condition.
(b)
(c)
(i)
(ii)
(iii)
(iv)
(d)
(i) The amount of the opportunity proposed to be made available to any Regulated Fund is not based on the Regulated Funds' and the Affiliated Funds' outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment; and
(ii) the aggregate amount recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity,
(e)
10.
(a) Each Adviser to a Regulated Fund will present to the Board of each Regulated Fund, on a quarterly basis, and at such other times as the Board may request, (i) a record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Funds or any of the Affiliated Funds during the preceding quarter that fell within the Regulated Fund's then-current Objectives and Strategies and Board-Established Criteria that were not made available to the Regulated Fund, and an explanation of why such investment opportunities were not made available to the Regulated Fund; (ii) a record of all Follow-On Investments in and Dispositions of investments in any issuer in which the Regulated Fund holds any investments by any Affiliated Fund or other Regulated Fund during the prior quarter; and (iii) all information concerning Potential Co-Investment Transactions and Co-Investment Transactions, including investments made by other Regulated Funds or Affiliated Funds that the Regulated Fund considered but declined to participate in, so that the Independent Directors, may determine whether all Potential Co-Investment Transactions and Co-Investment Transactions during the preceding quarter, including those investments that the Regulated Fund considered but declined to participate in, comply with the Conditions.
(b) All information presented to the Regulated Fund's Board pursuant to this Condition will be kept for the life of the Regulated Fund and at least two years thereafter, and will be subject to examination by the Commission and its staff.
(c) Each Regulated Fund's chief compliance officer, as defined in rule 38a-1(a)(4), will prepare an annual report for its Board each year that evaluates (and documents the basis of that evaluation) the Regulated Fund's compliance with the terms and Conditions of the application and the procedures established to achieve such compliance. In the case of a BDC Downstream Fund that does not have a chief compliance officer, the chief compliance officer of the BDC that controls the BDC Downstream Fund will prepare the report for the relevant Independent Party.
(d) The Independent Directors will consider at least annually whether continued participation in new and existing Co-Investment Transactions is in the Regulated Fund's best interests.
11.
12.
13.
14.
15.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Commission a proposed rule change to make permanent the pilot program related to the market-wide circuit breaker in Rule 11.16. The text of the proposed rule change is provided in Exhibit 5.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
On March 16, 2022, the Commission approved the proposal of the New York Stock Exchange LLC (“NYSE”), to adopt on a permanent basis the pilot program for Market-Wide Circuit Breakers (“MWCB”) in NYSE Rule 7.12.
The MWCB rules, which for the Exchange are contained in Exchange Rule 11.16, provide an important, automatic mechanism that is invoked to promote stability and investor confidence during periods of significant stress when cash equities securities experience extreme market-wide declines. The MWCB rules are designed to slow the effects of extreme price declines through coordinated trading halts across both cash equity and equity options securities markets.
The cash equities rules governing MWCBs were first adopted in 1988 and, in 2012, all U.S. cash equity exchanges and FINRA amended their cash equities uniform rules on a pilot basis (the “Pilot Rules,”
The Commission approved the Pilot Rules, the term of which was to coincide with the pilot period for the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS (the “LULD Plan”),
Beginning in February 2020, at the outset of the COVID-19 pandemic, the markets experienced increased volatility, culminating in four MWCB
On September 17, 2020, the Director of the Commission's Division of Trading and Markets asked the SROs to conduct a study of the design and operation of the Pilot Rules and the LULD Plan during the period of volatility in March 2020. In response to the request, the SROs created a MWCB “Working Group” composed of SRO representatives and industry advisers that included members of the advisory committees to both the LULD Plan and the NMS Plans governing the collection, consolidation, and dissemination of last-sale transaction reports and quotations in NMS Stocks. The Working Group met regularly from September 2020 through March 2021 to consider the Commission's request, review data, and compile its study.
On March 31, 2021, the MWCB Working Group submitted its study (the “Study”) to the Commission.
In light of those conclusions, the MWCB Working Group also made several recommendations, including that (1) the Pilot Rules should be made permanent without any changes, and (2) SROs should adopt a rule requiring all designated Regulation SCI firms to participate in at least one Level 1/Level 2 MWCB test each year and to verify their participation via attestation.
On July 16, 2021, NYSE proposed a rule change to make the Pilot Rules permanent, consistent with the Working Group's recommendations.
Further consistent with the Commission's approval of NYSE's proposal, the Exchange proposes to add new paragraphs (h), (i), and (j) to Rule 11.16, as follows:
(h) Market-Wide Circuit Breaker (“MWCB”) Testing.
(1) The Exchange will participate in all industry-wide tests of the MWCB mechanism. Members designated pursuant to paragraph (a) of Rule 2.4 to connect to the Exchange/s backup systems and participate in testing of such systems are required to participate in at least one industry-wide MWCB test each year and to verify their participation in that test by attesting that they are able to or have attempted to:
(A) Receive and process MWCB halt messages from the securities information processors (“SIP”);
(B) receive and process resume messages from the SIPs following a MWCB halt;
(C) receive and process market data from the SIPs relevant to MWCB halts; and
(D) send orders following a Level 1 or Level 2 MWCB halt in a manner consistent with their usual trading behavior.
(2) To the extent that a Member participating in a MWCB test is unable to receive and process any of the messages identified in paragraph (h)(1)(A)-(D) of this Rule, its attestation should notify the Exchange which messages it was unable to process and, if known, why.
(3) Members not designated pursuant to standards established in paragraph (a) of Rule 2.4 are permitted to participate in any MWCB test.
(f)[sic] In the event that a halt is triggered under this Rule following a Level 1, Level 2, or Level 3 Market Decline, the Exchange, together with other SROs and industry representatives (the “MWCB Working Group”), will review such event. The MWCB Working Group will prepare a report that documents its analysis and recommendations and will provide that report to the Commission within 6 months of the event.
(g)[sic] In the event that there is (1) a Market Decline of more than 5%, or (2) an SRO implements a rule that changes its reopening process following a MWCB Halt, the Exchange, together with the MWCB Working Group, will review such event and consider whether any modifications should be made to this Rule. If the MWCB Working Group recommends that a modification should be made to this Rule, the MWCB Working Group will prepare a report that documents its analysis and recommendations and provide that report to the Commission.
The Exchange believes that the proposal to make the Pilot Rules permanent is consistent with Section 6(b) of the Act,
Specifically, the Exchange believes that making the Pilot Rules permanent would benefit market participants, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest, because the Pilot Rules worked as intended during the March 2020 events. As detailed above, the markets were in communication before, during, and after each of the MWCB Halts that occurred in March 2020. All 9,000+ equity symbols were successfully halted in a timely manner when SPX declined 7% from the previous day's closing value, as designed. The Exchange believes that market participants would benefit from having the Pilot Rules made permanent because such market participants are familiar with the design and operation of the MWCB mechanism set out in the Pilot Rules, and know from experience that it has functioned as intended on multiple occasions under real-life stress conditions. Accordingly, the Exchange believes that making the Pilot Rules permanent would enhance investor confidence in the ability of the markets to successfully halt as intended when under extreme stress.
The Exchange further believes that making the Pilot Rules permanent would benefit market participants, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest, because the halts that were triggered pursuant to the Pilot Rules in March 2020 appear to have had the intended effect of calming volatility in the market without causing harm. As detailed above, after studying a variety of metrics concerning opening and reopening auctions, quote volatility, and other factors, the Exchange concluded that there was no significant difference in the percentage of securities that opened on a trade versus on a quote for the four days in March 2020 with MWCB Halts, versus the other periods studied. In addition, while the post-MWCB Halt reopening auctions were smaller than typical opening auctions, the size of those post-MWCB Halt reopening auctions plus the earlier initial opening auctions in those symbols was on average equal to opening auctions in January 2020. The Exchange believes this indicates that the MWCB Halts on the four March 2020 days did not cause liquidity to evaporate. Finally, the Exchange observes that while quote volatility was generally higher on the four days in March 2020 with MWCB Halts as compared to the other periods studied, quote volatility stabilized following the MWCB Halts at levels similar to the January 2020 levels, and LULD Trading Pauses worked as designed to address any additional volatility later in the day. From this evidence, the Exchange concludes that the Pilot Rules actually calmed volatility on the four MWCB Halt days in March 2020, without causing liquidity to evaporate or otherwise harming the market. As such, the Exchange believes that making the Pilot Rules permanent would remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest.
The Exchange believes that that making the Pilot Rules permanent without any changes would benefit market participants, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest, because the current design of the MWCB mechanism as set out in the Pilot Rules remains appropriate. As detailed above, the Exchange considered whether SPX should be replaced as the reference value, whether the current trigger levels (7%/13%/20%) and halt times (15 minutes for Level 1 and 2 halts) should be modified, and whether changes should be made to prevent the market from halting shortly after the opening of regular trading hours at 9:30 a.m., and concluded that the MWCB mechanism set out in the Pilot Rules remains appropriate, for the reasons cited above. The Exchange believes that public confidence in the MWCB mechanism would be enhanced by the Pilot Rules being made permanent without any changes, given investors' familiarity with the Pilot Rules and their successful functioning in March 2020.
The Exchange believes that proposed paragraph (h) regarding MWCB testing is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. The Working Group recommended that all cash equities exchanges adopt a rule requiring all designated Regulation SCI firms to participate in MWCB testing and to attest to their participation. The Exchange believes that these requirements would promote the stability of the markets and enhance investor confidence in the MWCB mechanism and the protections that it provides to the markets and to investors. The Exchange further believes that requiring firms participating in a MWCB test to identify any inability to process messages pertaining to such MWCB test would contribute to a fair and orderly market by flagging potential issues that should be corrected. The Exchange would preserve such attestations pursuant to its obligations to retain books and records of the Exchange.
The Exchange believes that proposed paragraph (i) would benefit market participants, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. Having the MWCB Working Group review any halt triggered under Rule 11.16 and prepare a report of its analysis and recommendations would permit the Exchange, along with other market participants and the Commission, to evaluate such event and determine whether any modifications should be made to Rule 11.16 in the public interest. Preparation of such a report within 6 months of the event would permit the Exchange, along with the MWCB Working Group, sufficient time to analyze such halt and prepare their recommendations.
The Exchange believes that proposed paragraph (j) would benefit market participants, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. Having the MWCB Working Group review instances of a Market Decline of more than 5% or an SRO implementing a rule that changes its reopening process following a MWCB Halt would allow the MWCB Working Group to identify situations where it recommends that Rule 11.16 be modified in the public interest. In such situations where the MWCB Working Group recommends that a modification should be made to Rule 11.16, the MWCB Working Group would prepare a report that documents its analysis and recommendations and provide that report to the Commission, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system while protecting investors and the public interest.
For the foregoing reasons, the Exchange believes that the proposed change is consistent with the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not intended to address competition, but rather, makes permanent the current MWCB Pilot Rules for the protection of the markets. The Exchange believes that making the current MWCB Pilot Rules permanent would have no discernable burden on competition at all, since the Pilot Rules have already been in effect since 2012 and would be made permanent without any changes. Moreover, because the MWCB mechanism contained in the Pilot Rules requires all exchanges and all market participants to cease trading at the same time, making the Pilot Rules permanent would not provide a competitive advantage to any exchange or any class of market participants.
Further, the Exchange understands that the other SROs will submit substantively identical proposals to the Commission. Thus, the proposed rule change will help to ensure consistency across SROs without implicating any competitive issues.
The Exchange neither solicited nor received comments on the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MEMX-2022-08 and should be submitted on or before
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the
The Exchange is filing with the Commission a proposed rule change to amend Rule 13.8(b) to clarify what information is disseminated in the MEMOIR Top data feed. The text of the proposed rule change is provided in Exhibit 5.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 13.8(b) to clarify what information is disseminated in the MEMOIR Top data feed. The Exchange does not propose any changes to the information that is disseminated in the MEMOIR Top data feed, or any changes to the Exchange's System functionality, order handling, or operation, in this filing. Instead, this proposed change merely corrects an inadvertent drafting error contained in the Exchange's initial Rules in order to clarify what information is disseminated in the MEMOIR Top data feed today. Specifically, the Exchange's Rule 13.8(b) currently states that MEMOIR Top is an uncompressed data feed that offers top of book quotations and execution information based on equity orders entered into the System, however, the information actually published through MEMOIR Top is limited to top of book quotations. Accordingly, the Exchange proposes to eliminate the reference to execution information from Rule 13.8(b). The proposed change is therefore intended to add clarity and promote transparency around the Exchange's current operation and Rules for the benefit of its Users and all market participants.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposal would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed change would add clarity and promote transparency around the Exchange's current operation and its Rules for the benefit of its Users and all market participants, as described above. No changes to the Exchange's System functionality, order handling, or operation are contemplated by these proposed changes, which would merely clarify the Exchange's current operation and its Rules. As such, the proposal does not address competitive issues but is concerned solely with the administration of the Exchange and its Rules. Accordingly, as the Exchange is not proposing any changes to the Exchange's System functionality, order handling, or operation, the Exchange does not believe the proposed rule change could have any impact on competition (intermarket or intramarket).
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
FINRA is proposing to amend FINRA Rules 1012, 1015, 6490, 9132, 9133, 9135, 9146, 9321, 9341, 9349, 9351, 9522, 9524, 9525, 9559 and 9630 to permit, and in some instances require, electronic service and filing of documents in disciplinary and other proceedings and appeals.
The text of the proposed rule change is available on FINRA's website at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Several of FINRA's rules regarding method of service and filing have been amended temporarily to permit, and in some instances require, electronic filing and service during the period in which FINRA's operations have been impacted by the COVID-19 pandemic.
FINRA is proposing to make the temporary amendments regarding electronic service and filing permanent, with some modifications. FINRA believes that advances in technology and its availability have made filing and service more efficient under the temporary amendments than under the original rules.
The FINRA Rule 1000, 6400, 9100, 9300, 9520, 9550 and 9600 Series contain filing, service and other procedural requirements. The temporary amendments to these rules allowed, and in some instances required, FINRA (in its capacity as an Adjudicator) to serve certain documents on parties by electronic mail (“email”) and required parties to file or serve documents by email, unless the parties agreed to an alternative method of service.
The proposed rule change includes provisions to allow, and in some instances require, FINRA to serve certain documents on parties by email and require parties to file or serve documents by email, unless another method of service is ordered by the Adjudicator. Several of the proposed rule changes differ from the temporary amendments, which required email service unless the parties agreed to an alternative method.
In addition, to support the transition to email service and filing, FINRA proposes to require parties in OHO proceedings to file and serve all parties with their current email address and contact information at the time of their first appearance, and to file and serve any change in email address or contact information during the course of the proceeding.
FINRA rules, with few exceptions, do not provide for service by email.
FINRA has elected email service whenever possible while the temporary amendments have been in effect, and it is FINRA's intention to continue to do so under the proposed rule change. If FINRA has knowledge that the address used for service is not current or not functional (
Further, to the extent an applicant, respondent or other party lacks the ability to use or access technology needed to file, serve or accept service by email, FINRA intends to provide reasonable accommodations to them. The process for requesting an alternative method of service or filing will be posted to FINRA's website, as well as explained in the Notice of Complaint and in the Code and Guide letter.
The proposed rule change to amend the FINRA Rule 1000, 6400, 9100, 9300, 9520, 9550 and 9600 Series is substantially the same as the temporary amendments currently in effect unless otherwise noted, below.
The FINRA Rule 1000 Series (Member Application and Associated Person Registration) governs, among other things, the process for (i) applying for FINRA membership; (ii) FINRA members to seek approval of a change in ownership, control or business operations, and (iii) an applicant to request that FINRA's appellate body, the NAC, review a FINRA decision rendered under the Rule 1000 Series. In connection with these processes, applicants and FINRA are required to file or serve certain documents using the prescribed methods set forth in FINRA Rule 1012(a), which do not include email.
FINRA Rule 6490 codifies the requirements in Exchange Act Rule 10b-17 for issuers of a class of publicly traded securities to provide timely notice to FINRA of certain corporate actions (
The FINRA Rule 9000 Series, among other things, sets forth the procedure for FINRA proceedings for disciplining a member, associated person or formerly associated person. The Rule 9100 Series is of general applicability to all proceedings set forth in the Rule 9000 Series, unless a rule specifically provides otherwise. Rules 9132(b),
In addition, to support the transition to email service and filing, FINRA proposes to amend Rule 9135 to add paragraph (d), which would require parties in OHO proceedings to file and serve the parties with their current email address and contact information at the time of their first appearance, and to file and serve any change in email address or contact information during the course of the proceeding. Based on the experience of operating under the temporary amendments, FINRA believes this proposed rule change, which was not part of the temporary amendments, will help ensure that documents are successfully sent from and received at a valid email address. It will also ensure that all participants, including FINRA, applicants, respondents and any other parties, have accurate contact information for all parties.
The FINRA Rule 9300 Series sets forth the procedures for review of disciplinary proceedings by the NAC and FINRA Board and for applications for SEC review. FINRA Rules 9321,
The FINRA Rule 9520 Series sets forth the procedures for eligibility proceedings and review of those proceedings by the NAC and FINRA Board. Rules 9522(a)(4),
The FINRA Rule 9550 Series sets forth the procedures for expedited proceedings and the ability of the NAC to call for review a proposed decision prepared under the Rule 9550 Series. Rule 9559(h)(2)
The FINRA Rule 9600 Series sets forth the procedures for members to seek exemptive relief from a variety of FINRA rules. Rule 9630(e)(1) and (2)
As discussed in detail in Item 3(b), FINRA believes the proposal will modernize the rules and make service
FINRA will announce the effective date of the proposed rule change in a
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA believes that the proposed rule change protects investors and the public interest by requiring use of broadly available technology to make service and filing processes more efficient and effective. FINRA's disciplinary and eligibility proceedings and other review processes serve a critical role in providing investor protection and maintaining fair and orderly markets by, for example, sanctioning misconduct and preventing further customer harm by members and associated persons.
The proposed rule change promotes efficiency in these processes by permitting electronic service and filing in most instances. To ensure that documents are effectively sent and received, FINRA is proposing to require parties to provide and update their contact information, including their email address, during the course of a proceeding. These amendments reduce the reliance on paper documents in favor of more efficient electronic formats. FINRA believes adopting permanent rules on electronic service and filing is especially important as hybrid and remote work become more common.
At the same time, the proposed rule change includes safeguards to ensure fairness. For example, there are procedures in place for persons who lack the ability to use or access technology necessary to send or receive documents electronically. Such parties will have the ability to request relief from the Adjudicator to file or serve documents by another method. Based on FINRA's experience of operating under the temporary amendments, which have permitted electronic service and filing since mid-2020, FINRA anticipates that requests to use non-electronic methods of service will be rare. In addition, the proposed rule change balances the interests of fairness and efficiency. As discussed, service of the initial complaint will continue to occur by hand, mail or courier, rather than by electronic means, thus ensuring there is satisfactory notice and fair process.
Thus, the proposed rule change represents a significant step toward modernizing the service and filing processes in a manner that will protect investors and the public interest by promoting efficiency while preserving fair process.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
FINRA has undertaken an economic impact assessment, as set forth below, to analyze the regulatory need for the proposed rule change, its potential economic impacts, including anticipated costs, benefits, and distributional and competitive effects, relative to the current baseline, and the alternatives FINRA considered in assessing how best to meet FINRA's regulatory objectives.
Several of FINRA's rules regarding method of service and filing have been amended temporarily to permit, and in some circumstances require, electronic filing and service during the period in which FINRA's operations have been impacted by the COVID-19 pandemic.
The economic baseline for the proposed rule change consists of the original rules together with the experience gained by broker-dealers, their associated persons, and FINRA in complying with the temporary amendments to the original rules. As discussed above, FINRA Rules 1000, 6400, 9100, 9300, 9520, 9550 and 9600 Series set forth filing and service requirements pertaining to expedited and disciplinary proceedings before OHO and to appeals before the NAC, among other types of FINRA proceedings. These rules, with few exceptions, do not allow FINRA to use email or require others to use email to meet certain filing and service requirements. FINRA temporarily amended these rules to permit, and in some instances require, electronic filing and service.
The proposed rule change is expected to affect parties to disciplinary proceedings before OHO and to appeals before the NAC. FINRA thus has collected information detailing the number of new cases filed in OHO and NAC proceedings and the number of respondents in association with these proceedings in the past three years. The numbers are presented below. Note that “Registered Rep” includes both current and former registered representatives and the numbers of new OHO filings include both expedited and disciplinary proceedings before OHO. The numbers show that the majority of respondents in OHO filings and NAC appeals consist of current and former registered representatives.
The proposed rule change will directly impact current and former member firms and associated persons, including registered representatives. With limited exceptions, these individuals would be applicants, respondents, or other related parties to disciplinary proceedings before OHO and to appeals before the NAC. The proposed rule change will not directly impact the customers of those firms.
Parties in relevant proceedings will benefit from savings on time and money on printing, shipping, and storage of paper documents as filing and serving paper copies will generally not be required following the proposed rule change. The proposed rule change would also improve the overall efficiency of FINRA's operations in collecting, preserving, and distributing documents to parties in these proceedings relative to the original rules. Such benefits are anticipated to accrue to firms and individuals as well as to FINRA in its capacity as an adjudicator. In particular, FINRA believes that the benefits to member firms from the proposal will likely be larger for those using hybrid and remote work models or in situations where access to physical office locations is limited or restricted.
The extent of the cost savings is likely not uniform across parties and cannot be estimated in aggregate for two reasons. First, FINRA does not know the frequencies of filing and service and the size of the documents in association with relevant proceedings. The expected cost savings will likely be greater for parties that file and serve large documents more frequently. Second, FINRA does not know how parties agreed to serve documents, by email, paper, or other alternative methods, during the pre-pandemic period.
Certain parties may bear incremental burdens over pre-pandemic filing and service practices. FINRA does not know the extent to which, under the proposed rule change, certain parties will incur some costs to scan documents. Anecdotally, FINRA understands that this group is small. The proposals to have a valid email address and to require filing by email are not expected to impose significant new costs because anecdotal evidence suggests that this method of filing was already adopted by most parties to OHO and NAC proceedings before the pandemic.
The proposal will likely impose a higher cost on parties who have limited access to the internet and to any hardware and software that may be involved in processing the documents. For example, it is unlikely that member firms or current registered representatives would face these challenges, but former registered representatives may. There have been a few such individuals in recent proceedings before OHO and the NAC.
The overall benefits and costs of the proposal will depend on the expected volume of the relevant proceedings and the number of respondents associated with these proceedings. As described earlier, there have been only a limited number of new cases or appeals filed annually in OHO and NAC proceedings in the past three years. The majority of these cases or appeals involved only one respondent. Based on these historical numbers, the overall economic impact is likely to be small.
In developing the proposal, FINRA sought to preserve the efficiencies in filing and service practices that were achieved during the pandemic. No significant alternatives to these requirements were considered.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe EDGX Exchange, Inc. (“EDGX” or the “Exchange”) is filing with the Securities and Exchange Commission (the “Commission”) a proposed rule change to amend the fees applicable to various market data products. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Market Data section of its Fees Schedule for its equities trading platform (“EDGX Equities”). Particularly, the Exchange proposes to adopt a free trial program for Exchange market data products, effective April 1, 2022.
The Exchange proposes a 30-day free trial for any User or Distributor that subscribes to or distributes, respectively, an Exchange real-time market data product (“Product”) listed on the Fee Schedule for the first time. As proposed, a first-time User would be any entity or individual that has not previously subscribed to a particular Product and a first-time Distributor would be any entity that has not previously distributed, internally or externally, a particular Product. A first-time User or Distributor of a particular Exchange market data product would not be charged any applicable fees listed in the Fee Schedule for that product for the duration of the 30 days.
The Exchange believes that providing a 30-day free trial to Exchange real-time market data products listed on the Exchange's Fee Schedule would enable potential Users and Distributors to determine whether a particular Exchange market data product provides value to their business models or investment strategies, as applicable, before fully committing to expend development and implementation costs related to the receipt or distribution of that product, and is intended to encourage increased use of the Exchange's market data products by defraying some of the development and implementation costs Users or Distributors would ordinarily have to expend before using a product. The
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that adopting a free trial program for real-time market data products listed in its Fees Schedule is equitable and reasonable. Particularly, providing Exchange real-time market data products to new Users and Distributors free-of-charge for the first 30 days is reasonable because it would allow vendors and subscribers to become familiar with the feeds and determine whether they suit their needs without incurring fees. It is also intended to incentivize Distributors to enlist more Users to subscribe to Exchange market data products in an effort to broaden the products' distribution. Making a new market data product available for free for a trial period is also consistent with offerings of other exchanges. For example, NYSE and Nasdaq offer similar free trial programs.
The Exchange believes the proposal to provide the Exchange market data products to new Users or Distributors free-of-charge for their first 30 days subscribing or distributing the data, as applicable, is equitable and not unfairly discriminatory because it applies to any first-time User or Distributor, regardless of the use they plan to make of the feed. As proposed, any first-time User or Distributor would not be charged any applicable fee listed in the Fee Schedule for any of the Exchange's real-time market data products listed in the Fee Schedule for 30 days. The Exchange believes it is equitable to restrict the availability of this free trial to Users or Distributors that have not previously subscribed to, or distributed, respectively the particular market data product, since Users or Distributors who are current or previous subscribers or Distributors, respectively of that product are already familiar with the product and whether it would suit their needs.
The Exchange believes that the proposed rule change providing for a free trial period to test is not unfairly discriminatory because the financial benefit of the fee waiver would be available to all Users subscribing to, and all Distributors distributing, an Exchange Product for the first time on a free-trial basis. The Exchange believes there is a meaningful distinction between Users and Distributors that are subscribing to or distributing a market data product for the first time, who may benefit from a period within which to set up and test use of the product before it becomes fee liable, and Users and Distributors that are already receiving or distributing the Exchange's market data products and are deriving value from such use. The Exchange believes that the limited period of the free trial would not be unfairly discriminatory to other users of the Exchange's market data products because it is designed to provide a reasonable period of time to set up and test a new market data product. The Exchange further believes that providing a free trial for 30 days would ease administrative burdens for data recipients to subscribe to or distribute a new data product and eliminate fees for a period before such users are able to derive any benefit from the data.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by competition among exchanges that offer similar data products to their customers. The Exchange believes that the proposed free trial program does not put any market participants at a relative disadvantage compared to other market participants. As discussed, the proposed trial would apply to first time Users and Distributors on an equal and non-discriminatory basis. Further, the Exchange believes that the proposed program does not impose a burden on competition or on other SROs that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposal would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges are free to lower their prices or provide a free trial to better compete with the Exchange's offering. Indeed, other national securities exchanges already offer similar free trial programs today.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe EDGA Exchange, Inc. (“EDGA” or the “Exchange”) is filing with the Securities and Exchange Commission (the “Commission”) a proposed rule change to amend the fees applicable to various market data products. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Market Data section of its Fees Schedule for its equities trading platform (“EDGA Equities”). Particularly, the Exchange proposes to adopt a free trial program for Exchange market data products, effective April 1, 2022.
The Exchange proposes a 30-day free trial for any User or Distributor that subscribes to or distributes, respectively, an Exchange real-time market data product (“Product”) listed on the Fee Schedule for the first time. As proposed, a first-time User would be any entity or individual that has not previously subscribed to a particular Product and a first-time Distributor would be any entity that has not previously distributed, internally or externally, a particular Product. A first-time User or Distributor of a particular Exchange market data product would not be charged any applicable fees listed in the Fee Schedule for that product for the duration of the 30 days.
The Exchange believes that providing a 30-day free trial to Exchange real-time market data products listed on the Exchange's Fee Schedule would enable potential Users and Distributors to determine whether a particular Exchange market data product provides value to their business models or investment strategies, as applicable, before fully committing to expend development and implementation costs related to the receipt or distribution of that product, and is intended to encourage increased use of the Exchange's market data products by defraying some of the development and implementation costs Users or Distributors would ordinarily have to expend before using a product. The
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that adopting a free trial program for real-time market data products listed in its Fees Schedule is equitable and reasonable. Particularly, providing Exchange real-time market data products to new Users and Distributors free-of-charge for the first 30 days is reasonable because it would allow vendors and subscribers to become familiar with the feeds and determine whether they suit their needs without incurring fees. It is also intended to incentivize Distributors to enlist more Users to subscribe to Exchange market data products in an effort to broaden the products' distribution. Making a new market data product available for free for a trial period is also consistent with offerings of other exchanges. For example, NYSE and Nasdaq offer similar free trial programs.
The Exchange believes the proposal to provide the Exchange market data products to new Users or Distributors free-of-charge for their first 30 days subscribing or distributing the data, as applicable, is equitable and not unfairly discriminatory because it applies to any first-time User or Distributor, regardless of the use they plan to make of the feed. As proposed, any first-time User or Distributor would not be charged any applicable fee listed in the Fee Schedule for any of the Exchange's real-time market data products listed in the Fee Schedule for 30 days. The Exchange believes it is equitable to restrict the availability of this free trial to Users or Distributors that have not previously subscribed to, or distributed, respectively the particular market data product, since Users or Distributors who are current or previous subscribers or Distributors, respectively of that product are already familiar with the product and whether it would suit their needs.
The Exchange believes that the proposed rule change providing for a free trial period to test is not unfairly discriminatory because the financial benefit of the fee waiver would be available to all Users subscribing to, and all Distributors distributing, an Exchange Product for the first time on a free-trial basis. The Exchange believes there is a meaningful distinction between Users and Distributors that are subscribing to or distributing a market data product for the first time, who may benefit from a period within which to set up and test use of the product before it becomes fee liable, and Users and Distributors that are already receiving or distributing the Exchange's market data products and are deriving value from such use. The Exchange believes that the limited period of the free trial would not be unfairly discriminatory to other users of the Exchange's market data products because it is designed to provide a reasonable period of time to set up and test a new market data product. The Exchange further believes that providing a free trial for 30 days would ease administrative burdens for data recipients to subscribe to or distribute a new data product and eliminate fees for a period before such users are able to derive any benefit from the data.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by competition among exchanges that offer similar data products to their customers. The Exchange believes that the proposed free trial program does not put any market participants at a relative disadvantage compared to other market participants. As discussed, the proposed trial would apply to first time Users and Distributors on an equal and non-discriminatory basis. Further, the Exchange believes that the proposed program does not impose a burden on competition or on other SROs that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposal would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges are free to lower their prices or provide a free trial to better compete with the Exchange's offering. Indeed, other national securities exchanges already offer similar free trial programs today.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The principal purpose of the proposed amendments is for ICE Clear Europe to (i) modify its Operational Risk Management Policy (the “Operational Risk Management Policy”) to update the Clearing House's operational risk management practices, and (ii) adding to the Clearing House's rule framework the Risk Identification Framework (“Risk Identification Framework”) which is a document that provides ICE Clear Europe with a structure to explore, identify and monitor risks. The updates would also make certain other amendments to remove outdated provisions and to make certain other non-substantive amendments.
In its filing with the Commission, ICE Clear Europe included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. ICE Clear Europe has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.
ICE Clear Europe is proposing to amend its Operational Risk Management Policy to make certain clarifications and enhancements to (i) ICE Clear Europe's approach to remediating identified control vulnerabilities and monitoring, (ii) transition to dynamic risk assessment where each risk would be assessed at least annually via a rolling review process, and (iii) the operational risk review process by linking it with the Enterprise Risk Register (described further below), as well as descriptive updates to the Enterprise Risk Register. The appendices to the Operational Risk Management Policy would also be updated to provide certain additional descriptive detail relating to current practices, including titles and impact guidelines and guidance charts in Appendix C. Various other typographical, clarificatory and stylistic improvements would also be made.
ICE Clear Europe is also proposing to add to the Clearing House's set of rules the Risk Identification Framework which would provide the Board with a structure to assist it in exploring, identifying and monitoring risks, as described below.
The overall description of operational risk management contained in Section 3 would be clarified to include management as well as identification, management [sic], monitoring and reporting of risk. The same section would also provide that risks would be documented within the Enterprise Risk Register.
Section 3.1 (previously titled “Risk Identification”) would be deleted in its entirety and replaced with a new section titled “Enterprise Risk Register”. The section would describe the Enterprise Risk Register (attached to the policy as Appendix A, and also referred to as the Risk Register Dashboard) which would serve as an inventory of the material risks faced by the Clearing House, incorporating the Risk Taxonomy (as discussed below). The section would also describe the purpose of the Enterprise Risk Register, which would be to strengthen the businesses' understanding of their risks and allow them to demonstrate to the relevant risk committees and the Board that the risks are managed. The section would also describe the responsibilities with respect to the Enterprise Register, including that the Risk Owners would be responsible for updating and
Section 3.2 (Risk Assessment) would be updated to describe the following five components for facilitating the effective management of enterprise risk: (1) Risk Identification, (2) Level 3 Risk Assessment,
Firstly, a new subsection 3.2.1 (Risk Identification) would be added and would describe risk identification as the process by which each department identifies risks which should be documented within the Risk Taxonomy and the Enterprise Risk Register. The Risk Taxonomy is the list of risks that the Clearing House is exposed to which is reviewed annually for completeness; those risks (and the related control assessment of those risks) are reflected in the Enterprise Risk Register. The amendments would also add that the risk identification could be performed more frequently than annually as part of a dynamic update.
The substance of previous Section 3.3 (Risk Response) would be replaced by new subsections 3.2.2, 3.2.3 and 3.2.3, as described herein. However, the ownership and nature of the Clearing House's risk responses would be substantively unchanged. New subsection 3.2.2. (Control Assessment) would provide descriptions of the Clearing House's risk assessment policies and processes, including the roles of Risk Owners. Risk Owners would be required to assess the expected level of mitigation that each control is expected to provide (High/Medium/Low—more information would be provided in Appendix D), as well as the effectiveness of each control (Satisfactory/Needs Improvement/Unsatisfactory). Key controls would be considered for control monitoring to further review effectiveness of controls. The amendments provide that the control assessment process should be performed at least once a year or more frequently as part of a dynamic control assessment. Dynamic control assessments would be performed to reflect material risk changes. Enterprise Risk Management (“ERM”) would be responsible for providing review and challenge of the Risk Owners control assessment. The ‘Worst-of Principle’ would be applied to Level 1 and 2 ratings, where the parent overall control rating would adopt the ‘worst-of’ overall control rating of the level below.
The subsection describing the Clearing House's risk assessment processes (now Section 3.2.3) would be updated to provide the role of inherent and residual risk assessments (attached as Appendix C to the policy). In the absence of mitigating controls risks identified are assessed by Risk Owners on an Inherent Risk basis and a Residual Risk basis (taking into consideration mitigating controls) at Level 3. To determine the Residual Risk, Risk Owners would take account of key risk data points.
The risk assessment process would be performed at least once a year through a rolling review process or more frequently as part of a dynamic risk assessments which are performed to reflect material risk changes. ERM would be responsible for providing review and challenge of the Risk Owners risk assessment. The ‘Worst-of Principle’ would be applied to Level 1 and 2 ratings, where the Parent Overall Control Rating would adopt the ‘worst-of’ rating of the level below across both inherent and residual risk.
New subsection 3.2.4 (Risk Management) would describe the Clearing House's risk management policies. Residual risks above agreed thresholds would require remediation actions to address the control vulnerability and reduce the level of residual risk to an acceptable level. Such thresholds refer to the Board-approved risk appetite metrics which are currently set as Medium (see Appendix B for Risk Assessment Ratings Grid). Any Risks assessed by the Risk Owners as High or Very High would require remediation actions, which will depend on the particular circumstances and risks involved. Proposed remediations would be escalated to senior management and applicable risk committees or Board. In certain circumstances, risk acceptance may be deemed appropriate dependent upon the Clearing House's risk appetite and Board approval. Recommendations would be assigned a priority rating and remediation timeline as a function of the expected level of risk mitigation and the control effective rating (attached as Appendix E). Remediation recommendations would be entered in the Issue Problems and Threat workflow unless already formally tracked.
The section describing risk monitoring (now subsection 3.2.5) would be updated to provide that in order to ensure that controls identified during the assessment are operating effectively and performing in line with the assessed control ratings; the Clearing House would perform periodic control monitoring on controls considered as “Key” which would be “High” mitigating controls mapped against “Very High” or “High” Inherent Risks. ERM would coordinate with the First, Second and Third Lines to develop control monitoring plans for key controls (described further in Appendix D).
Additionally, a new paragraph would be added providing that to ensure that key controls identified during the assessment are operating effectively, the Clearing House would perform control monitoring, and include a description of such processes. Control monitoring would be performed by either the First Line (Clearing Risk Team), the Second Line (Risk Oversight Department), the Clearing House's internal audit team or independent third parties. The results would be reviewed by the Chief Risk Officer and presented to the senior management team and other governance committees as appropriate.
The amendments would provide that Risk Owners would monitor operational risks on an on-going rather than a daily basis. They would also clarify that the Risk Oversight Department (“ROD”) would monitor risks daily or monthly (rather than only daily) and would monitor operational incidents raised by the Risk Owners.
The section describing risk reporting (now subsection 3.2.6) would be revised to include a new paragraph that describes the approval process for the Enterprise Risk Register as being approved monthly at each ERC and reported to each BRC and Board meeting. Stylistic changes would also be made to this section to replace certain terms with their acronym in order to aid with readability. Additionally, information regarding the roles of the Board, ERC and other groups that has been moved to other sections the document would be deleted from this section in order to avoid superfluousness.
Section 4.3 (Oversight of the Policy) would be updated to provide that the
Descriptive titles would be added to the appendices in order to aid with readability. Additionally, a table would be added to Appendix C that would describe the meaning of certain impact guidelines (severe/major/moderate/minor/incidental), the numerical score assigned to such guidelines, and the guidance applied with respect to the risk posed to such impact. A description would be added to Appendix G—Risk Mitigation to provide that the methodology to determine ICE Clear Europe's residual risk involves assessing the impact of ICE Clear Europe's control landscape on its inherent risks as shows by the matrix set out in the appendix.
The amendments would include the formal adoption of the Risk Identification Framework that are intended to formalize certain practices relating to the identification of risks. Section 1 (Introduction) of the Risk Identification Framework would provide an overarching description of the document and its purpose. The purpose of the Risk Identification Framework is to provide the Board with a structure to explore, identify and monitor risks as well as ensure that risk tolerance is articulated and documented, with responsibilities and accountabilities clearly assigned, as described further below. This framework would also support the Board in risk avoidance, mitigation or acceptance.
Section 2 (Components of the Risk Identification Framework) would describe the four components of the Risk Identification Framework: Risk Taxonomy, which provides a single universal risk structure, terminology and hierarchy; Enterprise Risk Register, which serves as an inventory of the material risks faced by the Clearing House; Risk Assessment, which requires risk owners to rate inherent risk, overall control rating and residual risk for each level 3 risk; and Emerging Risk Assessment, which facilitates ongoing identification, discussion and mitigation of emerging risks as Board and executive level. The subsections that follow would provide further descriptions of each component and the responsibilities and frequency relating to review of each.
Section 3 (Review and Governance) would describe the documentation ownership and governance processes in respect of the Risk Identification Framework. The document would be owned by the Chief Risk Officer, any material changes to the document would require Executive Risk Committee and Board Approval. The Executive Risk Committee and Board would review the Risk Identification Framework annually.
The appendices referenced throughout the document would follow and would include appendices providing for a risk register dashboard, rating guidance impact and likelihood and emerging business risks.
ICE Clear Europe believes that the proposed amendments to the Operational Risk Management Policy and the adoption of the Risk Identification Framework are consistent with the requirements of Section 17A of the Act
The proposed changes to the Operational Risk Management Policy and the adoption of the Risk Identification Framework are designed to strengthen ICE Clear Europe's tools to manage the risk of losses resulting from operational errors or failures. The amendments and adoption would update and clarify the processes, controls and escalations with respect to the testing and reviewing of the Clearing House's operations as well as outline the responsibilities of the Clearing House's committees, management and the Board in relation to each document. Through better managing risks in operational failure scenarios providing the policies and framework to identify, manage and monitor such risks, the proposed amendments to the Operational Risk Management Policy and the adoption of the Risk Identification Framework would promote the stability of the Clearing House and the prompt and accurate clearance and settlement of cleared contracts. The enhanced risk management is therefore also generally consistent with the protection of investors and the public interest in the safe operation of the Clearing House. (ICE Clear Europe would not expect the amendments to affect the safeguarding of securities and funds in ICE Clear Europe's custody or control or for which it is responsible.) Accordingly, the amendments satisfy the requirements of Section 17A(b)(3)(F).
The amendments to the Operational Risk Management Policy and the adoption of the Risk Identification Framework are also consistent with relevant provisions of Rule 17Ad-22.
Rule 17Ad-22(e)(2) provides that “[e]ach covered clearing agency shall establish, implement, maintain and enforce written policies and procedures reasonable designed to, as applicable [. . .] provide for governance arrangements that are clear and transparent”
The proposed amendments are also consistent with Rule 17Ad-22(e)(17)(i),
ICE Clear Europe does not believe the proposed amendments would have any impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purposes of the Act. The amendments are being adopted to update and clarify the Clearing House's Operational Risk Management Policy and to adopt the Risk Identification Framework, all of which relate to the Clearing House's internal processes for operational risk management. ICE Clear Europe does not believe the amendments and adoption would affect the costs of clearing, the ability of market participants to access clearing, or the market for clearing services generally. Therefore, ICE Clear Europe does not believe the proposed rule change imposes any burden on competition that is inappropriate in furtherance of the purposes of the Act.
Written comments relating to the proposed amendments have not been solicited or received by ICE Clear Europe. ICE Clear Europe will notify the Commission of any written comments received with respect to the proposed rule change and adoption.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The principal purpose of the proposed rule change is to revise the ICC Recovery Plan and the ICC Wind-Down Plan (collectively, the “Plans”). These revisions do not require any changes to the ICC Clearing Rules (the “Rules”).
In its filing with the Commission, ICC included statements concerning the purpose of and basis for the proposed rule change, security-based swap submission, or advance notice and discussed any comments it received on the proposed rule change, security-based swap submission, or advance notice. The text of these statements may be examined at the places specified in Item IV below. ICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
ICC proposes revising the ICC Recovery Plan and the ICC Wind-Down Plan, which serve as plans for the recovery and orderly wind-down of ICC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, consistent with Rule 17Ad-22(e)(3)(ii).
Consistent with the regulations applicable to ICC, the Recovery Plan is designed to establish ICC's actions to maintain its viability as a going concern to address any uncovered credit loss, liquidity shortfall, capital inadequacy, or business, operational or other structural weakness that threatens ICC's viability. ICC proposes general updates and edits to promote clarity and to ensure that the information provided is current. The proposed amendments reflect and relate to changes that impacted ICC in the past year, including changes to the composition of the ICC Board of Managers (collectively, the “Board” and each, a “Manager”) and the responsibilities and membership composition of internal committees.
ICC proposes general updates to ensure that the information in the Recovery Plan is current. In Section I and throughout the document, the proposed changes specify that the information provided is current as of December 31, 2021, unless otherwise stated. Namely, the proposed changes ensure that relevant information regarding ICC for recovery planning, such as information about ICC's ownership and operation, is current with respect to:
• Activities of Intercontinental Exchange, Inc. (“ICE” or collectively, the “ICE Group” of affiliated companies with ICE as the ultimate parent) in Section II.A;
• clearing Index Swaptions by ICC in Section IV.A;
• data regarding ICC revenues, volumes, and expenses in Section IV.D;
• ICC personnel and facilities in Section VI.A;
• financial resources for recovery in Section X;
• ICC and ICE Group financial information in Section XI; and
• Financial service providers (“FSPs”) that hold Clearing Participant (“CP”) cash and collateral in Appendix C in Section XIII.
Additionally, ICC proposes to amend the composition of the Board and the descriptions of internal committees to reflect changes that impacted ICC in 2021. In Section IV.C.1, ICC proposes to change the Board size from eleven to nine managers, consistent with the adoption of the Sixth Amended and Restated Operating Agreement of ICC in 2021 (the “Sixth A&R Operating Agreement”), and to revise Manager titles as necessary.
ICC proposes additional updates to promote clarity and consistency in the Recovery Plan. Amended Section IV.E.4 notes that ICC monitors FSPs daily, intraday, and monthly, consistent with the processes described in the ICC Counterparty Monitoring Procedures.
ICC proposes changes related to seeking additional capital from the ICE Group in Section VIII.B.3, which is another recovery tool that may be used in a non-CP default scenario. The proposed changes include updated financial information, which is intended to establish that the ICE Group is capable of making such infusion. Given the changes in Board composition, ICC proposes revised procedures for seeking such additional capital, including the individual within the ICE Group with whom such discussions would begin. The proposed changes identify the role of this individual within the ICE Group and update the composition of certain ICE Group boards. Additionally, ICC proposes to include updated financial information that is relevant to the execution of other recovery tools that may be utilized in a non-CP default scenario.
ICC proposes additional minor edits for clarity and consistency. In Section IX, ICC proposes to clarify that the Recovery Plan is made available to regulators in accordance with relevant regulations and to incorporate a reference to the ICC Default Management Procedures for details on ICC's default management testing. In Section XIV, the proposed changes update the index of exhibits with the current versions of policies and procedures, consistent with updated footnote references. Finally, ICC proposes minor typographical fixes in the Recovery Plan as well as conforming changes in in the Wind-Down Plan, including updates to entity names, and grammatical and formatting changes.
The Wind-Down Plan is designed to establish how ICC could be wound-down in an orderly manner. ICC proposes corresponding changes to the Wind-Down Plan. ICC proposes general updates and edits to promote clarity and to ensure that the information provided is current. The proposed amendments reflect and relate to changes that have impacted ICC in the past year, including changes to the composition of the Board.
ICC proposes general updates to ensure that the information in the Wind-Down Plan is current. In Section I and throughout the document, the proposed changes specify that the information provided is current as of December 31, 2021, unless otherwise stated. The proposed revisions ensure that relevant information regarding ICC for wind-down planning, such as information about ICC's ownership and operation, is current with respect to:
• Activities of ICE in Section II.A;
• ICC personnel and facilities in Section VII.C;
• financial resources to support wind-down in Section IX; and
• FSPs that hold CP cash and collateral in Appendix C in Section XI.
ICC proposes additional updates and edits to promote clarity and consistency in the Wind-Down Plan. Amended Section VI.A specifies that ICC will make required disclosures pursuant to applicable regulations once the decision to wind-down is made and includes updated regulatory contacts. Furthermore, given the changes in Board composition, ICC proposes revised procedures for seeking certain required consultations or approvals identified in the Wind-Down Plan, including the individual within the ICE Group with whom such discussions would begin. The proposed changes identify the role of this individual within the ICE Group and include information on the composition of a relevant ICE Group board. In Section X, ICC proposes to note that the Wind-Down Plan is made available to regulators in accordance with relevant regulations and to clarify the testing of the Wind-Down Plan. In Section XII, the proposed changes update the index of exhibits with the current versions of policies and procedures, consistent with updated footnote references.
ICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act
ICC believes the proposed changes would enhance its ability to effectuate a successful recovery as well as to execute an orderly wind-down by providing updates and additional clarity with respect to ICC's recovery and wind-down processes and procedures. As discussed herein, the proposed revisions ensure that relevant information regarding ICC for recovery and wind-down planning is current, including updated information regarding personnel and facilities, finances and operations, and financial resources for recovery and wind-down. The proposed amendments also reflect and relate to changes that impacted ICC in the past year, including changes to the Board composition from the adoption of the Sixth A&R Operating Agreement and the responsibilities and membership composition of internal committees based on their amended charters. Such changes ensure that the Plans clearly and accurately set out the functions of the Board and committees to remain effective and to ensure that these groups carry out their required functions. To support and enhance the implementation of the Plans, additional language clarifications or edits are included so that the Plans remain up-to-date, transparent, and focused on clearly articulating the policies and procedures used to support ICC's recovery and wind-down efforts. Such revisions include additional details regarding required disclosures, references to relevant policies, updated information regarding recovery tools, and amended language that is intended to be more precise. The Plans would thus promote ICC's ability to continue providing clearing services with as little disruption as possible, and should continuation not be feasible, promote ICC's ability to discontinue clearing services in an orderly manner with minimum negative impact to the marketplace and stakeholders. Accordingly, in ICC's view, the proposed rule change is consistent with the prompt and accurate clearance and settlement of securities transactions, derivatives agreements, contracts, and transactions, the safeguarding of securities and funds in the custody or control of ICC or for which it is responsible, and the protection of investors and the public interest, within the meaning of Section 17A(b)(3)(F) of the Act.
The proposed rule change would also satisfy the relevant requirements of Rule 17Ad-22.
Rule 17Ad-22(e)(3)(ii)
Rule 17Ad-22(e)(15)
ICC does not believe the proposed rule change would have any impact, or impose any burden, on competition. The proposed changes to the Plans will apply uniformly across all market participants. The changes are being proposed to promote clarity and ensure that the information provided is current in the Plans. ICC does not believe the amendments would affect the costs of clearing or the ability of market participants to access clearing. Therefore, ICC does not believe the proposed rule change would impose any burden on competition that is inappropriate in furtherance of the purposes of the Act.
Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice of request for public comment and submission to OMB of proposed collection of information.
The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment.
Submit comments up to May 16, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to CA/EX Special Assistant Robin Patzelt, U.S. Department of State, Bureau of Consular Affairs, Office of the Executive Director, SA-17, 7th Floor, Washington, DC 20522-1707, who may be reached on 202-485-7365 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
MyTravelGov is an electronic account creation and validation portal. U.S. citizens who wish to submit applications for consular services online (electronic applications) instead of submitting paper applications must create a unique user account through MyTravelGov. The unique user account will safeguard the submission and storage of personally identifiable information necessary to process an online application. The information collected will also be used by servers to validate subsequent log-ons to the unique user account or attempts to reset the account password to ensure the security and integrity of accounts.
Information is collected when an individual logs on to the MyTravelGov web portal and elects to create a unique user account.
Great Basin and Northern Railroad (Great Basin), a Class III rail carrier, has filed a verified notice of exemption pursuant to 49 CFR 1150.41 to assume operations over 127 miles of rail line between milepost 0.0 at or near Cobre, Nev., and milepost 127.0 at or near McGill Junction in White Pine County, Nev. (the Line).
Great Basin states that it currently possesses Board authorization to operate a connecting line extending from milepost 127.0 to milepost 146.1 at or near Keystone, Nev., and two branch lines connecting to that line segment.
Great Basin certifies that the proposed transaction does not involve a provision or agreement that may limit future interchange with a third-party connecting carrier. Great Basin also certifies that its projected revenues as a result of the transaction will not result in the creation of a Class I or Class II rail carrier and will not exceed $5 million.
Under 49 CFR 1150.42(b), a change in operator requires that notice be given to shippers. Great Basin states, however, that there are no customers on the Line.
The transaction may be consummated on or after April 28, 2022, the effective date of the exemption (30 days after the verified notice was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than April 21, 2022 (at least seven days before the exemption becomes effective).
All pleadings, referring to Docket No. FD 36601, should be filed with the Surface Transportation Board via e-filing on the Board's website. In addition, a copy of each pleading must be served on Great Basin's representative, Jeffrey O. Moreno, Thompson Hine LLP, 1919 M Street NW, Suite 700, Washington, DC 20036.
According to Great Basin, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic preservation reporting requirements under 49 CFR 1105.8(b).
Board decisions and notices are available at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Federal Highway Administration (FHWA), Department of Transportation (DOT).
Notice.
The FHWA is issuing this notice to advise the public that we are rescinding the Notice of Intent (NOI) to prepare a Supplemental Environmental Impact Statement (SEIS) for the highway improvement project: US Route 219 Springville to Salamanca, NY Route 39 to NY Route 17 (Interstate 86), Erie and Cattaraugus Counties, New York [New York State Department of Transportation (NYSDOT) Project Identification Number 5101.84].
Richard J. Marquis, Division Administrator, FHWA, New York Division, Leo W. O'Brien Federal Building, 11A Clinton Avenue, Suite 719, Albany, New York 12207, Telephone: (518) 431-4127; or Francis P. Cirillo, Regional Director, New York State Department of Transportation, 100 Seneca Street, Buffalo, New York 14203, Telephone: (716) 847-3238.
The FHWA issued a Final Environmental Impact Statement (FEIS) and Record of Decision (ROD) for the US Route 219 Springville to Salamanca project in 2003. The FHWA, in cooperation with the NYSDOT, subsequently intended to prepare a SEIS to supplement the 2003 FEIS. The NOI to prepare a SEIS was published in the
The purpose of the project, as presented in the 2003 FEIS, was to improve capacity, address safety deficiencies, and eliminate a two-lane corridor gap between Springville and Salamanca. The SEIS would have evaluated the effects of a proposal to improve the US Route 219 highway between the Town of Ashford and I-86 near the City of Salamanca, all in Cattaraugus County, New York. As stated in the NOI to prepare the SEIS, alternatives under consideration included: (1) The Null Alternative, taking no action; (2) the Upgrade Alternative, widening the existing two-lane highway to four lanes with the possible inclusion of population center by-passes; and (3) the Freeway Alternative, constructing a four-lane limited access freeway on new location. As stated in the NOI, the proposed improvement would have involved the construction of a new route or the upgrade and rehabilitation of the existing route for a distance of about 25 miles.
Due to economic considerations and the increased demand for funding of vital infrastructure improvement projects in the region, the NOI to prepare a SEIS is hereby rescinded. In accordance with 23 CFR 771.129, the FHWA and NYSDOT will re-evaluate the 2003 FEIS and ROD to determine whether or not the conclusions in the approved NEPA Document and final project decision remain valid. Comments and questions concerning the proposed action should be directed to the NYSDOT or FHWA at the addresses provided above.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition.
FMCSA announces its decision to exempt 18 individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) to operate a commercial motor vehicle (CMV) in interstate commerce. The exemptions enable these hard of hearing and deaf individuals to operate CMVs in interstate commerce.
The exemptions are applicable on April 11, 2022. The exemptions expire on April 11, 2022.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption request. DOT posts these comments, without edit, including any personal
On February 16, 2022, FMCSA published a notice announcing receipt of applications from 18 individuals requesting an exemption from the hearing requirement in 49 CFR 391.41(b)(11) to operate a CMV in interstate commerce and requested comments from the public (87 FR 8916). The public comment period ended on March 18, 2022, and two comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting exemptions to these individuals would achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(11).
The physical qualification standard for drivers regarding hearing found in § 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5—1951.
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, 35 FR 6458, 6463 (Apr. 22, 1970) and 36 FR 12857 (July 3, 1971).
FMCSA received two comments in this proceeding. One comment was in support of Wallace Bostrom obtaining a hearing exemption and the other comment requests granting the exemption be based on the applicant's driving history. FMCSA reviews the driving record of each applicant to ensure each applicant demonstrates a safe driving history.
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The Agency's decision regarding these exemption applications is based on current medical information and literature, and the 2008 Evidence Report, “Executive Summary on Hearing, Vestibular Function and Commercial Motor Driving Safety.” The evidence report reached two conclusions regarding the matter of hearing loss and CMV driver safety: (1) No studies that examined the relationship between hearing loss and crash risk exclusively among CMV drivers were identified; and (2) evidence from studies of the private driver's license holder population does not support the contention that individuals with hearing impairment are at an increased risk for a crash. In addition, the Agency reviewed each applicant's driving record found in the Commercial Driver's License Information System, for commercial driver's license (CDL) holders, and inspections recorded in the Motor Carrier Management Information System. For non-CDL holders, the Agency reviewed the driving records from the State Driver's Licensing Agency. Each applicant's record demonstrated a safe driving history. Based on an individual assessment of each applicant that focused on whether an equal or greater level of safety is likely to be achieved by permitting each of these drivers to drive in interstate commerce as opposed to restricting him or her to driving in intrastate commerce, the Agency believes the drivers granted this exemption have demonstrated that they do not pose a risk to public safety.
Consequently, FMCSA finds that in each case exempting these applicants from the hearing standard in § 391.41(b)(11) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption are provided to the applicants in the exemption document and includes the following: (1) Each driver must report any crashes or accidents as defined in § 390.5; (2) each driver must report all citations and convictions for disqualifying offenses under 49 CFR 383 and 49 CFR 391 to FMCSA; and (3) each driver is prohibited from operating a motorcoach or bus with passengers in interstate commerce. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. In addition, the exemption does not exempt the individual from meeting the applicable CDL testing requirements.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 18 exemption applications, FMCSA exempts the following drivers from the hearing standard, § 391.41(b)(11), subject to the requirements cited above:
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of petition for approval to move to phase 2 of track inspection test program.
This document provides the public notice that on March 24, 2022, Union Pacific Railroad (UP) petitioned the Federal Railroad Administration (FRA) to transition from phase 1 to phase 2 of a previously approved test program and associated temporary suspension of some visual track inspections. The Test Program is designed to test track inspection technologies (
Yu-Jiang Zhang, Staff Director, Track and Structures Division, Office of Railroad Safety, FRA, 1200 New Jersey Avenue SE, Washington, DC 20590, telephone (202) 493-6460 or email
On April 28, 2020, FRA conditionally approved the Test Program and UP's petition under 49 CFR 211.51 to suspend §§ 213.233(c) as applied to operations under the Test Program. A copy of the Test Program, FRA's conditional approval of the Test Program, and a previously published
As approved, the Test Program included two separate phases over 12 months, as outlined in Exhibit C of the Program.
UP is requesting to transition from phase 1 to 2 on one of the Test Program routes, the Sunset route. In support of its request, UP states that it has met the Test Program conditions required to move to phase 2 and has achieved an average safety metric of 0.67 unprotected geometry defects per 100 miles tested and 3.47 track inspector identified geometry defects per month in phase 1 of the Test Program. UP is not requesting to move to phase 2 on the SPCSL route.
A copy of the petition, as well as any written communications concerning the petition, if any, are available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
• Website:
Communications received by May 16, 2022 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable. Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Notice and request for public comment.
The U.S. Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently, the Community Development Financial Institutions Fund (CDFI Fund), Department of the Treasury, is soliciting comments concerning the Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery.
Written comments should be received on or before June 13, 2022 to be assured of consideration.
Submit your comments via email to Shannon McKay, Acting Manager, Office of Financial Strategies and Research, CDFI Fund, U.S. Department of the Treasury, at
Shannon McKay CDFI Fund, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC or by phone at (202) 653-0300. Other information regarding the CDFI Fund and its programs may be obtained through the CDFI Fund's website at
Feedback collected under this generic clearance will provide useful information, but it will not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is updating the identifying information on its Specially Designated Nationals and Blocked Persons List (“SDN List”) for a person whose property and interests in property are blocked pursuant to Executive Order 13224 of September 23, 2001, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism.”
See
OFAC: Andrea Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On April 7, 2022, OFAC published the following revised information for the following person on OFAC's SDN List whose property and interests in property are blocked pursuant to Executive Order 13224.
1. CHATAYEV, Akhmed (a.k.a. CHATAEV, Ahmed; a.k.a. CHATAEV, Akhmed Rajapovich; a.k.a. CHATAEV, Akhmet; a.k.a. CHATAYEV, Akhmad; a.k.a. CHATAYEV, Akhmet; a.k.a. SENE, Elmir; a.k.a. TSCHATAJEV, Achmed Radschapovitsch; a.k.a. TSCHATAJEV, Ahmed Radschapovitsch; a.k.a. TSCHATAYEV, Achmed Radschapovitsch; a.k.a. TSCHATAYEV, Ahmed Radschapovitsch; a.k.a. “Akhmed Odnorukiy”; a.k.a. “Akhmed the One-Armed”; a.k.a. “AL-SHISHANI, Akhmed”; a.k.a. “CHATAEV, A.R.”; a.k.a. “Odnorukiy”; a.k.a. “SHISHANI, Akhmad”); DOB 14 Jul 1980; POB Vedeno Village, Vedenskiy District, the Republic of Chechnya, Russia; citizen Russia; Passport 96001331958 (Russia) (individual) [SDGT] (Linked To: ISLAMIC STATE OF IRAQ AND THE LEVANT).
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Andrea Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On April 11, 2022, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
1. CLANCY, Bernard Patrick, 43 Senorio De Cortes, Estepona, Spain; Dubai, United Arab Emirates; DOB 04 Sep 1977; POB Ireland; citizen Ireland; Gender Male; Passport PS0129975 (Ireland); alt. Passport PG7546744 (Ireland) (individual) [TCO] (Linked To: KINAHAN ORGANIZED CRIME GROUP). Designated pursuant to section 1(a)(ii)(B) of Executive Order 13581 of July 24, 2011, “Blocking Property of Transnational Criminal Organizations” (E.O. 13581), as amended by E.O. 13863 of March 15, 2019, “Taking Additional Steps to Address the National Emergency With Respect to Significant Transnational Criminal Organizations” (E.O. 13863), for having materially assisted, sponsored, or provided financial, material, or technological support
2. DIXON, Ian Thomas, Arabian Ranches 2, Street 2, Lila Community, Villa 80, Dubai, United Arab Emirates; DOB 17 Sep 1989; POB Dublin, Ireland; nationality Ireland; Gender Male; Passport PT5688467 (Ireland); alt. Passport PW7797470 (Ireland); Driver's License No. 177803 (United Arab Emirates); Identification Number 784198943250948 (United Arab Emirates); alt. Identification Number 161995173 (United Arab Emirates); alt. Identification Number 082093477 (United Arab Emirates); alt. Identification Number 683129 (United Arab Emirates) (individual) [TCO] (Linked To: KINAHAN, Daniel Joseph). Designated pursuant to section 1(a)(ii)(B) of E.O. 13581, as amended by E.O. 13863, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Daniel Joseph KINAHAN.
3. KINAHAN, Daniel Joseph, 14 Palm Jumeirah, Dubai 378149, United Arab Emirates; Avda Juan Ramon Jimenez 2, Urbanizacion Cortijo Blanco, San Pedro de Alcantaras, Malaga 29670, Spain; Calle Galicia No 71 A, Guadalmina Baja, Estepona, Spain; DOB 25 Jun 1977; alt. DOB 26 May 1979; POB Dublin, Ireland; nationality Ireland; citizen Ireland; alt. citizen United Kingdom; Gender Male; Passport PB1642995 (Ireland); alt. Passport PW1900911 (Ireland); alt. Passport P008448 (Ireland); alt. Passport PD4435945 (Ireland); alt. Passport 704043374 (United Kingdom); Identification Number 784197715087538 (United Arab Emirates); alt. Identification Number 076822265 (United Arab Emirates); alt. Identification Number 195762701 (United Arab Emirates) (individual) [TCO] (Linked To: KINAHAN ORGANIZED CRIME GROUP). Designated pursuant to section 1(a)(ii)(C) of E.O. 13581, as amended by E.O. 13863, for having acted or purported to act for or on behalf of, directly or indirectly, the KINAHAN ORGANIZED CRIME GROUP.
4. KINAHAN, Christopher Vincent (a.k.a. “KINAHAN SENIOR, Christy”; a.k.a. “O'BRIEN, Christopher”; a.k.a. “THE DAPPER DON”), Dubai, United Arab Emirates; Calle Muntaner 325, Planta 6, 4, Barcelona 08021, Spain; Calle Los Geranios, Villa Indelo N 244, San Pedro De Alcantara, Marbella, Spain; Urbanizacion Torre Bermeja, N 1501, Estepona, Spain; DOB 23 Mar 1957; alt. DOB 19 Nov 1952; alt. DOB 23 May 1957; POB Cabra, Ireland; alt. POB Perivale, Middlesex, United Kingdom; alt. POB London, United Kingdom; alt. POB Dublin, Ireland; nationality Ireland; citizen Ireland; Gender Male; Passport PD3265994 (Ireland); alt. Passport 094456153 (United Kingdom); alt. Passport 707265430 (United Kingdom); alt. Passport C181651D (United Kingdom); alt. Passport 701191749 (United Kingdom) (individual) [TCO] (Linked To: KINAHAN ORGANIZED CRIME GROUP). Designated pursuant to section 1(a)(ii)(C) of E.O. 13581, as amended by E.O. 13863, for having acted or purported to act for or on behalf of, directly or indirectly, the KINAHAN ORGANIZED CRIME GROUP.
5. KINAHAN JUNIOR, Christopher Vincent (a.k.a. “CHRISTY JNR.”), 1404 Iris Blue Building, Dubai Marina, P.O. Box 11850, Dubai, United Arab Emirates; Calle Edificio El Noray, 2 Piso 1 B, Marbella, Spain; Urbanizacion Acosta Los Flamingos Golf, Bloque 82 D, Benahavis, Marbella, Spain; DOB 24 Sep 1980; alt. DOB 30 May 1981; POB Dublin, Ireland; nationality Ireland; citizen Ireland; Gender Male; Passport PW2418905 (Ireland); alt. Passport PT0298836 (Ireland); alt. Passport PN8384153 (Ireland); alt. Passport 512964060 (United Kingdom); Identification Number 784198027625874 (United Arab Emirates); alt. Identification Number 166622091 (United Arab Emirates); alt. Identification Number 077449510 (United Arab Emirates) (individual) [TCO] (Linked To: KINAHAN ORGANIZED CRIME GROUP). Designated pursuant to section 1(a)(ii)(B) of E.O. 13581, as amended by E.O. 13863, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the KINAHAN ORGANIZED CRIME GROUP.
6. MCGOVERN, Sean Gerard, Dubai, United Arab Emirates; DOB 12 Feb 1986; POB Dublin, Ireland; nationality Ireland; citizen Ireland; Gender Male; Passport PJ2861371 (Ireland) (individual) [TCO] (Linked To: KINAHAN, Daniel Joseph). Designated pursuant to section 1(a)(ii)(B) of E.O. 13581, as amended by E.O. 13863, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Daniel Joseph KINAHAN.
7. MORRISSEY, John Francis (a.k.a. “MORRISSEY, Johnny”), Dinamarca 46 B, Malaga, Spain; Marbella, Spain; DOB 20 Dec 1959; nationality Ireland; citizen Ireland; Gender Male; Passport W089513 (Ireland); alt. Passport PU8060632 (Ireland) (individual) [TCO] (Linked To: KINAHAN ORGANIZED CRIME GROUP). Designated pursuant to section 1(a)(ii)(B) of E.O. 13581, as amended by E.O. 13863, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the KINAHAN ORGANIZED CRIME GROUP.
8. DUCASHEW GENERAL TRADING LLC, Boulevard Plaza, Tower 2, Office No. 2101 and 2102, Sheikh Mohammed Bin Rashid Boulevard, Dubai 454602, United Arab Emirates; Organization Established Date 10 Oct 2016; Dubai Chamber of Commerce Membership No. 276774 (United Arab Emirates); Company Number 767691 (United Arab Emirates) [TCO]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13581, as amended by E.O. 13863, for being owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, Daniel Joseph KINAHAN.
9. HOOPOE SPORTS LLC (f.k.a. HOOPOE BUSINESS BROKERS LLC; f.k.a. HOOPOE SPORTS AGENT L.L.C.), Office No. 2101 and 2102, 21st Floor, Emaar Boulevard Plaza, Tower 2, Dubai, United Arab Emirates; Organization Established Date 17 May 2017; Dubai Chamber of Commerce Membership No. 289666 (United Arab Emirates); Commercial Registry Number 1286684 (United Arab Emirates); Company Number 782807 (United Arab Emirates) [TCO]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13581, as amended by E.O. 13863, for being owned or controlled by, directly or indirectly, Ian Thomas DIXON.
10. KINAHAN ORGANIZED CRIME GROUP (a.k.a. KINAHAN ORGANISED CRIME GROUP; a.k.a. “KOCG”), Ireland; United Kingdom; Spain; Netherlands; Dubai, United Arab Emirates; Target Type Criminal Organization [TCO]. Designated pursuant to section 1(a)(ii)(A) of E.O. 13581, as amended by E.O. 13863, for being a foreign person that constitutes a significant transnational criminal organization.
11. NERO DRINKS COMPANY LIMITED (a.k.a. NERO DRINKS COMPANY SL; a.k.a. NERO VODKA), 15 Cumbernauld Road, Stepps, Glasgow, Scotland G33 6LE, United Kingdom; Unit 20310, P.O. Box 6945, London W1A 6US, United Kingdom; C Dinamarca 46 B, Urbanizacion Faro De Calaburra, Mijas, Spain; Tax ID No. B93681724 (Spain); Company Number SC591051 (United Kingdom) [TCO]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13581, as amended by E.O. 13863, for being owned or controlled by, directly or indirectly, John Francis MORRISSEY.
Internal Revenue Service (IRS), Treasury.
Notice.
Publication of the reference price for the nonconventional source production credit for calendar year 2021.
Christopher Price, CC:PSI:6, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224, Telephone Number (202) 317-6853 (not a toll-free number).
The credit period for the nonconventional source production credit ended on December 31, 2013 for facilities producing coke or coke gas (other than from petroleum based products). However, the reference price continues to apply in determining the amount of the enhanced oil recovery credit under section 43 of title 26 of the U.S.C., the marginal well production credit under section 45I of title 26 of the U.S.C., and the applicable percentage
The reference price under section 45K(d)(2)(C) of title 26 of the U.S.C. for calendar year 2021 applies for purposes of sections 43, 45I, and 613A for taxable year 2022.
Internal Revenue Service (IRS), Treasury.
Notice of publication.
The 2022 inflation adjustment factor and reference price are used in determining the availability of the credit for renewable electricity production. For calendar year 2022, the credit period for refined coal production and Indian coal production expired.
Charles Hyde, CC:PSI:6, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224, (202) 317-6853 (not a toll-free number).
The 2022 inflation adjustment factor and reference price apply to calendar year 2022 sales of kilowatt hours of electricity produced in the United States or a possession thereof from qualified energy resources.
Department of the Treasury.
The extension of the application due date for the solicitation of nominations for membership of the Treasury Advisory Committee on Racial Equity.
The Treasury Department is soliciting nominations for membership on the Treasury Advisory Committee on Racial Equity (TACRE). The TACRE is composed of up to 25 members who will provide information, advice and recommendations to the Department of the Treasury on matters relating to the advancement of racial equity. This notice extends the process for applying for membership on the Committee until April 25th, 2022.
Applications are due on or before April 25, 2022.
Janis Bowdler, Counselor for Racial Equity, Department of Treasury, (202) 622-3002,
Pursuant to the Federal Advisory Committee Act (FACA) (5 U.S.C. app., as amended), the Department of the Treasury (“Department”) has established the Treasury Advisory Committee on Racial Equity (“Committee”). The Department has determined that establishing this committee is necessary and in the public interest in order to carry out the provisions of Executive Order 13985,
In order to achieve a fairly balanced membership, the Committee shall include representatives from a wide range of views, such as the Federal government, financial services industry, state regulatory authorities, consumer or public advocacy organizations, community-based groups, academia, philanthropic organizations, as well as others focused on the advancement of equity priorities within the United States. Membership balance will not be static and may change, depending on the work of the Committee. The number of Committee members shall not exceed twenty-five. The Committee shall meet at such intervals as are necessary to carry out its duties. It is estimated that the Committee will generally meet four times per year, virtually or in person. Generally, Committee meetings are open to the public.
The purpose of the Committee is to provide advice and recommendations to the Department of the Treasury to assist
The Committee will provide an opportunity for experts to offer their advice and recommendations to the Office of the Secretary on a regular basis on aspects of the domestic economy that have directly and indirectly resulted in unfavorable conditions for Black, Latino, and Indigenous and Native American persons, Asian Americans and Pacific Islanders and other persons of color. Topics to be addressed by the Committee may include, but are not limited to, financial inclusion, capital access, housing stability, federal government supplier diversity and economic development.
The duties of the Committee shall be solely advisory and shall extend only to the submission of advice and recommendations to the Offices of the Secretary and Deputy Secretary, which shall be non-binding to the Department. No determination of fact or policy shall be made by the Committee. Membership appointments are for a duration of two years. Members will not receive compensation, other than reimbursement for travel, if required.
Applicants are required to submit the following documents specifically referencing the objectives and duties outlined above:
• A one (1) page cover letter detailing their qualifications and areas of expertise as they relate to the key issues before the committee; and
• A two (2) page resume/curriculum vitae, which should clearly highlight relevant experience that addresses the focus areas of TACRE
Nominations may be submitted by the candidate him- or herself or by the person/organization recommending the candidate.
Some members of the Committee may be required to adhere to the conflict of interest rules applicable to Special Government Employees, as such employees are defined in 18 U.S.C. 202(a). These rules include relevant provisions in 18 U.S.C. related to criminal activity, Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR part 2635), and Executive Order 12674 (as modified by Executive Order 12731).
In accordance with Department of Treasury Directive 21-03, a clearance process includes fingerprints, tax checks, and a Federal Bureau of Investigation criminal check.
The application period for interested candidates will extend to the date outlined above. Applications should be submitted in sufficient time to be received by the close of business on the closing date and should be sent to
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. App. 2., that the Veterans' Advisory Committee on Education (the Committee) will meet virtually using Microsoft Teams May 24, 2022-May 26, 2022, from 10:00 a.m. to 5:00 p.m., EST. The meeting sessions are open to the public.
The purpose of the Committee is to advise the Secretary of Veterans Affairs on the administration of education and training programs for Veterans, Servicepersons, Reservists, and Dependents of Veterans including programs under Chapters 30, 32, 33, 35, and 36 of title 38, and Chapter 1606 of title 10, United States Code.
The purpose of the meeting is for the Committee to hear briefings on topics of interest to its three subcommittees (Modernization, OJT/Apprenticeship and Distance Learning) and to obtain updates based on its report and recommendations to VA submitted in December 2021.
Interested persons may attend. The meeting will be conducted using Microsoft Teams. Please email
Although no time will be allotted for receiving oral presentations from the public, individuals wishing to share information with the Committee may submit written statements for the Committee's review to Mr. Joseph Maltby, Designated Federal Official, Department of Veterans Affairs, by email at
Notice.
The Department of Veterans Affairs (VA) is seeking nominations of qualified candidates to be considered for appointment to the Advisory Committee (Committee) on Former Prisoners of War (FPOW).
Nominations for membership on the Committee must be received no later than 5:00 p.m. EDT on June 2, 2022.
All nominations should be mailed to Outreach, Transition and Economic Development (OTED), Veterans Benefits Administration (VBA), Department of Veterans Affairs, 1800 G St. NW, Washington, DC 20006 or emailed to
Julian Wright, Designated Federal Officer (DFO), OTED, Department of Veterans Affairs, 1800 G St. NW, Washington, DC 20006, telephone (202) 302-8629.
In carrying out the duties set forth, the activities of the Committee include, but are not limited to:
(1) Advising the Secretary on how VA can assist and represent FPOWs', including recommendations regarding expanding services and benefits to FPOWs' and related policy. Administrative, legislative, and/or regulatory actions;
(2) Advising the Secretary on incorporating lessons learned from current, and previous, successful family research and outreach efforts that
(3) Advising the Secretary on collaborating with family support programs within VA and engaging with other VA and non-VA advisory committees focused on specific demographics of FPOWs;
(4) Advising the Secretary on working with interagency, intergovernmental, private/non-profit, community, and Veteran service organizations to identify and address gaps in services for FPOWs;
(5) Providing such reports as the Committee deems necessary, but not less than one report per year, to the Secretary, through the DFO/VBA to describe the Committee's activities, deliberations, and findings, which may include but are not limited to: (1) Identification of current challenges and recommendations for remediation related to access to care and benefits services of FPOWs; and (2) identification of current best practices in care and benefits delivery to FPOWs, and the impact of such best practices.
(1) The administration of benefits for Veterans who are FPOW, in the areas of service-connected compensation, dependency and indemnity compensation, health care, and rehabilitation.
(2) The use of VA care and benefits services by FPOWs, and possible adjustments to such care and benefits services;
(3) Factors that influence access to, quality of, and accountability for services and benefits for FPOWs.
The members of the Committee are appointed by the Secretary of Veteran Affairs from the general public, from various sectors and organizations, including but not limited to:
(1) Veterans who are FPOWs.
(2) Appropriate representatives of Veterans who are former prisoners of war;
(3) Individuals who are recognized authorities in fields pertinent to disabilities prevalent among former prisoners of war, including authorities in epidemiology, mental health, nutrition, geriatrics and internal medicine; and
(4) Appropriate representatives of disabled Veterans.
In accordance with the Committee Charter, the Secretary shall determine the number, terms of service, and pay and allowances of Committee members. The term of service for any member may not exceed three years. The Secretary may reappoint any Committee member for additional terms of service.
To the extent possible, the Secretary seeks members who have diverse professional and personal qualifications including but not limited to subject matter experts in the areas described above. We ask that nominations include any relevant experience information so that VA can ensure diverse Committee membership.
(1) A letter of nomination that clearly states the name and affiliation of the nominee, the basis for the nomination (
(2) The nominee's contact information, including name, mailing address, telephone numbers, and email address;
(3) The nominee's resume; and
(4) A summary of the nominee's experience and qualifications relative to the membership considerations described above.
Individuals selected for appointment to the Committee shall be invited to serve a two-year term. Committee members will receive a stipend for attending Committee meetings, including per diem and reimbursement for eligible travel expenses incurred.
The Department makes every effort to ensure that the membership of VA Federal advisory committees are diverse in terms of points of view represented and the committee's capabilities. Appointments to this Committee shall be made without discrimination because of a person's race, color, religion, sex, sexual orientation, gender identify, national origin, age, disability, or genetic information. Nominations must state that the nominee is willing to serve as a member of the Committee and appears to have no conflict of interest that would preclude membership. An ethics review is conducted for each selected nominee.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Final rule with comment period.
This final rule with comment period (FC) will finalize the two remaining proposals from the proposed rule titled “Medicare and Medicaid Programs; Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” which appeared in the
In commenting, please refer to file code CMS-4190-FC4.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
Cali Diehl, (410) 786-4053 or
CMS will not post on
This final rule with comment period (FC) makes policy changes in alignment with federal laws related to the Medicare Advantage (MA or Part C) program from the 21st Century Cures Act (Pub. L. 114-255). The rule also includes regulatory changes to strengthen and improve the Part C program by codifying in regulation several CMS policies previously adopted through the annual Call Letter and other guidance documents to interpret and implement rules regarding benefits in MA plans.
In this FC, we are addressing the two remaining proposals from the February 2020 proposed rule that were not addressed in the June 2020 final rule (85 FR 33796) and the January 2021 final rule (86 FR 5864): (1) Maximum Out-of-Pocket (MOOP) Limits for Medicare Parts A and B Services (§§ 422.100 and 422.101); and (2) Service Category Cost Sharing Limits for Medicare Parts A and B Services and per Member per Month Actuarial Equivalence Cost Sharing (§§ 422.100 and 422.113). The changes to the proposals we are finalizing in this FC range from minor edits, reorganizations, corrections, and clarifications to substantive modifications based on the comments received, operational considerations (such as, changes stemming from the timing of this FC), and additional implementation of antidiscrimination requirements (such as, to support equitable access to plans for beneficiaries with high health needs). In
• The provisions relating to MOOP and cost sharing limits improve the operation of the MA program by making updates to reflect changes in Medicare FFS data projections (thereby ensuring the government program does not use outdated data) and clarifying existing policies (thereby answering questions regulated parties may have). Given the context of these provisions is a federal program, a federal regulatory approach is appropriate with respect to these provisions.
• The provisions also codify subregulatory guidance, which is an improvement in that regulated parties and CMS will have greater clarity regarding the application of these policies as a rule. Given the context of these provisions is a federal program, a federal regulatory approach is appropriate with respect to these provisions.
Section 1852(b)(1) of the Act prohibits discrimination by MA organizations on the basis of health status-related factors and directs that CMS may not approve an MA plan if CMS determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals. In a 2010 final rule, under the authority of sections 1852(b)(1)(A), 1856(b)(1), and 1857(e)(1) of the Act, CMS added §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3), effective for coverage in 2011, to require all MA plans (including employer group waiver plans (EGWPs) and special needs plans (SNPs)) to establish limits on enrollee out-of-pocket cost sharing for Parts A and B services that do not exceed the annual limits set by CMS (75 FR 19709 and 19711). Setting MOOP limits is an important step to ensure plan designs are not discriminatory and protect beneficiaries from significant changes in out-of-pocket costs regardless of the MA plan they choose. MA EGWPs must follow all relevant MA regulations and guidance unless CMS has specifically waived a requirement using its statutory authority under section 1857(i) of the Act. Section 1858(b)(2) of the Act requires a limit on in-network and out-of-pocket expenses for enrollees in Regional Preferred Provider Organization (RPPO) MA plans. MA Local PPO (LPPO) plans, under § 422.100(f)(5), and RPPO plans, under section 1858(b)(2) of the Act and § 422.101(d)(3), are required to have two maximum out-of-pocket (MOOP) limits (also called catastrophic limits) calculated by CMS annually, including—(1) an in-network limit; and (2) a total catastrophic (combined) limit that includes both in-network and out-of-network items and services covered under Parts A and B. Relying on the same statutory authority, we proposed amendments to the regulations at § 422.100(f)(4) and (5) and § 422.101(d)(2) and (3) to specify how these MOOP limits will be set for 2022 and subsequent years. In addition, our proposals made adjustments to current policy based on statutory changes that are relevant to how CMS calculates benefit category cost sharing limits.
We proposed to codify our current practices for setting MOOP limits with some revisions, including explicitly addressing authority to set up to three different MOOP limits. In addition, we proposed to conduct a multiyear transition of end-stage renal disease (ESRD) costs into the methodology for setting MOOP limits. Section 1851(a)(3) of the Act, as amended by section 17006 of the 21st Century Cures Act, amended the Medicare statute to permit Medicare beneficiaries with diagnoses of ESRD to enroll in MA plans beyond the previous enrollment limitations, beginning in contract year 2021. Enrollment impacts from section 17006 of the Cures Act are addressed in sections III.A., VII.B.3., and VIII.D.1. of the June 2020 final rule (85 FR 33796). Before the amendments made by the Cures Act were effective for contract year 2021, individuals diagnosed with ESRD could not enroll in a MA plan, subject to limited exceptions. Generally, those exceptions included the following circumstances: An individual that developed ESRD while enrolled in a MA plan could remain in that plan; an ESRD individual enrolled in a plan which was terminated or discontinued had a one-time opportunity to join another plan; or, an individual could enroll in a special needs plan that had obtained a waiver to enroll individuals with ESRD. We explained that the data we use to calculate the MOOP limits should also incorporate the out-of-pocket expenditures of beneficiaries with diagnoses of ESRD, which we are referring to in this FC as “ESRD costs,” to reflect this statutory change. Finally, we proposed safeguards to protect against excessive changes in the MOOP limit during and after the ESRD cost transition.
We are finalizing these MOOP proposals generally as proposed with changes to apply the provisions beginning in contract year 2023 rather than 2022, make modifications to be responsive to comments (including adoption of a transition schedule), and improve and clarify the methodology. A complete discussion of changes from the February 2020 proposed rule is available in section II.A. of this FC.
Section 1852 of the Act imposes a number of requirements that apply to the cost sharing and benefit design of MA plans. First, section 1852(a)(1)(B) of the Act specifies that MA plans may not charge enrollees higher cost sharing than is charged under original Medicare for chemotherapy administration services (which we have implemented as including Part B—chemotherapy/radiation drugs integral to the treatment regimen), skilled nursing care, and renal dialysis services. This provision is currently reflected in §§ 417.454(e) (for cost plans) and 422.100(j) (for MA plans). We proposed to restructure paragraph (j) and codify additional cost sharing limits for other services. We did not propose to change cost plan cost sharing standards. In addition, after publication of the February 2020 proposed rule, the Families First Coronavirus Response Act (Pub. L. 116-127) amended section 1852 of the Act to prohibit MA plans from charging enrollees higher cost sharing than is charged under original Medicare for COVID-19 testing and testing-related services identified in section 1833(cc)(1) for which payment would be payable under a specified outpatient payment provision described in section 1833(cc)(2) during the period from March 18, 2020 through to the end of the emergency period described in section 1135(g)(1)(B) (namely, the COVID-19 public health emergency). The Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) amended section 1852(a)(1)(B) to require MA plans have cost sharing that does not exceed cost sharing in Original Medicare for a COVID-19 vaccine and its administration described in section 1861(s)(10)(A) of the Act.
Second, section 1852(a)(1)(B)(i) of the Act provides that the MA organization must cover, subject to limited exclusions, the benefits under Parts A and B (that is, basic benefits as defined in § 422.100(c)) with cost sharing that does not exceed or is at least actuarially equivalent to cost sharing in original Medicare in the aggregate; this is repeated in a bid requirement under
Third, section 1852(a)(1)(B)(iv) of the Act authorizes CMS to add to the list of items and services for which MA cost sharing may not exceed the cost sharing levels in original Medicare.
Fourth, section 1852(b)(1) of the Act prohibits discrimination by MA organizations on the basis of health status-related factors and directs that CMS may not approve an MA plan if CMS determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals. The requirements under § 422.100(f)(4) and (5) that impose MOOP limits on MA plans are based on this anti-discrimination provision by requiring MA local plans to have limits on out of pocket spending by enrollees in order to ensure that beneficiaries with high health needs are not dissuaded from enrolling in an MA plan; while the requirements under § 422.101(d)(2) and (3) implement the statutory catastrophic limits imposed on regional MA plans under section 1858(b) of the Act, those limits similarly protect enrollees with high health needs and avoid discouraging them from enrollment in MA plans. Paragraph (f)(6) provides that cost sharing must not be discriminatory by imposing cost sharing limits. Imposing limits on cost sharing for covered services is an important way to ensure that the cost sharing aspect of an MA plan design does not discriminate against or discourage enrollment of beneficiaries who have high health care needs and who need specific services. CMS issued annual limits on cost sharing for covered services and guidance addressing discriminatory cost sharing, as applied to specific benefits and to categories of benefits, in the annual Call Letter (prior to 2020) and in bidding instructions. In addition, Chapter 4 of the Medicare Managed Care Manual (MMCM) has contained long-standing polices regarding discriminatory cost sharing based on the requirements under paragraphs (f)(4) and (5).
We proposed to codify our current and longstanding practice and methodology for interpreting and applying the limits on MA cost sharing, with some modifications. Our cost sharing proposal as a whole, in combination with the MOOP limit proposal in section VI.A. of the February 2020 proposed rule, aimed to provide MA organizations incentives to offer plans with favorable benefit designs for beneficiaries. As noted in the February 2020 proposed rule, organizations must also comply with applicable Federal civil rights laws that prohibit discrimination, including those that prohibit discrimination on the basis of race, color, national origin, sex (including sexual orientation and gender identity), age, and disability, such as section 1557 of the Affordable Care Act, Title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975. None of the proposals in the February 2020 proposed rule limited application of such anti-discrimination requirements. Overall, our proposal aimed to clarify how we use the most relevant and appropriate information to determine whether specific cost sharing is discriminatory and to calculate standards and thresholds above which we believe cost sharing is discriminatory. We shared our intent to communicate, similar to our current practice prior to bid submission, how we apply the proposed methodologies each year, such as through HPMS memoranda, as appropriate. We solicited comment on the following cost sharing proposals:
• Codifying a long-standing interpretation of the current anti-discrimination provision of section 1852(b)(1) that payment of less than 50 percent of the total MA plan financial liability discriminates against enrollees who need those services;
• Establishing a range of cost sharing limits for basic benefits furnished on an in-network basis based on the MOOP type established by the MA plan;
• Codifying the methodology used to calculate the limits for MA cost sharing for inpatient hospital acute and psychiatric services and incorporate ESRD costs into that methodology;
• Updating the cost sharing limits for emergency and post-stabilization services and codifying a new rule for cost sharing limits for urgently needed services;
• Codifying and adding specific benefits for which MA plans may not charge enrollees higher cost sharing than is charged under original Medicare; and
• Codifying our existing policy regarding the specific benefit categories for which an MA plan must not exceed the cost sharing in original Medicare on a PMPM actuarially equivalent basis.
The changes to the cost sharing proposals we are finalizing in this FC range from minor edits, corrections, and clarifications to substantive modifications based on the comments received, operational considerations (such as, changes stemming from the timing of this FC), and improvements to the methodology. CMS's goal in finalizing the cost sharing proposals as described in this FC is to adopt standards and require compliance that further antidiscriminatory requirements (such as, by supporting equitable access to plans for beneficiaries with high health needs). A complete discussion of changes from the February 2020 proposed rule is available in section II.B. of this FC.
We received approximately 44 timely pieces of correspondence containing multiple comments for the provisions implemented in this FC from the February 2020 proposed rule. Comments were submitted by health plans, provider associations, beneficiary and other advocacy organizations, and pharmaceutical companies.
We are finalizing the policies from the February 2020 proposed rule in more than one final rule. The first final rule
The changes to the proposals we are finalizing in this FC range from minor edits, reorganizations, corrections, and clarifications to substantive modifications based on the comments received, operational considerations (such as, changes stemming from the timing of this FC), and improvements to the methodology. CMS's goal in finalizing the cost sharing proposals as described in this FC is to adopt standards and require compliance that further antidiscriminatory requirements (such as, by supporting equitable access to plans for beneficiaries with high health needs). Summaries of the public comments received and our responses to those public comments are set forth in the various sections of this FC under the appropriate headings. We also note that some of the public comments received for the provisions implemented in this FC were outside of the scope of the February 2020 proposed rule. Summaries of the out-of-scope public comments made in relation to the provisions in this FC are provided in the various sections of this FC under the appropriate headings.
The Code of Federal Regulations (CFR) will be updated consistent with the respective effective date of each provision. Because CMS is finalizing these regulations as applicable for the contract year and coverage beginning January 1, 2023, the requirements in this FC will apply to MA bid submissions occurring in calendar year 2022 for contracts effective January 1, 2023.
Section 1852(b)(1) of the Act prohibits discrimination by MA organizations on the basis of health status-related factors and directs that CMS may not approve an MA plan if CMS determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals. Under the authority of sections 1852(b)(1)(A), 1856(b)(1), and 1857(e)(1) of the Act, CMS added §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3), effective for coverage in 2011, to require all MA plans (including employer group waiver plans (EGWPs) and special needs plans (SNPs)) to establish limits on enrollee out-of-pocket cost sharing for Parts A and B services that do not exceed the annual limits established by CMS (75 FR 19709 through 19711). MA EGWPs must follow all relevant MA regulations and guidance unless CMS has specifically waived a requirement under its section 1857(i) of the Act statutory authority. Section 1858(b)(2) of the Act requires a limit on in-network and out-of-pocket expenses for enrollees in Regional Preferred Provider Organization (RPPO) MA plans. In addition, MA Local PPO (LPPO) plans, under § 422.100(f)(5), and RPPO plans, under section 1858(b)(2) of the Act and § 422.101(d)(3), are required to have two maximum out-of-pocket (MOOP) limits (also called catastrophic limits) established by CMS annually, including (a) an in-network and (b) a total catastrophic (combined) limit that includes both in-network and out-of-network items and services covered under Parts A and B. Relying on the same authority, we proposed amendments to the regulations at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) to specify how these MOOP limits (“MOOP amounts” when referring to the limit established by an MA plan) will be set for 2022 and subsequent years. In addition, our proposals considered statutory changes that are relevant to how CMS sets cost sharing limits.
Under our current policy, MA organizations are responsible for tracking out-of-pocket spending incurred by the enrollee (that is, cost sharing includes deductibles, coinsurance, and copayments, pursuant to § 422.2) and to alert enrollees and contracted providers when the MOOP limit is reached. Health Maintenance Organization-Point of Service (POS) plans may offer out-of-network benefits as supplemental benefits, but are not required to have these services contribute to the in-network MOOP limit or to a combined in- and out-of-network MOOP limit. Although the MOOP limits apply to Parts A and B benefits, an MA organization can apply the MOOP limit to supplemental benefits as well.
As discussed in the February 2020 proposed rule, CMS currently sets MOOP limits based on a beneficiary-level distribution of Parts A and B cost sharing for individuals enrolled in Medicare Fee-for-Service (FFS). The CMS Office of the Actuary (OACT) conducts an annual analysis to determine the MOOP limits using the most recent Medicare FFS data and by projecting cost sharing using trend factors, such as enrollment changes and enrollment shifts between MA and original Medicare. The OACT bases its projections on actual claims data for Parts A and B benefits from the National Claims History files. MOOP limits for 2020, 2021 and 2022 were set under the current regulation text at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) that authorizes CMS to set MOOP limits that strike a balance between limiting costs (meaning cost sharing and premiums) to enrollees and changes in benefits, with the goal of ensuring beneficiary access to affordable and sustainable benefit packages. The mandatory MOOP limit represents approximately the 95th percentile of projected Medicare FFS beneficiary out-of-pocket spending for the year to which the MOOP limit will apply. Stated differently, using the contract year 2020 MOOP limits as examples, 5 percent of Medicare FFS beneficiaries are expected to incur approximately $6,700 or more in Parts A and B deductibles, copayments, and coinsurance; the voluntary MOOP limit of $3,400 represents approximately the 85th percentile of projected Medicare FFS out-of-pocket costs.
A strict application of the thresholds at the 95th and 85th percentile to set the MOOP limits, since adoption of the MOOP regulations for 2011, would have resulted in MOOP limits for MA LPPO and RPPO plans fluctuating from year-to-year. Therefore, CMS exercised discretion in order to maintain stable MOOP limits from year-to-year, when the established MOOP limits were approximately equal to the appropriate percentile. CMS took this approach in an effort to avoid enrollee confusion (which may result from annual MOOP fluctuations year over year), allow MA plans to provide stable benefit packages year over year, and not discourage MA
MA plans may establish MOOP amounts that are lower than the CMS-established maximum limits. As discussed in the February 2020 proposed rule, for 2020, we considered any MOOP amount within the $0-$3,400 range as a voluntary MOOP limit and any MOOP amount within the $3,401-$6,700 range as a mandatory MOOP limit. These amounts were updated to $0-$3,450 for the voluntary MOOP and $3,451-$7,550 for coverage in 2021 and 2022.
As noted in the February 2020 proposed rule, CMS affords greater flexibility in establishing Parts A and B cost sharing to MA plans that adopt a lower, voluntary MOOP amount (including PPO plans with a combined MOOP limit in the voluntary range) than is available to plans that adopt the higher, mandatory MOOP amount. The percentage of MA plans (excluding employer, dual eligible special needs plans (D-SNPs), and Medicare Medical Savings Accounts plans (MSAs)) offering a voluntary MOOP limit and the proportion of total enrollees in a plan with a voluntary MOOP limit (at or below $3,400) have decreased considerably from contract year 2011 to contract year 2020. Based on plan data from March 2021, this trend has continued through contract year 2021 with approximately 18.5 percent of plans (21.5 percent of enrollees) having an in-network MOOP amount within the range of the prior voluntary MOOP limit (at or below $3,400), as shown in Table 1. This percentage access to the voluntary MOOP increases to approximately 23.3 percent of plans (24.8 percent of enrollees) for contract year 2021 after taking into consideration the increase to the voluntary MOOP limit for that year (at or below $3,450).
CMS explained in the February 2020 proposed rule that we intend to continue using more than one MOOP limit with a goal of encouraging plan offerings that result in favorable benefit designs for beneficiaries. In addition, we explained that by codifying the methodology for how these MOOP limits will be set, we aimed to increase the level of transparency for the MOOP and cost sharing policies, and provide more stability and predictability to the MA program. For example, CMS expects implementing more than two levels of MOOP and cost sharing limits may increase beneficiary access to plans with MOOP limits below the mandatory MOOP limit or with lower cost sharing. CMS also discussed in the February 2020 proposed rule how section 17006 of the 21st Century Cures Act amended section 1851(a)(3) of the Act to allow Medicare eligible beneficiaries with diagnoses of end-stage renal disease (ESRD) to choose a MA plan for Medicare coverage starting January 1, 2021, without the restrictions on such enrollment that previously applied. Based on these prior enrollment restrictions, we explained how the data historically used by CMS to set the MOOP limits excluded the projected out-of-pocket spending for beneficiaries with diagnoses of ESRD, which we are referring to also in this FC as “ESRD costs,” but that we believed the data used to set the MOOP limits for future years should align with this change in eligibility for the MA program. The February 2020 proposed rule also identified CMS authority for its proposal related to MOOP limits for MA plans as flowing from sections 1852(b)(1)(A), 1856(b)(1), 1857(e)(1), and 1858(b) of the Act. We proposed to codify our current practice, with some revisions, substantially revising and restructuring §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) as described in the following subsections.
We are finalizing, for 2023 and subsequent years, the majority of our MOOP proposals with some changes. The changes include:
• Codifying explicit ranges used to determine if a MA plan's in-network (catastrophic) and combined (total catastrophic) MOOP limits are a mandatory, intermediate, or lower MOOP limit for purposes of § 422.100(f)(6) and (j) and §§ 422.101(d) and 422.113(b)(2)(v).
• Improving clarity in the regulations regarding how CMS will set the MOOP limits for 2023 and subsequent years, including how we will use actuarial principles and practices in making the projections required by the methodology to set MOOP limits and calculate the intermediate MOOP limit.
• Modifying the transition schedule for incorporating ESRD costs (that is, the out-of-pocket spending for beneficiaries with diagnoses of ESRD) into the methodology CMS uses to set MOOP limits.
• Simplifying the maximum threshold of the guardrails which was proposed to protect MA enrollees from potentially significant changes in out of pocket costs resulting from changes to the plan's MOOP amount (during and after the ESRD cost transition is completed).
• Removing the proposed requirement of a 3-year trend to update the MOOP limits, after the ESRD cost transition is completed, to avoid duplicating the OACT practice of trending years of data to project costs for an applicable year (which will ensure MOOP limits are updated to reflect changes in Medicare FFS costs in future years).
• Adopting explicit procedures for annually announcing the MOOP limits with a process for notice and comment by the public beginning for contract year 2024.
These changes are discussed in detail in section II.A.4. of this FC. This FC sets the specific MOOP limits for contract year 2023 using the methodology and standards in §§ 422.100(f) and 422.101(d) in addition to adopting the rules for 2024 and subsequent years.
CMS proposed to codify our current practices for setting MOOP limits with some revisions, including explicitly addressing authority to set up to three MOOP limits. In addition to the proposals specific to the methodology for setting the MOOP limits and how to incorporate ESRD costs into that methodology, we proposed specific rules for the MOOP limits. These proposals were to do all of the following:
• Use the term “basic benefits” instead of referring to Medicare Part A and B benefits in our proposed revisions to the regulations at §§ 422.100(f)(4) and (5) and § 422.101(d)(2) and (3) because the term “basic benefits” is now defined in § 422.100(c).
• Amend § 422.100(f)(4) to state the general rule that, except as provided in paragraph (f)(5), MA local plans must establish MOOP limits for basic benefits; as in the current regulation, proposed paragraph (f)(5) addressed how the MOOP limits apply to the out-of-network coverage provided by local PPO plans.
• Codify the rules for PPOs in establishing in-network and combined (or catastrophic) MOOP limits for basic benefits furnished in-network and out-of-network in §§ 422.100(f)(5) and 422.101(d)(2) and (d)(3).
• Add cross-references to codify the same limits under both § 422.100(f)(5) (for MA local PPOs) and § 422.101(d)(3) (for MA regional plans) for combined MOOP limits that apply to in-network and out-of-network cost sharing and to codify the same MOOP limit under § 422.100 (f)(4) (for MA local plans) and § 422.101(d)(2) (for in-network MA regional plans) to avoid repetitive regulation text.
• Codify in §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) the responsibility MA organizations have to track enrolled beneficiaries' out-of-pocket spending and to alert enrollees and contracted providers when the MOOP limit is reached. This is implicit in how a MOOP limit works, but we believe codifying these responsibilities emphasizes for MA organizations that these requirements are integral to the administration of basic benefits.
• Amend § 422.100(f)(4) to authorize CMS, for 2022 and subsequent years, to set up to three MOOP limits using projections of beneficiary spending that are based on the most recent, complete Medicare FFS data, including the current mandatory and voluntary MOOP limits and a third, intermediate MOOP limit. CMS proposed to use these terms (lower, intermediate, and mandatory) in referencing MOOP limits instead of only “voluntary” and “mandatory” MOOP limits.
• Codify the current rule for using ranges to identify the type of MOOP amount an MA plan has established and applying that rule to the three proposed types of MOOP limits: The mandatory MOOP limit, the intermediate MOOP limit, and the lower MOOP limit in § 422.100(f)(4)(ii). Specifically, establishing that: (1) The mandatory MOOP limit is any dollar limit that is above the intermediate MOOP limit and at or below the mandatory MOOP limit threshold established each year; (2) the intermediate MOOP limit is any dollar limit that is above the lower MOOP limit and at or below the intermediate MOOP limit threshold established each year; and (3) the lower MOOP limit is any dollar limit that is between $0.00 and up to and including the lower MOOP limit threshold established each year.
• Codify specific cost sharing limits and flexibilities tied to using the intermediate and lower (previously
CMS proposed to codify generally our current methodology for how we set MOOP limits with several revisions at § 422.100(f)(4) and to use cross-references in §§ 422.100(f)(5), 422.101(d)(2) and 422.101(d)(3) to establish how MOOP limits are set for local and regional plans. These proposals were to do all of the following:
• Amend § 422.100(f)(4) to impose general rules for setting the MOOP limits and codify the current practice of setting the MOOP limits based on a percentile of projected Medicare FFS beneficiary out-of-pocket spending, which would be developed based on the most recent, complete Medicare FFS data.
• Codify rounding each MOOP limit to the nearest whole $50 increment, or the lower $50 increment in cases where the MOOP limit is projected to be exactly in between two $50 increments, in § 422.100(f)(4)(iii).
• Codify our current policy of setting the combined MOOP limits (that is, the MOOP limits that cover both in-network and out-of-network benefits) by multiplying the respective in-network MOOP limits by 1.5 for the relevant year with rounding, if necessary, for MA regional plans in § 422.101(d)(3) and using a cross-reference to that rule for MA local PPOs in § 422.100(f)(5)(i).
• Establish the rules for setting the MOOP limits for contract years 2022, 2023, 2024, 2025, and subsequent years in § 422.100(f)(4)(iv), (v), and (vi). The proposal was, in effect, that the MOOP limits for contract year 2022 would be a recalibration of the MA MOOP limits by using a methodology adjusted from current practice. For contract year 2022, we proposed to set the MOOP limits as follows:
• The mandatory MOOP limit is set at the 95th percentile of projected Medicare FFS beneficiary out-of-pocket spending.
• The intermediate MOOP is set at the numeric midpoint of mandatory and lower MOOP limits.
• The lower MOOP limit is set at the 85th percentile of projected Medicare FFS beneficiary out-of-pocket spending.
These MOOP limits would be set subject to the rounding rules at § 422.100(f)(4)(iii). CMS proposed to use projections for the applicable contract year of out-of-pocket expenditures for Medicare FFS beneficiaries that are based on the most recent, complete Medicare FFS data that incorporates a percentage of the costs incurred by beneficiaries with diagnoses of ESRD (called “ESRD costs” in this FC), using the ESRD cost transition schedule proposed in paragraph (f)(4)(vii). In the following subsection, II.A.3. of this FC, we summarize that transition schedule and the data we proposed to use for setting MOOP limits.
For future contract years, we proposed to set the MOOP limits using a methodology that considers the amount of change from the prior year's MOOP limits to minimize disruption and change for enrollees and plans. Our proposed methodology was designed to allow MA plans to provide stable benefit packages year over year by minimizing MOOP limit fluctuations unless a consistent pattern of increases or decreases in beneficiary out-of-pocket costs emerges over time. Again, we proposed that these MOOP limits would be set subject to the rounding rules and using projections based on the most recent, complete Medicare FFS data that incorporates a percentage of the costs incurred by beneficiaries with diagnoses of ESRD, using the transition schedule at § 422.100(f)(4)(vii). In addition, the proposed methodology for MOOP limits for years 2023 until the end of this transition schedule was designed to balance the incorporation of increased costs incurred by beneficiaries with diagnoses of ESRD into the Medicare FFS data projections used to calculate the MOOP limits with the goal of providing stability in the MOOP limits. For example, we proposed to delay the ESRD cost transition in years where the change in the MOOP limit might otherwise be too significant, specifically when projections for the upcoming contract year were outside the range of two percentiles above, or below, the applicable percentile of Medicare FFS beneficiary out-of-pocket spending (including costs incurred by Medicare FFS beneficiaries with and without diagnoses of ESRD) from the prior year. Similarly, the proposed methodology for establishing MOOP limits for the years following the completion of the transition schedule was intended to provide stability in the MOOP limits by placing a cap on how much limits can increase from one year to the next when certain conditions are met.
To set the mandatory and lower MOOP limits for contract years 2023 and 2024 or, if later, until the end of the ESRD cost transition, we explained that under our proposal, CMS would—
• Review OACT projections of out-of-pocket spending for the applicable year that is based on updated Medicare FFS data, including all spending regardless of ESRD diagnoses;
• Compare the applicable year's projection of the 95th percentile and 85th percentile to the prior year's projections;
• Determine if the prior year's projections for the 95th percentile and 85th percentile are within a range, above or below, of two percentiles of the applicable percentile in that updated projection. For example, for the contract year 2023 mandatory MOOP limit, we would determine if the contract year 2022 95th percentile projection is between or equal to the 93rd and 97th percentiles of the projections for 2023 out-of-pocket expenditures;
• If the prior year's 95th and 85th percentile projections are between or equal to the two percentile ranges above or below, we would continue the ESRD cost transition schedule proposed at § 422.100(f)(4)(vii) for one or both of the MOOP limits;
• If one or both of the prior year's 95th and 85th percentile projections are not within the two percentile ranges above or below, we would increase or decrease one or both of the MOOP limits up to 10 percent of the prior year's MOOP limit annually until the MOOP limit reaches the projected 95th percentile for the applicable year, subject to the rounding rules as proposed at § 422.100 (f)(4)(iii). For example, if the dollar amount that needs to be transitioned represents 15 percent, then 10 percent would be addressed during the upcoming contract year, while any remaining amount would be addressed during the following contract year (if applicable based on updated data projections from the OACT). During this period of time, we would delay implementation of the next step in the ESRD cost transition schedule proposed in paragraph (f)(4)(vii). The ESRD cost transition schedule would resume at the rate that was scheduled to occur once the prior year's projected 95th and 85th percentile remains within the range of two percentiles above or below the projected 95th percentile for the upcoming contract year. For example, for the contract year 2023 mandatory MOOP limit, if the 2023 projected 95th percentile corresponds to the projected 98th percentile for contract year 2022 out-of-pocket expenditures, we would set the contract year 2023 mandatory MOOP by increasing the contract year 2022 mandatory MOOP limit by up to 10 percent and rounding as proposed at paragraph (f)(4)(iii); and
• The intermediate MOOP limit would be set by either maintaining it as the prior year's intermediate MOOP
We proposed regulation text to implement this process for setting the mandatory, intermediate, and lower MOOP limits at § 422.100(f)(4)(v), with paragraphs (f)(4)(v)(A), (B) and (C) addressing the mandatory, intermediate, and lower MOOP limits respectively.
For contract year 2025 (or the year following the conclusion of the ESRD cost transition schedule proposed at § 422.100(f)(4)(vii)) and for subsequent years, we proposed to include in the methodology a process to consider trends that are consistent for 3 years. The proposed regulation text included “or following the ESRD cost transition” to clarify that the ESRD cost transition schedule may end in 2025 or extend longer due to how we proposed to handle any sudden increases or decreases in costs. For example, if for contract year 2023, the projected 95th percentile amount represents the 98th percentile from the prior year's (contract year 2022) projections, then we would only increase the MOOP limit for contract year 2023 by up to 10 percent of the prior year's MOOP amount and extend the ESRD cost transition schedule past 2025 by the number of years it takes until the upcoming year's projected 95th percentile amount was within two percentiles above or below the prior year's projection of the 95th percentile. We also proposed the methodology for the mandatory and lower MOOP limits for contract year 2025 or following the ESRD cost transition schedule. Specifically, CMS proposed that the prior year's corresponding MOOP limit is maintained for the upcoming contract year if: (1) The prior year's MOOP limit amount is within the range of two percentiles above or below the projected 95th or 85th percentile of Medicare FFS beneficiary out-of-pocket spending incurred by beneficiaries with and without diagnoses of ESRD; and (2) the projected 95th or 85th percentile did not increase or decrease for 3 consecutive years in a row. If the prior year's corresponding MOOP limit is not maintained because either (1) or (2) occur, CMS would increase or decrease the MOOP limit by up to 10 percent of the prior year's MOOP limit amount annually until the MOOP limit reaches the projected applicable percentile for the applicable year, based on the most recent, complete Medicare FFS data projections from the OACT. The intermediate MOOP limit would be set by either maintaining it as the prior year's intermediate MOOP limit (if the mandatory and lower MOOPs are not changed), or updating it to the new numerical midpoint of the mandatory and lower MOOP limits, and rounding as proposed in paragraph (f)(4)(iii). We proposed regulation text to implement this process for setting the mandatory, intermediate, and lower MOOP limits for contract year 2025 or following the data transition schedule and subsequent years at paragraph (f)(4)(vi), with paragraphs (f)(4)(vi)(A), (B), and (C) addressing the mandatory, intermediate, and lower MOOP limits respectively.
We explained that the principal goals of our proposal were to outline clearly the methodology for establishing the MOOP limits, to provide stability in MOOP limits and benefit packages, minimize fluctuations in the MOOP limits from year-to-year, and to minimize the potential for enrollee confusion that may result from fluctuations from year-to-year in the MOOP limit. We solicited comment on whether the February 2020 proposed rule would accomplish those things.
Section 1851(a)(3) of the Act, as amended by section 17006 of the 21st Century Cures Act, permits Medicare beneficiaries with diagnoses of ESRD to enroll in MA plans beyond the previous enrollment limitations, beginning in contract year 2021. As discussed in the February 2020 proposed rule, CMS expected this change will result in Medicare beneficiaries with diagnoses of ESRD to begin transitioning to or choosing MA plans in greater numbers than previously. Specifically, the OACT expected ESRD enrollment in MA plans to increase by 83,000 beneficiaries as a result of the 21st Century Cures Act provision. The OACT assumed the increase would be phased in over 6 years, with half of those beneficiaries (41,500) enrolling during 2021. Based on actual 2021 enrollment data, the OACT continues to project that 83,000 beneficiaries with diagnoses of ESRD will enroll in the MA program over 6 years. We explained that the data we use to set the MOOP limits should also incorporate the out-of-pocket expenditures of beneficiaries with diagnoses of ESRD to reflect this statutory change.
For 2020 and prior years, CMS set MOOP limits using projected Medicare FFS beneficiary out-of-pocket spending for the year, based on a beneficiary-level distribution of Parts A and B cost sharing for individuals enrolled in Medicare FFS and excluding all costs for beneficiaries with ESRD. For example, for contract year 2020 MOOP limits, we used projected out-of-pocket costs for Medicare FFS beneficiaries (excluding out-of-pocket costs from beneficiaries with diagnoses of ESRD) prepared by the OACT, based on the most recent Medicare FFS data (from 2014 to 2018). We excluded the costs for individuals with diagnoses of ESRD because of the limits on when and how a Medicare beneficiary with diagnoses of ESRD could enroll in an MA plan under section 1851(a) of the Act. In the February 2020 proposed rule we stated that in contract year 2018, 0.6 percent of the MA enrollee population, or approximately 121,000 beneficiaries, have diagnoses of ESRD. This statistic was based on the statutory definition of ESRD and CMS data. Using more recent enrollment data, the number of beneficiaries enrolled in MA in contract year 2018 with diagnoses of ESRD is lower than previously stated, approximately 120,100 (which does not impact the 0.6 percent of the MA enrollee population figure).
CMS developed the approach to conduct a multiyear transition of ESRD costs into the methodology for how CMS establishes MOOP limits with input from the OACT. CMS did not
As part of developing the proposal, CMS looked at the impact of factoring in 100 percent of the costs of beneficiaries with ESRD into the data used to set MA MOOP limits. Using the most recent Medicare FFS data available at the time of the February 2020 proposed rule (2015 to 2019 data, with 2018 being the most heavily weighted), the OACT projected the out-of-pocket costs for Medicare FFS beneficiaries. Based on this data, we compared the 95th and 85th percentiles of the projected out-of-pocket costs for all Medicare FFS beneficiaries for the 2021 contract year to the $7,175 and $3,360 dollar amounts (calculated using the 95th and 85th percentiles of the projections without ESRD costs) to calculate the cost difference, which we consistently refer to as an ESRD cost differential. CMS calculated the $999 95th percentile ESRD cost differential by comparing the $7,175 to $8,174 with related ESRD costs, a difference of $999.
As discussed in the February 2020 proposed rule, our goal is to strike a balance between potential increases in plan costs and enrollee costs (meaning cost sharing and premiums) by scheduling adjustments to the MOOP limits (that is, adjustments to include data about the costs incurred by beneficiaries with diagnoses of ESRD into the data used to set the MOOP limits) to reflect a reasonable transition of ESRD beneficiaries into the MA program. Accordingly, our proposed revisions to the current methodology for setting MOOP limits included a scheduled transition for incorporating ESRD costs to allow MA organizations to plan for the change and mitigate sudden changes in MOOP limits, benefit designs, and premiums that could be disruptive to enrollees and MA organizations. To accomplish this, we proposed to do all of the following:
• Codify at § 422.100(f)(4)(vii) a multiyear transition schedule from our current practice of excluding all costs incurred by beneficiaries with diagnoses of ESRD to including all related costs into the Medicare FFS data that is used to set the MOOP limits.
• Add § 422.100(f)(4)(vii) to define the term “ESRD cost differential” to refer to the difference between: (1) Projected out-of-pocket costs for beneficiaries using Medicare FFS data excluding the costs incurred by beneficiaries with ESRD diagnoses for contract year 2021 and (2) the projected out-of-pocket costs for all beneficiaries using Medicare FFS data (including the costs incurred by beneficiaries with ESRD diagnoses) for each year of the ESRD cost transition.
• Identify the specific dollar amounts in the regulation text defining the ESRD cost differential at § 422.100(f)(4)(vii), as $7,175 for the 95th percentile and $3,360 for the 85th percentile based on the projected costs incurred by beneficiaries without ESRD diagnoses for the 2021 contract year.
• Add § 422.100(f)(4)(vii)(A), (f)(4)(vii)(B), and (f)(4)(vii)(C) to establish a specific schedule for factoring in an increasing percentage of the ESRD cost differential annually until 2024 or, if later, the final year of the transition and beyond.
• Begin the regulatory ESRD cost transition with the 2022 contract year, factoring in 60 percent of the ESRD cost differential and increasing that percentage by 20 percentage points for each successive year of the transition, as follows:
While we proposed to factor in the ESRD cost differential for contract year 2022 through contract year 2024, CMS initially started incorporating ESRD costs into the MOOP limits for contract year 2021. Specifically, CMS calculated the MOOP limits for contract year 2021, under the current regulations, using projections of Medicare FFS cost data from 2015 to 2019 for beneficiaries without diagnoses of ESRD. The OACT determined the Medicare FFS percentiles for 2021 by applying Medicare FFS cost sharing trends (consistent with the 2019 Medicare Trustees Report) to project contract year 2021 costs. CMS then added in 40 percent of the ESRD cost differential to the projected Medicare FFS percentiles. A more complete discussion on how CMS set MOOP limits for contract year 2021 is available in the HPMS memorandum titled “Final Contract Year 2021 Part C Benefits Review and Evaluation,” issued April 8, 2020. In the February 2020 proposed rule, CMS also proposed a methodology to prevent excessive changes in the MOOP limit. Taking into consideration both the 2021 MOOP limits and our proposal for contract years 2022 through 2024, CMS's proposed policy would have effectively used a 4-year period to transition to full incorporation of ESRD costs.
CMS included in the February 2020 proposed rule two tables (Table 4, “Illustrative Example of In-Network MOOP Limits Based on Most Recent Medicare FFS Data Projections” and Table 5, “Illustrative Example of Combined MOOP Limits for LPPO and Catastrophic (MOOP) Limits for RPPO Plans Based on Most Recent Medicare FFS Data Projections”) to show the potential impact of incorporating the out-of-pocket costs of Medicare FFS beneficiaries with diagnoses of ESRD into the methodology for the MOOP limits proposed at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) (85 FR 9077). These tables were developed to project 2021 costs using Medicare FFS data from 2015-2019, which was the most recent Medicare FFS data available at the time of the February 2020 proposed rule. In developing Tables 4 and 5 from the February 2020 proposed rule, we applied the proposed methodology, including not only the multiyear transition for incorporating the ESRD cost differential but also the rounding rules, and illustrated the ranges for the three MOOP limits. We explained that the tables were only illustrative MOOP limits for contract years 2022 through 2024 based on the most, recent complete Medicare FFS data at the time the February 2020 proposed rule was developed. As a result, we noted actual MOOP limits for these contract years may be different from the illustrative limits based on updated Medicare FFS data and projections. As part of our proposal, we explained that we would apply the methodology as codified and publish the resulting MOOP limits for each year on a timely basis, such as through an HPMS memorandum, with a description of how the regulation standard was applied, but we did not propose to codify the timeframe or a requirement for that publication.
In conclusion, we proposed to amend §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) as described to allow plans to provide stable benefit packages year over year by minimizing MOOP limit fluctuations unless a consistent pattern of increases or decreases in costs emerges over time. We solicited comment on this approach in light of our goal of avoiding enrollee confusion and maintaining stable benefit packages. We also solicited comments whether our proposed regulation text adequately and clearly specified the methodology that would be used to set the MOOP limits each
We received feedback from 27 commenters on this proposal. The majority of comments were from health plans, provider associations, beneficiary and other advocacy organizations, and pharmaceutical companies. A summary of the comments (generally by issue) and our responses follows:
The changes to the proposals we are finalizing in this FC range from minor edits, reorganizations, corrections, and clarifications to substantive modifications based on the comments received, operational considerations (such as, changes stemming from the timing of this FC), and improvements to the methodology. Our goal in finalizing the cost sharing proposals as described in this FC is to adopt standards and require compliance that further antidiscriminatory requirements (such as, by supporting equitable access to plans for beneficiaries with high health needs). Because of the timing of this FC, operational considerations, and to help ensure that MA organizations have sufficient implementation time, the provisions in this FC will be applicable for coverage beginning January 1, 2023. This reflects a one-year delay from the proposed implementation schedule. When MA bids for contract year 2023 are submitted for review and approval by the statutory deadline (June 6, 2022 for contract year 2023), the regulations and final MOOP and cost sharing limits in this FC will be used to evaluate those bids for approval as well as applying to the coverage provided beginning January 1, 2023. Several modifications to the proposed regulation text (for example, changing a reference from January 1, 2022 to January 1, 2023 in § 422.100(f)(4)) are because of this change in the implementation of the MOOP provisions. Therefore, to avoid repetitive text in responses to comments in this section II.A. of this FC, we explain here that the proposed regulation text in §§ 422.100 and 422.101 was modified to change implementation by 1 year. Changes to the implementation of the proposed policies that are more nuanced are explained in detail (for example, section II.A.4.c. of this FC addresses the multi-year transition schedule of ESRD costs into MOOP limits). For the same reason, to avoid repetitive text, where there is no distinction made about the Medicare FFS data projections used, CMS means the data includes out-of-pocket costs from beneficiaries with and without diagnoses of ESRD. Specifically, the term “Medicare FFS data projections” is used as defined in § 422.100(f)(4)(i).
We take this opportunity to clarify, in addition to the discussion in the February 2020 proposed rule, which costs are tracked and accumulate toward the MOOP limit. As discussed in the final rule titled, “Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs for Contract Year 2012 and Other Changes” that appeared in the
Under this FC, MA organizations are responsible for tracking out-of-pocket spending incurred by the enrollee, and must alert enrollees and contracted providers when the applicable MOOP amount is reached (for § 422.100(f)(4) the in-network MOOP; for paragraph (f)(5)(iii) the combined MOOP). In addition, we are not finalizing the regulations at § 422.101(d)(2)(ii) and (d)(3)(iii) as proposed (which substantively addressed the same requirement for the catastrophic (in-network) MOOP and the total catastrophic (combined) MOOP) to avoid repeating text that is in paragraph (d)(4). Existing § 422.101(d)(4) requires MA regional plans to track the deductible (if any) and catastrophic limits in paragraphs (d)(1) through (d)(3) based on incurred out-of-pocket beneficiary costs for original Medicare covered services and to notify members and health care providers when the deductible (if any) or a limit has been reached; we are not making any revisions to that specific provision. As finalized, the regulations at § 422.100(f)(4) and (f)(5)(iii) require MA organizations to track out-of-pocket spending incurred by the enrollee in a local MA plan and alert enrollees and contracted providers when the applicable MOOP amount (in-network, combined, catastrophic, or total catastrophic) is reached. This FC maintains the ability for D-SNPs to establish zero cost sharing for enrollees who are dually enrolled in both Medicare and Medicaid. For example, in a Zero-Dollar Cost Sharing D-SNP, Medicare inpatient hospital stays and doctor visits are available at no cost to the enrollee. A Medicare Non-Zero Dollar Cost Sharing D-SNP is a D-SNP under which the cost sharing for Medicare Part A and B services varies depending on the enrollee's category of Medicaid eligibility.
As we discussed in the CY 2019 Call Letter
• 24.9 percent of plans (25.8 percent of enrollees) have an in-network MOOP amount between $0 and $3,650 (the contract year 2023 lower MOOP limit);
• 36.9 percent of plans (41.7 percent of enrollees) have an in-network MOOP amount between $3,651 and $6,000 (the contract year 2023 intermediate MOOP limit); and
• 38.2 percent of plans (32.6 percent of enrollees) have an in-network MOOP amount between $6,001 (the lowest range amount for the contract year 2023 mandatory MOOP limit) and $7,550 (the highest allowable contract year 2021 mandatory MOOP amount).
This distribution shows that the smallest proportion of contract year 2021 plans established a MOOP amount that would qualify for a lower MOOP type in contract year 2023 (see Table 5 for the final contract year 2023 MOOP limits). A contributing factor to this distribution may be how most cost sharing standards for professional services have been historically set at the same amount regardless of the MOOP type (mandatory or lower, previously “voluntary” MOOP limit) established by the MA plan. In section VI.B. of the February 2020 proposed rule, we proposed differentiating cost sharing limits for highly utilized services (for example, primary care physician and physician specialist PBP service categories) and various other cost sharing services categories by the MOOP type, with lower MOOP limits receiving the most cost sharing flexibility. By establishing the maximum permitted cost sharing limit at different amounts (that is, by using a range of differentiated cost sharing limits for most services) across the three MOOP types, this FC is expected to promote greater differences between plans and provide MA organizations with meaningful cost sharing flexibilities if they choose to use the lower MOOP limits in their benefit design.
As discussed further in section II.B. of this FC, plan designs with mandatory MOOP types will have less flexibility in cost sharing and therefore less ability to use cost sharing as a means to incentivize enrollee behavior and manage medical costs beginning in contract year 2023. For example, MA organizations that establish a mandatory MOOP type for contract year 2026 will be subject to a 30 percent coinsurance limit for certain professional services and those that establish an intermediate MOOP type will be subject to a 40 percent coinsurance limit (as finalized in section II.B. of this FC). As discussed in the February 2020 proposed rule, the 30 percent coinsurance amount is most closely related to the cost sharing limit amounts stated in the CY 2020 Call Letter. Stated another way, we expect
CMS will monitor whether changes from this FC result in beneficiaries having access to MA plan offerings with lower or intermediate MOOP types and cost sharing that is lower or comparable when compared to existing benefit packages over time. Specifically, we will conduct these analyses annually and communicate concerns through the subregulatory process finalized at § 422.100(f)(7)(iii) and may consider whether changes are necessary in future rulemaking based on the results of these analyses.
Finally, CMS will also continue evaluations based on enforcement of the current authority prohibiting plans from misleading beneficiaries in their marketing and communication materials and continue efforts to improve plan comparison tools and resources (for example, Medicare Plan Finder, Medicare & You, and 1-800-MEDICARE) in order to monitor whether plan communications give the impression that MOOP amounts are not applied uniformly for all enrollees. We encourage beneficiaries and other stakeholders to bring to our attention marketing and communication materials or other activities that may indicate that an MA organization is violating the anti-discrimination requirements applicable in the MA program, by contacting 1-800-MEDICARE or by submitting a Medicare Complaint Form online.
Under section 1854(a)(5)(C)(ii) of the Act, CMS is authorized to deny a plan bid if the bid proposes significant increases in enrollee costs or decrease in benefits from one plan year to the next. A plan's Total Beneficiary Cost (TBC) is the sum of the plan-specific Part B premium, plan premium, and estimated beneficiary out-of-pocket costs. CMS uses a standardized TBC evaluation for each bid to evaluate year over year changes when bids are submitted for the upcoming contract year. The TBC standard is applied at the plan level to ensure enrollees in each applicable plan are not subject to too significant an increase in costs or decrease in benefits from one plan year to the next. CMS has observed that MA organizations tend to reduce their profit margins, rather than substantially change their benefit package from one year to the next. We believe this tendency may be to ensure that a bid does not exceed the TBC threshold and also due to marketing and competitive forces; for example, an MA plan with fewer or less generous supplemental benefits, even for one year, may lose its enrollees to competing plans that offer these supplemental benefits. Thus, it may be advantageous for the MA organization to temporarily reduce its margin, rather than reduce benefits. MA organizations have a range of cost sharing flexibilities for a few service categories now (such as, inpatient hospital acute and psychiatric length of stay scenarios) and typically do not establish the highest allowable cost sharing for the MOOP amount used by the MA plan. In fact, CMS has found that MA organizations typically offer benefits with lower cost sharing amounts than the maximum cost sharing limits for the vast majority of service categories we have permitted in past years (such as primary care physician). While we do not have definitive data, we believe this is due to multiple factors, including the principles and incentives inherent in managed care, effective negotiations between MA organizations and providers, and competition. Further, MA plan must, at a minimum, offer plan designs where the cost sharing for basic benefits is at least actuarially equivalent to the cost sharing in the original Medicare program. In addition, we expect beneficiary choice will continue to act as an incentive for MA organizations to offer favorable benefit designs. Considering these factors, CMS expects that differentiating cost sharing standards by the three MOOP types, and in some cases limiting the cost sharing flexibility for MA plans that establish a mandatory MOOP type, will encourage MA organizations to establish a lower MOOP type (that is, lower or intermediate) and/or lower cost sharing amounts for enrollees in order to maintain a competitive position in the market.
In regard to a commenter's suggestion to provide additional star rating value for MA plans offering the lower voluntary MOOP amount, we believe this request is outside of the scope of our proposal. Our Star Ratings proposals did not include adding a quality measure or a quality rating methodological change tied to MOOP type and were finalized in section IV.D. of the January 2021 final rule (86 FR 5864).
We are finalizing our proposal for three MOOP limits. We take this opportunity to explain the use of terminology in this FC and the regulations; we use consistent language when referring to MOOP limits (calculated by CMS by applying the methodologies finalized here), MOOP amounts (established by MA organizations), and MOOP types (lower, intermediate, and mandatory) in §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3). We are also finalizing the regulations at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) with slight changes from the February 2020 proposed rule to be clearer that: (1) § 422.100(f)(4) applies to an in-network MOOP limit for local MA plans and, consistent with our current policy and practice, that in-network MOOP limit applies to private fee-for-service (PFFS) plans; (2) § 422.100(f)(5) applies to a combined MOOP limit (for basic benefits that are provided in-network and out-of-network) for MA local PPO plans; (3) § 422.101(d)(2) applies to a catastrophic limit (in-network MOOP limit) for regional MA plans; and (4) § 422.101(d)(3) applies to a total catastrophic limit (combined MOOP) for regional MA plans. In addition, we made edits throughout these provisions to ensure clarity and consistency in referencing in-network, combined, catastrophic, and total catastrophic MOOP limits, amounts, or types. For example, in § 422.101(d)(3)(i) we clarify that the total catastrophic limit may not be used to increase the catastrophic limit described in paragraph (d)(2).
CMS is finalizing § 422.100(f)(4) with a clearer statement that MA local plans must have an enrollee in-network MOOP amount for basic benefits that is no greater than the annual limit calculated by CMS using Medicare FFS data projections (as defined in paragraph (f)(4)(i)). We believe this change clarifies a point from the February 2020 proposed rule that HMO-POS plans may offer out-of-network benefits as supplemental benefits, but are not required to have these services contribute to the in-network MOOP amount or to a combined in- and out-of-network MOOP amount. Currently, and with the change proposed and finalized in this rule, paragraph (f)(5) requires MA local PPO plans to have a combined MOOP amount for basic benefits that are provided in network and out-of-network. This change compared to our proposed text for paragraph (f)(4) also improves the regulation text by making the requirement to not exceed MOOP limits calculated by CMS more definitive and transparent than the general reference to paragraph (f)(4) in the February 2020 proposed rule. In addition, we added a statement to paragraph (f)(4) to codify CMS's longstanding policy (since 2012) that PFFS plans must use the in-network MOOP limit for all covered basic benefits, regardless of whether the provider is contracted with the PFFS plan or whether the PFFS plan has a partial or full provider network. Specifically, PFFS plans have been subject to the in-network MOOP limits for in- and out-of-network benefits because of the complexities of their provider network designs and ability to use balance billing. We also modified paragraph (f)(4)(i) to clarify that CMS will calculate three in-network MOOP limits. Additional changes to paragraph (f)(4)(i) (namely, defining a consistent term that describes the data CMS uses in the methodology to calculate MOOP limits and specifying the dollar ranges for each MOOP type) are discussed more completely in section II.A.4.b. of this FC.
We thank commenters for all of their input. In this FC, we are finalizing the proposed addition of a third, intermediate MOOP type at §§ 422.100(f)(4) and (f)(5) and 422.101(d)(2) and (d)(3). The three MOOP types will apply to MA local and regional plans and to in-network and, for PPO plans, out-of-network basic benefits. The methodology for calculating the MOOP limits, including that the calculations are subject to the rounding rules in paragraph (f)(4)(iii) and the ESRD cost transition schedule in paragraph (f)(4)(vii), is discussed in sections II.A.4.b. and c. of this FC. Among the modifications we are finalizing are a change in the scope of data used to calculate the MOOP and cost sharing limits (discussed in section II.A.4.b. of this FC) and a change in the transition schedule for the ESRD cost differential (discussed in section II.A.4.c. of this FC). Further, we are finalizing the addition of descriptive headings to § 422.100(f)(1)—(9) to orient the reader to the content in each paragraph. While we did not propose updates to paragraphs (f)(1)-(3), the addition of headings will improve the clarity of the regulations, does not change the substance of the regulations, and results in a consistent approach for paragraph (f). Paragraph (f)(6) and new paragraphs (f)(7)-(9) are discussed in detail in section II.B. of this FC.
We did not codify a deadline or a specific minimum time frame for the comment period on the MOOP and cost sharing standards for the upcoming contract year to ensure flexibility when necessary in future situations. As highlighted by the COVID-19 pandemic, maintaining a certain level of flexibility in regulation can be beneficial for the agency to better serve our stakeholders. For example, we may consider a comment period less than 30 days in the event of delays from external variables (such as, public health emergencies) when it is necessary in order to release final MOOP and cost sharing limits on a timeframe that is sufficient for MA organizations to prepare and submit plan bids. This approach will support the release of subregulatory guidance that addresses MOOP limits and cost sharing standards in advance of the upcoming plan year.
We are finalizing the proposal that the three MOOP types will be calculated using the 95th and 85th percentiles of projected Medicare FFS beneficiary out-of-pocket spending and the mid-point between those with the specific provisions as provided in § 422.100(f)(4). In addition, we are finalizing additional changes in the codification of the methodology that CMS uses to calculate MOOP limits in paragraph (f)(4). First, the ESRD cost transition (which was proposed in paragraph (f)(4)(vii)) is finalized in paragraph (f)(4)(vi) with changes from the proposal and we are finalizing the rules for calculating the in-network MOOP limits for 2023 in § 422.100(f)(4)(iv) and for 2024 and subsequent years in § 422.100(f)(4)(v) (as more completely addressed in section II.A.4.c. of this FC).
Second, we are not finalizing the term “complete” in various provisions that describe the data used to develop the cost projections that are the basis for calculating the MOOP limits to more accurately reflect current practice in calculating MOOP limits and cost sharing limits. The February 2020 proposed rule stated that the OACT uses the most recent, complete Medicare FFS data to project costs for the applicable year. Upon reflection, CMS realizes that the word “complete” may be subject to different interpretations. For example, “complete” could be interpreted as meaning that the data for that year being used to project costs is missing no information or that only one year of data would be used by the OACT to project costs. To ensure clarity in the regulation text on this point, we are removing the reference of “complete” and explaining here how the OACT approaches developing the projections to be used in calculating cost sharing limits. In developing the projections that CMS uses to determine cost sharing limits, the OACT uses several years of Medicare data (generally 99 percent complete) that apply trend factors (consistent with the most recent Medicare Trustees Report). The trend factors give the most weight to the more recent calendar years of data. Projections are then modified using actuarial judgement. This is considered an actuarially acceptable approach in determining and projecting Medicare FFS percentiles and is consistent with longstanding policy. As a result, we are updating the references to the data CMS uses to calculate MOOP and cost sharing limits throughout the regulations at §§ 422.100(f) and (j) and 422.101(d). Specifically, in paragraph (f)(4)(i) we are defining the term, “Medicare FFS data projections” as meaning the projections of beneficiary out-of-pocket costs for the applicable contract year, based on recent Medicare FFS data, including data for beneficiaries with and without diagnoses of ESRD, that are consistent with generally accepted actuarial principles and practices as outlined in paragraph (f)(7)(i) (discussed subsequently in this response). The Medicare FFS data and resulting Medicare FFS data projections necessarily include cost and utilization data associated with the projected out-of-pocket costs. As defined and used throughout the regulations, the term “Medicare FFS data projections” concisely and consistently describes the data CMS uses to calculate MOOP and cost sharing limits. In addition, we believe using the term “Medicare FFS data projections” in describing the data is consistent with past practice and our intent for this aspect of the methodology (that is, data are from calendar years but the data are not fully complete, data from more than one calendar year may be used, trend factors are used, and projections are made to the contract year for which the MOOP limits are set). Based on the definition and how we have used the term, the Medicare FFS
Third, we are finalizing the substance of proposed § 422.100(f)(4)(ii)(A) through (C) in paragraphs (f)(4)(i)(A) through (C) with clarification. Specifically, we are clarifying in paragraphs (f)(4)(i)(A) and (B), consistent with Table 4 (Illustrative Example of In-Network MOOP Limits Based on Most Recent Medicare FFS Data Projections) in the February 2020 proposed rule, that the ranges determining in a plan's MOOP amount is considered a mandatory or intermediate MOOP type are as follows:
• Mandatory MOOP limit: One dollar above the intermediate MOOP limit and up to and including the mandatory MOOP limit.
• Intermediate MOOP limit: One dollar above the lower MOOP limit and up to and including the intermediate MOOP limit.
We are finalizing the description of the range for the lower MOOP limit in paragraph (f)(4)(i)(C) as proposed (in paragraph (f)(4)(ii)(C)) as we believe the proposed regulation text is sufficiently clear.
Next, we are finalizing § 422.100(f)(4)(ii) with a more complete list of the regulations which use the terms “mandatory MOOP limit,” “intermediate MOOP limit,” and “lower MOOP limit.” These terms encompass a MOOP amount that varies from the specific highest allowable dollar figure announced by CMS for each MOOP type when the plan's MOOP amount is within the ranges specified in § 422.100(f)(4)(i)(A) through (C). We proposed to refer to paragraphs (f)(6) and (j) of § 422.100, but are finalizing references to paragraphs (f) and (j) of § 422.100, § 422.101(d), and § 422.113(b)(2)(v). This change better reflects the cost sharing requirements finalized in section II.B. of this FC. Referring to § 422.101(d) is consistent with how the types of in-network MOOP limits referenced in § 422.100(f)(4)(i)(A), (B), and (C) will be used, beginning for contract year 2023, to calculate the catastrophic and total catastrophic (combined MOOP) limits that apply to regional plans under § 422.101(d)(2) and (3).
To better reflect how finalized § 422.100(f)(4) applies to catastrophic and total catastrophic (combined MOOP) limits, increase clarity in the regulations, and make necessary corrections from the February 2020 proposed rule to codify the range CMS has applied in calculating and evaluating compliance with these MOOP limits, we are also finalizing changes in § 422.101(d)(2) and (3). We are consolidating proposed § 422.101(d)(2) to clearly require MA regional plans to: (1) Establish a catastrophic enrollee MOOP for basic benefits that are furnished by in-network providers that is consistent with § 422.100(f)(4); and (2) have the same MOOP type (lower, intermediate, or mandatory) for the catastrophic (in-network MOOP) limit and total catastrophic (combined in-network and out-of-network expenditures) limit under § 422.101(d)(3).
In addition, we are adding new paragraphs (d)(3)(ii)(A), (B), and (C) in § 422.101. New paragraphs (d)(3)(ii)(A), (B), and (C) specify the ranges to determine if a plan's total catastrophic (combined MOOP) amount is considered a mandatory, intermediate, or lower MOOP type for purposes of §§ 422.100 and 422.101. These correspond to the ranges in § 422.100(f)(4)(i)(A) through (C) but are specific to the total catastrophic (combined MOOP) limits. Including these ranges for total catastrophic (combined MOOP) limits improves the regulation overall by providing more specificity in our codification of longstanding policy. As finalized in new § 422.101(d)(3)(ii)(A), (B), and (C), the ranges that define the type of total catastrophic (combined MOOP) limit (mandatory, intermediate, and lower) are as follows:
• Mandatory MOOP limit: One dollar above the in-network intermediate MOOP limit and up to and including the total catastrophic mandatory MOOP limit.
• Intermediate MOOP limit: One dollar above the in-network lower MOOP limit and up to and including the total catastrophic intermediate MOOP limit.
• Lower MOOP limit: Between $0.00 and up to and including the total catastrophic lower MOOP limit.
This addition adds clarity to the regulation text and the ranges now codified in § 422.101(d)(3)(ii)(A) and (B) are consistent with our current practice for setting the lower and upper ranges of the total catastrophic MOOP limits.
Finalizing regulation text with these ranges explicitly described reflects a necessary correction to the proposed rule. Specifically, the approach in § 422.101(d)(3)(iii)(A) through (C) of having total catastrophic (combined MOOP) limits set one dollar above the in-network lower and intermediate MOOP limit amounts (for the total catastrophic (combined) intermediate and mandatory MOOP limits, respectively) is consistent with longstanding practice and reflects our current policy for how MA plans must have the same type of in-network and total catastrophic (combined MOOP) amount (mandatory, intermediate, or lower). In the illustrative MOOP limits from Table 5 (Illustrative Example of Combined MOOP Limits for LPPO And Catastrophic (MOOP) Limits for RPPO Plans Based on Most Recent Medicare FFS Data Projections) in the February 2020 proposed rule, the lower range of the illustrative combined intermediate and mandatory MOOP types did not correctly reflect our intention to continue our current policy. For example, based on the illustrative in-network and combined MOOP limits for contract year 2022 provided in Tables 4 and 5 in section VI.A. of the February 2020 proposed rule, an MA plan that established an in-network intermediate MOOP of $3,451 would have to establish a combined intermediate MOOP between $5,151 and $8,400, even if a plan wanted to establish a combined MOOP amount of $4,000. Requiring an MA plan with an in-network MOOP amount to establish a combined MOOP amount that is one dollar above the combined lower MOOP limit (as shown in Table 5 from the February 2020 proposed rule) unnecessarily raises the combined MOOP amount rather than tying the lower range of the amount to the type of in-network MOOP amount chosen. As a result, the contract year 2023 in-network and total catastrophic (combined MOOP) limits in Table 5 reflect this finalized policy (as well as other changes more completely discussed in this section to apply the proposed rounding rules in § 422.100(f)(4)(iii), clarify how the application of the 10 percent cap on increases to the MOOP limits applies, and changes to the proposed ESRD cost transition discussed in section II.A.4.c. of this FC.). No changes in the approach to calculating the lower range of the combined lower MOOP limit are needed as the MOOP limits were shown to correctly reflect current practice by beginning at zero dollars in Table 5 from the February 2020 proposed rule. In summary, CMS will continue our longstanding approach by codifying the ranges finalized in §§ 422.100(f)(4)(i) and 422.101(d)(3)(ii) to determine if an MA organization is compliant with the finalized requirement in § 422.101(d)(2)(ii) (proposed in paragraph (d)(2)(i)) that the MA plan has the same type of in-network and total catastrophic (combined MOOP) limit (mandatory, intermediate, or lower).
We are finalizing at § 422.100(f)(4)(iii) the rounding rules CMS uses for the MOOP limits generally as proposed but
We believe these modifications to § 422.100(f)(4)(iv)(B) and (v)(B), and to § 422.101(d)(3)(ii) will result in more precise in-network intermediate MOOP limits and total catastrophic (combined MOOP) limits for future years. CMS completed the calculations of the in-network intermediate and total catastrophic (combined MOOP) limits for contract year 2023 following this methodology as shown in Tables 3 and 4. The final contract year 2023 in-network intermediate MOOP limits and total catastrophic (combined MOOP) limits in Table 5 reflect these updates (as well as the other changes for calculating MOOP limits finalized in this FC). MA plans must comply with the resulting final MOOP limits included in Table 5 for contract year 2023.
We are also finalizing additional and revised text in § 422.101(d)(2) and (d)(3) to clarify the scope of the regional MA plan MOOP amounts and the specific services to which the different MOOP limits apply: The catastrophic limit calculated under paragraph (d)(2) applies to in-network basic benefits and the total catastrophic limit calculated under paragraph (d)(3) applies to in-network and out-of-network basic benefits. We are finalizing a new paragraph (d)(3)(iii) to clearly require an MA organization to establish the total catastrophic MOOP amount (mandatory, intermediate, or lower) within the dollar range specified in paragraphs (d)(3)(ii)(A) through (C) and the type of MOOP limit will be used for purposes of §§ 422.100(f)(6), (j)(1), 422.101(d), and 422.113(b)(2)(v).
In large part the proposal was to describe and codify the methodology used for MOOP limits under CMS's policies first developed in a 2011 rulemaking for adopting MOOP limits beginning in 2012. As described in the February 2020 proposed rule, the OACT performs the data projections used for setting MOOP limits. Taking the most recent Medicare FFS data and developing projections for the contract year for which we will be calculating the MOOP limits necessarily involves informed judgment and the making of actuarial assumptions. CMS and the OACT have been guided by generally accepted actuarial principles and practices in developing the projections used for calculating the MOOP limits. The proposal implicitly acknowledged this in its description of how the OACT analyzes the relevant data to develop the projections in the preamble of the February 2020 proposed rule. Specifically, the February 2020 proposed rule discussed how the OACT conducted necessary analyses and projections in the past and made clear that the OACT would be involved in applying the methodologies to calculate the MOOP limits we were proposing. CMS will continue to use generally accepted actuarial principles and practices in finalizing the projections of beneficiary out-of-pocket costs that form the basis of the methodology to calculate MOOP limits. As a result, we are also finalizing new § 422.100(f)(7) to ensure that this FC provides more detail regarding the actuarial nature of how Medicare costs are projected which we believe is better stated in the regulation text. These principles permit discretion and the exercise of actuarial judgment; as a result, different actuaries and analysts may come to different, equally appropriate, projections. Actuaries often consider different methodologies and assumptions to project the effect of uncertain events.
As discussed in more detail in section II.B of this FC, new § 422.100(f)(7) will also apply to how cost sharing standards in paragraph (f)(6) and (j) are calculated and evaluated using the methodologies adopted in this FC. Accordingly, we also discuss this new regulatory paragraph as it relates to cost sharing standards in section II.B. of this FC. Next, we address comments received on the ESRD cost transition schedule, explain how CMS's calculations of MOOP limits are impacted by ESRD costs, and more specifically address how the MOOP limits will be set for 2023 and future years in section II.A.4.c. of this FC.
CMS proposed to conduct a multiyear transition of ESRD costs into the methodology for how we calculate MOOP limits. Section 1851(a)(3) of the Act, as amended by section 17006 of the 21st Century Cures Act, amended the Medicare statute to permit Medicare beneficiaries with diagnoses of ESRD to enroll in MA plans beyond the previous enrollment limitations, beginning in contract year 2021. Before these amendments were effective for contract year 2021, individuals diagnosed with ESRD could not enroll in a MA plan, subject to limited exceptions. In the proposed rule, we explained that the data CMS uses to calculate the MOOP limits should also incorporate the out-of-pocket expenditures of beneficiaries with diagnoses of ESRD, which we are referring to in this FC as “ESRD costs,” to reflect this statutory change. We also proposed safeguards to protect against excessive changes in the MOOP limit during and after the ESRD cost transition. Since the February 2020 proposed rule, OACT studied the impact of expanded ESRD enrollment eligibility for the MA program on MA benefits using 2021 Medicare data and has estimated the impact to be $−0.45 PMPM which is the weighted average for all MA plans.
A commenter, in referencing a Wakely actuarial consulting firm study,
We appreciate that some MA plans anticipate increased costs associated with covering the cost of care for individuals with diagnoses of ESRD. An analysis conducted by the OACT demonstrates that the ESRD open enrollment opportunities beginning in 2021 are expected to have a limited impact on both the financial outcomes of MA organizations and the corresponding benefits and premiums of the MA program. The primary reasons for the relatively small effect are that the increase in projected MA ESRD enrollment will represent a small fraction of membership in MA plans and that any financial effects will be diluted across existing plan membership. For the base data for this analysis, the OACT used the 2019 ESRD experience submitted by MA
As provided in section 1853(a)(1)(H) of the Act, CMS establishes separate rates of payment to MA organizations for ESRD beneficiaries enrolled in MA plans. See also §§ 422.254 and 422.304 through 422.308. The rates used for enrollees in dialysis or transplant status are based on statewide average Medicare FFS costs for ESRD beneficiaries in dialysis status. For enrollees with functioning graft status, the MA county benchmark rates are the payment rates. The rates for those in dialysis, transplant, and functioning graft status are also adjusted using a risk adjustment methodology that is specific to the health care costs for beneficiaries with ESRD in dialysis, transplant or functioning graft status. The proposal being finalized here was about how the MOOP limits should be calculated, including the data used and the percentiles of Medicare FFS data projections that should be used in those calculations.
We proposed to transition the out-of-pocket costs for beneficiaries who have diagnoses of ESRD into the methodology CMS uses to calculate MOOP limits over multiple years to avoid sudden and significant changes, which would be disruptive to enrollees. A sudden and significant shift in the MOOP limits—which would happen if the MOOP limits were increased by 100 percent of the ESRD cost difference in one year—is not consistent with protecting enrollees from disruptive year over year benefit or cost sharing changes. In this manner, we believe our approach gives equitable consideration to containing out-of-pocket costs for all current and potential MA enrollees.
CMS acknowledges and understands that some plans may adopt a mandatory MOOP type. However, we expect MA organizations will continue to offer favorable benefit designs that meet beneficiary needs, are competitive, and are attractive to beneficiaries. In addition, MA organizations have multiple strategies to manage care and costs through provider contracting, care coordination, case management, plan benefit designs, and benefit flexibilities including SSBCI and MA uniformity flexibility. As such, CMS believes MA organizations have the opportunity to design affordable benefit packages that are tailored to beneficiary needs. CMS does not expect the potential negative downstream effects on MA enrollment, plan options, premiums, supplemental benefits (including SSBCI), care coordination services, and access to lower MOOP limits, referenced by the commenters, to come to fruition solely due to the provisions in this FC.
Further, we did not propose or discuss increasing MOOP limits or plan premiums for only beneficiaries with diagnoses of ESRD. Consistent with sections 1852(d) and 1854(c) of the Act, MA regulations at §§ 422.100(d), 422.254(b), and 422.262(c) require benefits, cost sharing, and premiums for enrollees to be uniform. Our interpretation of uniformity may permit an MA plan to reduce, not increase, cost sharing for similarly situated enrollees in order to address specific health needs of the enrollees (such as, lower cost sharing for enrollees with diabetes to see an endocrinologist). Section 422.100(d), which was finalized in section V.C. of the January 2021 final
As discussed in greater detail subsequently in this section, CMS will limit the potential increase in MOOP limits to a cap of 10 percent compared to the MOOP limits set for the prior year (beginning with contract year 2023). As illustrated in Tables 2 and 3 and reflected in the final MOOP limits for contract year 2023, the in-network contract year 2023 mandatory MOOP limit has been capped at a 10 percent increase based on the contract year 2022 mandatory MOOP limit. This means the mandatory MOOP limit for contract year 2023 does not fully reflect the 95th percentile of Medicare FFS data projections as doing so would result in an increase greater than 10 percent compared to the contract year 2022 mandatory MOOP limit. Applying this cap on the amount of potential increase each year to the MOOP limits is an important beneficiary protection and consistent with how we have previously balanced the goal of limiting enrollee costs (to avoid plan designs that discourage enrollment by sicker beneficiaries) and ensuring continued access to affordable and sustainable benefit packages when setting MOOP limits.
In a related note, a few commenters encouraged CMS to consider how coverage costs for ESRD patients can be significantly above or below the overall state average in certain locales, such as metropolitan areas in California, Florida, Ohio, and Texas. A commenter referenced the Avalere Health analysis of 2018 Medicare FFS claims data that found 10 of the top 15 metropolitan statistical areas with the most ESRD patients had costs that exceeded the MA payment rate.
We acknowledge that as beneficiaries with diagnoses of ESRD enroll in greater numbers into the MA program, MA organizations will more often than before have to cover the costs associated with that chronic condition when these enrollees meet the plan's MOOP amount and incur more costs past the MOOP than enrollees without diagnoses of ESRD are projected to do, on average. CMS uses historical FFS reimbursement and enrollment data for beneficiaries with diagnoses of ESRD to develop the rates used to pay MA organizations for these enrollees, which are generally higher than the rates paid to MA organizations for enrollees without diagnoses of ESRD.
MA organizations serve different geographic areas and ESRD enrollment and spending may vary across metropolitan areas and states. It would be overly complex to set MOOP limits by geographic area. For example, some complicating factors include: Medical economics in different geographic areas; how to reasonably define geographic areas; varying negotiating leverage of MA organizations and resources; and potential resulting complexities for beneficiaries in evaluating plan options. Also, it would be difficult to incorporate the remainder of the ESRD cost differential at a rate that was consistent with the enrollment rate of beneficiaries with diagnoses of ESRD in specific geographic areas. Finally, setting geographically specific MOOP limits was not proposed.
While we appreciate the commenter's suggestion to align the ESRD cost transition schedule with the OACT's projected rate of ESRD enrollment, we believe this would add another layer of complexity and further delay the transition process. As discussed in the February 2020 proposed rule, the OACT expected ESRD enrollment in MA plans to increase by 83,000 beneficiaries as a result of the 21st Century Cures Act provision. The OACT assumed the increase would be phased in over 6 years, with half of those beneficiaries (41,500) enrolling during 2021; the remaining 41,500 additional beneficiaries were expected to enroll in MA plans during the years 2022 to 2026 under the assumption that the number of additional enrollees who have diagnoses of ESRD will continue to increase during that time frame though
Several commenters recommended accelerating or simplifying the ESRD cost transition because: (1) A lengthy, complex or confusing transition would be difficult for MA organizations to plan and execute; (2) a longer transition would not support MA plans managing the higher ESRD costs quickly enough; and (3) delaying the transition may require premium increases to fully cover or subsidize ESRD member costs. A commenter requested CMS complete the transition over 3 years, instead of 4 years, by incorporating 25 percent of the ESRD cost differential each year as follows: 50 percent in 2021, 75 percent in 2022, and 100 percent of all ESRD costs incorporated in 2023. In addition, a few commenters were concerned that the OACT's projections of beneficiaries with diagnoses of ESRD that will enroll in an MA plan during the next several years is understated. A commenter explained that even if only a small number of beneficiaries with diagnoses of ESRD migrate from Medicare FFS to the MA program, MA organizations will face significantly increased medical care costs. This commenter also stated that CMS's phase-in proposal for the ESRD cost differential was understating the speed at which beneficiaries with ESRD will transition to MA plans. A commenter that wanted to accelerate the transition was also concerned that as beneficiaries with diagnoses of ESRD migrate to MA and fewer remain in Medicare FFS, CMS's methodology of calculating MOOP limits using both non-ESRD and ESRD costs would result in MOOP limits being set too low and would fail to achieve an actuarially equivalent level of cost sharing. Specifically, this commenter noted that the substantial financial benefits of the MOOP limit for ESRD members would result in the ultimate blending (of out-of-pocket costs for all beneficiaries) being insufficient if the penetration rate of ESRD members in MA plans ends up exceeding that of non-ESRD members.
We appreciate the recommendations about the timing to incorporate ESRD costs into the data used to calculate MOOP limits (and inpatient hospital acute and psychiatric cost sharing limits). In this FC, we are finalizing the use of a transition schedule combined with guardrails on overall increases with some modifications compared to the proposal. We are finalizing the definition and use of the ESRD cost differential as a specific way to measure ESRD costs and factor them into the data (and the methodology CMS uses to calculate annual MOOP limits) with
As discussed in section V.H.1. of this FC, CMS considered several alternatives to implementing the proposed ESRD cost transition schedule into the methodology CMS uses to calculate MOOP limits based on public comments, the timing of this FC, potential for enrollee disruption, and impacts of further delays in integrating ESRD costs. After consideration of those alternatives, we believe finalizing a modified transition schedule would be beneficial and address the concerns and interests raised by the comments. The delay in finalizing this provision resulted in no increased ESRD cost adjustment for contract year 2022 MOOP limits (rather, the ESRD cost differential remained the same as 2021) while ESRD enrollment in MA is projected to increase in 2022. Specifically, CMS maintained the contract year 2021 MOOP limits for contract year 2022. Therefore, we are not finalizing a provision to address the incorporation of the ESRD cost differential for contract year 2022 (proposed at paragraph (f)(4)(vii)(A)) and are organizing the regulation text as necessary.
As a result, we are finalizing at § 422.100(f)(4)(vi)(A) and (B) that the ESRD cost differential will be factored into the Medicare FFS data projections used to calculate the MOOP limits as follows: For 2023, 70 percent and for 2024, 100 percent.
In finalizing use of 70 percent of the ESRD cost differential for 2023, we aim to strike a balance among curbing potential disruptive changes in MOOP limits from contract year 2022 to contract year 2023, avoiding the concerns with a lengthy transition identified by commenters, and ensuring MA organizations can continue offering all plan enrollees, regardless of their ESRD status, quality care and service while keeping premiums and cost sharing at non-discriminatory levels. As finalized, § 422.100(f)(4)(iv) through (vi) reflects the updated timing for the finalized transition and includes some minor clarifications and edits to use consistent terminology. We expect these changes will help ensure that MA plans are able to both expand their membership to beneficiaries with diagnoses of ESRD and continue offering all enrollees, regardless of their ESRD status, high-quality health care and service while keeping premiums and out-of-pocket costs at reasonable levels for all enrollees.
The modified schedule we are finalizing to transition ESRD costs was used to update the MOOP limits from the illustrative figures provided in Tables 4 and 5 (Table 4, “Illustrative Example of In-Network MOOP Limits Based on Most Recent Medicare FFS Data Projections” and Table 5, “Illustrative Example of Combined MOOP Limits for LPPO and Catastrophic (MOOP) Limits for RPPO Plans Based on Most Recent Medicare FFS Data Projections”) in the February 2020 proposed rule. In this FC, Table 5 contains the final MOOP limits for contract year 2023 and Table 9 contains illustrative MOOP limits for contract year 2024 for comparison purposes to Tables 4 and 5 from the February 2020 proposed rule. The calculations to reach the MOOP limits in Tables 5 and 9 are provided in Tables 2-4 and Tables 6-8. In addition, Tables 4, 5, 8, and 9 include a correction in the calculation of the lower ranges to the total catastrophic (combined MOOP) limits per § 422.100(d)(3)(iii), as discussed in section II.A.4.b. of this FC. CMS took public comments on the MOOP limit proposal from the February 2020 proposed rule into consideration regarding the use of a subregulatory notice and comment process before finalizing the MOOP and cost sharing limits each year and as discussed in sections II.A.4.b. and II.B.5. of this FC, we are adopting that process for the future. However, as this FC is not being published early enough to provide time for CMS to solicit comment and release subregulatory guidance before the contract year 2023 bid deadline, the MOOP limits contained in Table 5 are final. These limits were calculated applying the rules finalized in this FC. CMS intends to update the illustrative contract year 2024 MOOP limits using contract year 2024 Medicare FFS data projections (based on Medicare FFS data from 2018 to 2022) when available and have a separate public comment period (based on § 422.100(f)(7)(iii)) before releasing the final contract year 2024 MOOP limits.
Using the 95th percentile of contract year 2023 Medicare FFS data projections (based on Medicare FFS data from 2017-2021), the projected percent increase to the mandatory MOOP limit for contract year 2023 would be greater than 10 percent in comparison to the mandatory MOOP limit set for contract year 2022. Table 2 compares the unrounded contract year 2023 in-network mandatory MOOP limit before application of the 10 percent cap ($8,530.20) to the mandatory MOOP limit set for contract year 2022 ($7,550.00); this increase equates to approximately 13 percent (after accounting for the rounding rules which would raise the MOOP limit amount to $8,550.00). As a result, Tables 2 through 5 illustrate application of the 10 percent guardrail for the mandatory MOOP limit in contract year 2023 to limit the increase to 9.9 percent after application of the rounding rules. Conversely, the percent increase of 5.8 percent to the lower MOOP limit for contract year 2023 is less than 10 percent in comparison to the voluntary MOOP limit set for contract year 2022. Similarly, comparing the highest allowable in-network mandatory and lower MOOP limits for contract year 2023 to the corresponding illustrative in-network MOOP limits for contract year 2024 is less than 10 percent. For example, the final contract year 2023 in-network mandatory MOOP limit
Under § 422.100(f)(4)(vi), the ESRD cost differential for contract year 2023 is the difference between, first, for the mandatory MOOP limit, $7,175 and for the lower MOOP limit, $3,360 and second, for the mandatory MOOP limit, the 95th percentile ($9,111.00) and for the lower MOOP limit, the 85th percentile ($3,772.00) of the contract year 2023 Medicare FFS data projections (based on Medicare FFS data from 2017 to 2021). As shown in Tables 2 through 5, modifying the ESRD cost transition from the proposed 80 percent to 70 percent of the ESRD cost differential in contract year 2023 and completing the calculations using projections of Medicare FFS data from 2017-2021 (compared to the 2015-2019 Medicare FFS data available at the time of the February 2020 proposed rule), produced a moderate increase from the illustrative amounts contained in the February 2020 proposed rule. For example, the highest allowable (and illustrative) in-network mandatory MOOP limit was listed as $7,950 for contract year 2023 in the February 2020 proposed rule. In comparison, as shown in Table 5, the final contract year 2023 highest allowable in-network mandatory MOOP limit is $8,300 (an increase of $350).
In summary, we are finalizing § 422.100(f)(4)(vi) (proposed in paragraph (f)(4)(vii)) with changes in the transition schedule to calculate annual in-network MOOP limits and modifications to paragraph (f)(4) addressed in this section and section II.A.4. of this FC.
CMS will monitor the penetration rate of beneficiaries with diagnoses of ESRD in MA plans and if the penetration rate ends up being significantly different from Medicare FFS, we will consider future rulemaking to alter the methodology CMS uses to set MOOP limits if there are significant unforeseen impacts or negative consequences that need to be addressed. We also would consider whether additional changes would outweigh the interests of maintaining a settled methodology for the MOOP limits and sufficiently protect enrollees from substantial changes in cost sharing and benefits from one year to the next. Finally, we note that MA organizations can still design a PBP with cost sharing that is actuarially equivalent to cost sharing in Medicare FFS while complying with the MOOP and cost sharing limits in this FC.
We are modifying the proposed guardrails to use only a 10 percent cap on increases to MOOP limits from the prior year and will apply this guardrail for contract year 2023 and subsequent years at § 422.100(f)(4)(iv) and (v). In essence, we are not finalizing the condition that the projections of the 85th or 95th percentile must shift more than two percentiles within one year in order to apply a 10 percent change cap to the mandatory and lower MOOP limits. We are also not finalizing the proposal to toll or delay the incorporation of the ESRD cost differential as part of the limits on changes to MOOP limits from year to year. We are finalizing the 10 percent guardrail in paragraphs (f)(4)(iv) and (v) and will apply it during and after the ESRD cost transition. To simplify the regulation text for how CMS calculates the MOOP limits for contract year 2024 and subsequent years, we are also consolidating into one paragraph ((f)(4)(v)(A)) rather than two (proposed paragraphs (f)(4)(v)(A) and (C)) the methodology that will apply consistently to both the mandatory and lower MOOP types (with the only difference being the percentile that determines the type of limit). This makes the regulation simpler while providing stability and a measure of predictability for enrollees and MA organizations about the degree of change that may occur in MOOP limits from year to year. As finalized, paragraphs (f)(4)(iv) and (f)(4)(v) provide that the mandatory and lower MOOP limits may only increase by 10 percent; the intermediate MOOP limit will be calculated as the numeric midpoint between the mandatory and lower MOOP limits after application of the 10 percent cap on increases, subject to the clarified rounding rules. By finalizing
Regarding the comments about potential increases in MA premiums associated with our proposals to limit increases in the MOOP limits from year to year and to phase-in the ESRD cost differential over a period of time, only 40 percent of the ESRD cost differential was incorporated into the MOOP limits set for contract year 2021 (and maintained for contract year 2022) which is a one year delay in incorporating additional ESRD costs (in comparison to the schedule proposed). Despite this delay and the limited increase in MOOP limits for these contract years during which enrollment of beneficiaries with diagnoses of ESRD continued to increase into the MA program, the weighted average monthly plan premium is continuing to decrease from prior years and the percent of plans offering supplemental benefits or other benefit flexibilities (such as, SSBCI) continues to increase (based on plan bid information for contract year 2022). This suggests that increases in plan premiums or supplemental benefit changes are not occurring on an aggregate level in response to a 1 year delay of incorporating additional ESRD costs into the methodology CMS uses to calculate MOOP limits. We expect this may be a result of market forces and competition. Therefore, we believe that finalizing a 10 percent cap on increases to the MOOP limits from the prior year and its application for the mandatory and intermediate MOOP limits (in-network and combined) using contract year 2023 Medicare FFS data projections (based on Medicare FFS data from 2017-2021) will not immediately result in MA plans increasing premiums or reducing benefits. We are finalizing guardrails at § 422.100(f)(4)(iv) and (v) that use this 10 percent cap on increases in the mandatory and lower MOOP limits; this cap will necessarily limit increases in the intermediate MOOP limit and the total catastrophic (combined) MOOP limits as well based on the methodology to calculate those limits.
Therefore, subject to the rounding rules in § 422.100(f)(4)(iii) and the ESRD cost transition schedule in § 422.100(f)(4)(vi), the MOOP limits for 2023 and subsequent years will be calculated as follows:
For contract year 2023 (applying both § 422.100(f)(4)(iv) and (vi)(A)):
• The mandatory MOOP limit is calculated as $7,175 (the 95th percentile of projected contract year 2021 Medicare FFS beneficiary out-of-pocket spending for beneficiaries without diagnoses of ESRD) plus 70 percent of the ESRD cost differential unless: the resulting MOOP limit (after application of the rounding rules in paragraph (f)(4)(iii) of this section) reflects an increase greater than 10 percent compared to the mandatory MOOP limit from the prior year, in which case CMS caps the increase to the mandatory MOOP limit by 10 percent of the prior year's MOOP limit.
• The intermediate MOOP limit is calculated as the numeric midpoint between the mandatory and lower MOOP limits (calculated before application of the rounding rules in § 422.100(f)(4)(iii) and after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year in paragraphs (f)(4)(iv)(A) and (C)).
• The lower MOOP limit is calculated as $3,360 (the 85th percentile of projected contract year 2021 Medicare FFS beneficiary out-of-pocket spending for beneficiaries without diagnoses of ESRD) plus 70 percent of the ESRD cost differential unless: The resulting MOOP limit (after application of the rounding rules in paragraph (f)(4)(iii) of this section) reflects an increase greater than 10 percent compared to the voluntary MOOP limit from the prior year, in which case CMS caps the increase to the lower MOOP limit by 10 percent of the prior year's MOOP limit.
The MOOP limits for contract year 2024 and subsequent years will be calculated, subject to the rounding rules in paragraph (f)(4)(iii), as follows:
• The mandatory and lower MOOP limits are calculated as the 95th and
• The intermediate MOOP type is either maintained at the prior year's limit or if either the mandatory or lower MOOP limit changes from the prior year, updated to the new numeric midpoint between the mandatory and lower MOOP limits (calculated before application of the rounding rules in paragraph (f)(4)(iii) and after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year in paragraph (f)(4)(v)(A)). This policy is finalized in paragraph (f)(4)(v)(B).
As a result, CMS will distribute significant (that is, more than 10 percent) increases to the mandatory and lower MOOP types over multiple years in order to avoid potential disruption to beneficiaries and plan designs for contract year 2023 and subsequent years. This is generally consistent with our approach in the February 2020 proposed rule of limiting changes in the MOOP limit but, we believe, is a more direct and simpler approach. Based on the contract year 2021 Medicare FFS data projections (based on Medicare FFS data from 2015-2019) available at the time of the February 2020 proposed rule, a comparison of 95th percentile data reflected an approximate 14 percent difference ($8,174 with and without ESRD costs compared to $7,175 with only non-ESRD costs, respectively). As discussed in the February 2020 proposed rule, distributing a difference in projected costs of this magnitude over multiple years is necessary in order to avoid disruption to beneficiaries. By applying the 10 percent cap, we will ensure changes of a similar magnitude are limited. For example, if the value at the 95th percentile of Medicare FFS data is $10,049 (meaning a MOOP limit of $10,050 after application of the rounding rules in paragraph (f)(4)(iii)), and the next year the value at the 95th percentile is projected to be $11,219 (a rounded MOOP value of $11,200), there would have been a potential increase of $1,150 or approximately 11 percent. Under the rules finalized here, the MOOP limit would be increased by only 10 percent, resulting in a mandatory MOOP limit of $11,050 in the second year. In the third year, the mandatory MOOP limit would incorporate any remaining difference, to the lower of $12,150 (a 10 percent increase) or the value at the 95th percentile as projected using the annually updated Medicare FFS data projections. If the 95th percentile for the third year is projected to be $11,603 (an increase of approximately 5 percent over the prior year), the MOOP limit for that third year would be $11,600 after application of the rounding rules. By applying the 10 percent cap, we will ensure increases of a similar magnitude are limited. However, the projections for 2024 and subsequent years would be made using annually updated Medicare FFS data projections that are based on data for beneficiaries with and without diagnoses of ESRD.
This 10 percent cap on increases to the MOOP limits provision in § 422.100(f)(4)(iv) and (v) will make sure that, if the projected 95th or 85th percentile substantially increases from one year to the next for contract year 2023 and subsequent years, enrollees are not subject to potentially significant increases in MOOP amounts for that contract year. In addition, by consistently applying the 10 percent guardrail and ESRD cost transition to both the mandatory and lower MOOP limits (which, in turn, determine the intermediate MOOP limit and the total catastrophic MOOP limits), there will be a level of stability and predictability for MA organizations and better protection for MA enrollees. Codifying this rule provides transparency in how CMS will address significant changes in Medicare FFS data projections for contract year 2023 and subsequent years. In addition to these substantive changes, this FC includes clarifying edits. By generally maintaining the proposed limit of a 10 percent increase in comparison to the prior year's MOOP limit amount, we are essentially continuing the ESRD cost transition, but in a limited fashion in order to protect enrollees from potentially significant changes in out-of-pocket costs. As a result, we do not believe these guardrails will directly result in increases in premiums or decreases to supplemental benefits. However, we will consider future rulemaking if there are significant unforeseen changes.
CMS proposed a similar but separate methodology to maintain or update MOOP limits for contract year 2025 or after completion of the ESRD cost transition at proposed § 422.100(f)(4)(vi). Since we are applying the simplified guardrails in paragraph (f)(4)(v) to contract year 2024 and subsequent years, we are not finalizing paragraph (f)(4)(vi) as proposed. Our proposal included similar guardrails for during the ESRD cost transition and after the completion of the ESRD cost transition to protect against potentially disruptive changes to the MOOP limits during and after the ESRD cost transition; this FC is generally consistent with that. In addition, we are not finalizing the requirement that there must be a consistent trend of changes over 3 years of the 85th and 95th percentiles to update the mandatory and lower MOOP limits after the ESRD cost transition is completed (proposed in paragraphs (f)(4)(vi)(A)
• Decreases of $50 or more, in $50 increments; or
• Increases of at least $50 and in increments of $50 but less than a 10 percent increase.
In summary, § 422.100(f)(4)(iv) and (v) reflect final CMS policies in this FC for 2023 and for subsequent years. We expect that applying the standardized update, as detailed in paragraphs (f)(4)(iv) and (v), will result in MOOP
CMS will annually update the mandatory and lower MOOP limits for the upcoming contract year (subject to the rounding rules at paragraph § 422.100(f)(4)(iii)) to reflect the Medicare FFS data projections of the 85th and 95th percentiles unless either of the resulting MOOP limits reflect an increase greater than 10 percent compared to the same type of MOOP limit from the prior year. If there is a 10 percent or more increase in the dollar value at the applicable percentile, we would cap the increase of the applicable MOOP limit(s) at 10 percent of the prior year's MOOP limit annually, until the MOOP limit(s) reflects the applicable percentile(s). In addition, under finalized paragraph (f)(4)(iv)(B) and (f)(4)(vi)(B), for 2023 and for subsequent years, the intermediate MOOP limit will either be maintained at the prior year's limit, or, if the mandatory or lower MOOP limit changes from the prior year, we will update the intermediate MOOP limit to the new numeric midpoint between the mandatory and lower MOOP limits (calculated before application of the rounding rules in paragraph (f)(4)(iii) and after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year in paragraphs (f)(4)(iv) and (v)). Application of this methodology for calculating and setting contract year 2023 MOOP limits is reflected in Tables 2 through 5, as described previously in this section.
We included Tables 6 through 9 to illustrate how contract year 2024 MOOP limits would be set using the methodology described in § 422.100(f)(4)(v) and applying the ESRD cost transition and the 10 percent cap on increases to the MOOP limits. Specifically, Tables 6 through 9 illustrate how CMS would calculate contract year 2024 MOOP limits using contract year 2023 Medicare FFS data projections (based on Medicare FFS data from 2017-2021) because contract year 2024 projections were not available at the time of this FC. For example, the illustrative contract year 2024 in-network mandatory and lower MOOP limits in Table 6 reflect 100 percent of the ESRD cost differential based on finalized § 422.100(f)(4)(vi)(B). However, other potential outcomes are possible and we expect the final contract year 2024 MOOP limits will be different than the illustrative amounts in Table 9 after updating the calculations to use contract year 2024 Medicare FFS data projections (based on Medicare FFS data from 2018-2022).
Some other potential outcomes of how CMS may annually update MOOP limits for 2024 and for subsequent years, subject to the rounding rules in paragraph (f)(4)(iii) and the ESRD cost transition in paragraph (f)(4)(vi), may include:
• Maintaining the contract year 2024 MOOP limits for contract year 2025 if the 95th and 85th percentiles of contract year 2025 Medicare FFS data projections result in values equivalent to the MOOP limits in effect for the prior contract year after applying the rounding rules at § 422.100(f)(4)(iii).
• Calculating updated MOOP limits for contract year 2026 (after the contract year 2024 MOOP limits were maintained for contract year 2025) if the 95th and 85th percentiles of contract year 2026 Medicare FFS data projections result in increases of 3 percent and 5 percent, respectively, from the MOOP limits in effect for the prior contract year.
• Increasing the prior year's mandatory MOOP limit by 10 percent and increasing the prior year's lower MOOP limit by 8 percent (and calculating the intermediate MOOP limit per the regulation text) for contract year 2025 if the 95th and 85th percentiles of contract year 2025 Medicare FFS data projections result in increases of 16 and 8 percent, respectively, from the MOOP limits in effect for the prior contract year.
We reiterate that, as finalized in § 422.100(f)(7)(i), CMS will use generally accepted actuarial principles and practices in projecting the beneficiary out of pocket costs using updated Medicare FFS data each year to calculate MOOP limits in accordance with paragraph (f)(4) and (5) and § 422.101(d)(2) and (d)(3). In addition, we may explain the calculations CMS made to apply the regulations through the subregulatory process finalized in paragraph (f)(7)(iii). Tables 2 through 4 illustrate how the methodology for setting the MOOP limits for has been applied for contract year 2023 MOOP limits. Because this FC is adopting the specific MOOP limits for contract year 2023, as shown in Table 5, the requirement for a subregulatory notice and comment process will begin with the calculation of the 2024 MOOP limits under the rules finalized in §§ 422.100(f)(4) and (f)(5) and 422.101(d)(2) and (d)(3).
If beneficiaries believe that an MA organization is not providing adequate access to services, complaints may be submitted online or by calling 1-800-MEDICARE. CMS monitors and investigates complaints related to plan coverage and CMS caseworkers assist in the resolution of issues with the MA organizations. CMS may take compliance or enforcement actions against an MA organization for failing to meet any contract or regulatory requirements, such as providing adequate access to medically necessary services, as warranted. In addition, enrollees who have complaints about their plan have the right to file a grievance under § 422.564 and, if they believe that benefits have been improperly denied, file an appeal under the appeal rules in §§ 422.562 through 422.619.
In addition, we believe provider networks and the plan's established MOOP amount are not the only factors beneficiaries consider when choosing a health plan. Enrollees may continue to consider a number of factors in relation to their unique healthcare needs and financial situation, such as perception of brand, premium, plan type, benefits, cost sharing, quality ratings, provider network, and the MOOP amount when choosing a health care plan
In addition, a few commenters were concerned that the estimate of kidney acquisition costs, which are carved out of MA payment rates, was inflated and tied that to the proposed MOOP limits. A commenter was specifically concerned that an inflated estimate of kidney acquisition costs, combined with the proposed MOOP limits, could lead to reductions in benefits and result in adverse selection for plans that may attract higher numbers of enrollees with diagnoses of ESRD (such as through lower MOOP limits and cost sharing structures). Other out-of-scope comments included suggestions to modify the MOOP limit to include the Part D prescription drug program and to change the total beneficiary cost (TBC) evaluation that CMS uses (under § 422.256(a)) each year to identify MA bids that include potentially significant increases in enrollee costs or decreases in enrollee benefits.
Finally, the MOOP limit is one of a number of factors that CMS takes under consideration in setting the TBC standard on an annual basis. For example, we also consider benefit and payment policies and technical out-of-pocket cost (OOPC) model changes. The TBC evaluation process is distinct and separate from calculating MOOP and cost sharing limits. We direct commenters to the HPMS memorandum titled “Final Contract Year 2021 Part C Benefits Review and Evaluation,” issued April 8, 2020, for TBC requirements finalized for contract year 2021 and the HPMS memorandum titled “Final Contract Year 2022 Part C Benefits Review and Evaluation,” issued May 20, 2021, for TBC requirements finalized for contract year 2022.
CMS received feedback from 27 commenters pertaining to the MOOP limit proposal, with the majority reflecting support for, or requests for modifications to, the proposed amendments at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) to: (1) Calculate three in-network and out-of-network MOOP limits for local and regional MA plans; (2) transition the ESRD cost differential (that is, data regarding the out-of-pocket costs of beneficiaries who have diagnoses of ESRD) into the Medicare FFS data used to calculate MOOP limits; and (3) calculate MOOP limits during and after completion of the transition schedule. We thank commenters for their feedback and helping to inform our final policy concerning MOOP limits. CMS intends to track several measures of plan benefit design to monitor the potential impact of the polices adopted in this FC, such as: (1) Percent of plans offering lower MOOP limits; (2) percent of plans that use copayments rather than coinsurance in their plan designs; (3) percent of plans that establish the highest allowable cost sharing for each service category (and/or the average or median cost sharing for each service category as a direct year over year comparison); (4) percent of plans with zero premium; and (5) the average number of plan options. CMS may consider additional changes to the methodology for calculating MOOP limits in future rulemaking if this FC results in unforeseen negative consequences, does not encourage favorable benefit designs for enrollees, or does not increase access to plan offerings with lower or intermediate MOOP amounts and cost sharing that is lower or comparable when compared to existing benefit packages.
After careful consideration of all the comments we received, and for the reasons set forth in the February 2020 proposed rule and in our responses to the related comments discussed previously, we are finalizing amendments §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) as proposed, with some modification. These new MOOP provisions are applicable for coverage beginning January 1, 2023 and later. We will therefore use these rules and the final contract year 2023 MOOP limits in Table 5 to evaluate MA bids submissions due the first Monday in June (June 6, 2022) for the 2023 contract year. We will also use these rules to evaluate MA bid submissions for subsequent contract years going forward. In summary, the proposed changes are finalized substantially as proposed but with the following modifications from the proposal:
• Adding descriptive headings to § 422.100(f)(1)-(9) to orient the reader to the content in each paragraph.
• Applying the methodology in the amendments to §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) beginning on or after January 1, 2023 instead of January 1, 2022.
• Revisions in §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) to use consistent language in regulation text when referring to: (1) Plan MOOP amounts established by MA organizations and MOOP limits calculated by CMS; (2) in-network, combined, catastrophic, and total catastrophic MOOP limits, amounts, or types; and (3) the Medicare FFS data projections CMS uses in calculating MOOP and cost sharing limits.
• Revising introductory language in § 422.100(f)(4) for clarity and to: (1) Retain how MA local plans, as defined in § 422.2, must have an enrollee in-network maximum out-of-pocket amount for basic benefits before January 1, 2023 that is no greater than the annual limit calculated by CMS using Medicare FFS data projections; and (2) codify current policy that the in-network MOOP limits apply to PFFS plans for all covered basic benefits.
• Revising § 422.100(f)(4)(i) to address: (1) That CMS will calculate three MOOP limits; (2) the addition of a definition for the term “Medicare FFS data projections”; and (3) how the MOOP limits are based on the Medicare FFS data projections.
• Adding § 422.100(f)(4)(i)(A)-(C) to specify: (1) The dollar ranges of the three in-network MOOP types; (2) the range of the mandatory MOOP limit begins one dollar above the intermediate MOOP limit; and (3) the range of the intermediate MOOP limit begins one dollar above the lower MOOP limit.
• Revisions in § 422.100(f)(4)(ii) to: (1) Clarify that the ranges specified in paragraphs (f)(4)(i)(A) through (C) are dollar ranges for each MOOP type; and (2) add references to §§ 422.101(d) and 422.113 because the MOOP types are referenced in those sections.
• Removing § 422.100(f)(4)(ii)(A)-(C), as this information is finalized with clarifications in paragraphs (f)(4)(i)(A)-(C).
• Revisions in § 422.100(f)(4)(iv) to: (1) Address how CMS will calculate MOOP limits for 2023, including incorporation of 70 percent of the ESRD cost differential in the data used for calculating the MOOP limits; and (2) apply a 10 percent cap on increases to the MOOP limits from the prior year.
• Revisions in § 422.100(f)(4)(iv)(B) to provide that the numeric midpoint is calculated from the mandatory and lower MOOP limits before rounding and after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year.
• Revisions in § 422.100(f)(4)(v) to: (1) Update the applicable dates (to 2024 and subsequent years); and (2) update the reference to the ESRD cost transition to paragraph (f)(4)(vi)(B).
• Revisions in § 422.100(f)(4)(v)(A) to: (1) Apply that paragraph to calculate both the mandatory and lower MOOP limits to make the regulation text concise and ensure consistency in the methodology; (2) replace the two-percentile guardrail with a 10 percent cap on increases to the MOOP limits from the prior year; and (3) to include clarifying edits because the proposal to delay the ESRD cost differential transition is not being finalized.
• Revisions in § 422.100(f)(4)(v)(B) to: (1) Clarify that the numeric midpoint is calculated between the mandatory and lower MOOP limits if either limit changes from the prior year; (2) avoid double rounding in the calculations of the intermediate MOOP limit; and (3) calculate the numeric midpoint after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year.
• Removing § 422.100(f)(4)(v)(C) as the methodology CMS will use to calculate the lower MOOP limit for contract year 2024 and subsequent years is addressed in paragraph (f)(4)(v)(A).
• Removing proposed § 422.100(f)(4)(vi) as the methodology for how CMS calculates MOOP limits for 2025 and subsequent years is now addressed in paragraph (f)(4)(v).
• Finalizing the proposed ESRD cost differential transition (proposed at § 422.100(f)(4)(vii)) in paragraph (f)(4)(vi) with revisions to: (1) Clarify that the definition of “ESRD cost differential” is used for purposes of the ESRD cost transition methodology to calculate annual MOOP limits; (2) correct and update the definition of the ESRD cost differential by using the new defined term of Medicare FFS data projections and identifying the specific Medicare FFS percentiles that CMS will use for each MOOP type; (3) decrease the percentage of ESRD cost differential to incorporate for 2023 (70 percent instead of 80 percent); and (4) finalize the substance of proposed paragraph (f)(4)(vii)(C) in paragraph (f)(4)(vi)(B) and apply it to 2024 and subsequent years.
• Revisions in § 422.100(f)(5) to clarify that the MOOP limits specified in paragraph (f)(4) apply to in-network providers.
• Revisions in § 422.100(f)(5)(i) to: (1) Clarify that the combined MOOP is applied to MA enrollees (rather than beneficiaries); and (2) refer to § 422.101(d)(3) to encompass the addition of dollar ranges for the total catastrophic (MOOP) limits.
• Revisions in § 422.100(f)(5)(iii) to clarify that the MA organization's responsibility to track out-of-pocket spending applies to the combined MOOP amount.
• Finalizing new § 422.100(f)(7)(i) to: (1) Clarify that CMS will use generally accepted actuarial principles and practices in making the projections and calculations used in the methodologies described in §§ 422.100(f)(4), (f)(5), (f)(6), (f)(7)(ii), (f)(8), and (j) and 422.101(d)(2) and (d)(3) to calculate the MOOP limits; and (2) provide examples of the types of approaches and data CMS may consider. This provision and paragraphs (f)(7)(i)(B)-(C) are also applicable to the cost sharing standards addressed in paragraph (f)(6) and (j) and a more complete discussion of these applications is available in section II.B. of this FC.
• Finalizing new § 422.100(f)(7)(iii) to: (1) Codify a specific rule, beginning with contract year 2024, requiring CMS to issue subregulatory guidance prior to bid submission that specifies the MOOP limits and cost sharing standards CMS sets for the upcoming year to allow sufficient time for MA organizations to prepare and submit plan bids; and (2) provide a public comment period on the projected MOOP limits and cost sharing standards for the upcoming contract year, unless a public comment period is impracticable, unnecessary, or contrary to the public interest.
• Revisions in § 422.101(d)(2) to specify the requirements related to establishing a catastrophic MOOP amount for MA regional plans.
• Revisions in § 422.101(d)(2)(i) to require MA regional plans to establish a catastrophic enrollee MOOP amount for basic benefits that are furnished by in-network providers that is consistent with § 422.100(f)(4).
• Revisions in § 422.101(d)(2)(ii) to: (1) Remove repetitive references to the requirement that MA organizations are required to track out-of-pocket spending and alert enrollees and contracted providers when the MOOP amount is reached; and (2) clarify that MA regional plans must have the same MOOP type for the catastrophic MOOP (in-network) limit and total catastrophic (combined in-network and out-of-network expenditures) limit.
• Revisions in the introductory language of § 422.101(d)(3) to clarify that the total catastrophic MOOP amount encompasses the combined in-network and out-of-network expenditures and that this MOOP amount is applied to MA enrollees.
• Revisions in § 422.101(d)(3)(i) to: (1) Avoid repetitive text in the regulation; and (2) clarify the reference to paragraph (d)(2) applies to the catastrophic limit.
• Revisions in § 422.101(d)(3)(ii) to: (1) Avoid double rounding in the calculations of the total catastrophic MOOP limits; (2) calculate the total catastrophic MOOP limits using the mandatory and lower MOOP limits after application of the 10 percent cap on increases from the prior year; and (3) add new paragraphs (d)(3)(ii)(A), (B), and (C) to provide the dollar ranges for each type of total catastrophic MOOP limit (mandatory, intermediate, and lower) for purposes of paragraph (d) and § 422.100(f) and (j).
• Removing proposed § 422.101(d)(3)(iii) and revising to: (1) Remove repetitive references to the requirement that MA organizations are required to track out-of-pocket spending and alert enrollees and contracted providers when the MOOP is reached; and (2) reference the total catastrophic MOOP dollar ranges specified in paragraph (d)(3)(ii) for purposes of paragraph (d) and §§ 422.100(f)(6), (j)(1), and 422.113(b)(2)(v) as those sections apply certain flexibilities depending on the MOOP type established.
• Adding various minor technical and grammatical changes from the proposed regulation text at §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3) to ensure clarity and avoid repetitive text in the regulations.
Finally, in addition to the authority outlined in the February 2020 proposed rule for these MOOP limits, section 1854(a)(5) and (6) of the Act provide that CMS is not obligated to accept every bid submitted and may negotiate with MA organizations regarding the bid, including benefits. Under section 1854(a)(5)(C)(ii) of the Act, CMS is authorized to deny a plan bid if the bid proposes too significant an increase in enrollee costs or decrease in benefits from one plan year to the next. While the rules adopted here do not limit our negotiation authority (§ 422.256), they provide minimum standards for an acceptable benefit design for CMS to apply in reviewing and evaluating bids in addition to establishing important protections to ensure that enrollees with high health care costs are not discouraged from enrolling in MA plans.
Section 1852 of the Act imposes a number of requirements that apply to the cost sharing and benefit design of MA plans. First, section 1852(a)(1)(B)(i) of the Act provides that the MA organization must cover, subject to limited exclusions, the benefits under Parts A and B (that is, basic benefits as defined in § 422.100(c)) with cost sharing that does not exceed or is at least actuarially equivalent to cost sharing in original Medicare; this is repeated in a bid requirement under section 1854(e)(4) of the Act. We have addressed and implemented that requirement in several regulations, including §§ 422.101(e)(2), 422.102(a)(4), and 422.254(b)(4). Second, section 1852(a)(1)(B)(iii) and (iv) of the Act also imposes particular constraints on the cost sharing for specific benefits, which have been implemented in § 422.100(j) for MA plans and extended to cost plans under § 417.454(e); the statute authorizes CMS to add to the list of items and services for which MA cost sharing may not exceed the cost sharing levels in original Medicare. Relatedly, we have codified a requirement in § 422.100(k) that MA plans must cover original Medicare-covered preventive services (as defined in § 410.152(l)) without cost sharing when the services are provided in-network; the same restriction is applied to cost plans under § 417.454(d). Third, section 1852(b)(1) of the Act prohibits discrimination by MA organizations on the basis of health status-related factors and directs that CMS may not approve an MA plan if CMS determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals. The requirements under §§ 422.100(f)(4) and (5) that impose Maximum Out-of-Pocket (MOOP) limits on MA local plans are based on this anti-discrimination provision and designed to prohibit discrimination against or discouragement of enrollment by beneficiaries with high health care needs. In addition, the MOOP requirements under §§ 422.101(d)(2) and (3) implement the statutory catastrophic limits imposed on regional MA plans under section 1858(b) of the Act. Section 422.100(f)(6) provides that cost sharing must not be discriminatory. Calculating limits on cost sharing for covered services is an important way to
Currently, CMS annually analyzes Medicare program data to interpret and apply the various cost sharing limits from these authorities and to publish guidance on MA cost sharing limits. The relevant Medicare data included in this analysis are the most recent Medicare fee-for-service (FFS) data, including cost and utilization data, and MA patient utilization information from MA encounter data. CMS sets cost sharing limits based on analyses of and projections from this data and then reviews cost sharing established by MA organizations to determine compliance with the cost sharing limits and requirements established in the statute and regulations, as interpreted and implemented in sub-regulatory guidance, including Chapter 4 from the MMCM. The cost sharing limits set by CMS reflect a combination of outpatient and professional visits and inpatient utilization scenarios based on the lengths of stays typically used by average to sicker Medicare patients. CMS uses multiple inpatient utilization scenarios to guard against MA organizations setting inpatient cost sharing amounts in a manner that is potentially discriminatory. CMS also sets review parameters for frequently used Medicare professional services, such as primary and specialty care services.
CMS proposed to codify our current and longstanding practice and methodology for interpreting and applying the limits on MA cost sharing, with some modifications. In addition, CMS proposed to add categories of services to the regulation requiring MA cost sharing be no greater than that in original Medicare. Our proposal as a whole, in combination with the MOOP proposal in section VI.A. of the February 2020 proposed rule, aimed to provide MA organizations incentives to offer plans with favorable benefit designs for beneficiaries. As noted in the February 2020 proposed rule, organizations must also comply with applicable Federal civil rights laws that prohibit discrimination on the basis of race, color, national origin, sex (sexual orientation and gender identity), age, disability, including section 1557 of the Affordable Care Act, title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975. None of the proposals in the February 2020 proposed rule limited application of such anti-discrimination requirements.
In the February 2020 proposed rule, CMS explained that in developing and applying the reviews of MA cost sharing for 2020 and prior years,
We explained in the February 2020 proposed rule how CMS is committed to encouraging plan offerings with favorable MOOP and cost sharing limits. Based on that, CMS proposed to modify the regulations at §§ 422.100(f)(6) and 422.113(b)(2)(v) and (vi) to establish a range of cost sharing limits for basic benefits furnished on an in-network basis based on the MOOP limit established by the MA plan. We explained that providing MA organizations with greater flexibility to set cost sharing based on different MOOP limits should incentivize MA organizations to create favorable benefit designs for MA enrollees.
In addition, CMS proposed amending §§ 422.100(f)(6) and (j) and 422.113(b)(2) to implement safeguards to ensure MA enrollees are not subject to discriminatory benefits or discriminatory costs for basic benefits. These proposed safeguards included codifying a long-standing interpretation of the current anti-discrimination provision of section 1852(b)(1) that payment of less than 50 percent of the total MA plan financial liability discriminates against enrollees who need those services. Specifically, CMS proposed to codify in § 422.100(f)(6)(i)(A) that MA plans may not pay less than 50 percent of the total MA plan financial liability, regardless of the MOOP limit established, for basic benefits that are provided in-network and out-of-network that are not explicitly addressed in the cost sharing standards at paragraph (f)(6). We noted in the February 2020 proposed rule that, under current policy and guidance,
CMS proposed to codify in § 422.100(f)(6) a set of general rules for cost sharing for basic benefits. The term “basic benefits,” as defined in § 422.100(c), means items and services (other than hospice care and, beginning 2021, coverage for organ acquisitions for kidney transplants) for which benefits are available under Parts A and B of Medicare and including additional telehealth benefits offered consistent with the requirements at § 422.135. We proposed that the rules in paragraph (f)(6) must be followed by MA plans in addition to other regulatory and statutory requirements for cost sharing. MA organizations have the option to charge either coinsurance or a copayment for most service categories, which we aimed to make clear in the proposed regulation text. Under our proposal, the MA plan would be prohibited from exceeding the coinsurance or copayment limit for service category standards set by CMS using the various rules in paragraph (f)(6) and (j). In addition, after publication of the February 2020 proposed rule, the Families First Coronavirus Response Act (Pub. L. 116-127) amended section 1852 of the Act to prohibit MA plans from charging enrollees higher cost sharing than is charged under original Medicare for COVID-19 testing and testing-related services identified in section 1833(cc)(1) for which payment would be payable under a specified outpatient payment provision described in section 1833(cc)(2) during the period from March 18, 2020, through to the end of the emergency period described in section 1135(g)(1)(B) (namely, the COVID-19 public health emergency). The Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) amended section 1852(a)(1)(B) to require MA plans have cost sharing that does not exceed cost sharing in Original Medicare for a COVID-19 vaccine and its administration described in section 1861(s)(10)(A) of the Act.
CMS proposed to codify our long-standing interpretation and implementation of the anti-discrimination provisions (including section 1852(b)(1) of the Act) that payment of less than 50 percent of the total MA plan financial liability discriminates against enrollees who have significant health care needs and discourages enrollment in the plan by such beneficiaries. We stated how we recognize that it is difficult to set a cost sharing limit for every possible benefit and that this catch-all rule, which has been long-standing policy used in our review of bids, is an important beneficiary protection. We proposed that this rule would apply regardless of the MOOP limit established and regardless of whether the basic benefit is furnished in-network or out-of-network, to protect beneficiaries regardless of the MA plan they choose. As used in the proposed regulation text, the term “total MA plan financial liability” meant the total payment paid and includes both the enrollee cost sharing and the amount paid by the MA organization. Specifically, CMS proposed to codify at § 422.100(f)(6)(i) that MA plans may not pay less than 50 percent of the total MA plan financial liability, regardless of the MOOP limit established, for in-network benefits and out-of-network benefits for which a cost sharing limit is not otherwise specified in proposed paragraph (f)(6), inclusive of basic benefits. In order to clarify this policy, we also proposed in paragraphs (f)(6)(i)(B) and (C) how this rule would apply when coinsurance or copayment structures are used: (1) If the MA plan uses copayments, the copayment for an out-of-network benefit cannot exceed 50 percent of the average Medicare FFS allowable amount for that service area and the copayment for in-network benefits cannot exceed 50 percent of the average contracted rate of that benefit (that is, the PBP service category level or for a reasonable group of benefits or services covered under the plan); and (2) if the MA plan uses coinsurance, then the coinsurance cannot exceed 50 percent.
CMS also proposed general rules to govern how CMS would set copayment limits. This included proposed § 422.100(f)(6)(ii)(A) which provided that CMS rounds amounts to the nearest whole $5 increment for professional services copayments and nearest whole $1 for inpatient acute and psychiatric and skilled nursing facility copayments. Our proposal at paragraph (f)(6)(ii)(B) provided that for all cases in which the copayment limit is projected to be exactly between two increments, CMS rounds to the lower dollar amount. This rounding rule would codify, for the most part, current policy, but with slight modification to protect beneficiaries from higher increases in costs by rounding down whenever possible.
In proposed § 422.100(f)(6)(iii), CMS proposed to codify rules to give MA plans flexibility in setting cost sharing for professional services, including primary care services, physician specialist services, partial hospitalization, and rehabilitation services. The proposed flexibility is, in many respects, the same as the flexibility we currently provide for MA plans that use the lower, voluntary MOOP limit, but with modifications to account for our proposal in section VI.A. of the February 2020 proposed rule which proposed the setting of three MOOP limits each year. This included new paragraph (f)(6)(iii)(A) to provide that an MA plan may not establish cost sharing amounts that exceed the limits under paragraph (f)(6)(iii) for basic benefits that are professional services furnished in-network (that is, by contracted providers). In addition, CMS proposed new paragraph (f)(6)(iii)(B) to specify the data that CMS would use in applying the methodology in paragraph (f)(6)(iii) to set the cost sharing limits for professional services. As proposed, the specific data would be projections of out-of-pocket costs representing beneficiaries with and without diagnoses of ESRD based on the most recent, complete Medicare FFS data. Finally, CMS proposed new paragraph (f)(6)(iii)(C) to outline the method for setting the cost sharing limits for professional services each year and to clarify that the resulting limits (specified as dollar amounts) are subject to the rounding rules in paragraph (f)(6)(ii). CMS explained the cost sharing limits would vary based on the type of MOOP limit used by the MA plan as follows:
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Under the proposal, an MA plan must pay no less than a specific percentage of the total financial liability for professional services to align with the range of flexibility each MOOP limit provides. We explained that our proposal was intended to ensure that there is a clear increase in an MA organization's financial responsibility for professional services if the MA plan uses a mandatory MOOP limit, rather than a lower or intermediate MOOP limit. We arrived at the specified percentages by assigning the highest coinsurance amount that was not discriminatory (50 percent) to the lowest MOOP limit, and assigning 30 percent coinsurance (which is most closely related to copayment limits from prior contract years) to the mandatory MOOP limit, to balance the incentives for each type of MOOP limit. We proposed the midpoint (40 percent) for the intermediate MOOP limit. We explained that these coinsurance percentages would result in reasonable differences between expected copayment limits for each of the MOOP limits. Overall, our proposal aimed to prevent discrimination against the enrollees with high health needs for the covered services by setting these cost sharing limits to cap the amount of financial responsibility for professional services the MA organization can transfer to enrollees. To set the actuarially equivalent values for the copayment limits based on the regulation text each year, we stated that CMS would calculate copayment limits that are approximately equal to the identified coinsurance percentage limit based on the OACT's projections of the most recent, complete Medicare FFS data that includes 100 percent of the out-of-pocket costs representing all beneficiaries with and without diagnoses of ESRD.
CMS proposed to base the approximate actuarially equivalent copayment limits for primary care, physician specialties, mental health specialty services, and physical and speech therapy on the most recent, complete Medicare FFS average cost data (including 100 percent of the out-of-pocket costs incurred by beneficiaries with diagnoses of ESRD), weighted by utilization for the applicable provider specialty types for each service category. We stated that using an average that is weighted by specialty type utilization is consistent with developing an actuarially equivalent copayment for the coinsurance percentage specified in proposed § 422.100(f)(6)(iii). We solicited comment on whether our regulation text should be further revised on this point. In the preamble of the February 2020 proposed rule, we listed the applicable provider specialty types we would use in this analysis:
In addition to these categories, we proposed to base the approximate actuarially equivalent copayment limits for psychiatric services, occupational therapy, and chiropractic care on the most recent, complete Medicare FFS cost data from a single, most applicable provider specialty: respectively, Psychiatry, Occupational Therapist, and Chiropractor. We solicited comment on whether other provider specialty types should inform our proposed actuarially equivalent copayment limits for the various professional services. Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from the February 2020 proposed rule (85 FR 9086-9087) provided an illustration of potential cost sharing limits for contract year 2022 based on projections of the Medicare FFS cost data from 2015-2019 for professional services, emergency/post-stabilization services, and urgently needed services.
We also solicited comment on whether to require additional regulation text to address combining or bundling of cost sharing. CMS has previously issued guidance in Chapter 4, section 50.1, “Guidance on Acceptable Cost-sharing,”
As discussed in the February 2020 proposed rule, since contract year 2011, CMS has set cost sharing limits for certain inpatient length of stay scenarios based on a percentage of estimated Medicare FFS cost sharing projected to the applicable contract year. We explained the current process and proposed to codify continued use of it with some modifications.
We stated in the February 2020 proposed rule that the OACT conducts an annual analysis of the most recent, complete Medicare FFS data, and uses that data to project costs for the Part A deductible and Part B costs based on the length of stay scenarios and the setting of the inpatient stay (acute or psychiatric), to help determine the inpatient hospital acute and psychiatric cost sharing limit amounts. CMS compares the cost sharing for an MA enrollee, under the plan design for each bid, to the projected Medicare FFS cost sharing in each scenario; for MA plans with the mandatory MOOP limit, the cost sharing limit is 100 percent of the Medicare FFS cost sharing for the applicable scenario and for MA plans using the lower, voluntary MOOP limit, it is 125 percent of the Medicare FFS cost sharing. If an MA plan's cost sharing exceeds the applicable limit for any of the length of stay scenarios, CMS considers the MA plan's cost sharing as discriminatory under current § 422.100 and does not approve that plan benefit package. CMS proposed new § 422.100(f)(6)(iv)(A) through (D) to codify this long-standing policy for the cost sharing established by an MA plan for inpatient acute and psychiatric services, with modifications to incorporate cost sharing expenditures for beneficiaries with diagnoses of ESRD in setting the limits and to set a limit for MA plans that use the intermediate MOOP limit. Proposed paragraph (f)(6)(iv)(A) required an MA plan to have cost sharing for inpatient hospital acute and psychiatric benefits that does not exceed the limits set in paragraph (f)(6)(iv). Our proposal aimed to provide transparency on how CMS will set the cost sharing thresholds with which MA organizations must comply for inpatient hospital acute and psychiatric benefits. We proposed that during our review of bids, we would evaluate the MA cost sharing included in plan bids to determine compliance with the cost sharing limits adopted in the regulation.
We proposed to add a 3-day length of stay scenario for acute stays and an 8-day length of stay scenario for psychiatric care to those used under our current policy; these proposed scenarios were based on Medicare FFS data and informed by patient utilization information from MA encounter data. As a result, proposed § 422.100(f)(6)(iv)(B) specified the seven inpatient stay scenarios (current and new) for which cost sharing would apply under original Medicare and that would be used to set the MA cost sharing limits. The inpatient hospital acute stay scenarios are for 3 days, 6 days, 10 days, and 60 days and the psychiatric inpatient hospital stay scenarios are for 8 days, 15 days, and 60 days. Many of these same scenarios were described in the contract year 2020 Call Letter and in previous years.
Under our proposal, cost sharing limits for each of the seven inpatient hospital length of stay scenarios would incorporate the projected Medicare FFS inpatient Part A deductible and Part B professional costs. We explained that under our proposal, plans could vary cost sharing for different admitting health conditions, providers, or services provided, but overall benefit cost sharing must satisfy the limits established by CMS. Proposed § 422.100(f)(6)(iv)(C) described the data CMS would use for calculating the Medicare FFS out-of-pocket costs for each scenario. Under the proposal, CMS would use projected out-of-pocket costs and utilization data based on the most recent Medicare FFS data that factors in out-of-pocket costs incurred by beneficiaries with diagnoses of ESRD on the transition schedule we proposed in paragraph (f)(4)(vii)(A) through (D) and could also use patient utilization information from MA encounter data. In addition, for purposes of setting these cost sharing limits, the February 2020 proposed rule provided that the Medicare FFS data that factors in the ESRD cost differential would not include the exceptions for tolling the scheduled transition that were proposed for the MOOP limit calculations (in proposed paragraphs (f)(4)(v)(A) and (C)).
As discussed in the February 2020 proposed rule, the OACT conducted an analysis to help determine the impact of including all costs incurred by beneficiaries with diagnoses of ESRD into the most recent Medicare FFS data projections used to calculate cost sharing standards. This analysis found adding in related ESRD costs affects inpatient hospital acute cost sharing limits but that adding in those costs did not impact inpatient hospital psychiatric standards based on projections of Medicare FFS data available at the time of writing the February 2020 proposed rule. Based on this, we proposed to update the methodology to consider ESRD costs in setting all inpatient hospital acute and psychiatric standards. Specifically, CMS proposed to integrate approximately 60 percent of the difference between Medicare FFS costs incurred by all beneficiaries (including those with diagnoses of ESRD) and the costs excluding beneficiaries with diagnoses of ESRD into the data used to set the inpatient hospital acute and psychiatric cost sharing limits for contract year 2022. After contract year 2022, CMS proposed to incorporate an additional 20 percent of costs incurred by beneficiaries with diagnoses of ESRD each year until contract year 2024, when CMS would integrate 100 percent of the costs incurred by beneficiaries with diagnoses of ESRD into the most recent, complete Medicare FFS data that is used to determine inpatient hospital acute and psychiatric cost sharing limits. This was the same schedule proposed to transition ESRD costs into MOOP limit calculations so we used a cross-reference in the proposed regulation text to avoid repetitive regulation text.
Finally, at § 422.100(f)(6)(iv)(D), CMS proposed specific cost sharing limits for inpatient acute and psychiatric stays that are tied to the type of MOOP limit used by the MA plan. The proposed limits were stated as percentages of the FFS costs for each length of stay scenario (based on original Medicare cost sharing for a new benefit period):
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We proposed to use the same percentage of estimated Medicare FFS cost sharing for the mandatory and lower MOOP limits (100 percent and 125 percent respectively) as under current policy to determine inpatient hospital acute and psychiatric cost sharing limits. Using the rule proposed in § 422.100(f)(6)(ii)(A), all inpatient hospital acute and psychiatric cost sharing limits would be rounded to the nearest or lower whole $1 increment. As discussed in the February 2020 proposed rule, our proposal for limits on the cost sharing for inpatient acute and psychiatric services aligned with our current practice (with some modifications, as discussed). We explained that would provide benefit design stability for MA plans.
The February 2020 proposed rule stated that CMS would continue to publish acceptable inpatient hospital acute and psychiatric cost sharing limits and a description of how the regulation standard is applied (that is, the methodology used) through subregulatory means, such as a Health Plan Management System (HPMS) memoranda, issued prior to bid submission each year. We solicited comment on whether to include additional regulation text to establish when information would be published for plans.
The February 2020 proposed rule included Table 4 (Illustrative Example of Cost Sharing Limits Based on Current Medicare FFS Data for Inpatient Hospital Acute 10-Day Length of Stay Scenario), to provide an illustrative example of the cost sharing limits for the 10-day length of stay scenario (an inpatient hospital acute stay); the illustration was developed using 2015-2019 data projected to contract years 2022 through 2024 (85 FR 9082). We explained that the limits were illustrations and that the actual cost sharing limits set for future years could change, based on updated projections and Medicare FFS cost sharing requirements. We also explained in more detail how the proposed methodology was applied to illustrate a contract year 2022 cost sharing amount in Table 4.
We also included Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) in the February 2020 proposed rule to illustrate the potential impact of our proposals for other in-network service categories (85 FR 9086 through 9087). The February 2020 proposed rule Table 5 included projections of potential inpatient hospital acute and psychiatric cost sharing limits based on the methodology we proposed in § 422.100(f)(6)(iv). As explained in the February 2020 proposed rule, we expect the cost sharing limits for inpatient services for future years would be different from the illustrations in the February 2020 proposed rule due to updated projections using Medicare FFS data.
CMS requested comments and suggestions on its proposed cost sharing standards. We also requested comment on whether additional regulation text or restructuring of § 422.100(f)(6)(iv) was needed to achieve CMS's goal of providing additional transparency on how CMS will: (1) Develop the seven length of stay scenarios for inpatient hospital acute and psychiatric services; (2) transition ESRD costs into inpatient hospital acute and psychiatric limit calculations; and (3) calculate inpatient hospital acute and psychiatric limits after the ESRD cost transition is complete.
CMS proposed to codify and adopt specific cost sharing limits for certain benefits (by service and by category of services) that are based on a comparison to the cost sharing applicable in the Medicare FFS program. We relied on both section 1852(a)(1)(B)(iv)(VII)
CMS proposed to modify the regulation at § 422.100(f)(6) to establish a range of cost sharing limits based upon the MOOP limit established by the MA plan for basic benefits (as defined in § 422.100(c)(1)) offered on an in-network basis. The proposal was intended to provide MA organizations with benefit design flexibilities while balancing the incentives for each MOOP type. As discussed in the February 2020 proposed rule, this proposal aligned with the long-standing policy of affording MA plans greater flexibility in establishing Parts A and B cost sharing when the MA plan adopts a lower, voluntary MOOP amount.
CMS proposed to add § 422.100(f)(6)(iii) to specify that for basic benefits that are for professional services furnished in-network, MA plans may have greater flexibility in setting cost sharing based on the MOOP limit they establish. This proposal addressed the type of data used to set cost sharing limits for those professional services and proposed paragraphs (f)(6)(iii)(C)
As discussed in the February 2020 proposed rule, CMS will monitor copayment amounts and coinsurance percentages during our annual review of plan cost sharing. Copayments are for specific benefits identified within the PBP service category or a reasonable group of benefits or services covered by the plan. Some PBP service categories may identify specific benefits for which a unique copayment would apply (for example, PBP service category 7a includes “primary care services”), while other categories may include a variety of services with different levels of costs which may reasonably have a range of copayments based on groups of similar services (for example, PBP service category 15 includes “Part B drugs—other” which covers a wide range of products and costs). We noted that MA plans may establish one cost sharing amount for multiple visits provided during an episode of care (for example, several sessions of cardiac rehabilitation) as long as the overall (or total) cost sharing amount satisfies CMS standards. Based on the amendments CMS proposed for §§ 422.100(f)(6), 422.100(j), and 422.113(b)(2)(v) and (vi), we clarified that if finalized, bids for the upcoming year to which the proposed rules would apply must reflect enrollee cost sharing for in-network services no greater than the coinsurance levels set in or the copayments amounts calculated using those regulations. We confirmed that, under our proposal, MA organizations would still have the option to charge either coinsurance or a copayment for most service category benefits. We also noted that although MA plans have the flexibility to establish cost sharing amounts as copayments or coinsurance, MA plans should keep in mind, when designing their cost sharing, that enrollees generally find copayment amounts more predictable and less confusing than coinsurance.
Currently, § 422.113(b)(2)(v) requires MA plans to charge cost sharing for emergency department services that does not exceed the lesser of: (1) An amount CMS sets annually; or (2) the plan's cost sharing for the services if they were obtained through the MA plan's network. After explaining that applying a specific dollar limit for cost sharing for emergency and post-stabilization services would be more appropriate than a methodology for changing the cost sharing limit for those services, we proposed to revise the existing rules for the cost sharing limits for emergency and post-stabilization services and to codify a new rule for cost sharing limits for urgently needed services. CMS proposed, at paragraph (b)(2)(v), that the MA organization is financially responsible for emergency and urgently needed services with a dollar limit on emergency/post-stabilization services costs for enrollees that is the lower of—
• The cost sharing established by the MA plan if the emergency/post-stabilization services were provided through the MA organization; or
• A maximum cost sharing limit permitted per visit that corresponds to the MA plan MOOP limit as follows:
○ $115 for MA plans with a mandatory MOOP limit.
○ $130 for MA plans with an intermediate MOOP limit.
○ $150 for MA plans with a lower MOOP limit.
As discussed in the February 2020 proposed rule, the proposed limits were based on analyses of Medicare FFS costs that showed shifts in payment trends that may affect emergency/post-stabilization services costs more so than urgently needed services. The proposed dollar limits were based on the projected median total allowed amount for emergency services (including visit and related procedure costs) using the most recent Medicare FFS data available at the time, which included 100 percent of the out-of-pocket costs incurred by all beneficiaries, both with and without diagnoses of ESRD. We arrived at the proposed cost sharing limits for an MA plan with a mandatory MOOP limit and an MA plan with a lower MOOP limit by taking the dollar figures that are 15 percent and 20 percent of that median cost, rounded to the nearest whole $5 increment. The proposed maximum cost sharing limits for MA plans with an intermediate MOOP limit was based on the numeric midpoint of the related cost sharing limits for MA plans with mandatory and lower MOOP limits, rounded to the nearest whole $5 increment. In addition, CMS proposed clarifying updates to the language at § 422.113(b)(2)(v) to note that the cost sharing limits for emergency services include post-stabilization service costs. For urgently needed services, CMS proposed that the same cost sharing limits for professional services under § 422.100 apply to urgently needed services, regardless whether those urgently needed services are furnished in-network or out-of-network. We did not propose any changes to § 422.113 regarding the MA organization's obligations to cover and pay for emergency/post-stabilization services and urgently needed services but only to codify specific cost sharing limits for those services. As noted in the February 2020 proposed rule, CMS intends to monitor trends and consider updating cost sharing limits for both urgently needed services and emergency/post-stabilization services in future rulemaking based on emerging trends.
Section 1852(a)(1)(B) of the Act specifies that MA plans may not charge enrollees higher cost sharing than is charged under original Medicare for chemotherapy administration services (which we have implemented as including Part B—chemotherapy/radiation drugs integral to the treatment regimen), skilled nursing care, and renal dialysis services. This provision is currently reflected in §§ 417.454(e) (for cost plans) and 422.100(j) (for MA plans). The statute provides authority for CMS to require cost sharing that does not exceed cost sharing in the FFS Medicare program for additional Medicare-covered services. As noted elsewhere, section 1852(b) of the Act also prohibits plan designs that have the effect of discriminating against or discouraging enrollment by beneficiaries based on their health needs; we rely on this authority and sections 1856(b) and 1857(e) of the Act, which authorize CMS to set implementing standards for Part C and adopt additional requirements as necessary, appropriate and not inconsistent with Part C, to the extent necessary to set these additional cost sharing protections for enrollees. CMS proposed to restructure paragraph (j) and codify additional cost sharing limits for other services. We clarified that under our proposal cost sharing standards for cost plans will remain the same.
In our current interpretation and application of this requirement for skilled nursing care, MA plans that establish the higher, mandatory MOOP limit must establish $0 per-day cost sharing for the first 20 days of a SNF stay and the per-day cost sharing for days 21 through 100 must not be greater than the original Medicare SNF amount.
In addition, CMS proposed to add the following services to the requirement that cost sharing charged by an MA plan may not exceed cost sharing required under original Medicare: (1) Home health services (as defined in section 1861(m) of the Act) for MA plans that establish a mandatory or intermediate MOOP limit; and (2) durable medical equipment (DME). For home health services, we also proposed that when the MA plan establishes the lower MOOP limit, the MA plan may have cost sharing up to 20 percent, or an actuarially equivalent copayment, of the total MA plan financial liability. Our proposal would prohibit the DME per-item or service cost sharing from being greater than original Medicare cost sharing for MA plans that establish a mandatory MOOP limit. For MA plans that establish a lower or intermediate MOOP limit, our proposal was that total cost sharing for all DME PBP service categories combined would be required to be equal or less than original Medicare cost sharing on a per member per month actuarially equivalent basis, but such MA plans would be permitted to establish cost sharing for specific service categories of DME that exceed the cost sharing under original Medicare as long as it complies with other CMS cost sharing requirements. In order to codify these changes at § 422.100(j), we proposed to reorganize that paragraph with new text at paragraph (j)(1) to provide that for the basic benefits specified, an MA plan may not establish in-network cost sharing that exceeds the cost sharing required under original Medicare.
We included Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) in the February 2020 proposed rule to provide examples of cost sharing limits for contract year 2022 based on projections of the most recent Medicare FFS data available at the time of the February 2020 proposed rule (2015-2019 data) and using the proposed methodology to set the various cost sharing limits specified as proposed §§ 422.100(f)(6), 422.100(j) and 422.113(b)(2)(v) and (vi). We noted these were only projections of potential cost sharing limits for contract year 2022 to illustrate the impact of the methodology. We stated that our proposed standards and cost sharing limits would continue to be inclusive of applicable service category deductibles, copayments and coinsurance, but do not include plan level deductibles. We proposed to update the cost sharing limits on an annual basis based on the final regulations. We noted our intention to apply the revised regulations each year to calculate the amounts that would be the copayment limits unless otherwise stated and that we would publish the annual limits with a description of how the regulation standard is applied (that is, the methodology used) prior to bid submission each year, such as through HPMS memoranda. We proposed to use projections of the most recent, complete Medicare FFS data that include 100 percent of ESRD costs to set the amounts for copayment limits, that is the actuarially equivalent amount of the coinsurance limits proposed in paragraph (f)(6), versus a transition of ESRD costs over time; there were no significant differences in the resulting cost sharing amounts when including ESRD for any of the physician specialties based on projections of the most recent Medicare FFS from the OACT.
In the February 2020 proposed rule, Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) did not include approximate actuarially equivalent copayment limits for some services: cardiac rehabilitation, intensive cardiac rehabilitation, pulmonary rehabilitation, supervised exercise therapy (SET) for symptomatic peripheral artery disease (PAD), partial hospitalization, home health, therapeutic radiological services, DME, dialysis, Part B Drugs Chemotherapy/Radiation Drugs, and “Part B Drugs—Other”. As discussed in the February 2020 proposed rule, we found these categories are subject to a higher variation in cost or unique provider contracting arrangements, which would potentially make using Medicare FFS average or median cost data less suitable for developing a standardized actuarially equivalent copayment value at this time. Accordingly, in order to monitor and enforce compliance with these cost sharing requirements when the copayment is based on an analysis of the contracted rates the MA plan uses for in-network services, CMS noted that MA organizations may be required to provide information to CMS demonstrating how plan cost sharing complies with the regulation standards proposed in § 422.100(f)(6). We solicited comment whether an explicit regulatory provision should be added to require MA organizations to demonstrate compliance with these standards upon request by CMS; such demonstration would include providing CMS with information substantiating the contracted rates for basic benefits that are professional services for which CMS has not calculated an approximate actuarially equivalent copayment limit, and illustrating how the MA organization determined its cost sharing amounts.
As discussed in the February 2020 proposed rule, MA organizations with plan benefit designs that use a coinsurance or copayment amount for which we did not propose to publish a specific cost sharing threshold (for example, coinsurance for inpatient or copayment for durable medical equipment), must maintain documentation that clearly demonstrates how the coinsurance or copayment amount satisfies the regulatory requirements for each applicable plan. This is consistent with existing MA program monitoring and oversight for MA organizations to be able to demonstrate compliance with applicable program requirements. Cost sharing and other plan design elements remain subject to § 422.100(f)(2), which prohibits MA plans from designing benefits to discriminate against beneficiaries, promote discrimination, discourage enrollment or encourage disenrollment, steer subsets of Medicare beneficiaries to particular MA plans, or inhibit access to services. This documentation may be used by CMS during bid review as well as to address issues concerning beneficiary appeals, complaints, and/or to conduct general oversight activities. In addition, MA plans are required to attest when they submit their bid(s) that their benefits will be offered in accordance with all applicable Medicare program authorizing statutes and regulations.
As discussed in the February 2020 proposed rule, under the statute and regulations, an MA plan's total cost sharing for Parts A and B services (excluding hospice services and kidney acquisition costs and including additional telehealth benefits) must not exceed cost sharing for those services in Medicare FFS on an actuarially equivalent basis and must not be discriminatory. In order to ensure that cost sharing is consistent with both §§ 422.254(b)(4), 422.100(f)(2), and
Proposed § 422.100(j)(2) required that total cost sharing for all basic benefits covered by an MA plan, excluding out-of-network benefits covered by a regional MA plan, not exceed cost sharing for those benefits in original Medicare on a per member per month actuarially equivalent basis. We explained that the provision implements section 1852(a)(1)(B) of the Act and the carve out of out-of-network benefits covered by a regional MA plan is to be consistent with section 1852(a)(1)(B)(ii) of the Act. As noted elsewhere, section 1852(b) of the Act also prohibits plan designs that have the effect of discriminating against or discouraging enrollment by beneficiaries based on their health needs. We explained in the February 2020 proposed rule that our proposals were based on this authority and sections 1856(b) and 1857(e) of the Act, which authorize CMS to set implementing standards for Part C and adopt additional requirements as appropriate and not inconsistent with Part C, to the extent necessary. CMS also proposed to codify, in § 422.100(j)(2)(i), our existing policy regarding the specific service categories for which an MA plan must not exceed the cost sharing in original Medicare on a per member per month actuarially equivalent basis. The services we proposed for this rule are consistent with long-standing policy and were: (1) Inpatient hospital acute and psychiatric services, defined as services provided during a covered stay in an inpatient facility during the period for which cost sharing would apply under original Medicare; (2) DME; (3) drugs and biologics covered under Part B of original Medicare (including both chemotherapy/radiation drugs and other drugs covered under Part B); and (4) skilled nursing care, defined as services provided during a covered stay in a SNF during the period for which cost sharing would apply under original Medicare.
As discussed in the February 2020 proposed rule, we believe our proposals would ensure that MA plans that have greater cost sharing flexibility in these categories are not designing benefits in a way that discriminates against enrollees with health status factors and conditions that require the services in § 422.100(j)(2)(i). Further, we noted that limiting cost sharing in this way will ensure that enrollees with certain conditions, or who are high utilizers of these basic benefits, are not discouraged from enrolling in MA plans because of higher cost sharing on necessary services. We noted that setting copayment limits through quantitative formulas (such as those used for our inpatient hospital acute and psychiatric standards) may be less appropriate for some categories, like DME and Part B drugs, and that it may be better to evaluate cost sharing for these service categories on an aggregate service category basis to determine whether they are discriminatory. These categories include items or services that significantly vary in cost or may be subject to provider contracting arrangements that make it difficult for CMS to calculate a specific copayment amount for the category as a whole, as opposed to specific items and benefits.
CMS also proposed, at § 422.100(j)(2)(ii), to extend flexibility for MA plans when evaluating actuarial equivalent cost sharing limits for those service categories to the extent that the per member per month cost sharing limit is actuarially justifiable based on generally accepted actuarial principles and supporting documentation included in the bid, provided that the cost sharing for specific services otherwise satisfies published cost sharing standards. The proposed exception would apply in limited situations, such as when the MA plan uses capitated arrangements with provider groups, when the MA organization operates its own facilities, or other unique arrangements. This flexibility would be consistent with long-standing policy and practice.
Overall, our proposal was aimed to describe how CMS would determine whether specific cost sharing is discriminatory and to set standards and thresholds above which CMS believes cost sharing is discriminatory as well as to implement specific statutory authority regarding cost sharing for basic benefits in an MA plan as compared to original Medicare. Similar to our current practice prior to bid submission, CMS shared our intent to communicate application of the regulation for future years, such as through HPMS memoranda, as appropriate. We solicited comment on our various cost sharing limit proposals.
We received feedback from 17 commenters on our proposal for codifying the methodology for setting certain cost sharing standards each year. The majority of comments were from health plans, provider associations, beneficiary and other advocacy organizations, and pharmaceutical companies. A summary of the comments (generally by issue) and our responses follows:
Consistent with our long-standing policy, most of the cost sharing standards we proposed and are finalizing apply only to in-network Parts A and B services and exceptions to that (where limits will apply to out-of-network benefits) are explicitly stated. In-network service category cost sharing standards are inclusive of applicable service category deductibles, copayments and coinsurance, but do not include plan-level deductibles (for example, deductibles that include several service categories). In addition,
The changes to the proposals we are finalizing in this FC range from minor edits, reorganizations, corrections, and clarifications to substantive modifications based on the comments received, operational considerations, and additional implementation of antidiscriminatory requirements (such as, to support equitable access to plans for beneficiaries with high health needs). Due to operational considerations and to help ensure that MA organizations have sufficient implementation time, the provisions in this FC will not be applicable until January 1, 2023. This reflects a one-year delay from the proposed implementation schedule. When MA bids for contract year 2023 are submitted for review and approval by the statutory deadline (June 6, 2022, for contract year 2023), the regulations in this FC will be used to evaluate those bids for approval. This change means that the dates in the proposed regulation text in §§ 422.100(f)(6), 422.100(j), and 422.113 have been updated from the February 2020 proposed rule (for example, changing a reference from January 1, 2022 to January 1, 2023) and we do not discuss those edits in much detail in our responses to comments and description of the final regulations. Changes to the implementation of the proposed policies that are more nuanced are explained (for example, section II.B.5.c. of this FC addresses the multi-year transition schedule of ESRD costs into inpatient hospital cost sharing limits). Further, we are adding descriptive headings to paragraphs (f)(6) introductory text and (f)(6)(i) through (iv) to identify the scope of the content in each paragraph. Additional changes to paragraphs (f)(6) introductory text and (f)(6)(i) through (iv) are discussed in sections II.B.5.a., b., and c. of this FC. Similarly, in our reorganization of proposed (j)(1) discussed in section II.B.5.e. of this FC, we are adding descriptive headings to paragraphs (j)(1)(i) and (ii). These headings are not substantive changes.
As discussed in section II.A. of this FC, the MOOP limits and cost sharing standards for contract year 2024 and future years will be communicated annually through a subregulatory process, which we are finalizing at § 422.100(f)(7)(iii). This FC adopts the MOOP limits and specific cost sharing limits for contract year 2023 by applying the rules being finalized. As finalized in § 422.100(f)(7)(iii), beginning with contract year 2024, CMS will issue annual subregulatory guidance that specifies the MOOP limits and cost sharing standards that are set and calculated using the rules adopted in this FC; that guidance will be released prior to bid submission to allow sufficient time for MA organizations to prepare and submit plan bids. We expect this date will typically be by the first Monday in April. In addition, CMS will provide a public notice and comment period on the projected MOOP limits and cost sharing standards for the upcoming contract year unless a public comment period is impracticable, unnecessary, or contrary to the public interest. We believe these situations will be rare and intend to solicit comment annually, but believe that aligning the availability of prior notice and an opportunity to comment with rulemaking standards, which include authority to waive prior notice and a comment period when it is impracticable, unnecessary, or contrary to the public interest, is appropriate. For example, CMS may solicit and consider public comment on actuarial approaches before releasing the final MOOP limits and cost sharing standards. The exercise of actuarial judgment by the OACT may be a topic on which the public, or MA organizations, wish to comment when reviewing how CMS has applied the regulations adopted in this FC to calculate the benefit parameters for MA plans. As appropriate, we will consider such comments and may revise the decisions made in developing the projections and calculations of the MOOP and other cost sharing limits. To set the final contract year 2023 cost sharing limits following the methodology in this FC, CMS is using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) which reflect the OACT's actuarial judgements of expected costs in contract year 2023, including considerations of the impact from COVID-19. We did not codify the first Monday in April as a deadline to release the final MOOP limit and cost sharing standards or a specific minimum time frame for the comment period so CMS can remain flexible to potential future situations. The regulation provides for the release of subregulatory guidance that addresses MOOP limits and cost sharing standards in advance of the upcoming plan year with sufficient time for MA organizations to prepare bids. For contract year 2023, we are releasing the final MOOP and cost sharing limits in this FC, in Tables 5 and 28. In addition, the final cost sharing limits for contract year 2023 through 2026 and future years for emergency services are provided in Table 24. Descriptions of the calculations CMS completed to reach these final contract year 2023 MOOP and cost sharing limits following the regulations finalized in this FC are available in section II.A.4. and II.B.5. of this FC.
In the February 2020 Proposed Rule, CMS solicited comment on whether to codify the current guidance regarding bundled copayments. Our current guidance
CMS strives to make sure that plan cost sharing is transparent to MA enrollees and Medicare beneficiaries who are considering enrolling in MA. To ensure the MA regulations are sufficiently clear on these points, we are finalizing additional regulation text, at § 422.100(f)(9), to require that cost sharing (copayments and coinsurance) reflect the enrollee's entire cost sharing responsibility, inclusive of professional, facility, or provider setting charges, by combining (or bundling) all applicable fees into the cost sharing amount for that particular service(s) and setting(s) and be clearly reflected as a single, total cost sharing amount in appropriate materials distributed to beneficiaries. MA enrollees must receive the plan's Evidence of Coverage (EOC) document and other applicable plan materials that clearly disclose their total cost sharing responsibility for particular benefits. By requiring MA plans to clearly disclose and apply cost sharing this way, this FC will ensure that beneficiaries receive information about their financial responsibility for covered benefits through an MA plan and when comparing MA plans. We are finalizing this provision at § 422.100(f)(9) instead of in § 422.111 because it is about cost sharing and related to the cost sharing rules we are codifying in paragraph (f) even if the underlying purpose of the existing guidance and adequate information is provided to beneficiaries. Finally, this requirement about bundling cost sharing into one copayment amount applies to cost sharing for basic benefits.
A few commenters were generally supportive and requested clarifications or technical modifications. For example, a commenter requested CMS confirm that it did not intend to require MA plans to measure financial liability at the individual item or service level or use the average allowable amount when calculating the copayment applicable to a specific transaction; the commenter noted that measuring financial liability at the “individual item or service level” would make the use of copayments very difficult, and would not correspond with other parts of the February 2020 proposed rule that indicated copayments are preferred over coinsurance. In addition, the commenter noted that MA plans may not have the average Medicare FFS allowed amount for each claim (which was referred to in the February 2020 proposed rule), but would have the plan's allowable amount for each particular provider to calculate a cost sharing threshold. Similarly, another commenter requested CMS allow the average contracted rate to be calculated at the parent organization level for purposes of determining compliance with the 50 percent total MA plan financial liability limit. This commenter noted that this approach would allow MA organizations the ability to consider credibility when setting cost sharing limits to help create year over year cost sharing stability for beneficiaries. CMS believes the commenter was referencing claims credibility for pricing purposes in their comment.
MA organizations previously and currently have flexibility to establish cost sharing up to 50 percent coinsurance for many benefits, but generally do not establish cost sharing amounts at the maximum allowable cost sharing limit for most service categories. MA organizations typically offer
Our rule explicitly addresses both copayment and coinsurance structures. We proposed (at § 422.100(f)(6)(i)(A), (B), and (C)) that coinsurance cannot exceed 50 percent of the total MA plan financial liability and specific rules for setting copayments based on that percentage limit. We are finalizing similar, but not identical requirements, at paragraph (f)(6)(i) to consolidate and simplify the regulation. We did not intend by our proposal at paragraph (f)(6)(i) that copayments would be required to vary with each specific encounter (that is, that the copayment amount for a particular item or service would vary based on the payment rate to a specific provider for that service). To ensure clarity in the regulations on this point, we are finalizing the introductory language in paragraph (f)(6) with a revision to explicitly provide that cost sharing may be a coinsurance or copayment for a plan benefit package service category or for a reasonable group of benefits covered under the plan. This means that copayments are not required to vary by specific provider, item, or service, based on the provider's payment amount but rather must be set at a dollar amount that applies to visits of the identified service category of benefits. This reflects CMS's intent to codify the less burdensome, longstanding policies that are familiar to MA stakeholders. In tandem with this modification to paragraph (f)(6), we are not finalizing the proposed regulation text in paragraph (f)(6)(i)(C) about using the MA organization's average contracted rate of that benefit (item or service) to calculate the copayment dollar amount for out-of-network benefits. Rather, we are finalizing rules in paragraph (f)(6)(i) to require that MA plans must not establish a cost sharing amount that exceeds 50 percent coinsurance or an actuarially equivalent copayment value for the service category or for a reasonable group of benefits in the PBP. This includes finalizing rules for the data used by the MA organization to determine an amount that is actuarially equivalent to 50 percent coinsurance, including authority to use the average Medicare FFS allowable amount (as proposed in paragraph (f)(6)(i)(C)). CMS will monitor copayment amounts and coinsurance percentages as part of our annual bid review process during which we examine plan cost sharing. In addition, MA organizations may use the estimated total MA plan financial liability for the service category or for a reasonable group of benefits in the PBP for that contract year to determine the actuarially equivalent value to 50 percent coinsurance. With this approach, we intend to permit the MA organization to use aggregate payment data about the service category, or for the reasonable group of benefits, to which the cost sharing applies when determining the dollar figure that is actuarially equivalent to 50 percent coinsurance. That dollar figure would be the maximum permissible copayment amount for the service category or group of benefits. In addition, we are adopting a provision that an MA plan must not charge an enrollee a copayment for a basic benefit that is greater than the cost of the covered service(s). We believe that this important enrollee protection is necessary and a corollary of our proposal that MA plans be responsible for at least 50 percent of total MA plan liability for basic benefits, whether furnished in-network or out-of-network. As this FC clarifies that our cost sharing limits apply at the service category level (or a reasonable group of benefits), we are finalizing regulation text to explicitly protect enrollees from paying more cost sharing than the estimated total MA plan financial liability for the covered service(s).
When CMS evaluates compliance, either through reviewing bids or other oversight activities, it may not examine in detail a plan's compliance with cost sharing standards for every service category. Also, CMS might not calculate and publish actuarially equivalent copayment values for every service category or situation. Nevertheless, the regulations we are finalizing here will continue to apply to all MA cost sharing charged for basic benefits. Sections II.B.5.b. through II.B.5.f. of this FC finalize specific cost sharing requirements for some in-network benefits in addition to the rule in paragraph (f)(6)(i) for all other in-network and out-of-network benefits (for example, certain categories of benefits in § 422.100(f)(6)(iii) and (iv) and specific services and categories in § 422.100(j)(1)). Section II.B.5.d. of this FC also finalizes specific cost sharing limits for emergency and urgently needed services in § 422.113(b)(2). MA plans (at the segment-level, if applicable) must comply with all of these requirements. To ensure clarity on this point, the introductory text in paragraph (f)(6) requires that an MA organization must establish cost sharing for basic benefits that complies with the standards in §§ 422.100(f)(6) and (j) and 422.113(b)(2) and codifies longstanding policy of how CMS completes cost sharing evaluations at the plan (or segment) level. These standards include coinsurance and specific copayment limits specified in the regulations or copayment limits calculated by CMS using the methodology identified in those regulations. As proposed and finalized with clarifying edits and additions, § 422.100(f)(6) states that these requirements are in addition to other limits and rules applicable to MA cost sharing, such as the requirement that the overall MA cost sharing for basic benefits be actuarially equivalent to Medicare FFS cost sharing (that is, the PMPM actuarial equivalence evaluation in § 422.254(b)(4) and as finalized in paragraph (j)(2)). In situations where CMS does not calculate a copayment limit for a particular service category specified in these regulations, then the copayment amount that the MA organization sets for that service must not exceed the actuarially equivalent value limit of the applicable coinsurance for the MOOP limit of the plan. Consistent with this, we are generally maintaining the current language in paragraph (f)(6) regarding how cost sharing for basic benefits specified by CMS must not exceed
We are finalizing at § 422.100(f)(6)(i) with a rule prohibiting MA plans from paying less than 50 percent of the estimated total MA plan financial liability for that contract year or the average Medicare FFS allowable amount for the plan service area for the benefit, which is generally what we proposed in paragraph (f)(6)(i)(A) with additions for clarity that remain consistent with our longstanding policy. For example, as discussed in more detail subsequently in this response, the addition of “estimated” to the term “total MA plan financial liability” in paragraph (f)(6)(i) recognizes that MA organizations may not have the data necessary to determine the final total MA plan financial liability for the benefit sufficiently in advance of the bid submission deadline. In addition, instead of stating the rule as how much an MA plan must pay, we are finalizing the rule as a limit on the cost sharing that an MA plan may impose on enrollees. As proposed, this rule regarding the 50 percent limit on cost sharing applies to all out-of-network basic benefits. While the proposed paragraph (f)(6)(i)(A) referred to paragraph (f)(6)(i), this FC clarifies that the 50 percent coinsurance limit applies to service categories that are not subject to other specific cost sharing standards set under §§ 422.100(f)(6) and (j)(1) and 422.113(b)(2). While we proposed (and are finalizing in sections II.B.5.b. through II.B.5.e. of this FC.) separate cost sharing standards and requirements for professional services, inpatient hospital service categories, emergency services, and a prohibition on cost sharing for certain specific benefits that exceeds the cost sharing under original Medicare, we believe that additional clarity on this point improves the regulation.
Setting limits on cost sharing for covered services and ensuring MA organizations comply with these limits are important ways to ensure that the cost sharing aspect of a plan design does not discriminate against or discourage enrollment in an MA plan by beneficiaries who have high health care needs. CMS has historically evaluated bid and market data to identify areas of concern and conduct research, and has added new service category cost sharing limits based on these analyses. For example, prior to contract year 2017, CMS did not set a copayment limit for cardiac rehabilitation. In the CY 2017 Call Letter,
As MA organizations may continue to establish coinsurance up to 50 percent, we do not believe that CMS retaining flexibility to calculate a copayment limit that equates to that coinsurance level reflects a change from current practice. Nor does the manner by which CMS calculates the copayment limits under this FC represent a drastic change. When CMS calculates an actuarially equivalent copayment limit for a service category subject to § 422.100(f)(6)(i), the administrative burden for MA plans may be reduced. In the past, when CMS did not set a copayment limit, MA organizations that use copayments instead of coinsurance generally had to submit supporting documentation to show how the MA plan's copayment met the 50 percent coinsurance standard. While, going forward, we may not require documentation demonstrating the calculation of every copayment used by an MA plan, documentation or justifications may be necessary in some cases to demonstrate compliance with the regulation. For service categories where we calculate a copayment that is actuarially equivalent to 50 percent coinsurance (such as “DME—diabetic shoes or inserts” as shown in Table 28), MA organizations will not need to provide supporting documentation if the MA plan's copayments are below the values calculated and issued by CMS under § 422.100(f)(6).
We are including information in Table 28 to illustrate how the 50 percent cap on cost sharing for basic benefits that are not addressed by other regulations will interact with the other regulations specifying cost sharing limits. Table 28 identifies 50 percent coinsurance as the cost sharing limit for all the DME service categories for MA plans that establish a lower or intermediate MOOP limit. This is a clarifying update from the “N/A” designations for the same service categories and types of MOOP limits in the February 2020 proposed rule's Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) and from subregulatory guidance in prior contract years for MA plans that established a voluntary MOOP limit.
As finalized, § 422.100(f)(6)(i) imposes limits on the cost sharing that may be charged to enrollees for out-of-network and in-network basic benefits for which another regulation has not otherwise calculated a cost sharing standard. This rule provides flexibility for CMS to calculate the value for copayment limits for new categories of basic benefits when CMS determines it is appropriate. This flexibility and how we intend to use it are consistent with CMS's prior practice for calculating copayment limits. For benefits subject to § 422.100(f)(6)(i), the enrollee coinsurance cannot exceed 50 percent and the copayment must be no greater than an actuarially equivalent value for that coinsurance regardless of the type of MOOP limit established by the plan (with one exception for the DME service categories for the mandatory MOOP limit, as discussed in section II.B.5.e. of this FC). Similarly, as proposed at § 422.100(f)(6)(iii)(C) (finalized with clarifying additions at § 422.100(f)(6)(iii)(C)-(F)), an MA plan must pay at least a specified percentage of the estimated total MA plan financial liability for the covered benefit for that contract year. As discussed in a subsequent response to comment in this section, the cost sharing limits imposed by § 422.100(f)(6)(i), like other cost sharing limits finalized in this FC, are also subject to the rounding rules finalized in paragraph (f)(6)(ii).
As also discussed in section II.A. of this FC, calculation of the MOOP and cost sharing limits using the methodologies and standards finalized in §§ 422.100(f) and (j) and 422.101(d) requires the exercise of actuarial judgment and the use of generally accepted actuarial principles and practices. Our proposal in the February 2020 proposed rule implicitly acknowledged the use of these principles and practices as a longstanding part of how CMS calculates cost sharing limits and it is inherent in how the OACT performs many of the projections and calculations. Specifically, the February 2020 proposed rule discussed how the OACT conducted necessary analyses and projections in the past and made clear that the OACT would be involved in applying the methodologies to calculate the MOOP and cost sharing limits we were proposing. As a result, while not explicitly proposed, CMS is finalizing a new regulation at § 422.100(f)(7)(i) that addresses use of generally accepted actuarial principles and practices by CMS and MA organizations to ensure that this FC provides more detail regarding the actuarial nature of how costs are projected (which we believe is better stated in the regulation text). This new provision describes how generally accepted actuarial principles and practices will be used in: (1) Developing the beneficiary cost sharing projections used to calculate the MOOP limits in § 422.100(f)(4) and (f)(5) and § 422.101(d)(2) and (d)(3) and the inpatient hospital acute and psychiatric service category cost sharing limits in § 422.100(f)(6)(iv); (2) calculating the copayment values that are actuarially equivalent to the coinsurance limits set for service categories in § 422.100(f)(6)(i), for professional services in § 422.100(f)(6)(iii), and for the benefits for which MA cost sharing may not exceed cost sharing under original Medicare in § 422.100(j)(1); (3) evaluating MA organization compliance with §§ 422.100(f)(6) and (j); and (4) developing the projections and calculations used in applying § 422.100(f)(8) for transitioning current (contract year 2022) copayment limits to the copayment limits produced by the methodology adopted in § 422.100(f)(6)(iii), (f)(7)(ii), and (j)(1), as discussed in more detail in section II.B.5.b. and e. of this FC. Under § 422.100(f)(7)(i), CMS and MA organizations must use generally accepted actuarial principles and practices for these purposes. As a result, in paragraph (f)(6)(i) we refer to paragraph (f)(7) as applying when CMS calculates copayment limits that are at an actuarially equivalent value to 50 percent coinsurance for service categories representing in-network basic benefits that are not otherwise addressed in paragraph (f)(6), (j)(1), or in § 422.113(b)(2).
CMS's longstanding practice in developing and setting MOOP and cost sharing limits has been to use generally accepted actuarial principles and practices in developing the projections of beneficiary costs. In projecting out-of-pocket costs and utilization based on the Medicare FFS data projections (as defined in § 422.100(f)(4)(i)) for CMS to use in calculating MOOP and cost sharing limits for contract year 2023 and future years, the OACT will continue to use generally accepted actuarial principles and practices. In the past, we have considered all or some of the following information when setting copayment limits: (1) Projected median or average total Medicare FFS allowed amounts (occasionally weighted by utilization, including place of service and/or provider type, as applicable); and (2) a Medicare FFS claims cost distribution. In continuing this practice under the rules adopted in paragraph (f)(7)(i)(A) when calculating cost sharing limits, we may take into account the number of visits or sessions a beneficiary typically receives in order to reach an actuarially equivalent copayment amount for a service category that is subject to a wide-range of costs. For example, as discussed in the February 2020 proposed rule, we calculated the illustrative copayment limit for the “mental health specialty services” service category in Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from the February 2020 proposed rule by weighting the average Medicare FFS allowed amount by the utilization of specific relevant provider specialty types (clinical psychologist, licensed clinical social worker, and psychiatry). As discussed in section II.B.5.b., the contract year 2023 actuarially equivalent copayment value for the “mental health specialty services” service category is calculated by weighting the average Medicare FFS allowed amount by the utilization of the same provider specialty types using updated Medicare FFS data projections. We will also consider the purpose of the cost sharing limits and their role in the MA program when deciding among different approaches and, if it is appropriate, to take additional data into consideration in making projections and calculating cost sharing and MOOP limits using generally accepted actuarial principles and practices. As codified in paragraph (f)(7)(i)(A), information such as changes in legislation (such as, changes in Medicare benefits), Medicare payment policy, trends over several years of data, and external variables (such as public health emergencies) may be taken into account when performing the calculations and projections used to set the MOOP limits and cost sharing limits. The OACT considers these variables as they develop their projections by applying trend factors (that are consistent with the most recent Medicare Trustees Report). In addition, future impacts of laws and regulations are factored into OACT's projections. Specifically, actuaries use their professional judgment when selecting
In addition to complying with § 422.100(f)(7)(i), we will follow the same process and apply the same considerations in calculating the values needed for copayment limits that are actuarially equivalent to the coinsurance percentages specified in the regulation text in § 422.100(f)(6)(i), (f)(6)(iii), and (j)(1). Rather than repeat those standards in each regulation, we are codifying them in a new provision at § 422.100(f)(7)(ii). As discussed previously, CMS may not calculate a specific copayment limit for every service category; if we do, it will be in compliance with paragraph (f)(7). New paragraph (f)(7)(ii) provides that CMS calculates copayment limits as feasible and appropriate to carry out program purposes and paragraphs (f)(7)(ii)(A) through (E) outline the process and standards for that. Paragraphs (f)(7)(ii)(A) and (B) address the data CMS will use in calculating copayment limits. As referenced in the February 2020 proposed rule, CMS has annually analyzed Medicare program data to set the various cost sharing limits under current law and to publish guidance on MA cost sharing limits. The relevant Medicare data has included the most recent Medicare FFS data, including cost and utilization data and, in some cases, MA patient utilization information from MA encounter data. For example, CMS has used patient utilization from MA encounter data to inform inpatient hospital acute and psychiatric length of stay scenarios used in identifying MA plan cost sharing standards that are not discriminatory. Paragraph (f)(7)(ii)(A) codifies how CMS will use Medicare FFS data projections (as defined in paragraph (f)(4)(i)) for the applicable year and service category in order to calculate copayment limits for service categories subject to paragraph (f)(6)(i), (iii), and (j)(1). Development of the Medicare FFS data projections are based on Medicare FFS cost and utilization data for specific services and service categories. If available and where appropriate to consider utilization differences between Medicare FFS beneficiaries and MA enrollees to reach a value that most closely reflects an actuarially equivalent copayment for the benefit and beneficiary population, paragraph (f)(7)(ii)(B) codifies how CMS may also use patient utilization information from MA encounter data in our calculations. For example, if the utilization of different settings of service (such as, outpatient hospital compared to physician office) were available, comparable, and significantly different between Medicare FFS and MA encounter data, we may weight Medicare FFS cost data projections by MA encounter utilization of the relevant facility and provider types in order to calculate a cost sharing limit that is most closely actuarially equivalent to what MA enrollees may typically experience. In many cases, we may determine that MA encounter data is sufficiently available and recent for the relevant service category in order to apply analyses of MA utilization encounter data in our copayment limit calculations. CMS will complete accuracy checks in determining whether and when to use MA encounter data when paragraphs (f)(6)(iv) and (f)(7)(ii) permit use of that data. (See section II.B.5.c. of this FC for discussion of § 422.100(f)(6)(iv).) As a result, we clarify here that the use of MA encounter data is not mandatory under paragraph (f)(7)(ii)(B) for calculating cost sharing limits. Rather, use of MA encounter data may be informative for CMS and the OACT to consider in making decisions about the actuarial approach to apply to the Medicare FFS data projections.
Consistent with prior practice and as finalized in new § 422.100(f)(7)(ii)(C), CMS will be guided by what is appropriate to carry out program purposes when deciding how to calculate copayment limits for a service category identified in these regulations using the data described in paragraphs (f)(7)(ii)(A) and (B). Program purposes include such considerations as setting copayment limits that most closely reflect an actuarially equivalent copayment for the benefit and beneficiary population, protecting against discriminatory cost sharing, and avoiding unnecessary fluctuations in cost sharing that may confuse beneficiaries. These considerations will guide how judgement is exercised when generally accepted actuarial principles and practices provide choices and discretion. In situations where there are multiple or a range of actuarially equivalent copayment values for a service category, CMS will select a particular approach to calculate an actuarially equivalent copayment value in order to carry out those program purposes. For example, CMS may choose the methodology that results in the lowest possible increase or change in cost sharing for enrollees from the prior year, if there are multiple methodologies that are actuarially acceptable in calculating an actuarially equivalent copayment value. This approach is consistent with the stated goal in the February 2020 proposed rule to protect enrollees from increases in cost sharing when possible and including it in the regulation text provides additional transparency for stakeholders. In addition, in a situation where there are multiple approaches resulting in multiple actuarially equivalent values, CMS may choose the actuarial approach that is most consistent with trends and patterns in MA utilization and costs, if such information is available. For example, in the February 2020 proposed rule we explained that CMS proposed to add new cost sharing limits for an inpatient hospital acute 3-day length of stay scenario because it represented the median length of stay based on separate analyses of Medicare FFS and MA encounter data (for the same time
As discussed in section II.B.5.b. and e. of this FC, we are finalizing at § 422.100(f)(8) a transition for copayment limits calculated under this FC. New paragraph (f)(7)(ii)(D) provides that actuarially equivalent copayment limits will be consistent with that transition. The actuarially equivalent copayment transition finalized at § 422.100(f)(8) is only applicable to service categories subject to paragraphs (f)(6)(iii) and (j)(1). Similarly, as discussed in section II.A. and II.B.5.c. of this FC, the transition of ESRD costs (finalized in paragraph (f)(4)(vi)) is only applicable for the methodology CMS uses to calculate MOOP and inpatient hospital cost sharing limits. Specifically, service categories subject to paragraph (f)(6)(i) are not subject to paragraph (f)(4)(vi) (the ESRD cost transition) or paragraph (f)(8) (the transition to actuarially equivalent copayments) because CMS has not historically calculated copayment limits in addition to the 50 percent coinsurance limit for most of these benefits in prior years. Finally, § 422.100(f)(7)(ii)(E) applies the rounding rules in paragraph (f)(6)(ii) as a necessary part of the copayment limit calculations. The rounding rules are discussed in more detail in a subsequent response to comment in this section.
In summary, § 422.100(f)(7)(i) and (ii) generally codify elements of our existing practice and policy for cost sharing limits and clarifies how the necessary judgment will be used in developing actuarially sound projections of beneficiary out-of-pocket costs (to calculate MOOP limits) and actuarially equivalent copayment amounts. As in the past when calculating cost sharing limits, CMS will conduct analyses and make projections using the various data described in the regulation. Taken together, § 422.100(f)(6), (f)(6)(i), and (f)(7) require an MA plan use cost sharing that is no greater than 50 percent coinsurance or an actuarially equivalent copayment value, with that copayment value calculated and announced by CMS or, if CMS does not calculate a copayment limit, based on the average Medicare FFS allowable amount for the plan service area or the estimated total MA plan financial liability for that contract year, for in-network benefits that are not otherwise addressed in §§ 422.100(f)(6), (j)(1), or 422.113(b)(2) and for out-of-network basic benefits.
To illustrate application of the methodology and how we intend to interpret and rely on § 422.100(f)(7)(i) and (ii) for a service category subject to paragraph (f)(6)(i), we explain here the development of final contract year 2023 copayment limits for the specific service category of “DME—diabetic shoes or inserts.” The copayment limit must be actuarially equivalent to 50 percent coinsurance for MA plans that establish a lower or intermediate MOOP amount. (As discussed in section II.B.5.e. of this FC, MA plans that establish a mandatory MOOP amount must have cost sharing that does not exceed cost sharing in original Medicare (that is, 20 percent coinsurance) for the specific service categories of DME specified in § 422.100(j)(1)(i)(E).) We acknowledge that the February 2020 proposed rule stated that the “DME” service category was one of several categories identified as subject to a higher variation in cost or unique provider contracting arrangements, which makes Medicare FFS average or median cost data less suitable for developing a standardized actuarially equivalent copayment value. Since then, we have worked closely with the OACT to analyze additional and updated Medicare FFS data projections for these service categories. CMS has been able to make progress to address and apply actuarial approaches (consistent with finalized paragraphs (f)(7)(i) and (ii)) to address these concerns (such as, weighting by the number of visits or sessions a beneficiary typically receives in order to reach an actuarially equivalent copayment amount for a service category that is subject to a wide range of costs). Table 10 includes the calculations of the actuarially equivalent copayment values for both the DME “diabetic shoes or inserts” and “diabetes monitoring supplies” service categories for the lower and intermediate MOOP types using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). Table 28 illustrates the results of applying paragraphs (f)(6), (f)(7), (f)(8), and (j)(1) to set final contract year 2023 in-network service category cost sharing limits. As a result, the actuarially equivalent copayment values from row D in Table 10 are included in Table 28 as the final contract year 2023 copayment limits for those DME service categories and MOOP types. The copayment values listed in Tables 10 and 28 for a lower and intermediate MOOP limit for the “DME—diabetic shoes or inserts” service category are the CMS-calculated actuarial equivalent value for a 50 percent coinsurance cost sharing limit. As illustrated in Table 10, to calculate this actuarially equivalent copayment value, we started with the contract year 2023 Medicare FFS data projections from the OACT. Based on HCPCS codes from the Medicare FFS data projections, the projected weighted average total Medicare FFS allowed amount for the “DME—diabetic shoes or inserts” service category equals $47.51 for contract year 2023. CMS weighted this projected average Medicare FFS allowed amount by utilization of pairs of diabetic shoes, inserts, and shoe modifications. We chose to weight the relevant HCPCS codes (A5500, A5501, A5512, A5513, and A5500) by utilization as there was a relatively wide range of costs projected for 2023, approximately $30 to $220, depending on whether the item was a custom molded shoe, insert, or shoe modification. Weighting the projected average costs by utilization results in a value that more accurately represents an actuarially equivalent value to the costs the OACT projects will be experienced by Medicare FFS beneficiaries. Using 50 percent of the projected Medicare FFS weighted average amount ($23.76), and applying the rounding rules in paragraph (f)(6)(ii), we reached $25.00 as an actuarially equivalent copayment value to 50 percent coinsurance for this service category for MA plans that establish a lower or intermediate MOOP amount in contract year 2023. CMS completed similar analyses to calculate and set a final contract year 2023 copayment limit that is actuarially equivalent to 50 percent coinsurance for the “DME—diabetes monitoring supplies” service category in Table 28.
As CMS did not set copayment limits for service categories subject to the longstanding 50 percent coinsurance limit in prior years, the limits we are adopting in paragraph (f)(8) to transition to actuarially equivalent values are not relevant for the DME service categories for MA plans that establish a lower or intermediate MOOP. Accordingly, Table 28 reflects a final contract year 2023 $25 copayment limit for the “DME—diabetic shoes or inserts” service category and a $20 copayment limit for the “DME—diabetes monitoring supplies” service category for MA plans with a lower or intermediate MOOP limit in addition to the 50 percent coinsurance limit. As discussed in section II.B.5.e. of this FC,
Consistent with § 422.100(f)(7), we may calculate actuarially equivalent copayment limits for the other DME service categories and other categories subject to § 422.100(f)(6)(i) (such as ambulance services) in future years (as those categories do not have final contract year 2023 copayment limits in Table 28) as feasible and appropriate to carry out program purposes. Considerations include whether additional Medicare FFS data projections are available and suitable (based on paragraph (f)(7)(i)), the need for CMS to prioritize use of its resources, and whether calculating a copayment limit would assist CMS in protecting against discriminatory cost sharing and avoiding unnecessary fluctuations in cost sharing that may confuse beneficiaries. These considerations and calculations of copayment limits will be completed annually based on the Medicare FFS data projections for the applicable year and service category. Conversely, there may be years where CMS does not exercise its authority to apply the methodology in these regulations to calculate a specific copayment limit for a particular basic benefit. In this case, if the MA organization wants to establish a copayment for a benefit where CMS has not calculated the actuarially equivalent copayment limit, the MA organization must apply these regulations to calculate the actuarially equivalent value of a particular coinsurance percentage for that basic benefit using the data specified in the regulations (for example, the MA plan's estimated total financial liability for that contract year). The reasons for CMS's approach each year may vary, such as that CMS resources may be better devoted to other program responsibilities or available data projections are insufficient to produce an actuarially equivalent copayment value for that year. However, preliminary analyses could indicate that there is a copayment level which clearly does not exceed the limits set in this regulation for copayments. It might be beneficial for CMS to provide that information along with an indication that CMS does not believe that scrutiny is required of copayments established by an MA plan at or below that level. In those cases, as no copayment limit has been officially issued by CMS, MA plans would need to be able to validate how a copayment established above that copayment level complies with the regulatory standards.
Under this FC, MA organizations may choose a copayment or coinsurance form of cost sharing for any in-network or out-of-network benefit. If the plan chooses to establish a copayment, the amount is limited to an actuarially equivalent value based on the applicable regulation standard. When using copayments for benefits where CMS has not calculated the value that is actuarially equivalent to the maximum coinsurance percentage value, MA organizations must also use generally accepted actuarial principles and practices and the type of data that is described in paragraphs (f)(6)(i) and (iii). We are finalizing § 422.100(f)(6) and (f)(6)(i) with changes from the proposal and finalizing new paragraph (f)(7) to provide context and clarity regarding how CMS will implement and apply the regulations and also how MA organizations may implement and demonstrate compliance with the cost sharing limitations and protections adopted in this FC.
MA organizations are not expected to experience any greater burden when demonstrating compliance with the service category cost sharing standards
For service categories where CMS does not calculate the specific copayment limits, each plan bid with a copayment for that benefit would need to be prepared and evaluated in relation to the estimated total MA plan financial liability for that contract year or the average Medicare FFS allowed amount for the benefit in the plan service area. Section 422.100(f)(6)(i) permits use of either of these. As discussed in sections II.B.5.b. and II.B.5.e. of this FC, paragraph (f)(6)(iii) requires use of only the estimated total MA plan financial liability for that contract year and § 422.100(j)(1) permits use of either set of data. We may request supporting documentation from the MA organization that shows how the plan's copayment amount satisfies the cost sharing standards finalized in paragraphs (f)(6) and (j)(1) as part of our evaluation of plan bids. The data MA organizations may use to develop supporting documentation for the cost sharing included in their PBP(s) are clarified in paragraphs (f)(6)(i), (iii)(B), and (j)(1)(ii) and are more completely discussed subsequently in this response. CMS, consistent with past years, will direct MA organizations through annual guidance, such as HPMS memoranda or bid instructions, on whether supporting documentation must be submitted with their initial bid or submitted upon request depending on the service category. MA organizations must identify this documentation separately from other supporting documentation submitted as part of the BPT. MA organizations may include information for multiple plans in one set of documentation, but calculations must be presented for each plan individually (or plan segment, if applicable). The MA organization's calculations and documentation must reflect cost sharing amounts that combines the enrollee's entire cost sharing responsibility as a single, total copayment as finalized in § 422.100(f)(9), even if the MA plan has contract arrangements involving separate payments to facilities and professional providers. This is consistent with our current practice of having MA organizations submit supporting documentation with the bid. For example, under current (contract year 2022) and previous policy, if an MA organization used copayments for the “DME—Equipment” service category and established a mandatory MOOP amount, it would have submitted supporting documentation in order to demonstrate how the copayment satisfied the cost sharing standards because only a coinsurance limit has been traditionally provided for that service category. This approach remains the same for contract year 2023 for the “DME—Equipment” service category and other DME service categories without final contract year 2023 copayment limits in Table 28. In addition, MA organizations with inpatient hospital acute and psychiatric and SNF coinsurance plan benefit designs in contract year 2022 and prior years submitted supporting documentation in order to demonstrate how their coinsurance met the cost sharing standards because we do not have a coinsurance limit for those service categories. This requirement also continues to apply for contract year 2023, as CMS has not included coinsurance limits for those service categories in the final contract year 2023 cost sharing limits provided in Table 28.
The February 2020 proposed rule noted that MA organizations must maintain (and provide to CMS upon request) supporting documentation for actuarial justifications for cost sharing, including the methods used in calculating the total MA plan financial liability. We proposed that regardless of the type of cost sharing used, an MA plan must not pay less than a specified percentage of the total MA plan financial liability for in-network benefits in proposed § 422.100(f)(6)(i), (iii), and (j)(1)(iv). The February 2020 proposed rule stated that the term “total MA plan financial liability” means the total payment paid and includes both the enrollee cost sharing and the MA organization's payment. In this FC we modified paragraphs (f)(6)(i), (f)(6)(iii), and (j)(1)(ii) to use the term “estimated total MA plan financial liability for that contract year” to clarify that MA organizations may use more than one year of data to project this amount (following generally accepted actuarial principles and practices as required by paragraph (f)(7)). As a result of using this term consistently in the regulations, the mechanics of this process for calculating the copayment amount when CMS has not calculated an actuarially equivalent copayment limit are quite similar for paragraphs (f)(6)(i), (f)(6)(iii), and (j)(1). (The specified percentage of the estimated total MA plan financial liability for that contract year will vary based on the type of MOOP limit used by the plan for benefits subject to paragraph (f)(6)(iii).) For each provision, the copayment amount must be equal to, or less than, the copayment limit calculated by CMS or a dollar amount that is actuarially equivalent to a specified percentage of the estimated total MA plan financial liability for that contract year (or the average Medicare FFS allowable amount for the plan service area for benefits subject to paragraph (f)(6)(i) or (j)(1)). We are generally finalizing those polices, with some modifications as discussed throughout section II.B of this FC. As a result, in the absence of a copayment limit calculated by CMS, the MA plan must pay at least the specified percentage of the estimated total MA plan financial liability for that contract year or average Medicare FFS allowable amount (as applicable) for the service category or for a reasonable group of benefits in the PBP. We are finalizing explicit regulation text to be clear in paragraphs (f)(6)(i), (f)(6)(iii)(B), and (j)(1)(ii) what data the MA organization may use in calculating a dollar amount, if CMS does not calculate a copayment limit. It is not necessary for an MA organization to use one data source over the other (estimated total MA plan financial liability for that contract year or average Medicare FFS allowable
In response to the comment requesting that CMS allow the average contracted rate to be calculated at the parent organization level, we clarify here that MA organizations may use the estimated total financial liability for that contract year calculated at the MA plan level where this FC permits use of data about the MA plan's financial liability. A minority of MA organizations use segmented plans and, in those cases, the estimated total financial liability for that contract year would be calculated at the segment level (CMS will also complete the cost sharing evaluation at the segment level). However, in calculating actuarially equivalent copayment standards CMS will use aggregate (or nationally representative) projections from the OACT. In comparison, MA organizations will use aggregate payment data for their plan service area about the service category, or for a reasonable group of benefits, to which the cost sharing applies when determining the dollar figure that is actuarially equivalent to the coinsurance standard. Conducting the evaluation at the plan (or segment) level is the better policy, and the one we are finalizing here, as it: (1) Reflects the cost sharing experienced by enrollees in the plan's service area; (2) protects against possible distortions from aggregating the average payment rate calculation across a larger organizational level that may not sufficiently reflect the plan's service area; and (3) coincides with the MA organization's provider contracts that may vary geographically. MA organizations that are new may calculate the estimated total MA plan financial liability for new plans based on projections of available provider contracts and expected enrollment trends for that contract year. In addition, MA organizations that are entering a new service area may calculate the estimated total MA plan financial liability for that plan based on the total MA plan financial liability for the benefit in the organization's existing service area and also take into consideration projections of available provider contracts and expected enrollment trends in that new service area for that contract year. To address the potential that the MA organization may have insufficient data about the specific service area, CMS will implement and enforce the rules adopted in this FC to permit use of data on the MA plan financial liability that is not limited to the specific service area for new plans and new service areas.
For in-network benefits, the estimated total MA plan financial liability for that contract year is based on the provider contracting arrangements and expected enrollee utilization for the particular provider type and service. MA plans and their network providers negotiate payment arrangements without interference by CMS and may have varying enrollee utilization experience; CMS lacks information on those specifics and understands that plans may contract with providers through a variety of arrangements (such as, FFS, capitation, salary, or value-based arrangements). As a result, if CMS does not calculate a copayment limit for an in-network professional service category for a particular contract year, calculating a dollar amount that is actuarially equivalent to the coinsurance value will require analysis by the MA organization and that analysis must consider the various amounts that the MA plan expects to pay for that basic benefit in the applicable year. An MA organization may consider the various types of payment arrangements it has with network providers and aggregate this information to calculate a dollar amount that is actuarially equivalent to the applicable coinsurance limit for service categories subject to § 422.100(f)(6)(i), (iii), and (j)(1). In addition, an MA organization may weigh the aggregated data in calculating this dollar amount (that is, the actuarially equivalent value to the applicable coinsurance limit) using past utilization and variation of provider payments. For example, to comply with the requirements in paragraph (f)(6)(i) for in-network copayments, an MA organization may use their contracted payment rates for the providers that furnish the service(s) to determine the estimated total MA plan financial liability for those service(s); the estimated total MA plan financial liability for that contract year is compared to the plan's cost sharing on a percentage basis to determine if the cost sharing exceeds an actuarially equivalent copayment amount to the 50 percent cost sharing standard. This process is consistent with the supporting documentation CMS has accepted in prior years.
For covered out-of-network basic benefits, the estimated total MA plan financial liability for that contract year must necessarily be based on the average Medicare FFS allowable amount for the plan service area because MA plans are required to ensure that out-of-network providers receive the Medicare FFS payment for the basic benefit that has been furnished to the enrollee. As a result, we are clarifying that, while § 422.100(f)(6)(i) describes the use of the estimated total MA plan financial liability for that contract year and the average Medicare FFS allowable amount, to comply with the requirement in paragraph (f)(6)(i) for out-of-network benefits, the plan must use the average Medicare FFS allowable amount for these determinations because the MA plan is required to pay, at a minimum, the Medicare FFS allowable amount for these benefits. If an MA organization is using copayment amounts for out-of-network services, the plan must use the average Medicare FFS allowable amount for all providers for the applicable service category or reasonable group of services in its plan service area as the basis for their calculations of the actuarially equivalent dollar amount. In addition, an MA organization may weigh the average Medicare FFS allowable amount using the plan's past utilization (such as including the Medicare FFS payment for each applicable provider type to administer the benefit) in calculating this dollar amount (that is, the actuarially equivalent value to the 50 percent coinsurance limit for out-of-network basic benefits). MA organizations establish cost sharing at the plan-level and we reiterate here that any calculations must be done at the plan (segment, if applicable) level to reflect the benefit design. This approach may be modified as necessary to comply with generally accepted actuarial principles and standards as described in paragraph (f)(7)(i). However, an MA organization that relies on paragraph (f)(7)(i) to use data and analyses from other than the plan's estimated total financial liability and service area must explain and support such a determination.
In summary, and as required by § 422.100(f)(6) and (j)(1) as finalized in this FC, MA organizations must establish either: (1) A coinsurance level that does not exceed the coinsurance percentage in the regulation; or (2) in the absence of a specific cost sharing limit calculated by CMS, a copayment that does not exceed the value that is actuarially equivalent to the specified
CMS's evaluations for purposes of determining compliance with § 422.100(f)(6) and (j)(1), if CMS has not published a copayment standard (or coinsurance limit for inpatient hospital standards set in paragraph (f)(6)(iv)), will align with OACT bidding guidance
Because the analyses performed by MA organizations must use generally accepted actuarial principles and practices pursuant to § 422.100(f)(7)(i), supporting documentation must be consistent with generally accepted actuarial principles and practices. The MA organization's analysis must demonstrate how plan cost sharing complies with the regulations in § 422.100(f)(6)(i), (iii), and (j)(1). As a result, the documentation must demonstrate:
• How the MA organization calculated the plan's estimated total financial liability for the benefit for that contract year (or the average Medicare FFS allowable amount for the service area for benefits subject to § 422.100(f)(6)(i) and (j)(1));
• The percentage the copayment represents of the plan's estimated total financial liability for the benefit for that contract year (or the average Medicare FFS allowable amount for the service area for benefits subject to § 422.100(f)(6)(i) and (j)(1)); and
• How the cost sharing does not exceed, as applicable, an actuarially
MA organizations must develop and maintain documentation that demonstrates how plan cost sharing satisfies the estimated total MA plan financial liability for that contract year and average Medicare FFS allowable amount requirements and other applicable cost sharing coinsurance limits for covered benefits. If CMS requests information as part of bid review or general oversight of the plan's copayment or coinsurance amounts for specific service categories, an MA organization may submit an analysis that addresses each of the three components described previously, or use a PMPM analysis that addresses multiple components simultaneously. For example, the copayment may be represented as a percentage of the estimated total MA plan financial liability for that contract year or the average Medicare FFS allowed amount for the benefit. If necessary, we expect that supporting documentation and data may include information on provider payments or costs, enrollee enrollment and utilization, and cost sharing paid by enrollees (both in terms of dollar figures and as a percentage of the estimated total MA plan financial liability for that contract year or average Medicare FFS allowable amount for the benefit) to demonstrate how the plan's cost sharing amounts satisfy requirements being finalized in this rule. We provide in Table 11 an illustration of one way an MA organization can approach developing and summarizing supporting documentation that addresses the three components described previously for some select service categories. We would expect MA organizations to also include any necessary payment, cost, and/or utilization data or assumptions. Requiring supporting documentation as described in this response protects enrollees from high cost sharing (generally and in relation to specific service categories, such as physical therapy and speech-language pathology, as summarized in section II.B.5.b. of this FC) by ensuring that MA plan copayments satisfy cost sharing requirements in various scenarios.
CMS intends to work with MA organizations when requesting supporting documentation to address any unique situations and ensure calculations and subsequent evaluations comply with generally accepted actuarial principles and standards. We may also provide additional information on how MA organizations should prepare their cost sharing supporting documentation and data (such as, potential formats and information to be included in documentation) through instructions, such as HPMS memoranda or bidding instructions. Individuals and organizations may request placement on the HPMS listserv at
Based on the changes to § 422.100(f)(6)(i) and new paragraph (f)(7), the transition schedule we are adopting in new paragraph (f)(8), and changes we are finalizing in § 422.100(j) (as discussed in section II.B.5.e. of this FC), we are finalizing proposed paragraph (f)(6)(ii) with modifications. First, as finalized, paragraph (f)(6)(ii)(A) will apply the $5 rounding rules proposed for professional service categories and benefits that are subject to § 422.100(f)(6)(i), (f)(6)(iii), and (j)(1)(i). As a result, in calculating copayment limits and in evaluating an MA plan's compliance with paragraphs (f)(6)(i), (f)(6)(iii), and (j)(1), CMS will round to the nearest whole $5 increment. The exception to this is copayments for inpatient hospital acute and psychiatric and SNF services, where paragraph (f)(6)(ii)(B) explicitly provides that the $1 rounding rule applies. In addition, MA plans that calculate actuarially equivalent copayments values because CMS has not calculated a copayment limit will round to the nearest whole $5 increment for service categories for which paragraph (f)(6)(ii)(A) applies. For cases in which the copayment limit is projected to be exactly between two increments, the final actuarially equivalent copayment value is rounded (by CMS and by MA plans) to the lower dollar amount. Consistent with current practice, this application of the rounding rules does not prevent an MA plan from establishing a copayment that is not a $5 increment. For example, if CMS does not set a copayment limit for a service category subject to paragraph (f)(6)(iii), an MA organization may choose to establish a $13 copayment if, in following the rules in paragraph (f)(6)(ii) and (f)(6)(iii), the calculations of an actuarially equivalent value to the applicable coinsurance standard equaled $12.52, rounded to $15. This ensures consistency in how actuarially equivalent copayment values are calculated using the rounding rules while maintaining flexibility for MA organizations to establish copayments below the actuarially equivalent value. In comparison, if CMS had the same result in calculating an actuarially equivalent copayment for a service category subject to paragraph (f)(6)(iii), $12.52, rounded to $15, we would issue the copayment limit at the $5 increment, or $15. Second, we added references to paragraphs (f)(6)(iv) and (j)(1)(i)(C) to paragraph (f)(6)(ii)(B) to clarify which regulations are subject to the inpatient hospital cost sharing rounding rules. Third, in making these changes we added introductory language to paragraph (f)(6)(ii) and reorganized (f)(6)(ii) for clarity. As a result, the proposed requirement in paragraph (f)(6)(ii)(B) that the actuarially equivalent copayment value is rounded down to the lower dollar amount is finalized generally as proposed in paragraph (f)(6)(ii)(C). Fourth, as discussed in a prior response to comment in this section, new paragraph (f)(7) codifies the use of actuarial principles and practices and the requirements to calculate actuarially equivalent copayment limits. To ensure these requirements are applied consistently with the proposed rounding rules, § 422.100(f)(7)(ii)(E) refers to paragraph (f)(6)(ii) as part of the steps for CMS calculation of copayment limits. Fifth, as discussed in section II.B.5.b. of this FC, we are adopting a transition schedule for certain cost sharing standards; we are finalizing a reference to that schedule (which is in paragraph (f)(8)) in paragraph (f)(6)(ii) to clarify that the rounding rules will be used for those transitional copayment limits as well.
In general, MA organizations are required to provide CMS with information that demonstrates how their bid and plan design (including coinsurance or copayment amounts) satisfy the regulatory requirements, if necessary as part of CMS's bid review process or at any time during the year for general oversight activities. For example, for MA plans that choose to establish a coinsurance cost sharing for inpatient hospital scenarios or SNF service categories, CMS will typically use plan information to evaluate, consistent with current practice, whether the coinsurance exceeds the applicable copayment dollar amounts calculated and issued for that contract year. This evaluation is based on actuarial information and analyses.
We agree with the commenter that increasing the number of service categories for which cost sharing limits can be differentiated by the type of MOOP limit from prior contract years may be an incentive for MA organizations to offer lower MOOP limits. We also believe differentiating these cost sharing limits may encourage innovative plan designs, such as those that are trying to improve health care outcomes. This may include changing cost sharing for certain service categories to encourage enrollees to seek preventive health care or high-value services. CMS supports value-based insurance design and expects that providing increased flexibility in plan designs, within non-discriminatory cost sharing ranges, will encourage competition and innovation by MA plans. However, we do not believe that a greater number of differentiated service categories would necessarily increase the actuarial value of cost sharing for that plan's benefit design. The actuarial value of the plan's cost sharing depends on the given benefit compared to other benefits. If a service type with a lower amount of cost sharing has a high rate of utilization, then that would likely lower the plan's actuarial value of cost sharing. For example, if an MA plan establishes a mandatory MOOP limit which has lower cost sharing standard amounts compared to prior contract years across a number of service categories then the plan may have a lower actuarial value of cost sharing. Finally, MA organizations establish cost sharing amounts based on a number of factors such as competition, provider contracts, and needs of beneficiaries in their service area. While CMS can set cost sharing requirements to discourage discrimination against beneficiaries with high health care needs and encourage MA plans to lower the financial burden on enrollees, we do not believe CMS should dictate identical cost sharing for all basic benefits for all MA plans and we did not propose to do so in this rulemaking.
Internal Medicine, General Practice, or Family Practice Services provided by a medical doctor or a doctor of osteopathy: General Physicians' services are the professional services performed by a physician for a patient including diagnosis, therapy, surgery, consultation, and care plan oversight. The services must be rendered by the physician or incident to physician's services. A service may be considered to be a physician's service where the physician either examines the patient in person or is able to visualize some aspect of the patient's condition without the interposition of a third person's judgment. Direct visualization would be possible by means of X-rays, electrocardiogram and electroencephalogram tapes, tissue samples, telecommunications, etc. References: 42 CFR 410.10 and 410.26 and the Medicare Benefit Policy Manual, Chapter 15.
We may change the list of provider specialties that are used to calculate actuarially equivalent copayments in future years and would generally describe such a change in the annual guidance required by § 422.100(f)(7)(iii). For example, in this FC, we are modifying the data used to calculate the final contract year 2023 copayment limits for the “primary care physician” and “physician specialist” service categories to better align the applicable provider specialties for these categories with network adequacy standards and typical standards of care. In the February 2020 proposed rule, we
As referenced in other comment summaries in this section and in sections II.B.5.d and e. of this FC, several commenters were also concerned about the proposed level of allowable cost sharing overall or for specific service categories (including the “dialysis services” and “physical therapy and speech-language pathology” service categories). For the “physical therapy and speech-language pathology” service category, a commenter on that topic was similarly concerned about the projected increase in the copayment limit from contract year 2021 limits being unreasonably high for enrollees.
We proposed and are finalizing that the cost sharing for in-network basic benefits that are professional services must not exceed specific coinsurance thresholds and actuarially equivalent copayment values, with those cost sharing thresholds tied to the type of MOOP limit used by the MA plan; in addition, the MA plan must not pay less than an identified percentage of the estimated total MA plan financial liability for these basic benefits for that contract year. We are finalizing a schedule for implementing the use of the 30 percent, 40 percent, and 50 percent cost sharing limits for use of the mandatory, intermediate and lower MOOP limits; that transition will be from 2023 through 2026 and is finalized in paragraphs (f)(6)(iii)(C) through (F). We are also finalizing an additional provision in new paragraph (f)(8) to limit increases to copayment limits calculated by CMS over the same transition period from 2023 to 2026. New paragraph (f)(8) will control how CMS calculates and issues copayment limits in order to transition from contract year 2022 copayment limits to values that are actuarially equivalent to the range of coinsurance limits that are finalized in paragraph (f)(6)(iii)(F) for contract year 2026. When CMS does not calculate the copayment limit for a professional service category, MA organizations must follow the transition schedule in paragraphs (f)(6)(iii)(C) through (F) for both coinsurance and copayments. In addition, we are finalizing a provision to more clearly address in paragraphs (f)(7) and (f)(8)(ii)(D) the specific methodology CMS will apply, in using the data described in proposed paragraph (f)(6)(iii)(B), to calculate copayment limits. The new provisions provide more detail, which we believe was implicit in the descriptions in the preamble of the February 2020 proposed rule but is better stated in the regulation text. Under this FC, the cost sharing limits set in paragraph (f)(6)(iii) are subject to new paragraph (f)(7). Overall, the changes from our February 2020 proposed rule regarding the limits on cost sharing for professional services that are basic benefits are to include transition provisions (for both coinsurance limits and copayment limits) and to more explicitly address the data and standards used to calculate values for copayment limits that are actuarially equivalent to the coinsurance limits.
We are finalizing § 422.100(f)(6)(iii)(A) substantially as proposed to prohibit MA plans from having cost sharing for in-network basic benefits that exceeds the limits in paragraph (f)(6)(iii) for the MOOP limit established by the plan, with a correction to reference paragraph (f)(6)(iii) as intended. We note this change does not affect how the rounding rules in paragraph (f)(6)(ii) will be applied to copayments for professional services. (Section II.B.5.a. of this FC discusses how the rounding rules are being finalized substantially as proposed.) Proposed paragraph (f)(6)(iii)(B) identified the data that CMS would use when calculating the cost sharing limits for in-network basic benefits that are professional services but as finalized specifies the rules for calculating copayment limits. In revising paragraph (f)(6)(iii)(B) to be subject to paragraph (f)(7), the standard for the data that CMS may use is now addressed in paragraphs (f)(7)(ii)(A) and (B). Specifically, CMS will use Medicare FFS data projections (as defined in paragraph (f)(4)(i) and discussed in detail in section II.A.4.b. of this FC) which includes cost and utilization data from beneficiaries with and without ESRD. In addition, CMS may use available MA encounter data if available and where appropriate (which is codified in paragraph (f)(7)(ii)(B)). While we only proposed use of MA encounter data in calculating cost sharing for inpatient services, we believe that it is appropriate to also permit use of MA encounter data for calculating other cost sharing in order to consider utilization differences between Medicare FFS beneficiaries and MA enrollees; these utilization differences may be useful to reach an amount that most closely reflects an actuarially equivalent copayment to the applicable coinsurance percentage for the service category and beneficiary population. For example, if the utilization of different physician types (such as, physical therapists compared to speech-language pathologists) was significantly different between Medicare FFS and MA encounter data, we may consider weighting Medicare FFS cost data by utilization reflected in available MA encounter data for the relevant facility and provider types in order to reach a copayment value that is most closely actuarially equivalent to what MA enrollees may typically experience at the applicable coinsurance level for the type of MOOP limit. CMS did not apply any MA encounter utilization data in our calculations to reach the final contract year 2023 copayment limits shown in Table 28. However, we believe that this is an important flexibility for ensuring that copayment limits are actuarially equivalent to the maximum coinsurance percentages set in the regulation. In addition, using MA encounter utilization data in this manner may be one of the topics on which we could solicit comment through the subregulatory process finalized in paragraph (f)(7)(iii) for contract year 2024 and future years. Finally, use of MA encounter data will also be limited to the encounter data
CMS is also modifying the cost sharing regulations to clarify that the cost sharing limits may be a coinsurance limit or a copayment limit that is an actuarially equivalent dollar amount to the applicable coinsurance limit (subject to § 422.100(f)(7) and (8)) and clarify that the copayment limits may be calculated by CMS, or, if CMS does not calculate a copayment limit, the MA plan must establish a copayment that does not exceed the actuarially equivalent dollar amount to the applicable coinsurance limit. This is also discussed in section II.B.5.a. of this FC in relation to finalized paragraph (f)(6)(i). To be clear on this point in relation to cost sharing limits for professional services, we are finalizing new text in paragraph (f)(6)(iii)(B). We also clarify that where CMS does not calculate a copayment limit, finalized paragraph (f)(6)(iii)(B) nonetheless requires that the copayment amount used by the MA plan not exceed the actuarial equivalent of the coinsurance percentage, based on the estimated total MA plan financial liability for that benefit and contract year. While the proposed regulation text stated an absolute requirement in paragraphs (f)(6)(iii)(C)
As discussed in section II.B.5.a. of this FC, in relation to new § 422.100(f)(7)(i) and (ii), CMS intends to only issue and maintain copayment limits for service categories subject to § 422.100(f)(6) and (j)(1) when: (1) An actuarially equivalent copayment can be calculated using Medicare FFS data projections available to CMS and using generally accepted actuarial principles and practices; and (2) CMS believes calculating such a copayment limit is appropriate to carry out program purposes, including setting copayment limits that most closely reflect an actuarially equivalent copayment for the benefit and beneficiary population, protecting against discriminatory cost sharing, and avoiding unnecessary fluctuations in cost sharing that may confuse beneficiaries. Where CMS does not calculate the copayment limit, MA organizations must establish copayment amounts that comply with paragraph (f)(6)(iii) based on their estimated total MA plan financial liability for the benefit for that contract year. In doing so, MA organizations may use their data about cost and utilization of the relevant services in the plan (or segment, if applicable) and must also use generally accepted actuarial principles and practices. A decision by CMS not to calculate a copayment limit applying the rules in paragraphs (f)(6), (7), and (8) for a particular year will not prevent CMS from calculating and issuing the copayment limit in future years. Because paragraph (f)(6)(iii) purposefully does not include a complete list of professional services that are basic benefits, but is rather representative of examples of professional services, CMS may need to request supportive documentation from MA organizations regarding various covered services in cases where an MA plan has calculated an actuarially equivalent value to establish the copayment for a particular service. We note instructional guidance is provided in section II.B.5.a. of this FC on how MA organizations can prepare supporting documentation for copayments subject to paragraph (f)(6)(iii). Next, we discuss the commenter's specific recommendation to conduct a multiyear transition to reach the proposed range of cost sharing by the type of MOOP limit by contract year 2025.
We agree with the commenters that CMS should minimize potential market and beneficiary disruption as we shift away from cost sharing limits that have not been updated in recent years to the cost sharing limits we proposed and are finalizing. In addition, as we considered our proposal to make annual changes to the copayment limits for professional services based on updated Medicare FFS data projections, we examined how other policies proposed and finalized in § 422.100(f)(4) through (f)(6) include protections to guard against volatility and significant changes from one year to the next. For example, we structured the proposals in sections VI.A. and B. of the February 2020 proposed rule to transition changes, such as the proposed multiyear incorporation of ESRD costs into the methodology that CMS uses to calculate MOOP and inpatient hospital cost sharing limits. We also proposed, and are finalizing with modifications (as discussed in section II.A. of this FC), guardrails in paragraph (f)(4)(iv) and (f)(4)(v) to limit the amount of change from one year to the next in the MOOP limits. CMS's goal is to provide MA organizations the flexibility to design stable benefit structures from 1 year to the next as well as ensure that enrollee cost sharing does not discriminate against beneficiaries with high health care needs. We believe that having MOOP and cost sharing standards that are predictable and stable from 1 year to the next supports this goal. To ensure that this goal is met in connection with the cost sharing polices as well, we must also take into account the change from the current (contract years 2021 and 2022) cost sharing limits, particularly copayment limits, to cost sharing limits that will be set under this rule.
We developed our proposal to create reasonable differences (which took into
Our proposed methodology to calculate copayment limits based on coinsurance percentages that are unique to the plan's MOOP limit type and the most recent Medicare FFS data projections available was, in effect, a proposal to recalibrate and update current copayment limits, using a methodology based on long-standing CMS policy with some changes. As a result, some of the illustrative copayment limits in Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from the February 2020 proposed rule represented substantial shifts from the 2020 and 2021 contract years. For example, as referenced by some commenters, the illustrative $85 copayment limit in the February 2020 proposed rule for the “physical therapy and speech-language pathology” service category (for MA plans that establish a mandatory MOOP limit) represented an increase of $45 from the contract year 2021 copayment limit for that service category. Similarly, the illustrative $80 copayment limit for the “physician specialist” service category in the February 2020 proposed rule (for MA plans that establish a lower MOOP limit) reflected an increase of $50 from the copayment limit established for 2021. These illustrative copayment limits (and the updated actuarially equivalent copayment values in Tables 14A, 14B, and 15) show how some of the copayment limits from contract year 2022 represent a significantly lower actuarially equivalent value than 50 percent coinsurance based on more recent Medicare FFS data projections. Despite the increases, CMS expects annually updating, based on the most recent Medicare FFS data projections, these long-standing copayment limits to values that are actuarially equivalent to coinsurance percentages will be an improvement from prior years. If CMS maintained copayment limits at lower amounts, MA organizations would still be able to establish higher cost sharing using coinsurance structures. Adopting requirements where the cost sharing limits are more equalized for coinsurance and copayment structures will provide transparency and more uniformity into the actual costs beneficiaries may experience.
We expect updating copayment limits to align with coinsurance limits based on the most recent Medicare FFS data projections will encourage the use of copayments in MA plan designs. We anticipate that MA organizations may take advantage of the increased flexibility for copayments resulting from this FC when establishing cost sharing for these service categories in future years. As stated in Chapter 4 of the MMCM, enrollees generally find copayment amounts more predictable and less confusing than coinsurance.
In an effort to minimize the risk of disruptive changes and be responsive to commenters' concerns, we are finalizing a process to transition from current practice to the range of coinsurance and actuarially equivalent copayment limits based on the type of MOOP limit proposed in § 422.100(f)(6)(iii). We expect that a multiyear implementation schedule could be helpful to: (1)
To implement the multiyear transition in Table 13 to the proposed coinsurance limits, CMS is finalizing additional paragraphs at § 422.100(f)(6)(iii)(D)-(F). The substance of what was proposed at paragraph (f)(6)(iii)(C) is being finalized at paragraph (f)(6)(iii)(F) to govern the cost sharing that is permitted for MA plans using the different MOOP types beginning with coverage in 2026. Specifically, for contract year 2023, as finalized at paragraph (f)(6)(iii)(C), MA plans must not exceed the cost sharing limits for professional service categories as follows:
• Mandatory MOOP limit: 45 percent coinsurance or an actuarially equivalent copayment value and the MA plan must not pay less than 55 percent of the estimated total MA plan financial liability for the benefit.
• Intermediate MOOP limit: 47 percent coinsurance or an actuarially equivalent copayment value and the MA plan must not pay less than 53 percent of the estimated total MA plan financial liability for the benefit.
• Lower MOOP limit: 50 percent coinsurance or an actuarially equivalent copayment value and the MA plan must not pay less than 50 percent of the estimated total MA plan financial liability.
As finalized, § 422.100(f)(6)(iii)(B) directs how copayment limits calculated by CMS take precedence over amounts MA organizations may calculate and applies to paragraphs (f)(6)(iii)(C)-(F). In addition, paragraph (f)(6)(iii)(C) no longer references paragraph (f)(6)(ii)(A) to reduce repetitive references to the rounding rules. All of the rounding rules under paragraph (f)(6)(ii) are applicable to the copayments calculated under paragraph (f)(6)(iii). Paragraphs (f)(6)(iii)(D) through (F) reflect the transition after contract year 2023, as included in Table 13.
Although this transition schedule we are finalizing in § 422.100(f)(6)(iii)(C) through (F) addresses our concerns about sudden changes to the permitted level of coinsurance, it does not fully address our concerns about how the majority of copayment limits for professional service categories that apply for contract year 2022 (which are similar if not the same as copayment limits in earlier years) are roughly an actuarial equivalent value to, or less than, 30 percent coinsurance (as discussed previously in this response). We believe additional steps are necessary to smooth the transition from the copayment limits announced for contract year 2022 for MA plans that use copayment structures instead of coinsurance. For example, the contract year 2022 copayment limit for the “primary care physician” service category was $35 (for both the voluntary and mandatory MOOP limits) and calculating copayment limits at actuarially equivalent values to 45, 47, and 50 percent for contract year 2023 (using contract year 2023 Medicare FFS data projections based on 2017 to 2021 Medicare FFS data), would increase the copayment limits to $50, $55, and $60 for the mandatory, intermediate, and lower MOOP limits, respectively. Then, in applying the coinsurance percentages finalized for contract 2026, our projections show the limits would decrease over the subsequent years to $35, $45, and $60 (the $35 and $45 amounts are the same as the illustrative
New § 422.100(f)(8) provides a multiyear transition for how CMS will change copayment limits from their current (contract year 2022) level to actuarially equivalent values for service categories subject to paragraph (f)(6)(iii) (and § 422.100(j)(1) as discussed in section II.B.5.e. of this FC). This transition will also be conducted over contract years 2023 through 2025, and result in CMS calculating, for contract year 2026 and subsequent years, copayment limits using actuarial equivalent values to the coinsurance percentages proposed for each MOOP type. However, this transition for (and cap on increases for) copayment limits in paragraph (f)(8) will not apply to the service categories subject to paragraph (f)(6)(i) and (f)(6)(iv). We proposed separate approaches for calculating the cost sharing limits for the services addressed in paragraph (f)(6)(i) and (f)(6)(iv). For contract year 2023, CMS calculated copayment limits for two service categories included in the PBP that are subject to paragraph (f)(6)(i) based on a review of the contract year 2023 Medicare FFS data projections and consultation with the OACT. These two service categories are the “DME—Diabetic Shoes or Inserts” and “DME—Diabetes Monitoring Supplies” service categories (for the lower MOOP type). Because CMS has not previously issued copayment limits for these service categories for MA plans that establish a lower MOOP limit, a copayment transition is not necessary for the “DME—Diabetic Shoes or Inserts” or the “DME—Diabetes Monitoring Supplies” service categories or for the other service categories subject to paragraph (f)(6)(i) that did not have a specific copayment limit for contract year 2022. Our final policy for the service categories subject to paragraph (f)(6)(i) and (f)(6)(iv) is more comprehensively addressed in sections II.B.5.a. and c. of this FC. For contract year 2026 and subsequent years, when CMS calculates copayment limits for in-network professional services that are basic benefits, it will do so using the methodology in paragraphs (f)(6)(iii), (f)(7), and (j)(1) but not paragraph (f)(8).
Section 422.100(f)(8) limits the amount of annual increase in copayment limits for a service category subject to § 422.100(f)(6)(iii) or (j)(1) during the transition. Specifically, paragraph (f)(8) requires CMS to set these copayment limits at an amount that is the lesser of: (1) An actuarially equivalent value to the applicable cost sharing standard (from paragraph (f)(6)(iii) or (j)(1)); or (2) the value resulting from the actuarially equivalent copayment transition in paragraph (f)(8)(ii) for that service category. In addition, these copayment limits are all rounded as provided in paragraph (f)(6)(ii). The copayment limits calculated using the formula in paragraph (f)(8)(ii) act as a cap on the copayment limits CMS sets following the requirements in paragraph (f)(6)(iii)(C) through (E). By “cap” here and in the regulation text, we mean that increases to the copayment limit will be governed by the formula in paragraph (f)(8)(ii). For example, if the value that is actuarially equivalent to 40 percent coinsurance (the coinsurance limit applicable for contract year 2024 for the mandatory MOOP type) for a given professional service category is $100 when applying paragraph (f)(6)(iii)(D)
Section 422.100(f)(8)(i) defines the main component of the formula used in paragraph (f)(8)(ii) for this transition of copayment limits: The actuarially equivalent copayment differential. The methodology under paragraph (f)(8)(ii) occurs over 4 years (beginning for contract year 2023) and is structured in a similar manner as proposed (and finalized) for ESRD costs (as discussed in sections II.A. and II.B.5.c. of this FC). Similar to the ESRD cost transition, this actuarially equivalent copayment transition factors in an increasing percentage of the difference between two values. The “actuarially equivalent copayment differential” is defined in paragraph (f)(8)(i) as:
• For cost sharing at the mandatory and lower MOOP limits, the difference between, first, the copayment limit set for a plan benefit package service category based on the MOOP type for 2022 and second, the projected actuarially equivalent copayment value for the same service category and MOOP type based on the coinsurance limits in §§ 422.100(f)(6)(iii) and (j)(1) that apply in 2026.
• For cost sharing at the intermediate MOOP limit, the difference between, first, the copayment limit set for a plan benefit package service category based on the mandatory MOOP type for 2022 and second, the projected actuarially equivalent copayment value for the same service category based on the coinsurance limits in §§ 422.100(f)(6)(iii) and (j)(1) that apply for the intermediate MOOP type in 2026.
Given the limited number of professional service categories in contract year 2022 that had cost sharing limits differentiated by the type of MOOP limit, the first value (for most comparisons) will be based on the same figure for each professional service category for which CMS may calculate copayment limits during the transition. The second value (the actuarially equivalent copayment to the applicable cost sharing standard) will be recalculated each year using updated Medicare FFS data projections, consistent with the standards in paragraph (f)(7). This definition of the “actuarially equivalent copayment differential” means that each year, for each service category subject to paragraph (f)(6)(iii) to which paragraph (f)(8)(i) applies, CMS will calculate the difference between these two figures for each service category:
• For the mandatory MOOP limit: The copayment limit set for contract year 2022 for the mandatory MOOP
• For the intermediate MOOP limit: The copayment limit set for contract year 2022 for the mandatory MOOP limit and the copayment value that is actuarially equivalent to 40 percent (the coinsurance limit that applies in 2026) using the Medicare FFS data projections (updated each year) to reflect the costs of the contract year for which the copayment limit will apply.
• For the lower MOOP limit: The copayment limit set for contract year 2022 for the voluntary MOOP limit and the copayment value that is actuarially equivalent to 50 percent (the coinsurance limit that applies in 2026) using the Medicare FFS data projections (updated each year) to reflect the costs of the contract year for which the copayment limit will apply.
In comparison, the “actuarially equivalent copayment differential” as defined and applied to service categories subject to § 422.100(j)(1) (as discussed in section II.B.5.e. of this FC) means that CMS will calculate, for all MOOP limits (unless otherwise specified in paragraph (j)(1)(i)), the difference between these two figures for each service category: (1) The copayment limit set for contract year 2022 and (2) the copayment value that is actuarially equivalent to cost sharing under original Medicare that applies in 2026 using the Medicare FFS data projections (updated each year) to reflect the costs of the contract year for which the copayment limit will apply. Assuming that there are no changes to cost sharing rules in original Medicare, this second figure will be an actuarially equivalent value to 20 percent coinsurance for most of the services listed in § 422.100(j)(1).
As a result, the value of the “actuarially equivalent copayment differential” is unique for each service category, MOOP type, and contract year. Tables 14A, 14B, and 15 illustrate how the actuarially equivalent copayment differential is calculated in row H in each table.
Section 422.100(f)(8)(ii) provides the specific formula CMS will follow to complete the actuarially equivalent copayment transition. Specifically, CMS will add a percentage of the “actuarially equivalent copayment differential” identified for each service category, MOOP type, and contract year to the copayment limit set for contract year 2022 for that service category. The percentage of the actuarially equivalent copayment differential that will be used each year is as follows:
• Contract Year 2023: 25 percent.
• Contract Year 2024: 50 percent.
• Contract Year 2025: 75 percent.
This means that for each year and service category subject to § 422.100(f)(6)(iii) or (j)(1) to which (f)(8)(ii) applies, CMS will calculate the transitional value under paragraph (f)(8) that will be compared to what is actuarially equivalent to the applicable coinsurance limit for that contract year to determine which is the lesser value. Each year, CMS will use the most recent Medicare FFS data projections for the contract year to calculate these figures. Specifically, for contract year 2023, the formula to calculate the transitional value is as follows:
• For the mandatory and lower MOOP limits: The respective copayment limits set for 2022 plus 25 percent of the actuarially equivalent copayment differential.
• For the intermediate MOOP limit: The copayment limits set for 2022 for the mandatory MOOP limit plus 25 percent of the actuarially equivalent copayment differential.
By capping the copayment limits to the “lesser of” value for years 2023 through 2025, we aim to smooth the transition from the current (contract year 2022) copayment limits to the copayment limits that will be based on the coinsurance levels permitted for each type of MOOP limit. The transition adopted at § 422.100(f)(8) applies only to copayment limits that were set for contract year 2022. If CMS calculates a copayment limit for a new service category (where a copayment limit was not set for contract year 2022) that would be subject to either § 422.100(f)(6)(iii) or (j)(1) during this transition period, those copayment limits for those new service categories would be calculated at a value that is actuarially equivalent to the coinsurance percentage for the applicable MOOP limit under the rules in paragraphs (f)(6)(iii) and (j)(i).
As referenced in section II.B.5.a. of this FC, CMS may calculate copayment limits for any category of professional services that are basic benefits for 2023 and future years. Our intention is to calculate copayment limits for as many service categories as possible that are subject to § 422.100(f)(6)(i), (iii), and (j)(1). In this FC, we apply § 422.100(f)(6)(iii) to calculate final contract year 2023 copayment limits for the same professional service categories for which CMS set copayment limits in contract year 2022. Tables 14A and 14B show the calculations of contract year 2023 copayment limits for several professional services categories for MA plans that establish a mandatory MOOP type; CMS used contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) to develop these tables. Calculations similar to those shown in Tables 14A and 14B was used to reach the final contract year 2023 copayment limits included in Table 28 for MA plans that establish a lower or intermediate MOOP type. As an example, calculations of the contract year 2023 copayment limits for the “cardiac rehabilitation” service category for all MOOP types is provided in Table 15. The calculation of a contract year 2023 copayment limit for the “Part B drugs—Other” service category is not included in Table 14A or 14B, as CMS is not finalizing a range of coinsurance limits based on the type of MOOP limit for this service category, as discussed in section II.B.5.e. of this FC.
Tables 14A and 14B illustrate how CMS applies the methodology in § 422.100(f)(8) to calculate transitional copayment limits for service categories subject to paragraph (f)(6)(iii) for contract year 2023. The total projected Medicare FFS cost for each service category in Tables 14A, 14B, and 15 is based solely on Medicare FFS data (MA encounter data for the same time period was unavailable at the time of writing this FC). In addition, the total projected Medicare FFS cost reflects the lesser value (that is, when a median and weighted average amount were compared, we selected the lesser value) for the service categories in Tables 14A, 14B, and 15 except for “urgently needed services”. The total projected Medicare FFS weighted average and median amounts for “urgently needed services” for contract year 2023 are $134.00 and $113.00, respectively. The standard finalized in paragraph (f)(7)(ii)(C) authorizes CMS to select among different approaches to avoid unnecessary fluctuations in the copayment limit, so we choose to use the higher amount ($134.00) as the contract year 2023 total Medicare FFS projected cost for this service category. Specifically, using the higher $134.00 weighted average to calculate contract year 2023 copayment limits for the “urgently needed services” service category decreases the amount of change from the contract year 2022 copayment limit ($65 for both MOOP types) in comparison to the transitional copayment limits that would result from using the $113.00 median value.
As shown in Tables 14A, 14B, and 15, CMS calculated an actuarially equivalent copayment to the coinsurance limit applicable for contract
For example, as shown in Table 14B, the contract year 2022 “primary care physician” service category copayment limit for MA plans that established a mandatory or voluntary (lower) MOOP amount was $35. Using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data), a $35 copayment is actuarially equivalent to 30 percent coinsurance. In essence, this means that the final contract year 2023 copayment limit for the “primary care physician” service category and mandatory MOOP type reflects an actuarially equivalent copayment to the 2026 standard for that MOOP type in paragraph (f)(6)(iii)(F). In comparison, the copayment limit for this service category and the lower MOOP type is a transitional value, and not fully actuarially equivalent to the 2026 standard for that MOOP type (increasing from $35 for contract year 2022 to $40 for contract year 2023 as shown in Table 28). As a result, the multiyear transition in paragraph (f)(8) for CMS to calculate actuarially equivalent copayment limits avoids unnecessary changes to the copayment limits from year to year.
The “lesser of” values in row L of Tables 14A, 14B, and 15 are in Table 28 as the final contract year 2023 copayment limits for the respective MOOP types. Table 28 updates the illustrative cost sharing limits for all three MOOP types from the February 2020 proposed rule's Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits), using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) and applying the requirements finalized in paragraphs (f)(6), (7), (8), and § 422.100(j)(1). As a result, the final contract year 2023 copayment limits in Table 28 are consistent with how paragraph (f)(8) provides that the lesser of values calculated under paragraphs (f)(6)(iii) and (j)(1) and values calculated under paragraph (f)(8) will be used as the copayment limit for a particular service category and cost sharing level. In addition, Table 28 includes final contract year 2023 copayment limits for several service categories that did not have illustrative copayment limits in the February 2020 proposed rule. Final contract year 2023 copayment limits for the following professional service categories are in Table 28 but were not illustrated in the similar table in the February 2020 proposed rule: Cardiac rehabilitation; intensive cardiac rehabilitation; pulmonary rehabilitation; Supervised exercise therapy (SET) for Symptomatic peripheral artery disease (PAD); and partial hospitalization. These are all professional services subject to the methodology finalized in § 422.100(f)(6)(iii), (f)(7), and (f)(8). This is consistent with the general approach we proposed that the same rules would apply for all professional services if CMS issues copayment limits, regardless of whether we had calculated a copayment limit for the category in the past. By following the “lesser of” requirement in paragraph (f)(8), choosing the measure of central tendency which produces the least amount of change from the prior contract year (as allowed in paragraph (f)(7)) when calculating actuarially equivalent values, and setting copayment limits for the service categories we have historically used for contract year 2023, we aim to avoid potentially disruptive copayment changes, such as copayment limits that fluctuate up and down over short periods of time, for enrollees and plan designs.
Tables 14A, 14B, and 15 also illustrate how CMS will generally approach applying the methodology in § 422.100(f)(8) for service categories subject to paragraph (f)(6)(iii) for contract years 2024 and 2025. Specifically, CMS will complete similar calculations of the copayment limits for contract years 2024 and 2025 as shown in Tables 14A, 14B, and 15 with modifications to reflect the specific coinsurance limits for each year, increases in the actuarial equivalent copayment differential used (per paragraph (f)(8)), and updates to the total Medicare FFS costs for each service category using the most recent Medicare FFS data projections.
As shown in Tables 15 and 28, some contract year 2023 service category copayment limits are the same amount for multiple MOOP types (for example, a $40 “cardiac rehabilitation services” service category copayment limit for all MOOP types in contract year 2023). Some copayment limits are the same in the beginning of the transition because most professional categories have the same contract year 2022 copayment limit, along with the rounding rules. We do not expect the number of professional service categories with the same copayment limit will result in the number of MA plans with lower MOOP limits decreasing significantly because the cost sharing flexibilities generally provide differentiation for most service categories by MOOP type throughout the transition period. In addition, we currently project (based on contract year 2023 Medicare FFS data projections) that all service categories subject to paragraph (f)(6)(iii) will have differentiated copayment limits based on the MOOP type once the transition in paragraph (f)(8) is completed in contract year 2026. Under this FC, the OACT will annually update the Medicare FFS data projections used to calculate copayment limits, so the actual copayment limits for professional services for contract year 2024 and subsequent years, calculated by applying the rules in § 422.100(f)(6)(iii), (7), and (8), could increase or decrease accordingly.
As shown in Tables 14A, 15, and 28, the contract year 2023 copayment limits for the cardiac rehabilitation, intensive cardiac rehabilitation, and pulmonary rehabilitation service categories reflect decreases from the corresponding contract year 2022 copayment limits for both MOOP types. CMS calculated actuarially equivalent copayments for these service categories by using the contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) of the total average per session cost (weighted by utilization of office and outpatient facilities). As a result, Medicare FFS data reflects changes in CMS payment policies, provider billing practices, and where services are provided (for example, hospital outpatient department or physician's office). In addition, the contract year 2023 copayment limits set for these service categories reflect application of the “lesser of” requirement in § 422.100(f)(8); the actuarially equivalent value to the coinsurance limit for contract year 2023 is less than the value resulting from the actuarially equivalent copayment transition (after application of the rounding rules) for all MOOP types. The projected Medicare FFS amounts for cardiac rehabilitation and intensive cardiac rehabilitation also comply with Medicare FFS payment requirements from sections 1848(A)(5) and 1861(E) of the Act. These factors in combination result in the decreases in copayments limits for these three service categories from the contract year 2022 copayment limits.
As finalized in new § 422.100(f)(8)(ii)(D), the transition to actuarially equivalent copayment limits will be complete by contract year 2026 and no cap on increases in copayment limits apply for contract year 2026 or later years. For contract year 2026 and subsequent years, CMS may calculate copayment limits for—
• In-network professional services that are basic benefits: At an actuarially equivalent copayment value to the coinsurance percentage required for the type of MOOP limit, under paragraph (f)(6)(iii)(F); and
• In-network benefits subject to § 422.100(j)(1)(i): At actuarially equivalent values to the cost sharing under original Medicare (see additional discussion in section II.B.5.e. of this FC).
In essence, we are finalizing a process of continuous recalibration of copayment limits for service categories subject to paragraph (f)(6)(iii) or (j)(1) to ensure those limits are appropriately updated to align with the coinsurance limits based on annually updated Medicare FFS data projections. This is consistent with our proposal to set the actuarially equivalent copayment values each year, by working with the OACT to establish copayment limits that are approximately equal to the identified coinsurance percentage limit based on the most recent Medicare FFS data projections.
Using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data), applying § 422.100(f)(8), combined with the effect of applying the rounding rules, results in some service categories for particular MOOP types reaching an actuarially equivalent copayment value before contract year 2026 while others are currently expected to take the full 4 years to reach a copayment limit that is an actuarially equivalent value to the applicable coinsurance requirement. Some of these potential outcomes for professional service categories are illustrated in Tables 16 and 17.
Table 16 illustrates how CMS would calculate the actuarially equivalent copayment transition (including the “lesser of” requirement) over the 4 years for the “SET for PAD” service category using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). (We reiterate that the transition provided in § 422.100(f)(8) only applies when: (1) CMS is calculating a copayment limit under paragraph (f)(6)(iii) for basic benefits that are professional services and § 422.100(j)(1) for basic benefits for which the cost sharing may not exceed cost sharing in original Medicare; and (2) there was a copayment limit published for contract year 2022 for that service category. When CMS does not calculate the copayment limit as a specific dollar amount, the MA plan would be in the position of calculating an actuarially equivalent value that the MA plan's copayments may not exceed.) For contract year 2022, the cost sharing limits for the “SET for PAD” service category are 50 percent coinsurance or a $30 copayment for MA plans with the voluntary or mandatory MOOP type. As shown in Table 16, the mandatory MOOP limit is currently projected to reach an actuarially equivalent value based on 30 percent coinsurance in contract year 2025 for the “SET for PAD” service category, while the lower MOOP limit retains its copayment limit from contract year 2022 as that is the projected actuarially equivalent value to 50 percent coinsurance. Although the February 2020 proposed rule stated that 30 percent coinsurance is most closely related to the professional service category copayment limits from the CY 2020 Call Letter, that is not the case for every service category. For example, using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data), the contract year 2022 copayment limits for the “urgently needed services” and “SET for PAD” service categories reflect an actuarially equivalent copayment value to 50 percent coinsurance. As a result, the lower MOOP type retains the contract year 2022 copayment limit for the “urgently needed services” and “SET for PAD” service categories for contract year 2023 and the copayment limit for the mandatory MOOP type reflects a decrease from the contract year 2022 copayment limit in the first year of the transition to the lower coinsurance standard for that MOOP type. However, we emphasize that the copayment limits contained in Table 16 for contract years 2024-2026 are illustrative in nature and may change based on updated Medicare FFS data projections.
Table 17 illustrates how CMS will apply both the copayment and coinsurance transitions to the “physician specialist” service category through contract year 2026, using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). Cost projections for contract years after 2023 were not available at the time of writing this FC, however Table 17 illustrates the potential impact of the transition rule in calculating cost sharing limits for contract years 2024 through 2026. For example, Table 17 shows that in implementing a 4-year transition, an actuarially equivalent copayment limit to 30 percent coinsurance for the mandatory MOOP type may take the full 4 years to reach for the “physician specialist” service category. We reiterate that while the transition of the applicable coinsurance percentage and the rules for CMS to calculate the copayment limits are set in this FC, the copayment limits provided in Tables 16 and 17 for contract years 2024 through 2026 are illustrative in nature and may change based on updated Medicare FFS data projections in future years. Tables 16 and 17 highlight how the transition schedules result in annual incremental changes in order to reach the cost sharing limits that we proposed by contract year 2026.
The multiyear transition schedule for copayment limits calculated by CMS will generally be applied consistently across professional services (including urgently needed services) and benefits for which cost sharing must not exceed cost sharing in original Medicare (as discussed previously in this response and in sections II.B.5.d. and e. of this FC) in order to streamline the methodology and preserve transparency as much as possible while meeting our goals of avoiding significant year-to-year changes in copayment limits. We expect the completion of the multiyear transition to the range of cost sharing limits proposed will: (1) Improve the accuracy of copayment limits by using
In summary, we believe that using the multiyear transitions (for contract years 2023 through 2026) finalized in § 422.100(f)(6)(iii)(C)-(F) and (f)(8) provide sufficient time for MA organizations to address the upcoming changes to these cost sharing requirements; we do not expect this policy to directly cause plans to non-renew or to cause considerable disruption in the MA market or for beneficiaries. CMS requested comments and suggestions on its application and interpretation of the existing MOOP and cost sharing standards, as well as on adding a third, MOOP limit to allow additional cost sharing flexibility for future years, as part of the CY 2020 Call Letter
To provide additional transparency regarding how § 422.100(f)(6)(iii), (f)(7), and (f)(8) will be applied in future contract years, we provide an example of the steps CMS will take to calculate copayment limits for the “physician specialist” service category for contract year 2027 or a subsequent year. First, CMS will consider and decide whether issuing a copayment limit for the “physician specialist” service category is appropriate; we intend to review and consider the following using the most recent Medicare FFS data projections as part of this decision:
• The projected Medicare FFS costs and utilization for the relevant provider specialties for furnishing specialty physician services, such as average costs and utilization for the following provider specialties: Cardiology, gastroenterology, nephrology, and otolaryngology (ENT); and
• Updated analyses of actuarially acceptable approaches to calculate an actuarially equivalent value to the applicable cost sharing standard in § 422.100(f)(6)(iii) from the OACT (for example, with or without waiting for utilization, or projected median total Medicare FFS allowed amounts or a Medicare FFS projected claims cost distribution).
As a result, some potential outcomes of applying paragraphs (f)(6)(iii)(F), (f)(7), and (f)(8)(ii)(D) to calculate copayment limits for the “physician specialist” service category for contract year 2027 may include the following:
• Maintaining the contract year 2026 copayment limits for contract year 2027 if the most recent Medicare FFS projections of the weighted average do not result in different actuarially equivalent values to the range of cost sharing standard (after application of the rounding rules in § 422.100(f)(6)(ii)).
• Calculating updated copayment limits for contract year 2027 if the Medicare FFS data projections for the relevant provider specialties for furnishing specialty physician services result in different actuarially equivalent values to the range of cost sharing standard (after application of the rounding rules in § 422.100(f)(6)(ii)).
• Calculating updated copayment limits for contract year 2027 that are based on different actuarial approaches to calculating an actuarially equivalent value (for example, adjusting for outliers by using the median allowed amounts of the various provider specialties) if the different approach reflects an actuarially acceptable approach and avoids disruptive changes (in essence, higher increases to the copayment limit) for beneficiaries and plan designs, consistent with § 422.100(f)(7)(ii)(C). For example, if using the median allowed amount compared to the average allowed amount would result in a lesser increase to the copayment limit from the prior year while still reflecting an actuarially equivalent copayment for the benefit and beneficiary population.
• Not calculating an actuarially equivalent value to be the copayment limit, thus permitting MA plans to analyze their own data on the estimated total MA plan financial liability for that contract year to calculate the dollar amount that is actuarially equivalent to the applicable coinsurance percentage and establish the MA plan's copayment at or below that dollar amount. Each of these potential outcomes would include compliance with § 422.100(f)(7)(iii), which provides for an opportunity for public notice and comment.
By applying the requirements in § 422.100(f)(6)(iii), (f)(7), and (f)(8) to recalibrate copayment limits based on Medicare FFS data projections on an annual basis, we will ensure copayment limits continually align with the coinsurance limits for service categories subject to paragraphs (f)(6)(i), (iii), and (j)(1) in future years. As discussed in section II.A. of this FC, we are also annually recalibrating MOOP limits based on Medicare FFS data projections to accurately reflect changes in expected costs, subject to the limit on changes in the MOOP limit of more than 10 percent from one year to the next. We believe that updates of this type are appropriate to carry out the goal of the February 2020 proposed rule to continue balancing limits on enrollee cost sharing and changes in benefits with maintaining beneficiary access the affordable and sustainable benefit packages and protecting against discriminatory cost sharing. The methodology in this FC coordinates the updates to the MOOP limits and cost sharing standards for contract year 2023 and future years.
In summary, as discussed in the February 2020 proposed rule, we believe providing MA organizations with the cost sharing flexibilities in § 422.100(f)(6)(iii) will ultimately act as an incentive to encourage more favorable benefit designs for beneficiaries. While we are finalizing transitions to the proposed coinsurance and copayment limits in paragraphs (f)(6)(iii)(C)-(F) and (f)(8), we do not expect the breadth of cost sharing flexibilities will be substantially limited between the three MOOP types during the transition. Specifically, we believe the policies in this FC may incentivize MA organizations to design favorable benefit packages such as through establishing lower or intermediate MOOP amounts and adopt cost sharing that is lower or comparable when compared to existing benefit packages while protecting enrollees from significant annual changes during the transition period.
With respect to the commenter's concern about MA plans being challenged to satisfy the total beneficiary cost (TBC) standard if cost sharing requirements are changed to the range of cost sharing limits proposed in a single year, the TBC standard evaluates year-over-year plan changes in premiums and benefits for purposes of CMS's review and acceptance of bids. The TBC change threshold is determined each year based on a number of factors. CMS has authority to reject bids that propose significant increases in beneficiary costs or decreases in benefits under § 422.254 and uses the TBC evaluation to identify bids that make such significant changes compared to the prior year. See also section 1854(a)(5)(C)(ii) of the Act and § 422.256(a). The TBC threshold for
CMS does not expect MA organizations to necessarily offer more plan options than they currently do as a result of this provision. MA organizations are not required to offer plans that use each MOOP type and cost sharing possibility. In our experience, MA organizations typically limit the number of plan options in their product portfolio to avoid beneficiary confusion in considering the options. For example, in past years (including contract year 2021) most MA organizations offer an average of 2 to 3 plans per plan type in each service area (excluding employer, D-SNP, and MSA plans). We expect this rule on cost sharing standards will: (1) Promote transparency for those who care to learn how CMS calculates copayment limits; and (2) incentivize MA organizations to offer MA plans with lower MOOP limits by aligning the cost sharing limits based on the MOOP type established by the MA plan with lower MOOP limits having the most cost sharing flexibility, which may benefit enrollees. In addition, CMS will continue conducting reviews and enforcing its current authority prohibiting plans from misleading beneficiaries in their marketing and communication materials and activities and continue to improve plan comparison tools and resources (for example, Medicare plan finder, Medicare & You and 1-800-MEDICARE).
A commenter opposed CMS's proposal to allow MA plans that establish a lower MOOP limit to set cost sharing as high as 50 percent or the actuarially equivalent copayment limit (projected as $85 in the February 2020 proposed rule) for physical therapy and speech-language pathology. The commenter was concerned that permitting cost sharing at these levels would result in MA plans establishing cost sharing that would pose a significant financial burden and barrier to access for beneficiaries who need those services, particularly for services such as physical therapy that are typically associated with a higher frequency in visits. In reference to those concerns, the commenter requested that CMS: (1) Acknowledge the reality of the financial implications of copays that are required for each physical therapist visit on beneficiaries; (2) add physical therapy to the list of services for which an MA plan may not exceed cost sharing required under original Medicare (to make the cost sharing limits more reasonable for physical therapy services); and (3) set lower cost sharing limits for all categories of services that have a higher frequency in visits. The commenter noted appreciation for CMS's rationale for allowing greater flexibility and that CMS will, in its annual review of plan cost sharing, monitor both copayment amounts and coinsurance percentages; however, the commenter had serious concerns with the cost sharing MA plans have imposed for physical therapy. This commenter acknowledged that MA plans may establish one cost sharing amount for multiple visits provided during an episode of care (for example, several sessions of cardiac rehabilitation) as long as the overall cost sharing amount satisfies CMS standards. However, the commenter noted they were not aware of any plans that have adopted one cost sharing amount for multiple visits provided during a physical therapy episode of care. In addition, this commenter stated that some enrollees have reported paying copayments that were higher than the amount the enrollee's Explanation of Benefits showed as the MA plan's payment to the physical therapist; the commenter gave the example of an MA plan reimbursing the physical therapist $25 while the enrollee's copay was $65 for each visit. In addition, the commenter reported the cost sharing established by MA plans for physical therapy imposes a significant barrier to care for beneficiaries and copayments for physical therapy are frequently cited as a reason that some consumers opt to reduce their frequency of care or forgo medically necessary care. The commenter compared the impact of higher cost sharing for physical therapy in relation to primary care and other specialist providers to illustrate the concern that high cost sharing for repetitively utilized services discriminates against patients who need such services. Enrollees typically require multiple physical therapy visits over an extended period to properly recover from an injury or alleviate symptoms related to an acute or chronic condition, while visits to primary care providers and other specialists are typically less frequent. Based on that utilization difference, the commenter noted that higher cost sharing requirements for physical therapy create a significant financial burden for enrollees in need of multiple visits for a full recovery and may be a deterrent to accessing care. The commenter stated that as a consequence of high physical therapy cost sharing, enrollees who fail to receive the rehabilitative care they need from a physical therapist are more likely to require higher-cost interventions to remain functional—potentially resulting in the development or recurrence of severe functional impairments and downstream costs, including surgery, imaging, and pharmacy.
As discussed previously in a response to comment in this section, based on comments and further consideration of strategies CMS can employ to avoid potential disruption for enrollees and plan designs, we are finalizing a 4-year transition from contract year 2022 cost sharing limits to the 30, 40, and 50 percent coinsurance and related actuarially equivalent copayments for professional services that are Part A and B benefits (that is, basic benefits) proposed in § 422.100(f)(6)(iii). The cost sharing limits resulting from the first year of applying this transition (contract year 2023) are reflected in Table 28, including for the “physical therapy and speech-language pathology” service category. Compared to the February 2020 proposed rule's illustrative cost sharing limits for the “physical therapy and speech-language pathology” service category (30 percent/$50, 40 percent/$65, and 50 percent/$85 for the mandatory, intermediate, and lower MOOP limit respectively), the final contract year 2023 copayment limits (as shown in Table 28: 45 percent/$45, 47 percent/$50, and 50 percent/$50 for the mandatory, intermediate, and lower MOOP limit respectively) are substantively lower due to the transition and “lesser of” requirement finalized in § 422.100(f)(8). We used contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) to calculate the final cost sharing limits for contract year 2023. The calculations CMS made to reach these final contract year 2023 copayment limits for the “physical therapy and speech-language pathology” service category (for plans that establish a mandatory MOOP limit) are available in Table 14B. Similar calculations were made to reach the final contract year 2023 copayment limits in Table 28 for the other professional service categories and types of MOOP limits.
Although this rule continues to permit certain MA plans to have cost sharing obligations of up to 50 percent for certain basic benefits, the cost sharing standards and the MOOP limit requirements (section II.A. of this FC) will apply together to protect enrollees.
We note the example provided by a commenter of a $65 copayment for a physical therapy visit is above the $40 copayment limit for the in-network “physical therapy and speech-language pathology” service category for approved bids for contract year 2020 (which was in effect at the time of the public comment period and for contract year 2021 and 2022). MA organizations contract with providers, including physical therapists, to provide services to enrollees. The terms of contractual arrangements include provider reimbursement, which may also include enrollee cost sharing that the provider is permitted to collect. If enrollees believe that an MA organization is not providing adequate access to services or its contracted providers are not billing enrollees correctly, complaints may be submitted online
We appreciate the feedback and are finalizing our proposals for cost sharing for professional services with moderate modifications; we are finalizing the methodology used to calculate MA cost sharing standards for professional services and calculating a range of cost sharing limits for benefits furnished on an in-network basis based on the MOOP type established by the MA plan. The modifications include using a 4-year transition to the proposed 30, 40, and 50 percent coinsurance and actuarially equivalent copayment limits (finalized at § 422.100(f)(6)(iii) and (f)(8)). In addition, we are finalizing various edits and restructuring of the regulation text to improve clarity in the regulations. By implementing more than two levels of MOOP limits and limiting the scope of services on which the highest allowable cost sharing could be imposed (50 percent), we expect to encourage plan offerings with favorable benefit designs so that beneficiaries can choose MA plans that meet their needs. CMS will monitor whether changes from this FC result in beneficiaries having access to plan offerings with MOOP limits below the mandatory MOOP limit and lower or comparable cost sharing when compared to existing benefit packages over time.
This rule is focused on addressing particular ways that cost sharing structures could be used to discourage enrollment by beneficiaries with significant or costly health needs. Prohibitions on discrimination continue to apply in the MA program and CMS takes its role in guarding against discrimination on the basis of health status seriously. CMS reviews cost sharing based on the current limits that are intended to address discrimination based on health needs and based on other standards regulating cost sharing, such as requirements in current § 422.100(j) and (k) for certain services to have cost sharing that does not exceed cost sharing in original Medicare. CMS will incorporate the standards adopted in this FC into those reviews, beginning with reviews of bids for contract year 2023. We will not approve a plan bid if its proposed benefit design substantially discourages enrollment in that plan by certain Medicare-eligible individuals, and cost sharing structures are an important consideration in our reviews. For example, CMS analyzes plan bid submissions to evaluate whether cost sharing levels satisfy MA requirements and are defined or administered in a manner that may discriminate against sicker or higher-cost beneficiaries. These analyses also may evaluate the impact of benefit design on beneficiary health status and/or certain disease states. CMS contacts MA organizations to discuss any issues that are identified in MA plan bids as a result of these analyses and seeks correction or adjustment of the bid as necessary. CMS is not required to accept every bid and has authority to negotiate the benefits offered by MA plans under section 1854(a)(5) and (6) of the Act. CMS will also continue evaluations and enforcement of the current authority prohibiting plans from misleading beneficiaries in their communication materials and continue efforts to improve plan comparison tools and resources (for example, Medicare Plan Finder, Medicare & You, and 1-800-MEDICARE).
In CMS's experience, for the most part MA organizations typically offer benefits with lower cost sharing amounts than the standards CMS calculates. However, we are concerned about benefit designs that have in-network cost sharing at the highest allowable level for a subset of benefits, including mental health services as discussed in section III. of this FC. In light of these concerns, we are considering whether cost sharing limits for mental health care, such as mental health specialty services, psychiatric services, partial hospitalization, opioid treatment program services, and treatment for substance use disorders should be subject to additional cost sharing limits, such as a requirement that cost sharing for those service not exceed cost sharing in original Medicare. As discussed in section III. of this FC, we seek comments for consideration should we choose to pursue future rulemaking on this topic. While we do not expect to release new rulemaking on this topic in time to apply to contract year 2023, we will rely on our existing authority to closely review plan designs for potential disparity in cost sharing for mental health and psychiatric services compared to other professional services and to review significant increases in enrollee costs. CMS may not approve a plan if the MA organization cannot sufficiently explain how their plan design is not discriminating against beneficiaries that need mental health and psychiatric services.
We are finalizing § 422.100(f)(6)(iv) and (f)(6)(iv)(A)-(D) with additional edits to consistently use the same language to reference the inpatient hospital acute and psychiatric service categories for which CMS calculates cost sharing limits and the length of stay scenarios used by CMS to evaluate plan cost sharing for those inpatient scenarios. Cost sharing for in-network basic benefits that are inpatient hospital acute and psychiatric service categories must not exceed a specified percentage of original Medicare cost sharing for the length of stay scenarios based on original Medicare cost sharing for a new benefit period. As finalized in paragraph (f)(6)(iv)(A), this requirement is subject to new paragraph (f)(7) (discussed in detail in section II.B.5.a. of this FC). In brief, this means that the inpatient hospital cost sharing limits are calculated (and plan cost sharing amounts are evaluated) using generally accepted actuarial principles and practices (as finalized in paragraph (f)(7)(i)). In addition, the inpatient hospital cost sharing limits for contract year 2024 and future years will be issued annually through the subregulatory process in paragraph (f)(7)(iii). In paragraph (f)(6)(iv)(B), we are not finalizing the reference to an inpatient facility as we believe individuals could interpret the word facility in a stricter fashion than how the cost sharing limits will be applied; finalizing paragraph (f)(6)(iv)(B) without this reference will more accurately reflect how the cost sharing limits in paragraph (f)(6)(iv) work and how MA organizations may deliver inpatient services. In addition, we are revising the descriptions of the length of stay scenarios to focus on the purpose of the stay (acute versus psychiatric). We are finalizing the proposed rounding rules for inpatient hospital acute and psychiatric cost sharing limits in paragraph (f)(6)(ii) and we are not including a reference to those rounding rules in paragraph (f)(6)(iv) because we believe paragraph (f)(6)(ii) is sufficiently clear about when the rounding rules apply.
We clarify in § 422.100(f)(6)(iv)(C) that CMS calculates the inpatient hospital acute and psychiatric service category cost sharing limits annually using projections of out-of-pocket costs and utilization for the applicable year and length of stay scenario and factors in out-of-pocket costs incurred by beneficiaries with diagnoses of ESRD on the transition schedule described in paragraphs (f)(4)(vi)(A) through (B); the cross reference is updated from the proposed reference to paragraphs (f)(4)(vii)(A) through (D) based on reorganization of the regulation text addressing the ESRD cost transition, as discussed in section II.A. of this FC. In addition, we removed the reference to exceptions for MOOP limit calculations in paragraphs (f)(4)(v)(A) and (C) in paragraph (f)(4)(iv)(C) as this FC does not include the provision that delays the schedule of incorporating ESRD costs into the methodology CMS uses to calculate MOOP limits (as discussed in section II.A. of this FC). This means that CMS is calculating the inpatient hospital acute and psychiatric service category cost sharing limits for contract year 2023 using projected Medicare FFS beneficiary out-of-pocket spending, which necessarily includes both costs and utilization data, for beneficiaries without diagnoses of ESRD plus 70 percent of the ESRD cost differential. Then, for contract year 2024 and subsequent years CMS will calculate the inpatient hospital acute and psychiatric service category cost sharing limits using Medicare FFS data projections (as defined in paragraph (f)(4)(i), which includes data for beneficiaries with and without diagnoses of ESRD). In addition, as proposed, we are finalizing that CMS may also use patient utilization information from MA encounter data in developing the length of stay scenarios. In summary, CMS implements the inpatient hospital cost sharing limits set in paragraph (f)(6)(iv) by evaluating the plan's cost sharing for each length of stay scenario in comparison to the specific limits that are calculated and published annually (as finalized in paragraphs (f)(6)(iv)(C) and (f)(7)(iii)). Inpatient hospital cost sharing above the annual limits for any one of the length-of-stay scenarios is not permissible.
In finalizing § 422.100(f)(6)(iv)(D), we are including several clarifying modifications. Final paragraph (f)(6)(iv) includes the requirement that the total cost sharing for the inpatient benefit must not exceed the plan's MOOP limit or overall cost sharing for those benefits in original Medicare on a per member per month actuarially equivalent basis. We are not finalizing this provision only in paragraph (f)(6)(iv)(D)
We are finalizing § 422.100(f)(6)(iv)(D)
We are finalizing § 422.100(f)(6)(iv)(D)
We believe it is important to reiterate that cost sharing limits applicable for any service category cannot exceed the associated MOOP limit, including the inpatient hospital acute and psychiatric length of stay scenarios as finalized in § 422.100(f)(6)(iv). CMS did not propose to allow, and would not approve a plan bid that allowed, inpatient hospital cost sharing above the related MOOP amount for that plan. The flexibility to establish cost sharing above 125 percent of estimated Medicare FFS cost sharing for the inpatient hospital acute 60-day length of stay scenario for MA plans with a lower MOOP amount (in paragraph (f)(6)(iv)(D)
In Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from the February 2020 proposed rule, we listed the cost sharing limit for the inpatient hospital acute 60-day length of stay scenario for MA plans that establish a lower MOOP amount as “N/A” to reflect the flexibility MA organizations have in establishing cost sharing above 125 percent of estimated Medicare FFS cost sharing. However, using projections of Medicare FFS data from 2015-2019 that was available at the time of writing the February 2020 proposed rule, a cost sharing limit at 125 percent of estimated Medicare FFS cost sharing (plus 80 percent of the ESRD cost differential for contract year 2022 as proposed) would have been $6,127. This amount is $2,677 higher than the illustrative contract year 2022 in-network lower MOOP limit of $3,450 shown in Table 4 (Illustrative Example of In-Network MOOP Limits Based on Most Recent Medicare FFS Data Projections) of the February 2020 proposed rule. The value of 125 percent of estimated Medicare FFS cost sharing using updated projections of Medicare FFS data (from 2017-2021) and the finalized ESRD cost transition schedule for the inpatient hospital acute 60-day length of stay scenario also exceeds the final contract year 2023 lower MOOP limit ($7,162 compared to $3,650). In order to be clear about the highest allowable inpatient hospital cost sharing that an enrollee could experience, we updated the “N/A” for the 60-day length of stay scenario to the final contract year 2023 in-network lower MOOP limit amount in Table 28 (that is, $3,650 as listed in Table 5 and discussed in section II.A. of this FC). The complete list of final contract year 2023 inpatient hospital cost sharing limits is available in Table 28, which were calculated using the rules finalized in § 422.100(f)(6)(iv) and the data described in § 422.100(f)(4)(vi)(A) (that is, projected Medicare beneficiary out of pocket spending for 2023 for beneficiaries without diagnoses of ESRD plus 70 percent of the ESRD cost differential).
MA plans that establish a lower MOOP amount will effectively have a cost sharing limit for the inpatient acute 60-day length of stay scenario that is calculated at the in-network lower MOOP limit amount whenever the calculations of 125 percent of Medicare FFS cost sharing exceed the lower MOOP limit. The dollar amount which is applied as the cost sharing limit, before rounding, is used in the calculation of the inpatient acute 60-day length of stay scenario cost sharing limit for MA plans that establish an intermediate MOOP limit (as discussed previously in this response and finalized in § 422.100(f)(6)(iv)(D)
In summary, we believe listing specific dollar amounts (instead of “N/A”) in Table 28 clarifies and avoids potential confusion about the level of flexibility MA plans have, including those that establish a lower MOOP amount, under § 422.100(f)(6)(iv). Listing the in-network MOOP amounts when applicable for particular inpatient length of stay scenarios in Table 28 and in subregulatory guidance for future contract years does not nullify the requirement that the total cost sharing for the inpatient benefit must not exceed the cost sharing for inpatient benefits in original Medicare on a per member per month actuarially equivalent basis. In addition, CMS provides instructions describing how excess cost sharing is evaluated using BPT information to satisfy the per member per month actuarially equivalent requirement for the benefit categories subject to § 422.100(j)(2) (including inpatient) in section II.B.5.f. of this FC. Our evaluations of the per member per month limits are specific to each MA plan bid and will happen during CMS review of bids, consistent with longstanding practice. For contract year 2024 and future years, instructions on these topics will be provided as part of the annual issuance of subregulatory guidance required by paragraph (f)(7)(iii).
Another commenter opposed CMS transitioning any ESRD costs into the methodology CMS uses to set inpatient hospital acute and psychiatric cost sharing limits. The commenter noted that by transitioning ESRD costs into the methodology that CMS uses to establish cost sharing limits for the 60-day length of stay scenario for inpatient hospital acute services, the resulting maximum cost sharing limits exceed 100 percent of the Medicare FFS cost sharing for individuals without diagnoses of ESRD. They explained that this results in cost sharing limits for the inpatient hospital acute service category that are not actuarially equivalent for the population of beneficiaries without diagnoses of ESRD and including ESRD costs in the methodology CMS uses to set inpatient hospital acute and psychiatric cost sharing limits could cause unintended disruption or unmanageable costs for beneficiaries without diagnoses of ESRD. In addition, the commenter noted establishing inpatient hospital cost sharing limits that are not actuarially equivalent for the non-ESRD population is illustrative of the concerns they have in general with the changes CMS proposed to address the increased MA plan cost due to changes in eligibility for beneficiaries with ESRD. The commenter explained that the changes CMS proposed involve various forms of cost subsidization by enrollees without diagnoses of ESRD, such as use of the ESRD subsidy in the Bid Pricing Tool (BPT), MOOP limit increases, and increases in Part C cost sharing limits. The commenter believed this non-ESRD enrollee cost subsidization will financially strain MA organizations and beneficiaries, and as a consequence, may reduce competition and beneficiary choice.
We agree that inpatient acute cost sharing limits are projected to continue increasing at a greater rate than if ESRD costs were excluded and understand the commenter's concern about non-ESRD enrollees subsidizing the costs related to the expansion of enrollment into the MA program by beneficiaries with diagnoses of ESRD. However, the 21st Century Cures Act required CMS to lift the enrollment restrictions for beneficiaries with diagnoses of ESRD beginning in 2021 and those beneficiaries are now eligible for MA enrollment on the same basis as other beneficiaries. Setting up separate benefit structures by using different cost sharing for MA enrollees based on whether they have been diagnosed with ESRD is not consistent with the Medicare statute, particularly sections 1852 and 1854(c) of the Act. Beneficiaries with diagnoses of ESRD are entitled to Medicare and therefore entitled to the same benefits and benefit options as other beneficiaries. The plan benefit package (PBP) portion of the bid requires uniformity in benefits and cost sharing pursuant to the uniformity requirements in §§ 422.4 (the definition of an MA plan), 422.100(d) and 422.254(b)(2). Characterizing benefit analysis by pitting healthier enrollees against sicker enrollees ignores the uniformity requirements and would discourage enrollment by less healthy beneficiaries into MA plans. Our approach to incorporate costs of beneficiaries with diagnoses of ESRD in setting inpatient hospital cost sharing limits is consistent with the approach CMS has historically used of spreading the burden of medical costs across all
CMS acknowledges and understands that some plans may adopt the mandatory MOOP limit, raise cost sharing for specific benefits where possible under the new cost sharing limits in this FC, or increase enrollee premiums, in part due to the costs they expect to incur to cover services for their enrollees. While some MA organizations have experience managing the health care services for beneficiaries with diagnoses of ESRD under the prior enrollment policy and during the first year of expanded enrollment eligibility, our proposal and the final policies provide incentives to MA organizations to adopt MOOP limits below the mandatory level and establish lower or comparable cost sharing when compared to existing benefit packages and utilize effective risk mitigation strategies. Our MOOP limit provision in section II.A. of this FC and the cost sharing limit policies addressed in section II.B. of this FC do not limit market competition and we expect beneficiary choice will continue to act as an incentive for MA organizations to offer favorable benefit designs. For example, we expect beneficiary choice will continue to drive MA organizations to offer supplemental benefits, such as vision and dental services. In addition, MA organizations can use multiple strategies to manage care and costs through provider contracting, reinsurance, care coordination, case management, plan benefit designs, and benefit flexibilities including additional telehealth benefits, Special Supplemental Benefits for the Chronically Ill (SSBCI), and our reinterpretation of the MA uniformity requirement (§ 422.100(d)(2)(ii)). We direct commenters to the June 2020 final rule (85 FR 33796) for how CMS finalized policies related to reinsurance (section IV.A.), SSBCI (section II.A.), and kidney acquisition costs (sections III.B. and III.B.) In addition, under section 1854(a)(5)(C) of the Act, CMS is authorized to deny a plan bid, including if it determines the bid proposes significant increases in enrollee costs or decrease in benefits from one plan year to the next. CMS is also authorized to negotiate with MA organizations regarding their bids by section 1854(6)(B) of the Act. The cost sharing requirements adopted under this FC reflect what is minimally acceptable, for the various reasons discussed in detail throughout the February 2020 proposed rule and this FC, and by codifying them in regulations, these standards are transparent for MA organizations. If an MA organization's bid represents too significant an increase in costs or decrease in benefits from the prior year, we have an established evaluation to identify that and engage with the MA organization to revise its bid. A plan's TBC is the sum of the plan-specific Part B premium, plan premium, and estimated enrollee out-of-pocket costs. CMS uses the TBC standard to evaluate year over year changes when bids are submitted for the upcoming contract year. The TBC standard is applied at the plan level to ensure enrollees in each applicable plan are not subject to too significant an increase in costs or decrease in benefits from one plan year to the next. Because of the availability of these strategies and plan requirements, we do not expect that MA organizations will automatically pass on the anticipated increased costs associated with enrollees with diagnoses of ESRD onto the MA population as a whole. In fact, CMS has observed that historically MA organizations tend to reduce their profit margins, rather than substantially change their benefit package from one year to the next. While we appreciate the commenter's suggestion to align the ESRD cost transition schedule with OACT's projected rate of ESRD enrollment, we believe this would add another layer of complexity and potentially delay the transition process. As discussed in section II.A. of this FC, we did not propose to set the schedule for transitioning ESRD costs into MOOP and inpatient hospital cost sharing limits based upon OACT's projection of ESRD enrollment because actual enrollment per plan may vary and OACT's analysis reflects expectations for the MA program as a whole. As discussed in the February 2020 proposed rule, the OACT expected ESRD enrollment in MA plans to increase by 83,000 beneficiaries as a result of the 21st Century Cures Act provision. The OACT assumed the increase would be phased in over 6 years, with half of those beneficiaries (41,500) enrolling during 2021; the remaining 41,500 additional beneficiaries were expected to enroll in MA plans during the years 2022 to 2026 under the assumption that the number of additional enrollees who have diagnoses of ESRD will continue to increase during that time frame though at a decreasing rate in later years. Based on actual 2021 enrollment data, the OACT continues to project that 83,000 beneficiaries with diagnoses of ESRD will enroll in the MA program over 6 years. If CMS were to match the transition of incorporating ESRD costs to that of OACT's enrollment projections, we would be forced to delay the full transition of ESRD costs until 2026. After publication of the February 2020 proposed rule, CMS announced that it would take the Medicare FFS costs of beneficiaries with diagnoses ESRD into account in developing MOOP and cost sharing limits for 2021.
For 2021, CMS set the voluntary and mandatory MOOP limits by applying the standard in current §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3). Because of the expected changes in enrollment in MA plans by beneficiaries with diagnoses of ESRD, we incorporated 40 percent of the ESRD cost differential for 2021 which increased both types of MOOP limits from 2020. The proposed 3-year transition schedule would have incorporated the ESRD cost differential as follows: 60 percent in 2022; 80 percent in 2023 or next year; and 100 percent in 2024 or the final year of transition. Our proposal attempted to strike a balance between providing plan stability while also protecting enrollees from rapid and significant cost and benefit changes. Based on the timing of this FC, the contract year 2021 MOOP limits were maintained for contract year 2022 (applying the existing standard in current §§ 422.100(f)(4) and (5) and 422.101(d)(2) and (3)). As a result, for purposes of the regulation text, our finalized methodology utilizes 2023 as the first year of the ESRD cost transition schedule. As discussed in section II.A. of this FC, we finalized the completion of the ESRD cost transition in the proposed time frame with a slightly lower incorporation of ESRD costs for contract year 2023; this change in schedule will also apply to the methodology CMS uses to calculate the inpatient hospital acute and psychiatric cost sharing limits as proposed and finalized in paragraph (f)(6)(iv)(C). In lowering the ESRD cost differential percentage for contract year 2023 compared to our proposal for 2023, we aim to strike a balance between curbing potential disruptive changes in MOOP and inpatient services cost sharing limits from contract year 2022 and providing MA organizations the ability to continue offering all plan enrollees, regardless of their ESRD status, quality care and service while keeping premiums and cost sharing at non-discriminatory levels. In summary, the final 2-year transition schedule we are codifying in paragraph (f)(4)(vi) incorporates the ESRD cost differential into the Medicare FFS data used for setting inpatient cost sharing limits as follows: 70 percent in 2023; and 100 percent in 2024 or the final year of transition. This builds on how CMS has incorporated 40 percent of the ESRD cost differential in setting the inpatient hospital cost sharing limits for 2021 and 2022. This transition schedule of ESRD costs remains a part of the final methodology CMS uses to calculate inpatient hospital cost sharing limits.
As proposed and finalized in § 422.100(f)(6)(iv)(C), the data used to calculate the inpatient hospital acute and psychiatric cost sharing limits will be aligned with the data used to calculate MOOP limits with regard to using the updated transition schedule to incorporate ESRD costs finalized in section II.A. of this FC. In applying this ESRD cost transition schedule, as finalized in section II.A. of this FC, the cross-reference is being updated to paragraph (f)(4)(vi)(A) through (B) and the reference to paragraph (f)(4)(v)(C) is being removed in the final regulation in paragraph (f)(6)(iv)(C). In addition, paragraph (f)(6)(iv)(C) has a slight modification to make the regulation text more consistent with the other modifications to the rules finalized for MOOP and cost sharing limits as discussed in sections II.A and II.B. of this FC. Specifically, the regulation text consistently refers to the out-of-pocket costs “incurred by” (rather than “representing”) beneficiaries with diagnoses of ESRD in describing the Medicare FFS data CMS would be using are projections for the applicable year and length of stay scenario in paragraph (f)(6)(iv)(C). This use of the phrase “incurred by” here is not relevant to the cost sharing that MA plans must count toward the MOOP limit when determining if the MOOP has been reached by a particular enrollee. These changes are consistent with the language finalized in § 422.100(f)(4)(vii), (f)(6)(i)(B), (f)(6)(iii)(B), and (j)(1)(i)(F)
As finalized, CMS is applying the ESRD cost transition consistently to the methodology for calculating cost sharing limits for inpatient hospital services and the methodology for calculating MOOP limits to provide stability to MA organizations. We are finalizing the proposal to use the same data and the transition schedule finalized for incorporating the ESRD cost differential that we adopted in connection with the MOOP limits, through the updated reference to paragraphs (f)(4)(vi)(A) through (B) in paragraph (f)(6)(iv)(C). We are not finalizing the tolling provision for incorporating the ESRD cost differential, so there is no need to address that part of the proposal in final § 422.100(f)(6)(iv). Inpatient hospital cost sharing limits for contract year 2021 were finalized through the HPMS memorandum titled “Final Contract Year 2021 Part C Benefits Review and Evaluation” issued April 8, 2020, and are not addressed in this rule; we used 40 percent of the ESRD cost differential to set those cost sharing limits. In addition, the inpatient hospital cost sharing limits were maintained from contract year 2021 for contract year 2022.
Tables 18 and 19 illustrate how CMS calculated the final contract year 2023 inpatient hospital acute cost sharing limits based on the MOOP type for the 10-day length of stay scenario using the finalized policy in § 422.100(f)(6)(iv) and projections of contract year 2023 costs based on 2017-2021 Medicare FFS data. In addition, Tables 20 and 21 provide similar projections for the same inpatient hospital acute 10-day length of stay scenario to illustrate cost sharing limits for contract year 2024 using contract year 2023 Medicare FFS data projections (as projections for contract year 2024 were not available at the time of writing this FC). Tables 20 and 21 illustrate how the completion of the finalized ESRD cost differential transition may affect the inpatient hospital cost sharing limits for contract year 2024. Tables 18 through 21 are similar to Table 4 (Illustrative Example of Cost Sharing Limits Based on Current Medicare FFS Data For Inpatient Hospital Acute 10-day Length of Stay Scenario) in the February 2020 proposed rule, with updates to apply the methodology as finalized for comparison purposes. Specifically, the inpatient hospital cost sharing limits in Tables 18 through 21 were developed by: (1) Incorporating 70 percent of the projected ESRD cost differential for 2023 and 100 percent of the ESRD cost differential for 2024 (the final year of the ESRD cost transition); (2) applying the modified methodology to calculate inpatient hospital cost sharing limits for MA plans with an intermediate MOOP limit (as discussed previously in a response to comment in this section); and (3) applying the rounding rules finalized in § 422.100(f)(6)(ii). Similar calculations as shown in Tables 18 and 19 were completed to reach the final contract year 2023 inpatient hospital cost sharing limits for the other length of stay scenarios include in Table 28.
As shown in Tables 18, 19, and 28, modifying the ESRD cost transition from
As discussed in section II.A. of this FC, CMS will monitor the percentage of beneficiaries with diagnoses of ESRD enrolled in MA plans compared to Medicare FFS. If appropriate, we will consider future rulemaking to alter the methodology CMS uses to calculate MOOP and cost sharing limits if there are significant unforeseen impacts or negative consequences that need to be addressed. We would also consider whether additional changes would outweigh the interests of maintaining a settled methodology for calculating the MOOP and cost sharing limits and sufficiently protect enrollees from changes in cost sharing and benefits from 1 year to the next. In addition, as proposed and finalized, § 422.113(f)(6)(iv)(C) provides that CMS may also use patient utilization information from MA encounter data. In the February 2020 proposed rule we explained that CMS compared inpatient hospital utilization information from both Medicare FFS and MA encounter data to determine the specific length of stay scenarios for which we proposed to calculate cost sharing limits. As finalized, CMS may pursue future rulemaking to add, remove, or modify the length of stay scenarios applied to inpatient hospital acute and psychiatric cost sharing limits based on comparisons of inpatient hospital utilization information from both Medicare FFS and MA encounter data.
A few other commenters opposed increasing the cost sharing limit for emergency/post-stabilization services. The commenters were concerned that increasing the cost sharing limit (and by extension, permitting increased cost sharing) would have the undesirable outcome of deterring beneficiaries from going to the emergency room when medically necessary, even when immediate medical care is truly needed, as many Medicare beneficiaries will simply be unable to afford the cost sharing. In reference to those concerns, the commenters requested CMS lower or maintain the contract year 2021 emergency/post-stabilization services cost sharing limits ($120 for the lower, voluntary MOOP limit and $90 for the mandatory MOOP limit). The commenters did not specifically address a cost sharing limit (or approach) for emergency/post-stabilization services for MA plans that establish an intermediate MOOP limit.
A commenter stated that CMS is unfairly penalizing Medicare beneficiaries who receive emergency services as CMS has increased the cost sharing limits for emergency services for the voluntary and mandatory MOOP limits by 60 percent and 20 percent respectively over the last several years. In addition, a commenter stated survey results from the Centers for Disease Control and Prevention (CDC) show that only a small percentage of emergency department visits are avoidable.
Our proposal based the dollar limits on the projected Medicare FFS median total allowed amount for emergency services (including visit and related procedure costs, $755) using contract year 2021 Medicare FFS data projections that were based on the 2015-2019 Medicare FFS data available at the time of the February 2020 proposed rule. We reviewed both the projected median and average total allowed amount from the OACT when determining the methodology for setting cost sharing limits for this category. If we had proposed to base our methodology on the projected average total allowed Medicare FFS amount ($998 including visit and related procedure costs), the highest allowable cost sharing for a plan that established a lower MOOP limit would have been $200, $50 higher than our proposal to use the projected median. However, we chose to use the projected median, which means that roughly half of Medicare beneficiaries in the Medicare FFS program were expected to incur cost sharing that was likely higher than these costs. Since the February 2020 proposed rule, updated contract year 2023 Medicare FFS data projections using Medicare FFS data from 2017-2021 increases the projected median and average total allowed amounts for emergency services (including visit and related procedure costs) to $861 and $1,106, respectively. The maximum cost sharing limits for emergency services are not being changed to reflect these updated projections because our proposal was to calculate specific dollar amounts for cost sharing limits for emergency and post-stabilization services. But understanding the out-of-pocket costs experienced in the Medicare FFS program provides important context for the cost sharing limits that we are adopting in this FC.
As discussed in the February 2020 proposed rule, to calculate the proposed emergency and post-stabilization care services cost sharing limits for the mandatory and lower MOOP limits (Mandatory—$115 and Lower—$150), CMS took 15 percent and 20 percent of the projected median total allowed amount ($755) respectively, rounded to the nearest whole $5 increment. In addition, the proposed cost sharing limit for an intermediate MOOP limit ($130) was calculated based on the numeric midpoint of the related cost sharing limits for MA plans with mandatary and lower MOOP limits, rounded to the nearest whole $5 increment. We realized that using up to 20 percent of this projected Medicare FFS median total allowed amount to set an emergency cost sharing amount for an MA plan that establishes a lower MOOP limit would result in an increase of the MA cost sharing limit, compared to the prior contract year. However, the cost sharing standard we proposed at § 422.113(b)(2)(v) for MA plans that establish a lower MOOP limit is comparable to what a beneficiary in Medicare FFS would be required to pay for a similar trip to the emergency room after reaching the Part B deductible, based on 20 percent of Medicare FFS costs. Therefore, we do not believe that setting a cost sharing standard that is based on costs that are 15 percent (for the mandatory MOOP limit) and 20 percent (for the lower MOOP limit) of the median projected total cost for emergency services (including visit and related procedure costs) experienced in the Medicare FFS program is discriminatory. Nor do we believe utilizing the numeric midpoint of those limits to set a cost sharing limit for intermediate MOOP limit is discriminatory. We believe that basing the MA cost sharing limits for these services to the projected costs for beneficiaries in the Medicare FFS program reasonably addresses and balances our goals for adopting cost sharing limits overall.
We proposed to align the highest permissible cost sharing amount (which is available for MA plans that use the lower MOOP limit) with original Medicare, by allowing a maximum emergency services cost sharing limit permitted per visit of $150, as an incentive for plans to offer a lower MOOP limit, which is another important financial protection for beneficiaries. If the cost sharing limits for emergency services do not change from the current amounts to reflect more recent Medicare FFS data projections and trends, we expect that the limits will act as a disincentive for MA plans to offer lower MOOP amounts. For example, for contract year 2021 (based on March 2021 plan data) approximately 85 percent of MA and MA-PD plans (excluding D-SNPs) established the highest allowable cost sharing for this service category based on the type of MOOP limit, suggesting that these upper limits may not fully reflect the costs MA organizations are experiencing to cover emergency services for enrollees. Conversely, while increasing flexibility in cost sharing
The cost sharing limits proposed at § 422.113 are reasonably close to emergency room copayment levels for employer and Qualified Health Plans. For example, the Kaiser Family Foundation (KFF) found that the majority of covered workers either have a coinsurance or copayment for an emergency room visit with the average coinsurance rate of 20 percent and the average copayment of $180 based on a 2017 employer health benefits survey.
We developed the transition schedule finalized in § 422.113(b)(2)(v) by taking the difference between the proposed cost sharing amounts for emergency services and the current (contract year 2022) cost sharing limits and incorporating 25 percent of the difference each year over a 4-year period and applying the rounding rules. In addition, contract year 2023 will be the first year CMS sets an intermediate MOOP limit. For purposes of calculating the transitional cost sharing limits for the intermediate MOOP limit, CMS used the numeric midpoint between the transitional cost sharing limits for the mandatory and lower MOOP limits before application of the rounding rules, then applied the rounding rules to that midpoint amount. This is consistent with our proposal to set maximum cost sharing limits for MA plans with an intermediate MOOP limit based on the numeric midpoint of the related cost sharing limits for MA plans with mandatory and lower MOOP limits, rounded to the nearest whole $5 increment. The calculations CMS completed to reach the final contract year 2023 emergency services cost sharing limits are available in Table 22 and 23. Similar calculations as shown in Tables 22 and 23 were completed to reach the final cost sharing limits for the following years of the transition, contract years 2024 through 2026. In summary, applying this transition and the rounding rules in § 422.100(f)(6)(ii) results in the emergency services cost sharing limits summarized in Table 24 for contract year 2023 and future years, which is what we are finalizing in § 422.113(b)(2)(v). Specifically, emergency services cost sharing limits will be transitioned to the amounts proposed for contract year 2026 and maintained for subsequent years. CMS modified the cost sharing limits proposed in paragraphs § 422.113(b)(2)(v)
In setting a 4-year transition to the proposed cost sharing limits, CMS is attempting to strike a balance between the needs of beneficiaries to seek emergency care and plan costs associated with the variety and expense of services included in the cost sharing limit. The dollar amounts for emergency services represent the maximum cost sharing permitted per visit (including related procedure costs) and are not subject to plan level deductibles or network restrictions. CMS will continue to track Medicare FFS cost trends for emergency services and may consider future rulemaking to update these cost sharing limits, if appropriate. For example, we will continue to review the projected average and median Medicare FFS allowed amounts from the OACT annually, consult with the OACT on whether any applicable cost trends are expected to be consistent for future contract years, and consider how market competition or payment policies may affect or necessitate changes to the methodology CMS used to calculate cost sharing limits proposed and finalized here.
We are also finalizing the proposal, at § 422.113(b)(2)(vi), that cost sharing for urgently needed services must not exceed the limits on cost sharing that are specified for professional services in § 422.100(f)(6)(iii). This means that cost sharing limits for urgently needed services may vary with the type of MOOP limit. Further, as with professional services, the cost sharing for urgently needed services may not exceed a set coinsurance percentage or an actuarially equivalent copayment value, and the values for copayment limits may be calculated by CMS applying the methodology in this FC or by the MA organization based on the estimated total MA plan financial liability for that contract year if CMS does not calculate the copayment limit for the specific service or service category. In addition, our proposed in-network cost sharing standards for urgently needed services represent the maximum out-of-pocket cost sharing amount that an MA plan may require an enrollee to pay for these services, inclusive of any variability in the costs provided during the visit. Specifically, CMS may calculate copayment limits for urgently needed services based on § 422.100(f)(6)(iii) (and new paragraph (f)(8)(i) during the transition to actuarially equivalent copayment limits). A more complete discussion related to the requirement for cost sharing for professional services, the range of permissible cost sharing, and the transition to actuarially equivalent copayment limits is available in section II.B.5.b. of this FC.
We are finalizing our proposals related to emergency services and urgently needed services generally as proposed, with 4-year transitions to reach the proposed cost sharing limits. We are not finalizing the proposal to consolidate the cost sharing limits for emergency and post-stabilization services (as discussed in a following response to comment in this section).
CMS described how post-stabilization may encompass a wide variety of services but is used in § 422.113 to reflect the services the enrollee receives immediately following stabilization in the emergency department in the CY 2019 Final Call Letter (issued April 2, 2018). This approach separates post-stabilization care services received as an admitted inpatient from emergency services and is also consistent with CMS's policy in the “Medicare Program; Establishment of the Medicare Advantage Program; Final Rule” published January 28, 2005 (referred to as the January 2005 final rule). For example, comments summarized in the January 2005 final rule supported CMS's clarification that the cost sharing limit for emergency services applied only to emergency department services and the notion that once an MA enrollee is admitted to a hospital, normal hospital cost sharing levels apply, even if the inpatient admission originates in the emergency department. As such, we clarify and reiterate that while the definition of emergency services references covered inpatient and outpatient services, CMS is not including post-stabilization inpatient acute care services for purposes of setting the cost sharing limits for emergency services in paragraph (b)(2)(v).
This distinction between services furnished in an emergency department from inpatient services after admission was used in our development of the cost sharing limits we are finalizing in § 422.113(b)(2)(v) for emergency services. As discussed previously in this section and in the February 2020 proposed rule, we used the projected median total allowed amount for emergency services (including visit and related procedure costs), based on the Medicare FFS data projections available at the time of the February 2020 proposed rule. These data were based on a sample of approximately 10,000 beneficiaries, excluding those that were admitted from the emergency room to the hospital as an inpatient within 3 days. In those cases where the beneficiary was admitted to the hospital, the emergency room or outpatient department services are paid for as part of the inpatient stay based on Medicare's “3-day payment window” for inpatient admissions. As a result, the projected median total allowed amount for emergency services used to calculate the proposed dollar limits did not need to be recalculated to remove any post-stabilization care costs related to services beneficiaries received once admitted to the hospital as an inpatient. Likewise, our proposed (and finalized) methodology to calculate inpatient hospital acute and psychiatric cost sharing limits did not require modification because post-stabilization care costs received as an inpatient are included in the projected Part B costs.
We are finalizing the proposed provisions regarding cost sharing for emergency services with modifications to apply a 4-year transition to reach the proposed cost sharing limits, remove post-stabilization care services language in § 422.113(b)(2)(v), and complete non-substantive formatting changes to ensure consistency in the regulation text in paragraphs (b)(2)(v)
As referenced in section II.B.5.a. of this FC, CMS may calculate copayment limits for any category of in-network professional services for 2023 and future years and our intention is to calculate copayment limits using the methodology in this FC for as many service categories as possible, including those service categories that are subject to § 422.100(j)(1). We believe calculating and issuing limits on cost sharing for covered services and ensuring MA organizations comply with these limits are important ways to ensure that the cost sharing aspect of a plan design does not discriminate against or discourage enrollment in an MA plan by beneficiaries who have high health care needs. CMS issued annual limits on cost sharing for covered services and guidance addressing discriminatory cost sharing, as applied to specific benefits and to categories of benefits, in the annual Call Letter (issue dates prior to 2020
We are finalizing § 422.100(j)(1) and (j)(1)(i) with the substance of proposed paragraph (j)(1) that in-network cost sharing established by an MA plan may not exceed the cost sharing required under original Medicare for the specific basic benefits and categories of basic benefits identified in paragraphs (j)(1)(i)(A) through (F). The revisions in this FC clarify that this requirement applies to coinsurance and copayments used by MA plans, that copayment limits are subject to the rounding rules finalizing in § 422.100(f)(6)(ii), and that when CMS calculates a copayment limit under paragraph (j)(1)(ii), copayments used by MA plans must not exceed those copayment limits. Copayments used by MA plans for the benefits listed in paragraph (j)(1) would generally be calculated at values that are actuarially equivalent to the cost sharing used in original Medicare, subject to limits on the increase in copayment levels when CMS calculates the copayment limit during a 4-year transition period. The transition period for the copayments for the service categories specified in paragraph (j)(1)(i) is the same as the transition period finalized for in-network basic benefits that are professional services specified in § 422.100(f)(6)(iii) and is codified at § 422.100(f)(8) (as discussed in more detail in section II.B.5.b. of this FC and subsequently in this response). We reiterate that MA plans always have the option to use either coinsurance or copayments in establishing the cost sharing obligations for their enrollees. The maximum coinsurance percentage permitted as cost sharing for the service categories listed in paragraph (j)(1)(i) regardless of MOOP type (excluding skilled nursing care, home health, and DME service categories) is 20 percent, which is the coinsurance used in original Medicare for those benefits.
We are finalizing the rules for calculating the copayment limits applicable to these services in § 422.100(j)(1)(ii). Section 422.100(j)(1)(i) requires that any copayment for these benefits used by an MA plan must not exceed the actuarially equivalent value calculated using the rules in paragraph (j)(1)(ii). When CMS calculates the copayment limit, we will follow the methodology in paragraphs (f)(7) and (8), as discussed in section II.B.5.a. of this FC. In brief, this means that CMS will use Medicare FFS data projections (as defined in § 422.100(f)(4)(i)) for the applicable year and service category and, where
Following the finalized methodology set through this FC, CMS calculated copayment limits for most of the service categories listed in § 422.100(j)(1) for contract year 2023. CMS does not expect that calculating copayment limits for the same service categories subject to paragraph (j)(1) as we have traditionally done in past years, will increase the burden of complying with these standards for MA organizations. The PBP software includes validations to prevent an MA organization from entering cost sharing for a particular service category that is above the cost sharing limit calculated and issued by CMS. This process will be maintained for contract year 2023 using the final cost sharing limits in Table 28. In addition, CMS expects to maintain this PBP validation in future years. This approach will help manage the administrative burden in developing and reviewing plan bids because without a copayment limit calculated by CMS, each plan bid would need to be prepared and evaluated in relation to either the average Medicare FFS allowed amount for the plan service area or the estimated total MA plan financial liability for the benefit for that contract year. In the absence of specific copayment limits, MA organizations may need to prepare supporting documentation for the cost sharing established. A more detailed discussion about how MA organizations may approach preparing supporting documentation for service categories subject to paragraph (j)(1) is available in section II.B.5.a. of this FC.
Our intention in this rulemaking is to set and codify a body of cost sharing standards that by themselves, and in combination with one another, guard against discriminatory plan designs by limiting the amount of cost sharing and out-of-pocket costs that MA plans may impose on enrollees for basic benefits. Since contract year 2011, we have calculated cost sharing limits for this purpose, but codifying the methodology will provide additional transparency for stakeholders and stability for the MA program. This FC will result in changes from the cost sharing limits that apply for contract year 2022, primarily for copayment limits, for many service categories. As discussed in section II.B.5.b. and d. of this FC in relation to copayment limit changes for professional services and emergency services, we agree with commenters that substantive changes to copayment limits should be implemented over several years to reduce disruption in the market and for enrollees. Use of a transition period to smooth these changes also aligns with our approach in several places in the February 2020 proposed rule, such as the multiyear incorporation of ESRD costs into the methodology that CMS uses to calculate MOOP and inpatient hospital cost sharing limits. Further, we acknowledge the concerns from commenters regarding changes resulting from this FC impacting the TBC standard. We expect the changes we are finalizing here (including a transitional period to update copayment limits for service categories subject to § 422.100(j)(1)) combined with the TBC evaluation will ensure that enrollees who continue enrollment in the same plan from one year to the next are not exposed to significant cost increases (or benefit decreases) in one year while, at the same time, ensure that MA organizations do not face unreasonable challenges to satisfy the TBC evaluation.
Table 28 includes final contract year 2023 cost sharing limits for most of the service categories that we proposed to add to § 422.100(j). The copayment values in Table 28 also reflect the requirements in new § 422.100(f)(7) and (8). As discussed in section II.B.5.b. of this FC, the copayment limits set for some service categories in past years do not reflect values that are actuarially equivalent to the applicable coinsurance levels, including those service categories subject to paragraph (j)(1) where the comparison is to 20 percent coinsurance used in original Medicare. Rather, some of the contract year 2022 copayment limit amounts have been in place without change for a number of years and were originally set to strike a balance between limiting beneficiary out-of-pocket costs and the potential impact to plan design and costs. The overarching goal of these copayment limits was to ensure beneficiary access to affordable and sustainable benefit packages rather than to be precisely tied to cost sharing in original Medicare each year. Our proposed methodology to calculate copayment limits based on actuarially equivalent values to the coinsurance limit, in effect, would recalibrate copayment limits within 1 year by using the methodology finalized here (while coinsurance limits for the service categories subject to paragraph (j)(1) remain consistent with longstanding practice by being set at the cost sharing required under original Medicare). Following this methodology, some of the illustrative copayment limits for professional services provided in Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) in the February 2020 proposed rule reflected potentially substantial increases from the prior contract year. Table 5 from the February 2020 proposed rule illustrated that the copayment limits were projected to increase, despite decreasing the coinsurance limits based on the MOOP type for the professional service categories from past years, as a result of using the most recent Medicare FFS data available to calculate actuarially equivalent copayment values at the time
Using on contract year 2023 Medicare FFS data projections (based on Medicare FFS data from 2017-2021), the actuarially equivalent values to 20 percent coinsurance for certain service categories subject to § 422.100(j)(1) would produce significant increases to the copayment limits compared to those set for contract year 2022. For example, the contract year 2023 projected total median cost per session for the “Part B—chemotherapy/radiation drugs” service category equals $1,397.00 and the total weighted average cost per session equals $4,038.00 based on contract year 2023 Medicare FFS data projections. Using these projections, an actuarially equivalent copayment limit to the 20 percent coinsurance limit would be $280 (based on the total median cost per session) or $810 (based on the total weighted average cost per session), after applying the rounding rules in § 422.100(f)(6)(ii). In comparison, the contract year 2022 copayment limit was $75 for the “Part B—chemotherapy/radiation drugs” service category. As a result, calculating a copayment limit at an actuarially equivalent dollar amount to 20 percent of $1,397.00 or $4,038.00 in contract year 2023 would be a substantial increase (from $75 in contract year 2022 to $280 or $810 in contract year 2023 based on the projected median and average per session costs, respectively) and would not adequately protect enrollees from potentially disruptive changes compared to the prior contract year. However, not updating the copayment limits to reflect the most recent actuarially equivalent values would not be consistent with our proposal, would result in copayment limits that require MA plans to have copayments that are significantly less than the cost sharing in original Medicare when section 1852(a)(1)(B) of the Act imposes the cost sharing in original Medicare as the maximum permitted for an MA plan, and would not address the rapid scientific advancements in cancer treatments and the costs MA organizations are expected to incur in providing these services for MA enrollees. For example, the OACT is projecting the utilization of chimeric antigen receptor T cells (CAR-T) therapy and other expensive immunological treatments will increase and substantively impact aggregate costs for the “Part B drug—chemotherapy/radiation drugs” service category starting in 2022. A similar increase in expensive drugs is projected for the Medicare FFS data that CMS may use for the copayment limits for the “Part B drugs—Other” service category (as discussed in a subsequent response to comment in this section and shown in Table 25B). As discussed in the February 2020 proposed rule, enrollees generally find copayments more predictable and less confusing than coinsurance.
Based on the potentially disruptive changes from updating contract year 2022 copayment limits to actuarially equivalent values for service categories subject to § 422.100(j)(1) for contract year 2023, concerns from commenters regarding discriminatory benefit designs for service categories subject to paragraph (j)(1) (such as dialysis services as discussed in a subsequent response to comment in this section), and the variability of provider contracting arrangements among MA organizations, we considered alternatives to ensure that copayment limits would be appropriately updated to reflect the most recent Medicare FFS data projections while also limiting the amount of change that could be incorporated within one year to protect enrollees. The alternatives we considered are discussed in section V.H. of this FC. After consideration of those alternatives, we believe a multiyear transition to actuarially equivalent copayment limits based on the most recent Medicare FFS data projections for service categories subject to paragraph (j)(1) would be beneficial and responsive to comments. Specifically, applying a multiyear transition to actuarially equivalent copayments during a period of potential disruption should be helpful as it will facilitate incremental changes and provide advance notice for MA organizations to consider in planning their bid designs.
As discussed in section II.B.5.b. of this FC, we are finalizing at § 422.100(f)(8) a provision that will cap the amount of change in copayment limits from year to year. That constraint permits a gradual transition from the copayment limits that are in place for contract year 2022 to copayment limits that are calculated using the actuarially equivalent value to cost sharing under original Medicare. If CMS calculates copayment limits for the services listed in § 422.100(j)(1), we will apply new paragraph (f)(8) to those copayment limits for the transition period of 2023 through 2026. This is explicit in § 422.100(j)(1)(ii) as finalized here. This copayment transition is discussed in detail in section II.B.5.b. of this FC as it is being operationalized in the same manner for service categories subject to paragraph (f)(6)(iii). The only substantive difference between service categories subject to paragraph (f)(6)(iii) and (j)(1) is the applicable coinsurance limit(s) used to calculate actuarially equivalent values. Under paragraph (j)(1), most of the service categories (excluding skilled nursing care, home health, and DME) are subject to a 20 percent coinsurance limit regardless of the MOOP type which is the cost sharing beneficiaries must pay under original Medicare; our current guidance on cost sharing limits for those services
For purposes of calculating the actuarially equivalent copayment differential defined in § 422.100(f)(8)(i), the actuarially equivalent copayment values for service categories subject to § 422.100(j)(1) are based on 20 percent coinsurance, except for: Skilled nursing care (as finalized in paragraph (j)(1)(i)(C)), home health services (for MA plans with an intermediate or mandatory MOOP, as finalized in paragraph (j)(1)(i)(D)), and each of the DME service categories (for MA plans with a lower or intermediate MOOP, as finalized in paragraph (j)(1)(i)(E)). We clarify this point because paragraph (f)(8)(i) requires use of the coinsurance limits that would apply in 2026, which is necessary for service categories subject to paragraph (f)(6)(iii), where the coinsurance percentages are changing over time. For purposes of paragraph (j)(1), the applicable coinsurance percentage is the same for contract years 2023 through 2026 and thereafter, unless the cost sharing requirements in original Medicare change. We are including a reference to paragraph (f)(8) in paragraph (j)(1) to apply the multi-year transition for copayment limits to the copayment limits calculated for these services.
CMS may calculate copayment limits for service categories subject to § 422.100(f)(6) and (j)(1) in contract year 2023 and subsequent years if we believe calculating such a copayment limit is feasible and appropriate to carry out program purposes, such as to protect beneficiaries against discriminatory cost sharing or to have further oversight of MA plans to ensure compliance with the regulatory standards. While certain factors complicated providing illustrative copayment amounts for all of the service categories listed in paragraph (j)(1) at the time of the February 2020 proposed rule, we are providing final contract year 2023 copayment limits in Table 28 for most of these service categories. The calculations to reach the contract year 2023 copayment limits for service categories subject to paragraph (j)(1) in Table 28 use contract year 2023 Medicare FFS data projections (based on 2017—2021 Medicare FFS data) and comply with the requirements in new paragraphs (f)(7) and (8). This includes projecting cost sharing which may be incurred by beneficiaries in 2023 using generally accepted actuarial principles and practices (as finalized in paragraph (f)(7)(i)).
As described in § 422.100(f)(7)(ii)(C), when there may be multiple or a range of actuarially equivalent copayment values for a service category, CMS will select a particular approach to calculate an actuarially equivalent copayment value to avoid disruptive changes for beneficiaries and plan designs. For example, CMS may choose to use the median rather than the average Medicare FFS allowed amount to calculate an actuarially equivalent copayment value for a service category subject to § 422.100(j)(1) if that measure of central tendency results in the least amount of change to the copayment limit from the prior contract year. This approach is consistent with our prior approach to set copayment limits. We may also consider choosing the median or average Medicare FFS allowed amount based on which value is most consistent with trends and patterns in MA utilization and costs (if available). For example, in the February 2020 proposed rule, we explained that CMS proposed to add new cost sharing limits for an inpatient hospital acute 3-day length of stay scenario because it represented the median length of stay based on separate analyses of Medicare FFS and MA encounter data (for the same time period). A similar comparison may be completed if MA encounter data is also available related to a service category subject to paragraph (j)(1). While helpful for comparison purposes and to inform which measure of central tendency CMS should use, MA encounter cost data will not be used to calculate the copayment limits. This approach further protects beneficiaries and plan designs from potentially disruptive changes to cost sharing. New paragraph (f)(7) is discussed in greater detail in section II.B.5.a. of this FC.
Tables 25A and 25B show the calculations to reach the transitional contract year 2023 copayment limits for service categories subject to paragraphs § 422.100(j)(1) and (f)(8). As shown in row D in Tables 25A and 25B, for most of the service categories subject to paragraph (j)(1), we calculated an actuarially equivalent value to the original Medicare coinsurance requirement using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). The total projected Medicare FFS cost for each service category in Tables 25A and 25B is based solely on Medicare FFS data (MA encounter data for the same time period was unavailable at the time of writing this FC). In addition, the total projected Medicare FFS cost reflects the lesser value of the median and weighted average amount (in selecting among these actuarial approaches, we selected the lesser value) for each of the service categories in Tables 25A and 25B. This approach results in the least amount of change from the copayment limits set for contract year 2022 and is consistent with avoiding unnecessary fluctuations in cost sharing as finalized in paragraph (f)(7)(ii)(C). As a result, we calculate the actuarially equivalent values based on a 20 percent coinsurance limit regardless of the type of MOOP limit for most of the service categories subject to paragraph (j)(1) (as illustrated in Tables 25A and 25B). This excludes all of the DME service categories for the lower and intermediate MOOP types, for which actuarially equivalent copayment values are based on a 50 percent coinsurance limit as discussed in section II.B.5.a. of this FC. In addition, for the following two service categories subject to paragraph (j)(1) the original Medicare cost sharing limit is unique: $0 for the first twenty days and one-eighth of the projected Part A deductible per day for days 21-100 of skilled
• Skilled nursing care: Codifies specific cost sharing limits for days 1-20 in § 422.100(j)(1)(i)(C) based on the type of MOOP limit established and a specific methodology to calculate cost sharing limits for days 21-100, regardless of the MOOP amount established calculated, in paragraph (j)(1)(i)(C)
• Home health: Applies the original Medicare cost sharing of $0 for MA plans that establish a mandatory or intermediate MOOP type and uses an actuarially equivalent value to 20 percent coinsurance to calculate the cost sharing limit for MA plans that establish a lower MOOP limit, in paragraph (j)(1)(i)(D).
Barring these exceptions and as shown in Tables 25A and 25B, a value that is actuarially equivalent to 20 percent coinsurance for a particular service category subject to § 422.100(j)(1) was compared to the contract year 2022 copayment limit for the same service category. The difference between those two values equals the actuarially equivalent copayment differential (which is a unique figure for each service category and contract year). Then, we took 25 percent of the actuarially equivalent copayment differential and added it to the contract year 2022 copayment amount and applied the rounding rules in § 422.100(f)(6)(ii) to reach the transitional copayment for that service category based on the first year of the actuarially equivalent copayment transition. The values in row I in Tables 25A and 25B are the result of this application of the formula in paragraph (f)(8)(ii). As discussed in section II.B.5.b. of this FC, paragraph (f)(8) requires CMS to set the copayment limit for a given year at the value that is the lesser of amounts resulting from: (1) An actuarially equivalent value to the applicable cost sharing standard (in paragraphs (f)(6)(iii) and (j)(1)); and (2) an amount resulting from the actuarially equivalent copayment transition formula in paragraph (f)(8)(ii). To illustrate this comparison, row J in Tables 25A and 25B compares all of the transitional values from row I (resulting from paragraph (f)(8)(ii)) to the actuarially equivalent value to the applicable cost sharing standard in row E (20 percent coinsurance for most service categories subject to paragraph (j)(1)). As shown in row J of Tables 25A and 25B, all of the transitional values are less than (or equal to) the actuarially equivalent amount to cost sharing under original Medicare. As a result, the “lesser of” values in row J of Tables 25A and 25B are used in Table 28 as the final contract year 2023 copayment limits for those service categories and applicable MOOP types. By following the “lesser of” requirement in paragraph (f)(8) and choosing the measure of central tendency which produces the least amount of change from the prior contract year (as allowed in paragraph (f)(7)) when calculating actuarially equivalent values, we aim to avoid potentially disruptive copayment changes for enrollees and plan designs.
Tables 25A and 28 contain final contract year 2023 copayment limits for only two of the DME service categories (specifically, the DME “diabetic shoes or inserts” and “diabetes monitoring supplies” service categories). CMS is
We do not expect that calculating copayment limits at values that are less than a value that is actuarially equivalent to original Medicare (based on the most recent Medicare FFS data projections) during the applicable transition year(s) will directly result in MA organizations incorporating higher MOOP amounts, increasing premiums, or reducing supplemental benefits in their plan designs. This is because MA organizations can continue to use coinsurance that does not exceed cost sharing under original Medicare. Further, applying this methodology we are finalizing—to use actuarially equivalent values subject to a cap that acts to transition changes from the copayment limits set for contract year 2022 copayment limits to actuarially equivalent values—is projected to increase copayment limits from the contract year 2022 levels for service categories subject to § 422.100(j)(1). In addition, if the actuarially equivalent copayment amount did not reflect a substantive change in comparison to the cost sharing limit set in contract year 2022, the contract year 2023 copayment limit may reflect the full amount. As shown in Tables 25A and 28, this is the case for the DME “diabetic shoes and inserts” and “diabetes monitoring supplies” service categories for the mandatory MOOP limit. The $10 copayment limit from contract year 2022 for both of these service categories remains unchanged for contract year 2023 because $10 reflects an actuarially equivalent value to 20 percent coinsurance after application of the rounding rules in § 422.100(f)(6)(ii), using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data).
MA organizations may have benefit designs that include different copayment levels within the same service category (referred to as minimum and maximum copayment in the plan benefit package software). This capability helps address service categories that may include a wide range of items or services with lower and higher costs, such as Part B drugs. For example, a plan can have a lower copayment amount for lower cost services and a higher copayment amount for other higher cost services within the same service category, as long as the cost sharing satisfies CMS standards.
Table 26 provides an illustrative example of how the copayment limits may change in future years for a particular service category subject to § 422.100(j)(1) as more of the actuarially equivalent copayment differential is incorporated and the “lesser of” value is used to set copayment limits during the transitional period. Specifically, Table 26 provides the final contract year 2023 cost sharing limits and illustrative copayment limits across the multiyear transition schedule to actuarially equivalent values for the “Part B Drugs—chemotherapy/radiation drugs” service category using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). We reiterate that the copayment limits for contract years 2024 through 2026 in Table 26 remain illustrative in nature and may change based on updated and more recent Medicare FFS data projections in future years. Projections for contract years after 2023 were not available at the time of writing this FC and the copayment limits for those years in Table 26 illustrate the transition over the 4 years.
Table 26 illustrates how implementing a multiyear transition to actuarially equivalent copayment values with the “lesser of” requirement avoids the sudden significant and potentially disruptive increases that would occur without such a transition. Specifically, for the “Part B Drugs—Chemotherapy/Radiation” service category, which had a $75 copayment limit in contract year 2022, it transitions the $205 difference from the 2022 amount and the actuarially equivalent value of $280 by approximately $50 increments annually until the actuarially equivalent value is reached in contract year 2026. We acknowledge in order to reach an actuarially equivalent copayment limit during what we consider a reasonable transition timeframe of 4 years, the year over year change in the copayment limit for some service categories subject to paragraph (j)(1) is more than what CMS likely would have adopted in prior years. Applying this multiyear transition to benefits that must not exceed cost sharing under original Medicare will strike a balance in making the changes necessary to reach actuarially equivalent copayments while protecting beneficiaries. In addition, we believe that it is important to begin transitioning copayment limits to be actuarially equivalent to the cost sharing in original Medicare to encourage MA plans to consider copayments instead of coinsurance. As noted in the February 2020 proposed rule, although MA plans have the flexibility to establish cost sharing amounts as copayments or coinsurance, enrollees generally find copayment amounts more predictable and less confusing than coinsurance.
As also discussed in section II.B.5.b. of this FC, CMS is finalizing new § 422.100(f)(8) to transition current (contract year 2022) copayment limits to actuarially equivalent values by contract year 2026. The completion of the transition to actuarially equivalent copayment values as provided in new paragraph (f)(8) means that CMS will annually update the copayment limits (including those subject to § 422.100(j)(1)) to new actuarially equivalent values based on the most recent Medicare FFS data projections available (subject to the rounding rules in paragraph (f)(6)(ii)) beginning for contract year 2026 and subsequent years. We believe annually updating copayment limits ensures that all cost sharing limits are consistent with cost sharing in original Medicare, will provide a measure of predictability and stability for MA organizations, and ensures copayment limits do not become outdated in future years.
A commenter noted a mandate of zero cost sharing for dialysis across all types of MOOP limits would ensure that all plans are on an even footing in their plan offerings, and beneficiaries would have access to the optimal benefit structure most likely to duplicate the positive results achieved by chronic condition SNPs (C-SNPs) and ESRD Seamless Care Organization (ESCOs). The commenter stated that while this approach is beneficiary-friendly, it does have a drawback in that MA plans which enroll a disproportionate share of ESRD patients could suffer relative to competitors. However, the commenter noted a zero-cost sharing mandate also would permit plans to encourage patient adherence to dialysis without fear of attracting too many ESRD patients. The commenter explained such a mandate would be consistent with the agency's interest in promoting value-based insurance design (VBID) principles.
Another commenter cited several provisions (the anti-discrimination provisions in section 1852(b)(1) of the Act and section 3202 of the Affordable Care Act (ACA), which added the statutory requirement that MA plans have cost sharing for renal dialysis (and other services) that does not exceed cost sharing in original Medicare, and § 422.100(f)(2)), and CMS's review of bids as the basis for requesting that CMS ensure MA plans' cost sharing designs do not discriminate against individuals with ESRD. A commenter stated that charging maximum cost-sharing that is permissible under the law for a particular service used by a particular population could be viewed as discriminatory on its face. This commenter explained that the intent of cost sharing is to prevent the over-utilization of health care services, but that dialysis is a regular, medically necessary service for a population with a particular diagnosis and not a service that is over-utilized by those diagnosed with ESRD. Therefore, the commenter believed that dialysis was not a service that would benefit from cost sharing limits that were designed to control
The percentage of MA and MA-PD plans (excluding employer, D-SNP, and Medicare MSA plans) with zero cost sharing for dialysis services has remained relatively consistent between contract year 2012 (approximately 2.6 percent) and contract year 2021 (approximately 2.9 percent) based on March 2021 data. The vast majority of MA plans have designed their dialysis benefit with cost sharing greater than zero and use coinsurance rather than a copayment. The percentage of these MA plans with non-zero cost sharing that established the same coinsurance as original Medicare for dialysis services was approximately 94.7 percent in contract year 2012 and is approximately 99.9 percent for contract year 2021 (as a percentage of enrollment, 91.4 percent in contract year 2012 and 99.9 percent in contract year 2021). There are MA plans where coinsurance for dialysis services is equal to original Medicare and program enrollment of beneficiaries with diagnoses of ESRD has not decreased and, therefore, does not suggest that this aspect of MA plan designs is discouraging enrollment of enrollees with diagnoses of ESRD.
The contract year 2022 copayment limit of $30 for dialysis services has been in place for a number of years and does not reflect a current actuarially equivalent value equal to 20 percent coinsurance based on contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). Under the current regulation at § 422.100(f)(6), the contract year 2022 copayment limit for dialysis services was originally set to strike a balance between limiting beneficiary out-of-pocket costs the and potential impact to plan design and costs, with the goal of ensuring beneficiary access to affordable and sustainable benefit packages. Since most MA plans use 20 percent coinsurance for the cost sharing for dialysis services, calculating a copayment limit that is lower than the coinsurance level does not actually result in lower out of pocket cost sharing payments by enrollees. Setting copayment limits using actuarially equivalent values to cost sharing under original Medicare (20 percent coinsurance for most services categories subject to § 422.100(j)(1)) would, in effect, recalibrate copayment limits compared to current levels. We believe that this recalibration and better alignment of the copayment and coinsurance limits for dialysis services, like for the other services listed in § 422.100(j)(1), is important to incentivize MA organizations in how they structure cost sharing for enrollees and to have a more transparent methodology and process for MA cost sharing limits.
While an illustrative actuarially equivalent copayment limit for dialysis services was not available to share at the time of the February 2020 proposed rule, using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data), calculating a copayment limit at an actuarially equivalent value equal to 20 percent coinsurance (after applying the rounding rules in § 422.100(f)(6)(ii)) would equal $65, a substantive increase from the $30 copayment limit used for contract year 2022. Less than 1 percent of 2021 plans that require cost sharing for dialysis (based on March 2021 data, excluding employer, D-SNP, and MSA plans) charge a copayment for these services in their benefit design. As previously discussed, we expect that transitioning copayment limits to be actuarially equivalent to the cost sharing in original Medicare will encourage MA plans to consider the use of copayments instead of coinsurance. However, given the potential disruption that could result from substantive increases in one year for those plans with copayments and to be responsive to commenters, CMS is adopting a multiyear transition to actuarially equivalent copayment
CMS contracts with MA organizations for one year at a time, and MA organizations may change their benefit designs and cost sharing structures annually within statutory and regulatory requirements. We remind commenters that existing statutory (Section 1852(a)(1)(B)(iv) of the Act) and regulatory requirements (§ 422.100(j)) require that renal dialysis services not exceed cost sharing under original Medicare (that is, 20 percent coinsurance). CMS will continue to monitor MA plan benefit designs to observe whether there is information indicating potential discrimination or efforts by MA plans to discourage enrollment by beneficiaries with diagnoses of ESRD. We are finalizing our proposal to keep this existing requirement and updating the re-designation to § 422.100(j)(1)(i)(B) from proposed paragraph (j)(1)(ii).
We also take this opportunity to provide guidance as to how we intend to implement the SNF cost sharing limits in the current PBP data entry options. Consistent with current practice, MA organizations may indicate in the PBP that the plan establishes a coinsurance for the SNF service category instead of using the specific per day copayment amounts that are permitted. The process of developing supporting documentation that shows how the coinsurance meets the cost sharing standard under § 422.100(j)(1) is consistent with prior years and is referenced in our general discussion related to supporting documentation in section II.B.5.a. of this FC. In addition, MA organizations may submit their plan bids based on the CMS SNF copayment limits (in the regulation for the first 20 days and published prior to MA bid submission for days 21 through 100) or choose to indicate in the PBP SNF service category that the plan will use the actual Medicare FFS cost sharing amount for both SNF benefit periods, that is the first 20 days and days 21 through 100. CMS typically publishes the original Medicare cost sharing parameters (for example, Part A and B deductibles) a few months prior to the upcoming year, but this generally happens well after the MA bid deadline. As explained in the preamble of the February 2020 proposed rule, we calculate the cost sharing limit for days 21-100 in a SNF by taking one-eighth of the projected Part A deductible for the contract year. To ensure clarity in the regulation on these points, we are finalizing a change to § 422.100(j)(1)(i)(C)
In approaching how to set cost sharing limits for DME, CMS is mindful that the category includes items and services that vary significantly in cost and that MA plans are not uniform in whether and to what extent the MA organization uses specific contracting arrangements permitted by § 422.100(l). We did not intend to require MA plans to establish cost sharing at the individual item or service level for DME and it would not follow current industry practice, nor how benefits are submitted through the PBP, to do so. As indicated in Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) in the February 2020 proposed rule, the proposed service categories with higher cost sharing flexibility for MA plans that establish lower or intermediate MOOP limits for DME are: Equipment, prosthetics, medical supplies, diabetes monitoring supplies, and diabetic shoes or inserts. However, this flexibility is limited by how, for all MA plans and regardless of MOOP type, the total cost sharing for all DME service categories combined must not exceed original Medicare on a per member per month actuarially equivalent basis. Under this FC, MA plans that establish a lower or intermediate MOOP limit may have cost sharing equal to or less than 50 percent coinsurance (or an actuarially equivalent copayment) for specific service categories of DME while MA plans that use a mandatory MOOP limit must have cost sharing that does not exceed cost sharing in original Medicare for DME in those categories. We finalize this flexibility in proposed § 422.100(j)(1)(v) as paragraph (j)(1)(i)(E) with a modification to reference the specific service categories of DME (equipment, prosthetics, medical supplies, diabetes monitoring supplies, diabetic shoes or inserts). This flexibility is consistent with previous CMS policy and subject to the requirement in § 422.100(f)(6)(i) that an MA plan must pay at least 50 percent of the estimated total MA plan financial liability for that contract year where another, more specific rule on cost sharing limits does not apply. We provide a more complete discussion of this requirement in section II.B.5.a. of this FC. In brief, this rule that cost sharing cannot exceed 50 percent of the MA plan's estimated total financial liability for that contract year applies to DME at the service category level and in addition to the specific cost sharing rules that apply to items and services under paragraph (j) or rules other than paragraph (f)(6).
To provide additional transparency and better guidance on the level of cost sharing allowed for DME service categories for MA plans that establish a lower or intermediate MOOP amount, as discussed in section II.B.5.a. of this FC, the “N/A” descriptions that were used in Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from the February 2020 proposed rule are updated to 50 percent in Table 28 (which generally updates the information from Table 5 in the February 2020 proposed rule). We believe this change better reflects how the requirement at § 422.100(f)(6)(i), that the MA plan pay at least 50 percent of estimated total MA plan financial liability for that contract year, applies to the cost sharing for service categories of DME for MA plans with the lower or intermediate MOOP amounts while the requirement of 20 percent coinsurance applies only to MA plans with a mandatory MOOP amount. As indicated in the footnotes of Table 28, all MA plans must have total cost sharing for the overall DME benefit that is not greater than the per member per month actuarially equivalent cost sharing for the DME benefit in original Medicare. The clarifications discussed previously are incorporated into the final language in § 422.100(j)(1)(i)(E).
If CMS does not calculate an actuarially equivalent copayment limit for any of the DME service categories, MA organizations may still establish an actuarially equivalent copayment to the applicable coinsurance limit instead of using coinsurance. This is consistent with footnote 5 from Table 5 (Illustrative Contract Year 2021 In-Network Service Category Cost Sharing Limits) in the February 2020 proposed rule, which noted that MA plans may establish a copayment that is actuarially equivalent to, or less than, the applicable coinsurance limit for service categories for which CMS does not calculate a copayment limit (85 FR 9087). The information in this footnote is updated to reflect our final policy in footnote 7 from Table 28. Specifically, for DME service categories without a copayment limit calculated by CMS, MA organizations may establish a copayment based on the average Medicare FFS allowable amount for the plan service area or their estimated total MA plan financial liability for the benefit (subject to the rounding rules in § 422.100(f)(6)(ii)) as finalized in paragraph (f)(6)(i) (for the lower and intermediate MOOP limits) and § 422.100(j)(1)(i) (for the mandatory MOOP limit). For example, CMS did not set a final contract year 2023 copayment limit for the DME “equipment” service category and MA plans may calculate an actuarially equivalent copayment for that service category using the rules in paragraph (j)(1)(ii) for that contract year. Further information on how MA organizations may calculate actuarially equivalent copayments and develop supporting documentation in the absence of a copayment limit calculated by CMS is available in section II.B.5.a. of this FC. CMS will continue to gather and review the data described in finalized § 422.100(f)(7)(ii) for use in calculating copayment limits related to the remaining DME service categories for future years and we may calculate copayment limits for these categories in the future.
CMS also proposed to codify our longstanding policy of limiting cost sharing for home health services for MA plans that establish a mandatory or intermediate MOOP amount to that charged under original Medicare and 20 percent coinsurance for plans with a lower MOOP amount. As discussed in the February 2020 proposed rule, maintaining the maximum cost sharing flexibility for lower MOOP limits acts as an important incentive for plans to offer a lower MOOP amount, which is another important financial protection for beneficiaries. We generally rely on our authority at 1852(a)(1)(B)(iv)(IV) of the Act to apply original Medicare cost sharing limits to other Part A or B benefits that the Secretary determines appropriate; for benefits where cost sharing in original Medicare is zero, we also rely on our authority in section 1856(b)(1) of the Act to calculate MA standards by regulation, and in section 1857(e)(1) of the Act to impose additional terms and conditions found necessary and appropriate to require that cost sharing for these services under MA plans conform to that under original Medicare, meaning that no cost sharing could be imposed for these services. Despite the limitation in section 1852(a)(1)(B)(v) of the Act on our authority to identify additional benefits for which MA cost sharing must not exceed the cost sharing in original Medicare, we believe that it is necessary and appropriate to limit cost sharing for these services to avoid discouraging enrollment by beneficiaries who need those services and to incentivize MA plans to use the lower MOOP limits. This FC generally limits cost sharing to zero for those services where original Medicare does not impose costs only when an MA plan establishes a mandatory or intermediate MOOP amount. Therefore, an MA plan is not prohibited from using cost sharing for these services and may elect to use cost sharing for them by establishing a lower MOOP amount. In addition, codifying specific benefit standards that we believe are appropriate for MA plan designs provides transparency as to how CMS would use its authority under section 1854(a)(5)(C)(i) and (a)(6)(B) of the Act to evaluate and negotiate bids for MA contracts. Overall, this approach to regulating cost sharing is consistent with the statute as it protects beneficiaries while also preserving a measure of flexibility for MA plans. Finally, we believe that maintaining this longstanding standard does not limit market competition and we expect beneficiary choice will continue to act as an incentive for MA organizations to offer favorable benefit designs.
With regard to comments about MA plans being able to include cost sharing for home health when original Medicare does not permit cost sharing, we note that commenters on the Final Rule titled “Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs for Contract Year 2012 and Other Changes” published April 15, 2011 (referred to as the April 2011 Final Rule), including MedPAC, opposed CMS's prior proposal to limit cost sharing for home health services, under MA and cost plans at original Medicare levels. For example, in the April 2011 Final Rule, MedPAC commented that home health cost sharing should be one of the tools that MA plans can use at their discretion as a means of ensuring appropriate utilization. In addition, MedPAC's March 2020 “Report to Congress: Medicare Payment Policy,” Chapter 9 Home Health Care Services (page 258), states the following: “Medicare does not provide any incentives for beneficiaries or providers to consider alternatives to home health care, such as outpatient services. Beneficiaries who meet program coverage requirements can receive an unlimited number of home health episodes and face no cost sharing.” We agree that finalizing the flexibility for MA plans in connection with cost sharing for these benefits where original Medicare does not have cost sharing is appropriate for these reasons as well as others discussed throughout this FC for our cost sharing policies. MA plans that establish a lower MOOP amount may use cost sharing up to certain levels for specific services (as identified in § 422.100(j)(1)(i)) as a means of incentivizing use of alternative services or ensuring an overall balance of enrollee payments and plan financial liability for the entire package of basic benefits is competitive and attractive to beneficiaries.
CMS is finalizing the proposal concerning cost sharing for home health benefits—which was generally consistent with current policy—to require MA plans with a mandatory or intermediate MOOP amount to have cost sharing that does not exceed original Medicare for home health, but to permit MA plans with a lower MOOP amount to charge cost sharing up to 20 percent coinsurance with a modification to avoid duplicative language in the regulation. As discussed in a previous response to comment in this section, § 422.100(j)(1)(ii) requires that MA organizations use the average Medicare FFS allowable cost in the plan service area or the estimated total MA plan financial liability for the benefit for that contract year to calculate an actuarially equivalent copayment value to cost sharing under original Medicare, in the absence of a copayment limit calculated by CMS, for benefits subject to paragraph (j)(1). We are finalizing the rule for cost sharing for home health services largely as provided in proposed paragraph (j)(1)(iv) (re-designated to paragraph (j)(1)(i)(D)), with edits to be consistent with paragraph (j)(1)(ii) and to avoid limiting MA organizations to using only the estimated total MA plan financial liability for that contract year to calculate a copayment that is actuarially equivalent to, or less than, 20 percent coinsurance. We note MA organizations may use the total MA plan financial liability to establish a copayment for home health services, as proposed, under the modifications finalized to paragraph (j)(1) if CMS does not set a copayment limit. CMS will continue to review plans' cost sharing amounts to make sure that plan designs are consistent with MA rules, do not impose significant increases in cost sharing or decreases in benefits from the prior contract year, and are not discriminatory.
After consideration of several alternatives as discussed in section V.H.2. of this FC, instead of finalizing this aspect of our proposal, CMS is maintaining and codifying our longstanding 20 percent coinsurance limit for the “Part B Drugs—Other” service category, by adding new § 422.100(j)(1)(i)(F), which adds other drugs covered under Part B of original Medicare (that is, Part B drugs not included in paragraph (j)(1)(i)(A)) to the list of benefits for which cost sharing must not exceed cost sharing under original Medicare. The use of Part B drugs to treat serious illnesses and the potential for those drugs to be costly likely presents significant potential for discrimination against (or potential for discouraging enrollment by) beneficiaries who have health conditions treated by Part B drugs other than chemotherapy/radiation. We believe that maintaining our long-standing policy of having 20 percent coinsurance and copayment limits for all Part B drugs, in addition to a per member per month actuarially equivalent requirement for the Part B drug service category, protects beneficiaries with high health care needs from benefit designs that discriminate against or discourage enrollment in an MA plan, steer subsets of Medicare beneficiaries to particular MA plans, or inhibits access to services. The language in paragraph (j)(1)(i)(F) is clear that this requirement is separate from the service category specific to Part B chemotherapy drugs and radiation therapy. In comparison, these service categories were combined in our proposal to include “drugs and biologics covered under Part B of original Medicare (including both chemotherapy/radiation drugs integral to the treatment regimen and other drugs covered under Part B)” in paragraph (j)(2). Having coinsurance and copayment limits in addition to a PMPM actuarially equivalent requirement is consistent with our long standing practice and policy for cost sharing for Part B drugs. As a practical matter, in proposing both: (1) Applying a range of cost sharing limits to the “Part B drugs—Other” service category; and (2) requiring cost sharing to be actuarially equivalent to Medicare FFS on a PMPM basis for Part B drugs (which is inclusive of the “Part B drugs—Other” service category), the flexibility that seems available by proposing a range of cost sharing limits up to 50 percent coinsurance or actuarially equivalent copayment for this service category is very limited.
Currently, § 422.100(j)(1) requires MA plans to use cost sharing that does not exceed cost sharing in original Medicare for “chemotherapy administration services to include chemotherapy drugs and radiation therapy integral to the treatment regimen;” we proposed to revise the text to describe these benefits as “chemotherapy administration services to include chemotherapy/radiation drugs integral to the treatment regimen” and to redesignate it as paragraph (j)(1)(i). We are finalizing continued application of this cost sharing limit, but redesignating it as paragraph (j)(1)(i)(A) and refining the text to clarify this limit applies to chemotherapy administration services to include chemotherapy/radiation drugs and radiation therapy integral to the treatment regimen. We are fundamentally maintaining the current regulatory description and aligning the language with the current structure of the PBP (which captures cost sharing information for therapeutic radiological services and chemotherapy/radiation drugs in separate sections). We are not making any changes to our longstanding bid review practices or policies related to this service category by making this change to the name of the benefit in paragraph (j)(1)(i)(A).
As discussed in section II.B.5.b. of this FC, copayment limits set for certain service categories in past years do not reflect current actuarially equivalent values based on 20 percent coinsurance. Rather, our proposed methodology to calculate copayment limits based on values that are actuarially equivalent to the coinsurance limit, will result in recalibration of the copayment limits by applying a methodology adjusted from longstanding policy to the most recent Medicare FFS data projections available. Commenters expressed concerns about potentially significant increases to cost sharing limits within one year, such as for the “physical therapy and speech-language pathology” and “dialysis services” service categories in addition to the “Part B drugs—Other” service category. As discussed in other responses to comment in section II.B. of this FC, CMS agrees with the commenters that the proposed policies can be improved by providing for a transition process to recalibrate copayment limits over time. This
Row J in Tables 25A and 25B illustrates the comparison CMS will complete after calculating both the actuarially equivalent value to cost sharing under original Medicare and the transitional copayment limit for each service category subject to paragraph (j)(1) during the multiyear transition to actuarially equivalent copayment limits. For example, as shown in row J in Table 25B, the transitional copayment value for contract year 2023 is less than the actuarially equivalent value compared to cost sharing under original Medicare for the “Part B drugs—Other” service category. As a result of the “lesser of” requirement in paragraph (f)(8), this transitional copayment value from row J in Table 25B is included in Table 28 as the final contract year 2023 copayment limit for this service category. In addition, no transition is being applied to the coinsurance limit for the “Part B drugs—Other” service category because the 20 percent limit has been in place under our current policy since 2012.
We acknowledge that under our final policy, the copayment limit for the “Part B drugs—Other” service category is still increasing from $50 in contract year 2022 to $120 for contract year 2023 after incorporating 25 percent of the actuarially equivalent copayment differential in § 422.100(f)(8)(ii)(A) and application of the rounding rules in § 422.100(f)(6)(ii). However, updating the copayment limits to reflect the most recent actuarially equivalent values will address the costs MA organizations are expected to incur in providing these services for MA enrollees and make appropriate adjustments for medical inflation since the current copayment limits were last updated. Currently, the vast majority of MA plans have designed their “Part B drugs—other” benefit with cost sharing greater than zero and use coinsurance rather than a copayment. For contract year 2021 (based on March 2021 plan data) approximately 2 percent of MA and MA-PD plans (excluding employer,D-SNPs, and MSA plans) established a copayment for the “Part B drugs—other” service category ($50 or greater than zero), suggesting that the upper copayment limits for contract year 2022 may not fully reflect the costs MA organizations are experiencing to cover this benefit for enrollees. This trend of a small percentage of plans offering a copayment has remained relatively consistent since 2012. In 2012, approximately 5 percent of MA and MA-PD plans (excluding employer, D-SNPs, and MSA plans) established a copayment of $50 or greater than zero for the “Part B drugs—other” service category. Considering the percent of plans and enrollees where coinsurance is equal to original Medicare for the “Part B drugs—other” service category (approximately 97 percent and 93 percent in contract year 2021, respectively), we believe it is persuasive that having a copayment set at an amount that is less than an actuarially equivalent value to the coinsurance limit does not necessarily result in lower cost sharing, but might encourage plans to use coinsurance instead. The copayment limits for the “Part B Drugs—Other” category set for contract year 2022 have been in place since at least 2012. We expect that this transition to actuarially equivalent values will ultimately result in stable benefit packages by ensuring cost sharing limits are calculated following established actuarial methods, using the most recent Medicare FFS data projections available, and by keeping copayment limits aligned with coinsurance limits. CMS will track cost sharing changes for the “Part B drugs—Other” service category and pursue future rulemaking, if appropriate. For example, we will continue to review the projected weighted average and median Medicare FFS allowed amounts from the OACT annually, consult with the OACT on whether any applicable cost trends are expected to be consistent for future contract years, and consider how market competition or payment policies may affect or necessitate changes to the methodology CMS used to calculate cost sharing limits finalized here.
As finalized, § 422.100(j)(2)(i)(A) includes a clarification in the definition and scope of inpatient hospital acute and psychiatric services to which the PMPM limit will apply. For this regulation, “inpatient hospital acute and psychiatric services” means services provided during a covered inpatient stay during the period for which cost sharing would apply under original Medicare. We are not finalizing the reference to an inpatient facility as we believe individuals could interpret the word facility in a stricter fashion than how this category is reviewed for the PMPM evaluation. As finalized, the regulation is consistent with how CMS has completed the PMPM evaluation in longstanding practice and with section 1852(a)(1)(B)(ii) of the Act (85 FR 9087).
As part of the annual release of subregulatory guidance under new § 422.100(f)(7)(iii), CMS intends to issue instructions describing how excess cost sharing is evaluated using bid pricing tool (BPT) information to satisfy the per member per month actuarially equivalent requirement for the benefit categories subject to § 422.100(j)(2) (including inpatient). We include instructions for contract year 2023 in this section of this FC and will issue instructions for future contract years through annual subregulatory guidance. The approach evaluating compliance with the per member per month limits uses information specific to each MA plan bid and will happen during CMS review of bids consistent with longstanding practice. We are codifying this evaluation to protect beneficiaries against discriminatory cost sharing. The per member per month actuarial equivalence factors for the Inpatient and SNF benefit categories had historically included costs from beneficiaries with diagnoses of ESRD. A correction was made beginning for contract year 2021 bids to exclude costs from beneficiaries with diagnoses of ESRD in order to be consistent with the treatment of ESRD in the BPT. ESRD costs are excluded since the bid development is for the non-ESRD population to correspond with payment policy. Although the limits on eligibility for MA plan enrollment by beneficiaries with ESRD diagnoses were removed beginning for contract year 2021, ESRD utilization and payment information is different, when compared to other enrollees, and CMS will continue to exclude these factors from the primary pricing sections of the MA BPT. Additionally, the Medicare FFS Actuarial Equivalent Cost Sharing Factors in the MA BPT are calculated excluding ESRD utilization and payment information because the pricing in the bid is for the non- ESRD population. Therefore, in response to the commenter's question on whether the calculations and methodology used to compare per member per month plan cost sharing to the adjusted original Medicare actuarially equivalent cost sharing was modified to account for the impact of beneficiaries with diagnoses of ESRD enrolling in the MA program beginning in contract year 2021 as a result of section 17006 of the 21st Century Cures Act, we note that the evaluations and analyses to determine compliance with § 422.100(j)(2) will not include beneficiaries with diagnoses of ESRD in the development of the adjustment factors that account for physician allowed costs and cost sharing for the Inpatient and SNF benefit categories subject to § 422.100(j)(2). This approach does not have a material impact on MA plans being able to meet the Inpatient hospital and SNF cost sharing PMPM actuarial equivalence evaluation and is consistent with how information is collected in the BPT. The actuarially equivalent cost sharing factors used in the MA BPT exclude enrollees in ESRD status, as does the projection of bid expenditures. That is, MA organizations are paid the full risk-adjusted benchmark rate for ESRD enrollees and ESRD enrollees are excluded from the BPT and benchmark projections. In order to account for the projected marginal costs (or savings) of enrollees in ESRD status (as referenced in BPT instructions) the BPT allows for an adjustment that is allocated across ESRD and non-ESRD members (including out-of-area members).
In response to the request for clarity about the impact of the ESRD cost transition on the Inpatient hospital PMPM actuarial equivalence evaluation required by § 422.100(j)(2)(i)(A), we note that the PMPM actuarial equivalence evaluation is separate from and is conducted differently than evaluating the MA cost sharing standards. Both evaluations are used to protect against benefit designs that discriminate against and discourage enrollment by beneficiaries with a health status that requires those services. The per member per month actuarial equivalence evaluation uses BPT data in four service categories (Inpatient, SNF, DME, and Part B drugs) in a manner consistent with the BPT data collection that excludes ESRD costs. The BPT is used for establishing payments for non-ESRD enrollees, while payments for ESRD enrollees are based on the ESRD ratebook. The service category cost sharing standards adopted in this rule
CMS's longstanding policy has been to allow MA plans to establish up to 50 percent coinsurance or an actuarially equivalent copayment for in-network professional services except for those services for which cost sharing cannot exceed original Medicare, regardless of the MOOP type (including cost sharing for physical therapy). In this FC, we are limiting, subject to a transition period, this flexibility to MA plans that establish a lower MOOP amount. We also note a more complete discussion related to CMS's considerations of changing our longstanding policy to limit certain cost sharing flexibilities to MA plans that establish a lower MOOP amount is provided in section II.B.5.b. of this FC. As discussed in section II.B.5.b. of this FC, in response to comments specifically about physical therapy, the provisions we proposed and are finalizing ensure that, beginning with contract year 2023, MA plans always pay at least 50 percent of the estimated total financial liability (for plans with a lower MOOP amount) and a higher percentage for those services in plans that establish an intermediate or mandatory MOOP amount than in prior contract years.
We believe the cost sharing standards we are finalizing in § 422.100(f)(6)(iii) for physical therapy and in § 422.100(j)(1)(i)(D) for home health will adequately protect beneficiaries from discriminatory cost sharing with regard to those services. Because original Medicare has no cost sharing for home health, it would be difficult to apply the PMPM actuarial equivalence evaluation in paragraph (j)(2) to this service category. The highest allowable MA plan cost sharing limit for home health is 20 percent or an actuarially equivalent copayment (including a copayment limit calculated by CMS as discussed in sections II.B.5.a., b., and e. of this FC) which is limited to MA plans with a lower MOOP amount. MA plans that establish a mandatory or intermediate MOOP amount must establish $0 cost sharing for home health services under the provision we are finalizing in § 422.100(j)(1)(i)(D) (proposed in paragraph (j)(1)(iv)). CMS will continue to evaluate MA plans during bid review in relation to these cost sharing categories and will pursue future rulemaking to address any concerns, if appropriate.
We are finalizing § 422.100(j)(2)(ii) generally as proposed, but with modifications to: (1) Correct the reference to generally accepted actuarial principles and practices (rather than only principles) in the regulation; (2) clarify the requirements in paragraph (j)(2)(i) apply to the MA plan's cost sharing for all for basic benefits and specific categories of basic benefits, rather than specific services; and (3) clarify that CMS may extend flexibility regarding compliance with the requirements in paragraph (j)(2)(i) to an MA plan that has excess cost sharing (meaning the PMPM actuarial value of the plan's cost sharing is higher than the PMPM actuarial value of the cost sharing in original Medicare) to the extent that it is actuarially justifiable and provided that certain conditions are met. Specifically, the MA plan's cost sharing must be based on generally accepted actuarial principles and practices (consistent with paragraph (f)(7)) and supporting documentation included in the bid, and the MA plan's cost sharing must otherwise comply with applicable cost sharing standards.
We are finalizing in § 422.100(j)(2), with the modifications discussed previously in this section, our proposals to impose requirements related to the per member per month (PMPM) actuarial value of the cost sharing for basic benefits. As a result, for contract year 2023 and subsequent years, CMS will separately evaluate the PMPM actuarial value of the cost sharing used by each MA plan for the following service categories: Inpatient, Skilled Nursing Facility (SNF), Durable Medical Equipment (DME), and Part B drugs. Whether in aggregate, or on a service-specific basis, this evaluation is done by comparing two values in the plan's BPT. In essence, CMS compares the actuarial value of a plan's PMPM cost sharing for the benefit category to the estimated actuarial value of original Medicare cost sharing for the same benefit category in order to determine plan compliance. Specifically, for contract year 2023, a plan's PMPM cost sharing for Medicare covered services (BPT Worksheet 4, Section IIA, column l) will be compared to Medicare covered actuarially equivalent cost sharing (BPT Worksheet 4, Section IIA, column n). For Inpatient hospital and SNF services, the Medicare actuarially equivalent cost sharing values, unlike plan cost sharing values, do not include Part B cost sharing. Therefore, an adjustment factor is applied to these Medicare actuarially equivalent values to incorporate Part B cost sharing and to make the comparison valid. CMS annually updates and communicates the Part B adjustment factors prior to bid submission. Please note that factors for Inpatient and Skilled Nursing Facility in column #4 of Table 27 (Part B Adjustment Factor to Incorporate Part B Cost Sharing) have been updated for contract year 2023. Once the comparison amounts have been determined, CMS can evaluate excess cost sharing. Excess cost sharing is the difference (if positive) between the plan cost sharing amount (column #1 in Table 27) and the comparison amount in column #5 of Table 27 (which reflects an estimated original Medicare cost sharing which is weighted based on the plan's projected county enrollment). This evaluation process remains consistent with prior years.
CMS will, as described in new § 422.100(f)(7)(iii) (and previously discussed in section II.B.5.a. of this FC), issue subregulatory guidance for contract year 2024 and future years prior to bid submission to allow sufficient time for MA organizations to prepare and submit plan bids. This guidance will include how CMS will evaluate compliance with § 422.100(j)(2) and identify excessive cost sharing. The information will be consistent with prior years
Comments received on section VI.B.3.d. from the February 2020 proposed rule were summarized and responded to in sections II.B.5.a.-f. of this FC. Table 28 provides a summary of final contract year 2023 in-network service category cost sharing limits based on the finalized policies discussed in section II.B.5.a.-f. of this FC. This table is an updated version of Table 5 (Illustrative Contract Year 2022 In-Network Service Category Cost Sharing Limits) from section VI.B. of the February 2020 proposed rule. Some of the changes, in comparison to Table 5 from the February 2020 proposed rule, are a result of various factors: (1) Using the more recent Medicare FFS beneficiary data projections available at the time of this FC; (2) applying the updated ESRD cost transition schedule finalized at § 422.100(f)(4)(vii) for inpatient hospital cost sharing limits (and for MOOP limits where the MOOP limit amount restricts the available cost sharing); (3) applying the cost sharing limit transition provisions (finalized at §§ 422.100(f)(6), (f)(8), and 422.113(b)(2)(v)) for professional services, benefits for which cost sharing must not exceed cost sharing under original Medicare, and emergency services; (4) calculating the actuarially equivalent copayment limits for the “primary care physician” and “physician specialist” service categories based on the revised group of provider specialties discussed in section II.B.5.b. in this FC; and (5) applying the requirement finalized at § 422.100(j)(1)(i)(F) that MA plans must not use cost sharing that exceeds cost sharing in original Medicare for Part B drugs other than the specific drugs listed in paragraph (j)(1)(i)(A). In addition, we updated prior “N/A” designations for certain service categories as discussed in section II.B.5.a. and c. of this FC and the footnotes for clarity and to reflect the finalized policies.
As discussed in the February 2020 proposed rule, CMS will annually update the cost sharing limits, using the methodology adopted in this FC (at §§ 422.100(f)(4) through (f)(8), 422.100(j), and 422.113(b)(2)) to calculate and issue the cost sharing limits each year. As this FC is being published in advance of the bidding deadline for contract year 2023 and with the availability of contract year 2023 Medicare FFS data projections, the contract year 2023 cost sharing limits in Table 28 are final. In addition, CMS will calculate updated limits for contract year 2024 and future years based on more recent Medicare FFS data projections from the OACT and the methodology finalized through this FC. As a result, in-network service category cost sharing limits for contract year 2024, as well as subsequent years, will be issued annually using a subregulatory guidance process that includes an opportunity for comment, as finalized in paragraph (f)(7)(iii).
Except for the requirement in § 422.100(f)(6)(i) that MA plans pay at least 50 percent of estimated total MA financial liability for basic benefits, even when furnished out of network, the standards in Table 28 only apply to in-network Parts A and B services. All standards and cost sharing are inclusive of applicable service category deductibles, copayments and coinsurance, but do not include plan level deductibles (for example, deductibles that include several service categories). Together, the per member per month actuarial equivalence evaluation and the Part C service category cost sharing standards make sure that benefit designs are not discriminatory to beneficiaries based on health status.
MA plans may not charge enrollees higher costs sharing than is charged under Original Medicare for COVID-19 testing and testing-related services identified in section 1833(cc)(1) for which payment would be payable under a specified outpatient payment provision described in section 1833(cc)(2) during the period from March 18, 2020 through to the end of the emergency period described in section 1135(g)(1)(B), pursuant to amendments to section 1852 of the Act, as amended by the Families First Coronavirus Response Act. We have not incorporated that cost sharing limit into Table 28 because of the time-limited nature of the requirement. However, MA organizations must comply with it and other statutory cost sharing limits, such as the requirement that cost sharing must not exceed cost sharing in Original Medicare for a COVID-19 vaccine and its administration described in section 1861(s)(10)(A) of the Act, regardless whether CMS specifically addresses such limits when issuing the cost sharing limits calculated annually under §§ 422.100(f) and (j) and 422.113(b)(2).
We received feedback from 17 commenters pertaining to the proposal for setting cost sharing limits, with the majority providing general support, suggested clarifications, or concerns about certain elements of the proposed amendments to §§ 422.100(f)(6), 422.100(j)(1) and (2), and 422.113(b)(2). We thank commenters for their input in helping to inform our final policy concerning cost sharing limits. We are soliciting comments to potentially inform future rulemaking on cost sharing limits as discussed in section III of this FC.
After careful consideration of all the comments we received, and for the reasons set forth in the February 2020 proposed rule and in our responses to the related comments discussed previously, we are finalizing the proposals to amend §§ 422.100(f)(6), 422.100(j)(1) and (2), and 422.113(b)(2) with some modifications and additional provisions to: (1) Delay the beginning of implementation of the cost sharing policies by one year; (2) codify the long-standing policy that MA plans must not charge cost sharing that exceeds 50 percent coinsurance or an actuarially equivalent copayment, regardless of the MOOP limit established, for basic benefits (identified within the PBP service category or a reasonable group of benefits or services) that are provided in-network and out-of-network that are not explicitly addressed in § 422.100(f)(6), (j)(1), or § 422.113(b)(2); (3) codify, with some updates and changes, the current process for calculating non-discriminatory cost sharing limits, taking into account ESRD costs; (4) apply a multiyear transition to calculate cost sharing limits for professional services (furnished on an in-network basis based on the MOOP limit established by the MA plan), emergency services, and benefits for which cost sharing must not exceed cost sharing under original Medicare; (5) codify, with some updates and changes (including applying the revised multiyear transition of ESRD costs finalized in section II.A. of this FC), the methodology used to calculate the cost sharing standards for inpatient hospital acute and psychiatric services; (6) set specific cost sharing requirements for emergency services; (7) apply the range of cost sharing limits calculated for professional services to the urgently needed services category; (8) codify that MA plans must not impose cost sharing that exceeds original Medicare for certain specific benefits in addition to the current list in § 422.100(j); (9) codify the cost sharing under original Medicare (20 percent coinsurance) as a cost sharing limit for the “Part B drugs—Other” service category; (10) codify the requirement that total MA cost sharing for all basic benefits and for certain categories of benefits must not exceed cost sharing for those benefits in original Medicare on a per member per month actuarially equivalent basis; (11) provide that an MA plan must not charge an enrollee a copayment for a basic benefit that is greater than the cost of the covered service(s); (12) provide for an subregulatory comment period for how these regulations are applied for annual cost sharing limits beginning for contract year 2024; and (13) codify the use of generally accepted actuarially principles and practices in applying the MOOP and cost sharing limit regulations. These provisions are applicable for coverage beginning January 1, 2023 and later. We will therefore use these rules and the final contract year 2023 cost sharing limits in Table 28 to evaluate MA bids submissions due the first Monday in June (June 6, 2022) for the 2023 contract year. We will also use these rules to evaluate MA bid submissions for subsequent contract years going forward. In summary, the proposed changes to §§ 422.100(f)(6), 422.100(j)(1) and (2), and 422.113(b)(2) are being finalized substantially as proposed with
• The methodology for calculating cost sharing limits in the amendments to §§ 422.100(f), (j), and 422.113(b)(2)(vi) and the specific cost sharing limits in § 422.113(b)(2)(v) are applicable beginning on or after January 1, 2023 instead of January 1, 2022.
• Adding descriptive headings to paragraphs in § 422.100(f)(6) and (j)(1)-(2) to orient the reader to the content in each paragraph.
• Revising § 422.100(f) and (j) to use consistent language in regulation text when referring to: (1) A cost sharing requirement that the MA plan “must”, not “may”, follow; (2) out-of-pocket costs “incurred by” beneficiaries with and without diagnoses of ESRD; (3) “service categories” instead of “services” or “items”; (4) cost sharing limits “calculated” by CMS by applying these regulations; and (5) cost sharing “established” by MA plans as part of their benefit designs.
• Revising introductory language in § 422.100(f)(6) to: (1) Clarify that the cost sharing limits (coinsurance or copayments) are calculated at the plan benefit package service category level or for a reasonable group of benefits covered under the plan; (2) add references to §§ 422.100(j) and 422.113(b)(2), to encompass the cost sharing requirements that apply in those sections; (3) clarify that § 422.254(b)(4) requires that overall MA cost sharing for basic benefits be actuarially equivalent to, or less than, Medicare FFS cost sharing; (4) clarify that cost sharing evaluations will be completed at the plan (or segment) level; and (5) codify the requirement that an MA plan must not charge an enrollee a copayment for a basic benefit that is greater than the cost of the covered service(s).
• Consolidating the requirements in § 422.100(f)(6)(i)(A), (B), and (C) into one regulatory paragraph at (f)(6)(i) with revisions to: (1) Clarify the requirements MA plans must follow to establish a cost sharing amount for service categories subject to paragraph (f)(6)(i); (2) specify the data MA plans must use to determine that its copayment amount for a service category or for a reasonable group of benefits in the PBP does not exceed an actuarially equivalent value to 50 percent coinsurance; (3) clarify that the copayment limits calculated by CMS take precedence; (4) add references to other applicable regulations to clarify the scope of the requirements in paragraph (f)(6)(i); and (5) generally simplify and clarify regulation text.
• Adding language to § 422.100(f)(6)(ii) to: (1) Clarify that CMS will apply the same rounding methodology when calculating copayment limits and evaluating MA plan compliance with paragraphs (f)(6), (f)(7), (f)(8), and (j)(1); and (2) reorganize the regulation text to apply the rounding rules when MA organizations calculate actuarially equivalent values and to increase clarity.
• Revising § 422.100(f)(6)(ii)(A) to add references to paragraphs (f)(6)(i), (f)(6)(iii), and (j)(1) to apply the $5 rounding methodology consistently to cost sharing limits for professional services and benefits for which cost sharing must not exceed cost sharing under original Medicare.
• Moving the rule for rounding inpatient hospital acute and psychiatric and skilled nursing facility cost sharing limits from § 422.100(f)(6)(ii)(A) to § 422.100(f)(6)(ii)(B) and adding references to paragraphs (f)(6)(iv) and (j)(1)(i)(C) to clarify the regulations that govern the methodology to calculate cost sharing limits for those service categories.
• Moving the rule for rounding copayments when a copayment limit is projected to be exactly between two increments from proposed paragraph (f)(6)(ii)(B) to new § 422.100(f)(6)(ii)(C).
• Revising § 422.100(f)(6)(iii)(A) to refer to paragraph (f)(6)(iii) (instead of paragraph (f)(6)(ii)).
• Moving the rule identifying the Medicare data that CMS may utilize to calculate copayment limits subject to paragraph (f)(6)(iii) from proposed paragraph (f)(6)(iii)(B) to new § 422.100(f)(7)(i)(A).
• Finalizing new language at § 422.100(f)(6)(iii)(B) to: (1) Clarify how CMS will apply the regulations to calculate copayments that are actuarially equivalent to the coinsurance limits, subject to other cited regulations; (2) refer to new paragraphs (f)(7) and (f)(8) to apply generally accepted actuarial principles and practices and restrictions on increases to the copayment limits to CMS's calculations of actuarially equivalent copayments; and (3) to provide if CMS does not calculate a copayment limit, the MA plan must not establish a copayment that exceeds the actuarially equivalent value to the coinsurance limits in paragraph (f)(6)(iii) based on the estimated total MA plan financial liability for that benefit for that contract year.
• Revising and adding new paragraphs at § 422.100(f)(6)(iii)(C) through (F) to adopt a transition over 4 years to the cost sharing limits for professional service categories based on use of the lower, intermediate, or mandatory MOOP type.
• Revising § 422.100(f)(6)(iv)(A) to add a reference to new paragraph (f)(7).
• Revising § 422.100(f)(6)(iv)(B) to: (1) Clarify the cost sharing limits calculated for the seven length of stay scenarios apply to inpatient hospital acute and psychiatric service categories; (2) remove the reference to an inpatient facility to match how CMS applies the inpatient hospital cost sharing limits; and (3) generally improve the flow of the regulation text.
• Revising § 422.100(f)(6)(iv)(C) to: (1) Update the description of the Medicare FFS data used to calculate the inpatient hospital service category cost sharing limits for the applicable year and length of stay scenario to reflect the ESRD cost transition; and (2) update the reference to the ESRD cost transition schedule to paragraphs (f)(4)(vii)(A) through (B) to reflect the modified transition finalized in section II.A. of this FC.
• Revising § 422.100(f)(6)(iv)(D) to: (1) Clarify that this paragraph is applicable to inpatient hospital acute and psychiatric service categories; and (2) apply the rule proposed in paragraph (f)(6)(iv)(D)
• Revising § 422.100(f)(6)(iv)(D)
• Revising § 422.100(f)(6)(iv)(D)
• Revising § 422.100(f)(6)(iv)(D)
• Also, as discussed in section II.A. of this FC, adding § 422.100(f)(7)(i) to clarify that generally accepted actuarial principles and practices must be applied in the process of developing the projections and calculations described in §§ 422.100(f)(4), (f)(5), (f)(6), (f)(7)(ii), (f)(8) and (j) and in 422.101(d)(2) and (3).
• Adding § 422.100(f)(7)(i)(A) to clarify in applying generally accepted actuarial principles and practices, actuarial judgment and discretion may be used, including to take into account relevant information, select among different approaches, and select data or data samples used in the calculations.
• Adding § 422.100(f)(7)(i)(B) to require MA organizations to also use generally accepted actuarial principles and practices in complying with the regulations in paragraphs (f)(6) and (j).
• Adding § 422.100(f)(7)(i)(C) to clarify that CMS will apply generally accepted actuarial principles and practices in evaluating MA organization compliance with § 422.100(f)(6) and (j).
• Adding § 422.100(f)(7)(ii) to adopt standards for whether and how CMS will calculate actuarially equivalent copayment limits for basic benefits subject to § 422.100(f)(6)(i), (f)(6)(iii), and (j)(1).
• Adding § 422.100(f)(7)(ii)(A) to provide that CMS will use Medicare FFS data projections (defined in paragraph (f)(4)(i)) to calculate an actuarially equivalent copayment value for the applicable year and service category.
• Adding § 422.100(f)(7)(ii)(B) to describe how CMS may use MA encounter data in addition to the Medicare FFS cost data projections.
• Adding § 422.100(f)(7)(ii)(C) to clarify how CMS may select among particular approaches to calculate actuarially equivalent copayment values in order to carry out program purposes.
• Adding § 422.100(f)(7)(ii)(D) to provide for applying the actuarially equivalent copayment transition in paragraph (f)(8) for calculating copayment limits.
• Adding § 422.100(f)(7)(ii)(E) to clarify use of the rounding rules in paragraph (f)(6)(ii) when calculating copayment limits at an actuarially equivalent value to the applicable cost sharing standard.
• Finalizing § 422.100(f)(7)(iii) to: (1) Clarify that CMS will issue subregulatory guidance (beginning with contract year 2024) that specifies the MOOP limits and cost sharing standards for the upcoming contract year that are set and calculated using the methodology and standards in §§ 422.100(f) and (j), 422.101(d), and 422.113; (2) codify that this subregulatory guidance will be released prior to bid submission to allow sufficient time for MA organizations to prepare and submit plan bids; and (3) provide for a public notice and comment period on the projected MOOP limits and cost sharing standards for the upcoming contract year unless a public comment period is impracticable, unnecessary, or contrary to the public interest.
• Adding § 422.100(f)(8) to adopt a definition of and methodology for using an actuarially equivalent copayment differential (defined in paragraph (f)(8)(i)) to cap increases to copayment limits (for service categories subject to paragraph (f)(6)(iii) or (j)(1)) during the transition to actuarially equivalent copayment limits that ends in 2026, as described in detail in section II.B.5.b. and e. of this FC.
• Adding § 422.100(f)(9) to require MA organizations to bundle cost sharing amounts where separate cost sharing applies for that particular service(s) and setting(s) and be clearly reflected as a single, total cost sharing in appropriate materials distributed to beneficiaries for basic benefits.
• Redesignating the text at § 422.100(j)(1) to paragraph (j)(1)(i) and redesignating with modifications current paragraphs (j)(1), (j)(2) and (j)(3) as (j)(1)(i)(A), (j)(1)(i)(B), and (j)(1)(i)(C).
• Reorganizing the regulation text in paragraph (j)(1) and clarifying the description of the benefit in paragraph (j)(1)(i)(A) (proposed in § 422.100(j)(1)(i)).
• Revising § 422.100(j)(1)(i) to: (1) Clarify the scope of the requirement that cost sharing for certain services must not exceed cost sharing under original Medicare; and (2) require MA plans establishing a copayment for a service category subject to paragraph (j)(1)(i) to establish an amount that is equal to or less than an actuarially equivalent value to cost sharing required under original Medicare using the rules in paragraph (j)(1)(ii).
• Moving the regulatory text in proposed § 422.100(j)(1)(iii) to paragraph (j)(1)(i)(C) with the addition of specific per day cost sharing limits for the first 20 days of a SNF stay for each MOOP type.
• Moving the regulatory text in proposed § 422.100(j)(1)(iii)(A) and (B) to paragraphs (j)(1)(i)(C)
• Moving the regulatory text in proposed § 422.100(j)(1)(iv) to paragraph (j)(1)(i)(D) with modifications to change the requirement from cost sharing up to 20 percent of the total MA plan financial liability to cost sharing not greater than 20 percent or an actuarially equivalent copayment (the data which would make this determination is now contained in paragraph (j)(1)(ii)).
• Moving the regulatory text in proposed § 422.100(j)(1)(v) to paragraph (j)(1)(i)(E) with the following clarifications and additions: (1) The specific service categories applicable to paragraph (j)(1)(i)(E) for MA plans that establish a mandatory MOOP limit are: Equipment, prosthetics, medical supplies, diabetes monitoring supplies, diabetic shoes or inserts; and (2) the requirement that the total cost sharing for the overall DME benefit must be no greater than the per member per month actuarially equivalent cost sharing for the DME benefit in original Medicare is applicable for all MOOP limits.
• Adding § 422.100(j)(1)(i)(F) to apply the requirement that cost sharing must not exceed cost sharing under original Medicare to the other drugs covered under Part B of original Medicare (that is, Part B drugs not included in paragraph (j)(1)(i)(A)).
• Adding § 422.100(j)(1)(ii) to codify the rules for calculating copayment limits for the basic benefits listed in paragraph (j)(1)(i) which include: (1) How CMS calculates copayment limits following the requirements in paragraph (f)(7) and the restrictions on changes in copayment amounts in paragraph (f)(8); and (2) how an MA plan must establish a copayment that does not exceed an actuarially equivalent value to the coinsurance required under original Medicare when CMS does not calculate a copayment limit for a benefit listed in paragraph (j)(1)(i) using actuarially accepted principles and practices included in paragraph (f)(7)(i) and basing calculations of an actuarially equivalent value on the average Medicare FFS allowed amount in the plan's service area or the estimated total MA plan financial liability for that benefit for that contract year.
• Revising § 422.100(j)(2) to clarify that this paragraph addresses the evaluation of all basic benefits and specific categories of basic benefits in the aggregate for which an MA plan's total cost sharing for all basic benefits (excluding out of network benefits covered by a regional MA plan) must not exceed cost sharing in original
• Revising § 422.100(j)(2)(i) to generally simplify and clarify regulation text.
• Revising § 422.100(j)(2)(i)(A) to: (1) Clarify that services provided are during a covered inpatient stay; and (2) remove the language referencing an inpatient facility.
• Revising § 422.100(j)(2)(i)(C) to apply the requirement under paragraph (j)(2) to all drugs and biologics covered under Part B of original Medicare.
• Revising § 422.100(j)(2)(ii) to: (1) Clarify that CMS extends the proposed flexibility to the evaluation of compliance with the requirements in paragraph (j)(2)(i) regarding actuarial equivalent cost sharing for all basic benefits and specific categories of basic benefits; and (2) clarify that the flexibility is based on whether the MA plan's cost sharing for specific service categories otherwise satisfies applicable cost sharing standards and is based on “generally accepted actuarial principles and practices” (consistent with paragraph (f)(7)).
• Removing references to post-stabilization services costs in § 422.113(b)(2)(v).
• Revising § 422.113(b)(2)(v)(B)
• Revising § 422.113(b)(2)(v)(B)
• Revising § 422.113(b)(2)(v)(B)
• Adding § 422.113(b)(2)(v)(B)
• Adding various minor technical and grammatical changes from the proposed regulation text at §§ 422.100(f)(6) and 422.113(b)(2) to ensure clarity and avoid repetitive text in the regulations.
Finally, in addition to the authority outlined in the February 2020 proposed rule for these cost sharing limits, section 1854(a)(5) and (6) of the Act provides that CMS is not obligated to accept every bid submitted and may negotiate with MA organizations regarding the bid, including benefits. Under section 1854(a)(5)(C)(ii) of the Act, CMS is authorized to deny a plan bid if the bid proposes too significant increases in enrollee costs or decrease in benefits from one plan year to the next. While the rules adopted here do not limit our negotiation authority (§ 422.256), they provide minimum standards for an acceptable benefit design for CMS to apply in reviewing and evaluating bids in addition to establishing important protections to ensure that enrollees with high health care costs are not discouraged from enrolling in MA plans.
We are requesting comments and information on new or different ways to update and change cost sharing limits for all service categories subject to §§ 422.100(f)(6)(i), (iii), and 422.100(j)(1), including mental health services, to inform future rulemaking. In brief, we are soliciting comments on: (1) Modifying the cost sharing limits for specific service categories to better protect against potentially discriminatory cost sharing; and (2) the necessity, appropriateness and feasibility of adding parameters to update copayment limits after the cost sharing limit transitions are completed (based on § 422.100(f)(8)).
For the most part MA organizations typically offer benefits with lower cost sharing amounts than the cost sharing limits CMS has used in the past. However, we are concerned about benefit designs that have in-network cost sharing at the highest allowable level for a subset of benefits, including mental health services, even if the MA plans uses lower cost sharing for other benefits or categories of services. As a result, we are soliciting recommendations regarding the service categories for which CMS should consider modifying cost sharing limits (including specific cost sharing limits changes) to ensure beneficiaries are protected from potentially discriminatory cost sharing. For example, these recommendations could include adding new service categories, such as “mental health services” or categories that address substance use disorders, such as opioid treatment program services, to existing service categories at § 422.100(j)(1). The goal of these modifications would be to prohibit cost sharing amounts for those service categories that exceed cost sharing in original Medicare. By comparison, coinsurance limits for the “mental health services” service category in contract year 2022 were 50 percent regardless of the MOOP type established, and under this FC, by contract year 2026, the limit for the mental health services category will be, at the lowest, at the 30 percent coinsurance limit (or actuarially equivalent copayment limit) for MA plans that establish a mandatory MOOP amount.
As established in this FC, CMS will annually update cost sharing limits based on more recent data and will use a 4-year transition period to move from the cost sharing limits set for contract year 2022 to a new set of coinsurance limits and actuarially equivalent copayment limits. For 2026 and subsequent years, this FC does not contain specific restrictions on increases in copayment limits and requires them to increase as the dollar value of the coinsurance percentage increases. We are soliciting comments on the necessity, appropriateness, and feasibility of preventing copayment limits from changing dramatically or fluctuating from year to year.
Our goal is to allow MA organizations to design stable benefit structures from year to year and meet beneficiary needs while ensuring that cost sharing is not discriminatory or excessive. We expect that having cost sharing standards that are predictable and stable from year to year supports this goal. A process that allows standards to change dramatically or fluctuate by minimal amounts from year to year would not promote stable benefit packages over time. In addition, we believe copayment limits should closely reflect the coinsurance amounts that MA enrollees are expected to pay and that copayment limits should be calculated using the applicable coinsurance percentages and considering and applying sound actuarial methods to reach an approximate actuarially equivalent value. We are soliciting ideas for regulatory, subregulatory, policy, practice, and procedural changes to better accomplish these goals. Ideas could include recommendations of specific actuarial approaches or parameters to do the following:
• Establish rules for when CMS should maintain or moderate the change from the prior year's copayment limits when calculating copayment limits for the upcoming contract year, while keeping copayment limits approximately in line with the coinsurance limits established in § 422.100(f)(6) and (j).
• Apply specific minimum and maximum thresholds to the
• Ensure the methodology can be applied effectively to both service categories with higher and lower copayment limits.
CMS's overall goal in soliciting comments is to consider recommendations for how we can best mitigate disruption from changing copayment limits to ensure copayment limits do not become substantially different than the actuarially equivalent value to the coinsurance standard under this FC, while also striking a balance between protecting beneficiaries (especially vulnerable populations with higher-cost health care conditions) from excessive cost sharing and the costs experienced by MA organizations in providing the benefits. Commenters may also include recommendations regarding how CMS can simplify the rules and policies adopted here through future rulemaking to ensure beneficiaries have access to MA plans that meet the goals and objectives outlined in this FC as the basis for finalizing § 422.100(f)(6), (f)(7), (f)(8), and (j). Specific recommendations for how CMS can best evaluate MA compliance with the cost sharing standards adopted in this FC may also be provided in response to this solicitation. Comments regarding other cost sharing standards that CMS should consider for potential future rulemaking may also be submitted.
In responding to this comment solicitation, we request that all respondents provide complete, clear, and concise comments that include, where practicable, data and specific examples of how we may maintain or calculate updated copayment limits for these benefits in future years. If the proposals involve novel legal questions, analysis regarding our authority is welcome for our consideration. Language illustrating the suggested approach is also welcome so that CMS may understand more precisely the parameters of the suggestions. We are soliciting comment on all of the considerations discussed in this section.
This FC contains a request for comment. In accordance with the implementing regulations of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), this general solicitation is exempt from the PRA. Facts or opinions submitted in response to general solicitations of comments from the public, published in the
We note that this request for comment is issued solely for information and planning purposes; it does not constitute a Request for Proposal (RFP), application, proposal abstract, or quotation. This request for comment does not commit the U.S. Government to contract for any supplies or services or make a grant award. Further, we are not seeking proposals through this request for comment and will not accept unsolicited proposals. Respondents are advised that the U.S. Government will not pay for any information or administrative costs incurred in response to this request for comment; all costs associated with responding to this request for comment will be solely at the interested party's expense. We note that not responding to this request for comment does not preclude participation in any future procurement or rulemaking, if conducted. It is the responsibility of the potential respondents to monitor this request for comment announcement for additional information pertaining to this request. In addition, we note that we will not respond to questions about the policy issues raised in this request for comment.
We will actively consider all input as we develop future plans and policies. We may or may not choose to contact individual respondents. Such communications would be for the sole purpose of clarifying statements in the respondents' written responses. Contractor support personnel may be used to review responses to this request for comment. Responses to this notice are not offers and cannot be accepted by the Government to form a binding contract or issue a grant. Information obtained as a result of this request for comment may be used by the Government for program planning on a non-attribution basis. Respondents should not include any information that might be considered proprietary or confidential. This request for comment should not be construed as a commitment or authorization to incur cost for which reimbursement would be required or sought. All submissions become U.S. Government property and will not be returned. In addition, we may publicly post the public comments received, or a summary of those public comments.
The February 2020 proposed rule solicited public comment on our proposed information collection requirements (ICRs), burden, and assumptions for 17 provisions. We also solicited public comment on the provisions without ICRs and stated that those provisions did not propose any new or revised collection of information requirements and/or burden and, therefore, are not subject to the requirements of the Paperwork Reduction Act (PRA). We received no disagreement from the public commenters on this approach for the two provisions being implemented in this FC: (1) Maximum Out-of-Pocket (MOOP) Limits for Medicare Parts A and B Services (§§ 422.100 and 422.101); and (2) Service Category Cost Sharing Limits for Medicare Parts A and B Services and Per Member Per Month Actuarial Equivalence Cost Sharing (§§ 422.100 and 422.113).
In this FC we make some modifications to the proposals, including the addition of a transition period to implement the range of cost sharing limits for professional service categories (as discussed in section II.B.5.b. of this FC) and adjusting the percentage of ESRD costs to incorporate into the MOOP and inpatient hospital cost sharing limits for 2023 (as discussed in sections II.A.4.c. and II.B.5.c. of this FC), however these changes do not impose new or revised information collection requirements for these two provisions.
Consequently, we are finalizing that the two provisions do not impose any new or revised collection of information requirements and/or burden. In making this assertion we note that the finalized provisions codify and update current guidance governing MA organization bid requirements,
This FC also updates certain longstanding requirements and modifies the way that MOOP limits and cost sharing limits have been set by adopting
Additionally, we received no PRA-related public comments for the provisions implemented in this FC.
Consequently, since there is no additional burden over and above the annual bid-review guidance and plan responses, we are finalizing our estimate of no impact without creating or modifying active ICR(s).
We note that the two MOOP and cost sharing provisions mentioned in this section are the only proposed provisions that are being finalized in this FC. The remaining proposed provisions from the February 2020 proposed rule were finalized in the June 2020 and January 2021 final rules.
The provisions in this FC codify and update current subregulatory guidance governing MA organization bid requirements. This includes changes to MOOP limits and inpatient hospital cost sharing limits consistent with section 17006 of the 21st Century Cures Act (Cures Act), which amended section 1851(a)(3) of the Act to allow Medicare eligible beneficiaries with diagnoses of ESRD to choose an MA plan for Medicare coverage starting January 1, 2021, without the limits on such enrollment that currently apply. Prior to contract year 2021, we excluded the projected out-of-pocket spending for beneficiaries with diagnoses of ESRD, which we are also referring to in this FC as “ESRD costs,” from the data used to set MOOP and cost sharing limits. After publication of the February 2020 proposed rule, we announced that we would incorporate a portion of ESRD costs into the data used to set and calculate MOOP and inpatient hospital cost sharing limits for contract year 2021.
This FC introduces a third MOOP limit as well as changes to cost sharing requirements, including how cost sharing limits will be set for professional services and updating the limits for emergency services. As noted in the February 2020 proposed rule, the percentage of eligible Medicare beneficiaries with access to an MA plan (excluding employer group waiver plans that limit enrollment to employer group members and D-SNPs) offering a voluntary MOOP amount and the proportion of total enrollees in a voluntary MOOP plan have decreased considerably from contract year 2011 to contract year 2019. Based on plan data from March 2021, this trend has continued through contract year 2021 with approximately 18.5 percent of plans (21.5 percent of enrollees) having an in-network MOOP amount within the range of the prior voluntary MOOP limit (at or below $3,400), as shown in Table 1. This percentage access increases to 23.3 percent of plans (24.8 percent of enrollees) for contract year 2021 after taking into consideration the increase to the lower MOOP limit for that year (at or below $3,450). Consequently, we expect this trend to continue without intervention. A factor that may further spur this trend is that beneficiaries with diagnoses of ESRD are increasingly enrolling in the MA program because of their typical high health care costs, which the MA organization is financially responsible for after the ESRD enrollee reaches the MOOP amount. To abate this trend and incentivize MA organizations to offer lower MOOP amounts and/or lower or comparable cost sharing, this FC makes cost sharing limits for various service categories dependent on three distinct MOOP types. This FC reduces the cost sharing limits for professional services over a transition period from 50 percent to either 40 percent or 30 percent coinsurance (and actuarially equivalent copayments) for MA plans that use an intermediate or mandatory MOOP type and is a substantive change from longstanding practice. In proposing these changes, CMS also included a methodology to make updates to the cost sharing limits (for example, annually updating the copayment limits for professional services to actuarially equivalent values to align with the coinsurance standard based on the most recent Medicare FFS data projections) and a requirement for MA organizations to comply with cost sharing requirements in a particular manner (for example, using the MA plan total financial liability for a benefit to determine a copayment amount that reflects the coinsurance limit in cases where CMS has not calculated an actuarially equivalent copayment limit).
This rule also codifies the longstanding policy by CMS to calculate MOOP and cost sharing limits for specific service categories by calculating limits based on the most recent Medicare FFS data projections. More specifically, CMS is codifying: (1) That CMS will use Medicare FFS data projections that, with modifications from past practice, incorporate data on the out of pocket costs of beneficiaries with diagnoses of ESRD over a specific schedule; (2) the percentiles used to calculate MOOP limits; (3) the 50 percent cost sharing limit for basic benefits covered by MA plans (which are Part A and B benefits excluding hospice and the costs of kidney acquisition for transplants); (4) the methodology CMS uses to calculate inpatient hospital acute and psychiatric cost sharing limits; (5) applying the cost sharing under original Medicare as a cost sharing limit to several service categories in MA; and (6) codifying that an MA plan's cost sharing for categories of basic benefits in the aggregate must not exceed cost sharing for those benefits in original Medicare on a per member per month actuarially equivalent basis. In codifying the general policies and approaches used in the past, CMS is also adopting some specific changes from its longstanding policy, including provisions regarding how updates to the MOOP and cost sharing limits are made each year and adopting the range of cost sharing flexibilities tied to using three MOOP
In response to comments on the February 2020 proposed rule, the timing of this FC, updated Medicare FFS data projections, and the potential impact of the COVID-19 pandemic since the February 2020 proposed rule, we are also finalizing several changes from the proposals, to smooth the transition to the new MOOP and cost sharing limit regulations. The major vehicle for smoothing this change is the use of multiyear transitions. With these multiyear transitions, we aim to avoid potentially disruptive cost sharing changes, such as sudden and substantive changes in cost sharing from the prior contract year and copayment limits that fluctuate up and down over short periods of time, for enrollees and plan designs.
These new multiyear transitions are used in the following provisions that are finalized in this rule: (1) The coinsurance and copayment limits for professional service categories; (2) the cost sharing limits for emergency services; and (3) and copayment limits for service categories for which cost sharing must not exceed cost sharing under original Medicare. This rule also finalizes (with modifications) the proposed multiyear transition for ESRD costs for MOOP limits and inpatient hospital cost sharing limits.
In the past, CMS set MOOP limits by striking a balance between limiting beneficiary out-of-pocket costs and potential impact to plan design and costs and set cost sharing limits for specific benefits at amounts that CMS believed exceeding would be discriminatory for beneficiaries with high health needs. MA plans were required to have MOOP amounts and cost sharing at or below these limits set by CMS. This FC finalizes regulations with more specific rules for how the limits will be set to achieve the same and other similar program goals. We expect the finalized methodology to update cost sharing limits will be an improvement from prior years. Some of the contract year 2022 copayment limit amounts for professional service categories and benefits for which cost sharing must not exceed cost sharing under original Medicare have been in place for a number of years. Our proposed methodology to calculate copayment limits at actuarially equivalent values to the coinsurance standards being adopted in this rule is, in effect, a recalibration of these copayment limits by using a methodology adjusted from longstanding policy and the most recent Medicare FFS data projections available. Similarly, our proposed methodology to update copayment limits for emergency services considered updated Medicare FFS cost projections that MA organizations are expected to incur in providing these benefits. We expect that updating these copayment limits over several years to reflect the updated Medicare FFS data projections will be a significant improvement in how professional cost sharing standards are applied to MA plans compared to prior years. For example, these updates will incorporate costs resulting from medical inflation and new treatments that became available after the current copayment limits were originally set. Without an actuarially acceptable and structured process to update copayment limits, the standards applied to MA plans could quickly become outdated and discourage MA organizations from establishing copayments over coinsurance structures in their plan designs. As noted in the February 2020 proposed rule, this would not be an ideal outcome as enrollees generally find copayment amounts more predictable and less confusing than coinsurance. CMS expects that this methodology will ultimately result in stable benefit packages by ensuring cost sharing limits are calculated following established actuarial methods, using the most recent Medicare FFS data projections available, and by keeping copayment limits aligned with coinsurance limits.
The regulatory impact statements for the provisions implemented in this FC are included in this section under the appropriate headings.
We have examined the impacts 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 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
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). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in: (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 must be prepared for major rules with significant regulatory action/s and/or with economically significant effects ($100 million or more in any 1 year). This rule is economically significant under Executive Order 12866. The Office of Information and Regulatory Affairs has designated this rule as a major rule pursuant to the Congressional Review Act, 5 U.S.C. 804(2).
Section 202 of UMRA requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2022, that threshold is approximately $165 million. This FC is not anticipated to have an unfunded effect on state, local, or tribal governments, in the aggregate, or on the private sector of $158 million or more.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. Since this FC does not impose any substantial costs on state or local governments, preempt state law or have federalism implications, the requirements of Executive Order 13132 are not applicable.
If regulations impose administrative costs on reviewers, such as the time needed to read and interpret this FC, then we should estimate the cost associated with regulatory review. As of
Using the BLS wage information for medical and health service managers (code 11-9111), we estimate that the cost of reviewing this FC is $114.24 per hour, allowing 100 percent increase for fringe benefits and overhead costs (
We note that this analysis assumed two readers per contract. Some alternatives include assuming one reader per parent organization. Using parent organizations instead of contracts will reduce the number of reviewers. However, we expect it is more reasonable to estimate review time based on the number of contracting MA organizations because a parent organization might have local reviewers assessing potential region-specific effects from this FC.
In accordance with the provisions of Executive Order 12866, this FC was reviewed by OMB.
Executive Order 13272 requires that HHS thoroughly review rules to assess and take appropriate account of their potential impact on small business, small governmental jurisdictions, and small organizations (as mandated by the RFA). If a rule may have a significant economic impact on a substantial number of small entities, then that rule must discuss steps taken, including alternatives, to minimize burden on small entities. The RFA does not define the terms “significant economic impact” or “substantial number.” The Small Business Administration (SBA) advises that this absence of statutory specificity allows what is “significant” or “substantial” to vary, depending on the problem that is to be addressed in the rulemaking, the rule's requirements, and the preliminary assessment of the rule's impact. Nevertheless, HHS typically considers a “significant” impact to be 3 to 5 percent or more of the affected entities' costs or revenues.
For purposes of the RFA, we estimate that many affected payers are small entities as that term is used in the RFA, either by being nonprofit organizations or by meeting the SBA definition of a small business. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. The North American Industry Classification System (NAICS) is used to classify businesses by industry and is used by the United States, Canada, and Mexico. While there is no distinction between small and large businesses among the NAICS categories, the SBA develops size standards for each NAICS category. Note that the most recent update to the NAICS classifications went into effect for the 2017 reference year. The latest size standards are for 2019.The policies being implemented in this FC are: (1) Maximum Out-of-Pocket (MOOP) Limits for Medicare Parts A and B Services (§§ 422.100 and 422.101), and (2) Service Category Cost Sharing Limits for Medicare Parts A and B Services and Per Member Per Month Actuarial Equivalence Cost Sharing (§§ 422.100 and 422.113). These policies codify, modify, and update current guidance governing MA organization bid requirements.
This rule has several affected stakeholders. They include: (1) MA organizations offering MA plans such as HMOs, local and regional PPOs, MSAs, and PFFS plans; (2) providers, including institutional providers, outpatient providers, clinical laboratories, and pharmacies; and (3) enrollees. Note that cost plans are specifically excluded from the provisions of this rule and that the rule only affects Part A and B benefits (not Part D benefits) covered by MA plans. Some descriptive data on these stakeholders are as follows:
• Pharmacies and Drug Stores, NAICS 446110, have a $30 million threshold for “small size” with 88 percent of pharmacies, those with under 20 employees, considered small.
• Direct Health and Medical Insurance Carriers, NAICS 524114, have a $41.5 million threshold for “small size,” with 75 percent of insurers having under 500 employees meeting the definition of small business. Several Medicare Advantage plans (about 30-40 percent) are not-for-profit resulting in a “small entity” status.
• Ambulatory Health Care Services, NAICS 621, including about 2 dozen sub-specialties, including Physician Offices, Dentists, Optometrists, Dialysis Centers, Medical Laboratories, Diagnostic Imaging Centers, have a threshold ranging from $8 to $35 million (Dialysis Centers, NAICD 621492, have a $41.5 million threshold). Almost all firms are big, and this also applies to sub-specialties. For example, for Physician Offices, NAICS 621111, receipts for offices with under 9 employees exceed $34 million.
• Hospitals, NAICS 622, including General Medical and Surgical Hospitals, Psychiatric and Substance Abuse Hospitals, Specialty Hospitals have a $41.5 million threshold for small size, with half of the hospitals (those with between 20-500 employees) considered small.
• Skilled Nursing Facilities (SNFs), NAICS 623110, have a $30 million threshold for small size, with half of the SNFs (those with under 100 employees) considered small.
The costs to MA organizations to cover Part A and B benefits for their enrollees are funded by the Federal government through the bidding process and the resulting capitated payments. Therefore, there is no significant burden on MA organizations to fund these benefits. We discuss the details of this immediately below in this section. This discussion will establish that there is no significant burden to a significant number of entities from this proposed rule for these provisions. Each year, MA plans submit a bid for furnishing Medicare Part A and B benefits (excluding hospice and the costs of acquisition of kidneys for transplant) as provided in section 1852 of the Act. The entire bid amount is paid by the government to the plan if the plan's bid is below an administratively set benchmark. If the plan's bid exceeds that benchmark, the beneficiary enrolled in the plan pays the difference in the form of a basic premium (note that a small percentage of plans bid above the benchmark and the enrollees in those MA plans must also pay an MA basic premium to the MA plan in addition to their Medicare Part B premium; however, this percentage of plans is not “significant” as defined by the RFA and as justified below).
Under 42 CFR 422.100(c)(2) and 422.102, MA plans can also offer supplemental benefits that are not covered under Medicare Parts A, B and D. These supplemental benefits are paid for through enrollee premiums, extra government payments, or a combination
To the extent that the government's total payments to plans, for the bid, risk adjustment, and the rebate, exceeds costs in Original Medicare, those additional payments put upward pressure on the Part B premium which is paid by all Medicare beneficiaries, including those in Original Medicare who do not have the enhanced coverage available in many MA plans.
Part D plans, including MA-PD plans, submit bids and those amounts are paid to plans through a combination Medicare funds and beneficiary premiums. In addition, for enrolled low-income beneficiaries Part D plans receive special government payments to cover most of premium and cost sharing amounts those beneficiaries would otherwise pay.
Thus, the cost of providing services by MA and Part D plans is funded by a variety of government funding and in some cases by enrollee premiums. As a result, MA and Part D plans are not expected to incur burden or losses since the private companies' costs are being supported by the government and enrolled beneficiaries. This lack of expected burden applies to both large and small health plans.
Small entities that must comply with MA regulations, such as those in this FC, are expected to include the costs of compliance in their bids, thus avoiding additional burden, since the cost of complying with any final rule is funded by payments from the government and, if applicable, enrollee premiums.
For Direct Health and Medical Insurance Carriers, NAICS 524114, plans estimate their costs for the upcoming year and submit bids and proposed plan benefit packages. Upon approval, the plan commits to providing the proposed benefits, and CMS commits to paying the plan either—(1) the full amount of the bid, if the bid is below the benchmark, which is a ceiling on bid payments annually calculated from original Medicare data; or (2) the benchmark, if the bid amount is greater than the benchmark.
Thus, there is a cost to plans bidding above the benchmark that is not funded by government payments. Additionally, if an MA plan bids above the benchmark, section 1854 of the Act requires the MA plan to charge enrollees a premium for that amount. Table 29 reports the percent of the plans bidding above the benchmark along with the percent of affected enrollees in recent years. The table reports aggregates of proprietary bid data collected by the Office of the Actuary. The CMS threshold for what constitutes a substantial number of small entities for purposes of the RFA is 3 to 5 percent. As shown in Table 29, both the percentage of plans and the percentage of affected enrollees is decreasing and below this 3-5 percent threshold. Consequently, we may conclude that the number of plans bidding above the benchmark is not considered substantial for purposes of the RFA.
The preceding analysis shows that meeting the direct cost of this FC does not have a significant economic impact on a substantial number of small entities, as required by the RFA.
Additionally, this FC is not expected to have impacts because: (1) Several of its provisions are codifications of long-standing practices which CMS knows plans have complied with because of annual bid reviews; and (2) section 1852(a)(1)(B) of the Act requires MA plans to cover Part A and B benefits with cost sharing that is, in the aggregate, actuarially equivalent to cost sharing in the Original Medicare program.
There are certain indirect consequences of these provisions which also create impact. We have already explained that at least 98 percent of the plans bid below the benchmark. Thus, their estimated costs for the coming year are fully paid by the Federal government. However, the government additionally pays the plan a “beneficiary rebate” amount that is an amount equal to a percentage (between 50 and 70 percent depending on a plan's quality rating) multiplied by the amount by which the benchmark exceeds the bid. The rebate is used to provide additional benefits to enrollees in the form of reduced cost-sharing or other supplemental benefits, or to lower the Part B or Part D premiums for enrollees. (Supplemental benefits may also partially be paid by enrollee premiums.) However, as previously noted, the number of plans bidding above the benchmark to whom this burden applies do not meet the RFA criteria of a significant number of plans.
It is possible that if the provisions of this FC would otherwise cause bids to increase, plans will reduce their profit margins, rather than substantially change their benefit package. This may be in part due to market forces; a plan lowering supplemental benefits even for 1 year may lose its enrollees to competing plans that offer these supplemental benefits. Thus, it can be advantageous to the plan to temporarily reduce profit margins, rather than reduce supplemental benefits.
We next examine in detail each of the other stakeholders and explain how they can bear cost. Each of the following are providers (inpatient, outpatient, or pharmacy) that furnish plan-covered services to plan enrollees for: (1) Pharmacies and Drug Stores, NAICS 446110; (2) Ambulatory Health Care Services, NAICS 621, including about two dozen sub-specialties, including Physician Offices, Dentists, Optometrists, Dialysis Centers, Medical Laboratories, Diagnostic Imaging Centers, and Dialysis Centers, NAICD 621492; (3) Hospitals, NAICS 622, including General Medical and Surgical Hospitals, Psychiatric and Substance Abuse Hospitals, and Specialty Hospitals; and (4) SNFs, NAICS 623110. Whether these providers are contracted or, in the case of PPOs and PFFS, not contracted with the MA plan, their aggregate payment for services is the sum of the enrollee cost sharing and plan payments. For non-contracted providers, § 422.214 and sections 1852(k)(1) and 1866(a)(1)(O) of the Act require that a non-contracted provider accept payment that is at least what they would have been paid had the services been furnished in a fee-for-service setting. For contracted providers, § 422.520 requires that the payment is governed by a mutually agreed upon contract between the provider and the plan. CMS is prohibited from requiring MA plans to contract with a particular healthcare provider or to use a particular price structure for payment under the plan by section 1854(a)(6)(B)(iii) of the Act. Consequently, for these providers, there is no additional cost burden above the already existing burden in original Medicare.
Based on the above considerations, the Secretary has certified that this FC will not have a significant impact on a substantial number of small entities.
In addition, Section 1102(b) of the Social Security Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. With regard to the section 1102(b) requirements for hospitals, while this rule does have a provision relating to inpatient hospital cost sharing limits, this rule imposes a burden neither on rural or non-rural hospitals because this FC applies only to enrollee cost sharing and does not require any changes in the amounts paid to hospitals. For example, after the MOOP amount is reached, hospitals are paid in full (by the plan or secondary insurance) with the enrollee paying nothing out of pocket. Consequently, the Secretary has certified that this FC does not impost a burden on hospitals.
Executive Order 13132, “Federalism,” establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on State and local governments, preempts state law, or otherwise has Federalism implications. The Department has determined that this FC will not impose such costs or have any Federalism implications.
We have analyzed this FC in accordance with the principles set forth in Executive Order 13175. We have determined that this FC does not contain policies that would have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
We have determined that this FC will not have a significant impact on the environment.
This FC is identified as economically significant which corresponds to the observation that certain groups of beneficiaries may have significant savings or losses. Nevertheless, for three reasons, we expect no aggregate impact to enrollees from the MOOP limit and Cost Sharing provisions adopted in this FC. First, there is a statutory requirement for submitted bids to be actuarially equivalent to coverage in original Medicare, implying that plans can shift costs, but not create additional out of pocket costs for enrollees compared to the original Medicare program. Even if there are shifts in enrollee out of pocket costs, in aggregate there will be no dollar impact. This is operationalized through an actuarial equivalence test that is a projection that MA cost sharing under each MA plan equals Medicare FFS cost sharing. At the time that the actuarially equivalent cost sharing amounts are calculated, the expectation is that there will be no costs or savings for the policy year in question.
Second, many provisions in this FC are codifications of long-standing policies. CMS is confident that this codification will not result in dollar impact, because CMS annually reviews bids, and has observed compliance with the bid requirements.
Third, an analysis of plan bid changes from contract year 2020 to 2021 provides supportive quantitative evidence that plans, for marketing reasons and because of the principles and incentives inherent in managed care, are not (in most cases) establishing the highest allowable MOOP amount. We note the $6,700 in-network mandatory MOOP limit calculated for contract year 2020 has been longstanding and we used this as a baseline to determine if MOOP amounts were being substantially increased under the new, higher MOOP limits. For example, based on March 2021 MA and MA-PD plan data, after CMS increased MOOP limits for contract year 2021 (using Medicare FFS data with 40 percent of ESRD costs), approximately 63 percent of plans established a MOOP amount below $6,700 (compared to approximately 65 percent with a MOOP amount below $6,700 for contract year 2020). This example highlights how MA organizations typically offer benefits with lower enrollee cost sharing responsibility than the annual limits published by CMS.
MOOP and cost sharing limits are important beneficiary protections and integral to ensuring that MA enrollees who need extensive or expensive health care services because of their health status do not face discrimination. While the overall statutory requirement that cost sharing in an MA plan must be at least actuarially equivalent to cost sharing in original Medicare limits the overall costs that MA plans must cover in their bids and overall out-of-pocket costs for enrollees, the ability to change or set cost sharing for different benefits at different levels could potentially be used by MA plans to discourage enrollment by beneficiaries with high health needs or specific types of health needs (for example, specific specialist services). Requiring MOOP and cost sharing limits in MA plan design in addition to the statutorily required MOOP limits for regional MA plans is necessary in order not to discourage enrollment by individuals who utilize
In preparing plan bids for contract year 2023 and future years to which this FC is applicable, we expect MA organizations may, as a result of the provisions of this FC, make adjustments to their benefit design, for example, increasing the MOOP amount and/or specific service category cost sharing. However, as indicated at the beginning of this section, which presents three arguments, we do not expect these changes will have a significant aggregate impact.
A substantive change of this FC from the February 2020 proposed rule is inclusion of multiyear transitions to adjust cost sharing limits for: (1) Professional service categories; (2) emergency services; and (3) benefits for which cost sharing must not exceed cost sharing under original Medicare. For example, we finalized a multiyear transition from the 50 percent professional cost sharing limit to a range of cost sharing limits (30, 40, and 50 percent) based on the MOOP type. We expect that a multiyear implementation schedule will be helpful to: (1) Mitigate potentially disruptive changes based on the projected increases to certain service category copayment limits resulting from using the Medicare FFS data projections; and (2) be responsive to commenter requests to provide time for MA organizations and enrollees to adjust to updated cost sharing limits.
We also proposed a multiyear transition schedule of incorporating costs related to Medicare-eligible enrollees with diagnoses of ESRD into the methodology we use to calculate MOOP and inpatient hospital acute and psychiatric cost sharing limits. We proposed to complete this transition by factoring in the ESRD costs into the methodology through an ESRD cost differential (which was generally finalized as proposed as a specific way to measure ESRD costs and factor them into the data used for calculating the MOOP and cost sharing limits). We proposed to transition the ESRD cost differential for both MOOP and inpatient hospital acute and psychiatric cost sharing limits as follows: 60 percent in 2022; 80 percent in 2023; and 100 percent in 2024. As discussed in sections II.A. and B. of this FC, we are finalizing the multiyear transition of ESRD costs into MOOP and cost sharing limits to complete in contract year 2024 as proposed, but given the delay in releasing a final rule for these provisions we are adjusting the ESRD cost differential percentage for contract year 2023 from 80 to 70 percent. The MOOP and cost sharing limits were maintained for contract year 2022 in the absence of a final rule for these provisions; we did not incorporate 60 percent of the ESRD cost differential in contract year 2022 as proposed. We expect judiciously adjusting the percent of ESRD cost differential in contract year 2023, while maintaining the final date by which the multiyear transition is completed (2024), will mitigate the risk of potential increased premiums or decreased benefits that may be associated with the migration of ESRD beneficiaries from Medicare FFS to the MA program and minimize disruption to beneficiaries. Under the finalized methodology, the ESRD cost differential is incorporated as follows: For 2023, 70 percent and for 2024, 100 percent. As discussed in the February 2020 proposed rule, we recognize incorporating ESRD costs would increase all in-network and combined MOOP limits for local and regional MA plan types, but including ESRD costs is an important and necessary step to ensure that plan designs are not discriminatory and protect beneficiaries from high and unreasonable financial costs regardless of the MA plan. We coordinated the MOOP and cost sharing proposals in sections VI.A. and B. of the February 2020 proposed rule in an effort to prevent substantial increases in MOOP limits, cost sharing limits, and premiums to protect beneficiaries, and proposed reasonable updates and flexibilities for MA organizations to offer sustainable MA plans with stable benefit designs.
As discussed in the February 2020 proposed rule, CMS expects transitioning ESRD costs into the data used to calculate MOOP and cost sharing limits may result in a combination of savings and costs for MA organizations. Depending upon an individual's health status and health care coverage selections, some enrollees may experience increased costs while others may experience decreased costs. CMS is not able to quantify these potential impacts precisely.
Accordingly, we provide background and a qualitative discussion to share our rationale. The cost to the MA organization of having a MOOP amount and reduced cost sharing is captured as a supplemental benefit in the bid pricing tool if the MA organization's decision about how to establish MOOP and cost sharing amounts for its plan design results in overall aggregate cost sharing for Medicare-covered benefits for that MA plan to be less than actuarially equivalent to cost sharing in original Medicare. With a higher MOOP limit or cost sharing (as a result of incorporating ESRD costs and/or using the most recent Medicare FFS data to calculate copayment limits), the cost of the MOOP limit and benefits are lower to the MA organization which allows additional rebate dollars to be spent elsewhere (for example, for cost sharing reductions or additional benefits). From an actuarial perspective, on average, the MA enrollee is receiving the same level of benefits in total (of course, individual impacts will vary). MA organizations can continue to structure their PBP to be actuarially equivalent to FFS (without supplemental benefits) through the cost sharing flexibilities that this FC includes. As a result, we expect the MOOP and Cost Sharing provisions will have no material aggregate impact.
Enrollment impacts from section 17006 of the 21st Century Cures Act are addressed in sections III.A., VII.B.3., and VIII.D.1. of the June 2020 final rule (85 FR 33796). Before the amendments made by the 21st Century Cures Act were effective for contract year 2021, individuals diagnosed with ESRD could not enroll in an MA plan, subject to limited exceptions. Generally, those exceptions included the following circumstances: An individual that developed ESRD while enrolled in an MA plan could remain in that plan; an ESRD individual enrolled in a plan which terminated or discontinued had a one-time opportunity to join another plan; or, an individual could enroll in a special needs plan that had obtained a waiver to be open for enrollment to individuals with ESRD. CMS calculated separate payment rates to address the higher costs MA plans may experience when managing care for enrollees with ESRD, and has been continuing to do so after Medicare beneficiaries with diagnoses of ESRD were allowed to enroll in MA plans in greater numbers.
MA organizations have been aware of the program change to allow Medicare beneficiaries with diagnoses of ESRD to enroll in MA since section 17006 of the Cures Act was enacted in December 2016. Accordingly, CMS expects MA organizations have planned and prepared for this program change by conducting business activities, such as evaluating plan benefits, provider contracting with network providers, developing case management programs, and addressing reinsurance arrangements as applicable. Following the 21st Century Cures Act, the OACT projected the number of individuals with diagnoses of ESRD that may enroll in MA.
CMS notes that MA organizations are in a competitive market and design their plan bids to manage risk, encourage enrollment, and satisfy Medicare coverage requirements. CMS does not require MA organizations to disclose these strategies, and as such, cannot quantitatively project what savings or costs MA organizations may incur from the changes in MOOP and cost sharing limits. CMS's goal is to provide predictable and transparent MOOP limits and cost sharing standards and to calculate limits at a level that should not result in significant new costs for MA organizations or enrollees. By taking the program changes from section 17006 of the 21st Century Cures Act into account within our existing process to calculate and update MOOP limits and cost sharing standards, we are protecting MA enrollees against high out-of-pocket costs and sudden changes in those costs.
As discussed in the February 2020 proposed rule, CMS believes the MOOP limit in the MA program provides a protection to MA enrollees from high out-of-pocket costs. CMS notes beneficiaries with diagnoses of ESRD previously enrolled in Medicare FFS with or without Medigap coverage may experience different cost sharing and out-of-pocket costs if they switch to an MA plan. For example, a Medicare beneficiary with a diagnosis of ESRD enrolled in Medicare FFS (without Medigap or employer coverage) may experience higher out-of-pocket costs annually if their annual health care treatment out-of-pocket costs go above the MOOP limit required for MA plans.
CMS cannot precisely project the individual cost impacts for enrollees and MA organizations in its proposed MOOP and cost sharing limit changes because potential savings and costs are largely influenced by—
• The rate of transition for Medicare beneficiaries with diagnoses of ESRD into the MA program;
• Enrollee cost sharing information including how many individuals (with and without ESRD) reach the MOOP, variability in reaching the MOOP by year, and frequency of utilization of services both below the MOOP and above the MOOP; and
• The mechanisms MA organizations choose to address this programmatic change, such as provider contracting, case management, plan benefit designs, and benefit flexibilities including Special Supplemental Benefits for the Chronically Ill, MA uniformity flexibility, and the proposed MOOP limits and cost sharing flexibilities, while additionally making sure the plan bid remains actuarially equivalent to original Medicare.
By implementing more than two levels of MOOP limits and providing increased flexibility in calculating cost sharing amounts for MA organizations with lower MOOP limits, we expect to encourage plan offerings with favorable benefit designs for Medicare beneficiaries to choose from. We note that beneficiaries consider the MOOP limit and cost sharing structure when choosing an MA plan, however we do not expect them to face more complex plan options due to our regulatory changes. From a beneficiary's perspective, the individual will have the ability to review the same volume of information about MOOP limits and cost sharing structures as currently available. We also do not expect MA organizations to necessarily offer more plan options than they currently do as a result of this change. MA organizations can already create different MOOP amount and cost sharing structures based on a number of market factors that may, or may not, be related to beneficiaries with ESRD diagnoses being able to enroll in MA plans. Additionally, CMS will continue evaluations and enforcement of its current authority prohibiting plans from misleading beneficiaries in their marketing and communication materials and continue efforts to improve plan offerings and plan comparison tools and resources (for example, Medicare & You and 1-800-MEDICARE). Consistent with statutory requirements, CMS will not approve a plan bid if its proposed benefit design substantially discourages enrollment in that plan for certain Medicare-eligible individuals.
We did not receive any comments that specifically referenced the cost impact of the MOOP and cost sharing proposals.
In this section, CMS includes discussions of Alternatives Considered to implement the provisions to which they are applicable. We note a more detailed discussion of the finalized implementation approach and the mechanics of operationalizing it for the policies discussed in this section is available in sections II.A. and B. of this FC. When considering the alternative transition scenarios presented in this section, the actuarial equivalence tests are still upheld, implying that in aggregate the expected enrollee cost sharing expenses will remain the same for those enrollees in MA and for those enrollees in FFS. Consequently, there are no expected changes to the Medicare Trust Fund expenditures since aggregate enrollee cost sharing remains unchanged under the alternative scenario(s). Additionally, several provisions of this FC codify long-standing existing polices used by CMS in annual bid reviews, implying that no additional dollar impact across the program as a whole will occur.
Throughout section V.H.1. and 2. of this FC we list alternatives, including multiyear transitions, for each or for combinations of the provisions. The multiyear transitions considered are generally consistent with the transition methodology proposed to incorporate ESRD costs into MOOP and inpatient hospital cost sharing limits. At a high level, all alternatives considered sought to strike a balance between: (1) Finalizing policies that would incentivize MA organizations to establish lower MOOP amounts; and (2) protecting enrollees from potential disruption that may result from
Throughout this section, each alternative would result in a terminal year in which MOOP limits and cost sharing standards are at 100 percent of what we proposed, with one exception for the “Part B drugs—other” service category (as explained in detail in sections II.B.5.e. and V.H.2. of this FC). The main difference between the alternatives is the length of time in which the finalized provisions are not fully in effect. In the February 2020 proposed rule, CMS developed the proposals to apply to contract year 2022 and future years. However, we did not finalize these provisions in advance of the contract year 2022 bid deadline. Consequently, we needed to delay implementation of the provisions in this FC to contract year 2023 and future years. This led us to use the MOOP limits and cost sharing standards that were set for contract year 2022 as the baseline (as shown in Tables 30, 31, and 33 through 37) for comparing the proposed and finalized policies. The level to which the provisions are in effect during the transitional period described in each alternative is described as a percentage in most cases. For example, 100 percent signifies that the transitional period has concluded and the provisions are fully implemented as finalized in this FC.
These transitions are examined through tables and narratives indicating consequences. While we project that there is no dollar impact to the Medicare Trust Fund from any of these alternatives, certain transitions may have unintended adverse beneficiary and marketing impacts. More specifically, a transition that is implemented too quickly may have an unintended effect of increasing cost sharing for certain services too quickly (based on the most recent Medicare FFS data projections available at the time of this FC). Such sudden increases would be expected to—
• Result in beneficiary concern;
• Potentially affect the “total beneficiary cost”; and
• Potentially steer certain sets of beneficiaries away from enrolling in the MA program or to different plans (this might have quantitative adverse impact, but we have no way of knowing how each group of beneficiaries would react nor how many are involved).
Similarly, a transition that is too slow is not useful or protective to enrollees. This delay would contradict the very purpose of using updated Medicare FFS data projections to calculate MOOP limits and cost sharing limits for inpatient services; this might result in MA organizations making other changes to their bid design, such as increasing premiums or reducing benefits. However, we have no way to quantify the potential adverse effects this may cause.
To avoid repetitive text, throughout this section we reference potential disruption generally instead of repeating the preceding paragraphs. Specifically, references to potential disruption include one or more of the adverse consequences listed previously in this section. Our goal in considering these alternatives in implementation is to achieve a balance in the transition, not too fast and not too slow for the stakeholders involved (namely, enrollees and MA organizations). Details of the projected MOOP and cost sharing limits that would result from the various alternatives (which motivated CMS in choosing a final implementation approach) are available in the tables and discussions in sections V.H.1. and 2. of this FC.
CMS considered two alternatives to finalize the ESRD cost transition into the methodology CMS uses to calculate MOOP limits at specific percentiles of beneficiary out of pocket costs in the Medicare FFS program. We note this part of the MOOP provision makes substantive changes to existing policy. Specifically, we considered alternatives in the rate and length of the ESRD cost transition due to all the following:
• Timing of this FC.
• Potential for enrollee disruption and impacts of further delays in integrating ESRD costs.
• Public comments on the MOOP limit proposals (as summarized in section II.A.4. of this FC).
The projections from the OACT in the February 2020 proposed rule on expected enrollment of 83,000 Medicare beneficiaries with diagnoses of ESRD into the MA program appear to align with actual enrollment based on 2021 enrollment data. As such, the delay of this FC resulted in the proposed 60 percent of the ESRD cost differential not being incorporated into contract year 2022 MOOP limits while enrollment of beneficiaries with diagnoses of ESRD in MA is projected to increase. Finally, as summarized in section II.A. of this FC, we received some public comments requesting changes to the proposed transition, including an accelerated transition of ESRD costs into the methodology CMS uses to calculate MOOP limits. As a result, CMS considered the following alternatives:
As shown in Tables 30 and 31, finalizing 80 percent of the ESRD cost differential for contract year 2023 would increase the MOOP limits at a greater rate than illustrated in the February 2020 proposed rule (using updated projections based on Medicare FFS data from 2017-2021). For example, in the February 2020 proposed rule the highest allowable in-network mandatory MOOP limit for contract year 2023 was projected to be $7,950 and this alternative implemented with updated projections based on 2017-2021 Medicare FFS data increased this amount to $8,700 (a $750 increase) as shown in Table 30. We also note this would reflect a $1,150 increase from the highest allowable in-network mandatory MOOP limit of $7,550 in contract year 2022. The increases to the MOOP limits resulting from this alternative shown in Table 30 (and by extension based on how the total catastrophic MOOP limits
We considered these higher projected increases in relation to actual contract year 2021 plan MOOP changes, potential impacts of further delays in integrating ESRD costs, and feedback from public commenters in determining the final ESRD cost transition as further described in this section. Ultimately, we expect that transitioning from 40 percent of the ESRD cost differential (initially incorporated for contract year 2021 and maintained for 2022) to 80 percent for contract year 2023 would have a greater potential to produce disruptive consequences (such as, greater disenrollment from the MA program as a result of potential plan benefit design changes) than reducing the percentage of ESRD costs that are incorporated for contract year 2023. As a result, we declined to adopt the ESRD cost transition exactly as proposed for contract year 2023 as we believe that another approach would better protect against potential enrollee disruption and be responsive to public commenters.
As shown in Table 30, finalizing 60 percent of the ESRD cost differential for contract year 2023 would increase the highest allowable in-network mandatory MOOP limit to $8,350, an increase of $400 from the illustrative $7,950 amount in the February 2020 proposed rule using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). This $8,350 amount also reflects a $800 increase from the highest allowable in-network mandatory MOOP limit of $7,550 in contract year 2022. In comparison, the highest allowable in-network mandatory MOOP limit increased from $6,700 to $7,550 ($850) from contract year 2020 to 2021 as a result of the Medicare FFS data percentile projections (based on 2015-2019 Medicare FFS data) and 40 percent of the ESRD cost differential being incorporated.
For the same reasons as discussed in the first alternative of this section, the increases to the MOOP limits resulting from this alternative do not reflect the application of a 10 percent change cap from the prior year's MOOP limit because the updated 95th and 85th percentiles did not increase or decrease more than 2 percentiles above or below the 95th and 85th percentiles from the prior year. Given this potential increase, we reviewed the changes MA plans made in establishing their contract year 2021 MOOP amounts and determined that most MA organizations were not utilizing the full flexibility from the increased MOOP limits. Comparing contract year 2020 and 2021, we found that approximately 35 percent of all MA and MA-PD plans established the highest allowable MOOP amount ($6,700) for contract year 2020 and approximately 37 percent of all MA and MA-PD plans chose to establish a MOOP amount at or above $6,700 for contract year 2021. This indicates a modest increase in the percent of plans with the highest allowable MOOP amount from the prior contract year on an aggregate basis. This data does not suggest that incorporating a greater percentage of the ESRD cost differential is likely to result in most MA organizations substantially increasing their MOOP amounts for contract year 2023 (as they already could increase their MOOP amounts further and chose not to for contract year 2021). However, we acknowledge that our data are limited to comparing the change between contract year 2020 and 2021. As a result, we cannot make a definitive prediction on how MA organizations may utilize the available flexibility in establishing their plan MOOP amounts for future years.
Feedback from public commenters (as summarized and responded to in section II.A. of this FC) included requests for an accelerated transition of ESRD costs into the methodology CMS uses to calculate MOOP limits given the potential for faster growth of ESRD enrollment in the MA program and geographic variations. In addition, the delay of this FC resulted in no increased ESRD cost adjustments in calculating contract year 2022 MOOP limits while enrollment of beneficiaries with diagnoses of ESRD in MA is projected to increase. Extending the ESRD cost transition would effectively produce changes that are contrary to commenter feedback, are not consistent with the increased costs MA organizations may experience based on enrollment projections, and are not sufficiently supported by the number of plans using the existing level of flexibility in MOOP limits. As a result, we rejected this alternative ESRD cost transition schedule because the data and public commenter feedback summarized previously did not suggest that an extended transition of ESRD costs in the methodology to calculate MOOP limits was justified or necessary to protect against potential enrollee disruption.
The proportion of ESRD cost differential incorporated into the MOOP limits for contract year 2023 was finalized at 70 percent instead of 80 percent as proposed. The impact of incorporating 80 percent (with the requirement that to apply the 10 percent cap on changes to the MOOP limit the respective percentiles of Medicare FFS costs would need to exceed two percentiles from the prior contract year) using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) is addressed in our discussion of the first alternative in this section and illustrated in Tables 29 and 30. In comparison, as shown in Table 30, this finalized approach increased the highest allowable in-network mandatory MOOP limit for contract year 2023 from the $7,950 illustrative amount in the February 2020 proposed rule to $8,300 (a $350 increase) using projections of Medicare FFS costs based on 2017-2021 Medicare FFS data. The $8,300 amount also reflects a $750 increase from the highest allowable in-network mandatory MOOP limit of $7,550 in contract year 2022. This increase to the mandatory MOOP limit was calculated using the contract year 2022 mandatory MOOP limit plus 10 percent of that amount and applying the rounding rules at § 422.100(f)(4)(iii) as the 10 percent cap on increases was met (without the requirement to exceed two percentiles from the prior contract year as described in section II.A.4. of this FC). The delay of this FC resulted in no increased ESRD cost adjustments in calculating contract year 2022 MOOP limits (versus the 20 percent increase proposed) while ESRD enrollment in MA is projected to increase in 2022. As a result, we considered changes to the ESRD cost transition to reduce the potential disruption from transitioning to 80 percent of the ESRD cost differential in 1 year (from 40 percent that was incorporated in contract year 2021 and maintained for contract year 2022). While the proportion of MA plans with mandatory MOOP amounts did not significantly change between contract year 2020 and 2021 (approximately 2 percent as discussed previously in this section) this trend may not continue if MOOP limits do not fully reflect ESRD costs as ESRD enrollment in the MA program continues to increase. For example, as indicated in our discussion of disruption in section V.H. of this FC, delaying the ESRD cost transition may result in MA organizations choosing to use the maximum level of flexibility that is available (increasing the MOOP amount to the maximum MOOP limit to a greater extent than prior years) or making other changes to their plan benefit designs (increasing premiums or cost sharing amounts) in order to compensate for the additional costs they would be covering.
In addition, feedback from public commenters (as summarized and responded to in section II.A. of this FC) included requests for an accelerated transition of ESRD costs into the methodology CMS uses to calculate MOOP limits given the potential for faster growth of ESRD enrollment in the MA program and geographic variations. While the finalized approach does not accelerate the timeframe to fully integrate ESRD costs into MOOP limits, as some commenters requested, the transition schedule as finalized strikes a balance between curbing more significant increases to MOOP limits from contract year 2022 and helping ensure that MA organizations are able to continue offering all plan enrollees, regardless of their ESRD status, high-quality care and service while keeping premiums and out-of-pocket costs at non-discriminatory levels. By striking this balance and continuing our longstanding practice of calculating MOOP limits based on Medicare FFS data projections, CMS expects the finalized transition schedule will also mitigate the risk of increased premiums or decreased benefits that may be associated with the migration of beneficiaries with diagnoses of ESRD from Medicare FFS to the MA program.
As noted in section V.G. of this FC, because of multiple factors affecting bids and our longstanding actuarially equivalent plan bid requirements, we have not estimated a cost to this provision and acknowledged a possible combination of savings and costs for individual MA organizations and enrollees. Similarly, we would not be able to quantify potential impacts from these alternatives. However, potential impacts from the alternatives are noted previously in this section.
Similar to our approach for the MOOP limit provision, CMS developed several alternatives to finalizing the specific proposals on Cost Sharing that make substantive updates to existing policy. These proposals include the following:
• Range of Cost Sharing Limits for Certain Outpatient and Professional Services (§ 422.100(f)(6)(iii)).
• Emergency/Post-Stabilization Services and Urgently Needed Services (§ 422.113(b)(2)(v) and (vi)).
• Services No Greater Than Original Medicare (§ 422.100(j)(1))
We considered alternatives due to all of the following:
• Timing of this FC.
• Potential for enrollee disruption.
• Public comments on the Cost Sharing proposals (as summarized in section II.B.5. of this FC).
After the February 2020 proposed rule was released, we received updated Medicare FFS projections for service category cost sharing amounts from the OACT that were not available at the time of drafting the February 2020 proposed rule (for example, updated average and median allowed amount Medicare FFS data projections based on 2017 through 2021 Medicare FFS data). We evaluated the potential enrollee disruption resulting from the use of these updated amounts to calculate actuarially equivalent copayment limits. Finally, as summarized in section II.B. of this FC, we received public comments requesting changes to our proposals, including applying a transition to the range of cost sharing limits for professional services and delays to increases to cost sharing for emergency services.
In this section we address the consequences of alternatives that were considered in response to the factors and feedback discussed previously. While each cost sharing proposal, such as the ones for emergency services or the ones for the copayment limits for professional services, had unique aspects, we present the narrative discussing the alternatives for all of these proposals in one section (as the approach is generally the same for each provision). However, the tables in this section show how each alternative would uniquely impact the copayment limits that are subject to a particular policy (either §§ 422.100(f)(6)(iii), (j)(1), or 422.113(b)(2)(v)).
The following tables contain the projected impact of finalizing each of the alternatives discussed in this section on contract year 2023 cost sharing limits for particular service categories:
• Table 33: Physical therapy and speech-language pathology.
• Table 34: Partial hospitalization.
• Table 35: Emergency services.
• Table 36: Part B drugs—chemotherapy/radiation drugs.
• Table 37: Part B drugs—other.
A more complete discussion of the data analyses completed to reach the actuarially equivalent values of the copayment limits in Tables 33 through 37 is available in the February 2020 proposed rule and section II.B.5 of this FC. In addition, the cost sharing limits in Tables 33 through 37 for Alternative 3 are final amounts resulting from CMS applying the regulations using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). In addition, the specific emergency services cost sharing limits in Table 35 for Alternative 3 in section V.H.2.c. of this FC are codified in § 422.113(b)(2)(v) for contract year 2023. We note that no additional Medicare FFS data projections were used to calculate the cost sharing limits for emergency services during the transition in Table 35 (all amounts were based on the specified dollars limits from the February 2020 proposed rule). A complete list of final contract year 2023 in-network cost sharing limits calculated following the methodology in this FC is available in Table 28.
As shown in Table 33, finalizing the range of cost sharing limits for contract year 2023 would increase the physical therapy and speech-language pathology copayment limit for a plan that establishes a lower MOOP amount to $90, a $5 increase from the illustrative amount in the February 2020 proposed rule (using contract year 2023 Medicare FFS data projections based on 2017-2021 Medicare FFS data). This $90 amount also reflects a $50 increase from the contract year 2022 copayment limit for this service category. Similarly, as shown in Table 34, this alternative would increase the partial hospitalization copayment limit for a plan that establishes a lower MOOP amount to $135. This $135 amount reflects a $80 increase from the contract year 2022 copayment limit for this service category.
As shown in Table 35, finalizing the proposed emergency services cost sharing limits for contract year 2023 would increase the cost sharing limit for a plan that establishes a lower MOOP amount from $120 in contract year 2022 to $150 for contract year 2023 and future years (an increase of $30) as generally illustrated in the February 2020 proposed rule. These specific cost sharing limits would apply unless cost
As shown in Table 36, the 20 percent coinsurance limit (cost sharing under original Medicare) for the Part B drugs—chemotherapy/radiation drugs service category remains consistent with the cost sharing standards CMS has used since 2012. In addition, using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data) for the Part B drugs—chemotherapy/radiation drugs service category, an actuarially equivalent copayment value based on 20 percent coinsurance would be $280. As a result, if this first alternative were finalized, beginning in contract year 2023 MA organizations could establish a $280 copayment (a $205 increase from the $75 copayment limit for Part B drugs—chemotherapy/radiation drugs for contract year 2022) which would be potentially disruptive to enrollees.
As shown in Table 37, to be consistent with the February 2020 proposed rule for this alternative, we considered the alternative under which we would apply the range of cost sharing limits (30, 40, and 50 percent) for the “Part B drugs—other” service category rather than our longstanding 20 percent coinsurance requirement. This alternative would increase the cost sharing limit for a plan that establishes a lower MOOP amount from $50 or 20 percent coinsurance in contract year 2022 to $800, or 50 percent coinsurance for contract year 2023 (an increase of $750). Specifically, $800 reflects an actuarially equivalent value to 50 percent coinsurance for the “Part B drugs—other” service category using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data).
We note that if we instead codified the 20 percent coinsurance limit without a transition, based on the same contract year 2023 Medicare FFS data projections, the actuarially equivalent copayment limit would be $320 for the “Part B drugs—other” service category in contract year 2023. Based on these significant projected increases to the “Part B drugs—other” copayment limit in comparison to the contract year 2022 limit (as shown in Table 37), we decided to address this service category differently from the other service categories we proposed to be subject to § 422.100(f)(6)(iii) for the rest of this section. Specifically, instead of finalizing a range of cost sharing for this service category, we considered both codifying our longstanding 20 percent coinsurance requirement and applying a multiyear transition to an actuarially equivalent copayment value based on 20 percent coinsurance in the other alternatives discussed in this section.
In relation to the cost sharing limits in Tables 33, 34, 36, and 37, as discussed in section II.B.5. of this FC, if CMS does not calculate a copayment limit for a service category subject to § 422.100(f)(6)(iii) or (j)(1) (which would also be consistent with the February 2020 proposed rule), an MA plan must not establish a copayment that exceeds an actuarially equivalent value to the cost sharing standard. This means the potential outcomes shown in Tables 33, 34, 36, and 37 for this alternative remain essentially the same in the absence of a copayment limit calculated by CMS. For example, if CMS did not set a contract year 2023 partial hospitalization service category copayment limit for MA plans with a lower MOOP amount those plans may still be able to establish up to an $135 copayment under this alternative for contract year 2023 (the same amount shown in Table 34 for this alternative).
As discussed in section II.B. of this FC, calculating copayment limits based on updated Medicare FFS data projections reflects plan costs associated with the variety and expense of services included in the cost sharing limit. In addition, calculating a maximum cost sharing limit of up to 50 percent coinsurance or an actuarially equivalent copayment value for a lower MOOP type is consistent with CMS's longstanding interpretation and application of the anti-discriminatory requirements, which is that cost sharing over 50 percent for services—where there are no other applicable cost sharing limits—is discriminatory to enrollees who need those services. However, our proposed methodology to calculate copayment limits based on specified percentages is, in effect, a recalibration of the copayment limits in one year by using a methodology adjusted from longstanding policy and updated Medicare FFS data projections. As a result, implementing this alternative means that some of the projected copayment limits in Tables 33 through 37 represent substantial disruptive shifts from the prior contract year since enrollees could experience changes in copayments up to those amounts. As discussed in the introduction to section V.H. of this FC, we understand such increases (in conjunction with the other projected increases to MOOP limits as discussed in more detail in section II.A. and V.H.1. of this FC) could have significant disruptive consequences for enrollees, especially if they have limited financial means.
Public comments (as summarized and responded to in section II.B.5. of this FC) were mixed on these three cost sharing proposals (in §§ 422.100(f)(6)(iii), (j)(1), and 422.113(b)(2)(v) and (vi)). In brief, some commenters generally opposed the proposed increases to the cost sharing limits for certain service categories (such as physical therapy and speech-language pathology, emergency services, and dialysis services) as they stated it may prevent MA enrollees from having meaningful access to services and substantial changes to copayment limits from one year to the next should be avoided to reduce disruption in the market and for beneficiaries. Other commenters were supportive as they stated it would provide an incentive for MA organizations to offer plans with lower MOOP amounts. In addition, a commenter requested CMS conduct a multiyear transition from the current cost sharing limits to the range of cost sharing limits proposed given the potential for enrollee disruption (based on the projected changes to cost sharing limits in the February 2020 proposed rule). While we respond to these (and other) comments in section II.B.5. of this FC, we agree that it is important that enrollees do not face unexpected financial hardships in accessing needed health care services. Further, finalizing these proposals for contract year 2023, when the actuarially equivalent copayment limits for some professional service categories have increased to a greater extent than illustrated in the February 2020 proposed rule (using contract year 2023 Medicare FFS data projections based on 2017-2021 Medicare FFS data) would not have fully addressed the concerns raised in those public comments that CMS shared.
In summary, implementing this alternative to finalize as proposed (with the delay of implementation of the three cost sharing proposals from contract year 2022 to 2023) would mean that many of the copayment limits for services categories subject to §§ 422.100(f)(6)(iii), (j)(1), and 422.113(b)(2)(v) and (vi) would substantially increase from the prior contract year. Based on the enrollee's situation, these changes would be disruptive; they could, for example, potentially discourage them from seeking those services with increased cost sharing and/or result in enrollees choosing to disenroll from the plan or the MA program. We rejected this alternative because the data and public commenter feedback summarized previously did not suggest that
Further, CMS has a practice of phasing in changes in the MA program in order to avoid unnecessary disruption and to ensure a smooth transition. For example, CMS began incorporating encounter data into risk score calculations in 2015 as an additional source of diagnoses. Between 2016 and 2022, CMS calculated risk scores for MA organizations using a weighted average of RAPS-based and encounter data-based risk scores, gradually phasing in encounter data in risk score calculation. In 2022, CMS completed the transition to calculating risk scores for payment to MA organizations using only encounter data. Similarly, the 21st Century Cures Act mandated that several changes be made to the Part C risk adjustment model for MA organizations, and that these changes be phased in over a 3-year period, beginning with 2019, with the changes being fully implemented for 2022. CMS began implementing the risk adjustment requirements in the Cures Act in 2019, with a portion of the risk score applied in payments to MA organizations calculated with a risk adjustment model that included new condition categories. CMS continued implementation by calculating an increasing portion of the risk score used for payments for 2020 and 2021 using a model that included additional condition categories and factors that take into account the total number of diseases or conditions of a beneficiary. For 2022 payment to MA organizations, the risk adjustment model that meets Cures Act requirements was fully phased in. This history has demonstrated the value of using transition schedules when incorporating changes into the MA program.
Alternative 2: We considered: (1) Finalizing a 5-year transition to implement the three cost sharing proposals (with one exception for the “Part B drugs—other” service category) beginning for contract year 2023; (2) codifying our longstanding requirement of 20 percent coinsurance (the cost sharing under original Medicare) for the “Part B drugs—other” service category; (3) calculating copayment limits for the “Part B drugs—other” service category consistent with the 5-year transition (rather than immediately using a copayment limit that is actuarially equivalent to the coinsurance limit); and (4) requiring that CMS set copayment limits at an amount that is the lesser of: An actuarially equivalent value to the applicable cost sharing standard or the value resulting from the 5-year actuarially equivalent copayment transition for that service category. In considering these changes our goal is to protect against potential enrollee disruption, provide MA organizations with adequate time to prepare for these changes, and to incentivize MA organizations to establish lower MOOP amounts. This alternative would result in the least substantial increases to the contract year 2023 cost sharing limits as shown in Tables 33 through 37 in comparison to the other alternatives discussed in this section. However, we ultimately rejected this alternative because of potential disruptive consequences resulting from an extended transition as discussed at the beginning of this section and in section V.H. of this FC (for example, MA organizations increasing premiums or reducing benefits).
The detailed aspects of operationalizing a multiyear transition for these proposals is provided in section II.B.5 of this FC. Our goal in this Alternative Considered section is to analyze the individual cost sharing and difficult-to-quantify impacts of various alternatives. However, in order to understand the long-term implications of this alternative, we summarize the coinsurance limits that would be applied for service categories subject to § 422.100(f)(6)(iii) in Table 32. Table 32 is not included in section II.B. of this FC as that section focuses on the finalized methodology (the third alternative in this section). In addition, Table 32 is only relevant to service categories subject to paragraph (f)(6)(iii) as the coinsurance limit for benefits subject to § 422.100(j)(1) would not need to be transitioned (20 percent coinsurance remains consistent with contract year 2022) and the cost sharing limits for emergency services in § 422.113(b)(2)(v) do not include coinsurance limits (before our proposal and as proposed). As shown in Table 32, CMS would maintain the 50 percent coinsurance limit for the lower (previously “voluntary”) MOOP type and transition the contract year 2022 coinsurance limit of 50 percent for the mandatory MOOP type to the proposed 30 percent coinsurance limit by decreasing the limit 4 percent each year. In addition, as finalized in section II.A. of this FC, the intermediate MOOP limit is a new type of MOOP beginning in contract year 2023. In order to provide consistently differentiated coinsurance limits between the MOOP limits through the 5-year transition, we would set a 48 percent coinsurance limit for contract year 2023 for the intermediate MOOP limit and decrease it by 2 percent each year to reach the proposed 40 percent coinsurance by contract year 2027.
In implementing the requirement that CMS set copayment limits at an amount that is the lesser of: (1) An actuarially equivalent value to the applicable cost sharing standard; or (2) the value resulting from the 5-year actuarially equivalent copayment transition for that service category, we note the first value would be the actuarially equivalent copayment to the coinsurance limit shown in Table 32. The second value would result from CMS factoring in an increasing percentage of the difference (or differential) between two values: (1) The contract year 2022 copayment limit for the service category; and (2) the actuarially equivalent value for that service category based on the proposed
• Contract Year 2023: 20 percent
• Contract Year 2024: 40 percent
• Contract Year 2025: 60 percent
• Contract Year 2026: 80 percent
• Contract Year 2027: 100 percent
By factoring in 100 percent in contract year 2027 CMS would complete the transition to actuarially equivalent copayment values at the same time the range of coinsurance limits are completed in Table 32 (that is, the copayment limits calculated for contract year 2027 would be actuarially equivalent to the coinsurance limits that apply for that year as we proposed for contract year 2022).
As shown in Table 33, finalizing a 5-year transition to the range of cost sharing limits reduces the increase to the physical therapy and speech-language pathology copayment limit for a plan that establishes a lower MOOP amount compared to the first alternative discussed in this section (using Medicare FFS data projections based on 2017-2021 Medicare FFS data). For example, the contract year 2023 copayment limit for the physical therapy and speech-language pathology service category if a plan establishes a lower MOOP amount would be $50 under this alternative. This $50 amount reflects a $35 decrease compared to the $85 illustrative copayment limit in the February 2020 proposed rule. In addition, this $50 amount is a $10 increase from the contract year 2022 copayment limit of $40 for this service category (compared to a $50 increase for the lower MOOP limit if the first alternative discussed in this section was implemented). Similarly, as shown in Table 34, this alternative would result in a $70 contract year 2023 copayment limit for the partial hospitalization service category for a plan that establishes a lower MOOP amount. This $70 amount reflects a $15 increase compared to the contract year 2022 copayment limit of $55 for this service category. The copayment limits in Table 33 and 34 also reflect implementing the “lesser of” requirement (for both alternative two and three in this section); each copayment limit calculated from factoring in an increasing percentage of the actuarially equivalent copayment differential over the transition period was less than the amount that would be actuarially equivalent to the coinsurance limit that would apply in contract year 2023 (as listed in Table 32 and described in the third alternative in this section).
As shown in Table 35, applying a 5-year transition would reduce the impact of the increase to the emergency services cost sharing limit for a plan that establishes a lower MOOP amount from $120 in contract year 2022 to $125 for contract year 2023, an increase of $5 from the prior contract year instead of the $30 increase, as illustrated in the February 2020 proposed rule. As no coinsurance limits for emergency services were proposed, the requirement that CMS set copayment limits at an amount that is the lesser of: (1) An actuarially equivalent value to the applicable cost sharing standard; or (2) the value resulting from the actuarially equivalent copayment transition for that service category does not apply to emergency services.
Table 36 illustrates that applying a 5-year transition would reduce the increase to the Part B drugs—chemotherapy/radiation drugs service category copayment limit; the copayment limit would increase from $75 in contract year 2022 to $115 for contract year 2023. This $115 amount reflects an increase of $40 from the prior contract year and a decrease of $165 in comparison to the first alternative in this section (using contract year 2023 Medicare FFS data projections based on 2017-2021 Medicare FFS data). The copayment limits in Table 36 also reflect implementing the “lesser of” requirement (for both alternative two and three in this section); each copayment limit calculated from factoring in an increasing percentage of the actuarially equivalent copayment differential over the transition period was less than the amount that would be actuarially equivalent to the coinsurance limit that would apply in contract year 2023 (20 percent, reflecting the cost sharing in original Medicare).
Table 37 shows applying this alternative for the “Part B drugs—other” service category produces substantially lower copayment limits than the first alternative discussed in this section (using the same contract year 2023 Medicare FFS data projections). This is because the differential between the contract year 2022 limit and the final cost sharing limits that would be applied in contract year 2027 is reduced from a maximum of $800 (for the lower MOOP limit under the first alternative) to $105 (for all MOOP types under this alternative). Specifically, Table 37 applies a 5-year transition to reach an actuarially equivalent copayment limit to our longstanding 20 percent coinsurance requirement for the “Part B drugs—other” service category. For example, under this alternative the contract year 2023 “Part B drugs—other” service category copayment limit for a plan that establishes a lower MOOP amount would be $105, an increase of $55 from the $50 contract year 2022 copayment limit. In comparison, the increase from contract year 2022 would be $750 from the first alternative in this section (which would have used a 50 percent coinsurance limit for the lower MOOP type). Finally, the copayment limits shown in Table 37 for both the second and third alternative discussed in this section also reflect implementing the “lesser of” requirement; each copayment limit calculated from factoring in an increasing percentage of the actuarially equivalent copayment differential over the transition period was less than the amount that would be actuarially equivalent to the coinsurance limit that would apply in contract year 2023 (20 percent).
If CMS does not set a copayment limit for a service category subject to § 422.100(f)(6)(iii) or (j)(1) (which would also be consistent with the February 2020 proposed rule), an MA plan must not establish a copayment that exceeds an actuarially equivalent value based on the coinsurance limit. In comparison, the contract year 2023 copayment limits that would result from this alternative (and the third alternative in this section) in Tables 33, 34, 36, and 37 are not solely based on being actuarially equivalent to the coinsurance limit, using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). Rather, they are influenced by the contract year 2022 copayment limits through the increasing incorporation of the differential (and the requirement to set the copayment limit using the lesser value) as discussed previously in this section. As a result, if CMS does not set a copayment limit during a multiyear transition period (following this alternative or the third alternative discussed in this section) for a service category subject to paragraph (f)(6)(iii) or (j)(1), the copayments MA organizations may establish for that service category may be higher or lower than the values in Tables 33, 34, 36, and 37. The potential administration burden for each service category for which CMS does not calculate a copayment limit
As discussed in section II.B. of this FC, the copayment limits set for some service categories (subject to § 422.100(f)(6)(iii) and (j)(1) in this FC) in past years do not reflect current actuarially equivalent values using contract year 2023 Medicare FFS data projections (based on 2017-2021 Medicare FFS data). In applying a multiyear transition to recalibrate copayment limits and a requirement to set copayment limits at the lower value, enrollees will be better protected from potential disruption and MA organizations will have more time to consider different cost sharing structures and approaches, such as using copayment structures (which may be more transparent for beneficiaries) instead of coinsurance, or using lower cost sharing than the maximum permitted.
However, as indicated in the introduction to this Alternative Section, applying a lengthy multiyear transition to reach the proposed range of cost sharing limits may not provide an incentive for MA organizations to adopt a lower MOOP amount as quickly. In addition, an earlier completion of the transition will: (1) Improve the alignment of copayment limits with the coinsurance limits; (2) increase the flexibility MA organizations have in establishing copayments; (3) may encourage the use of copayments and lower MOOP amounts among MA plans; and (4) mitigate potential premium increases or benefit reductions. Further, MA organizations were able to, and may continue to, establish cost sharing equal to original Medicare for all benefits subject to paragraph (j)(1) and cost sharing up to 50 percent coinsurance for professional service categories subject to § 422.100(f)(6)(iii) in contract year 2022 and prior years through coinsurance structures. Some MA organizations may have chosen to use coinsurance structures in their benefit designs because of geographic variation in health care costs. While CMS is finalizing the policies in this FC in a manner to avoid potentially disruptive changes for enrollees wherever possible, a longer transition schedule for service categories subject to paragraph (j)(1) means that the copayment limits remain out of proportion to the consistent 20 percent coinsurance limit for a longer period of time. If CMS maintained copayment limits at lower than actuarial equivalent amounts for a long period of time, MA organizations may still modify their plan benefit designs in other ways to cover these additional costs.
We rejected this alternative to apply a 5-year transition schedule because we expect a shorter transition schedule is a more reasonable way for MA organizations to absorb the costs of providing these services and in designing plan benefits. In addition, as discussed in section II.B. of this FC, updated Medicare FFS projections since the February 2020 proposed rule show further increases (for service categories applicable to each of the three cost sharing proposals discussed in this section). However, we clarify that the projected increased costs for emergency services (based on contract year 2023 Medicare FFS data projections) are not factored into the transition of cost sharing limits in Table 35 as the proposal for that service category was based on specific amounts.
Alternative 3 (Finalized): This alternative: (1) Shortens the multiyear transition by 1 year (compared to the second alternative discussed in this section); (2) continues to codify the longstanding 20 percent coinsurance limit for the “Part B drugs—other” service category (with the same 4-year transition); and (3) requires that CMS set copayment limits at an amount that is the lesser of: An actuarially equivalent value to the applicable cost sharing standard or the value resulting from the 4-year actuarially equivalent copayment transition for that service category. The shorter transition schedule results in increases to the copayment limits for contract year 2023 for the service categories shown in Tables 33 through 37 that are generally greater than the second alternative but less than the first alternative. In addition, applying either this alternative or the second alternative discussed in this section also results in the same cost sharing limits for contract year 2023 for certain service categories and MOOP limits (as shown in Tables 33 through 35). However, the differences in applying this alternative or the second alternative discussed in this section, would result in greater differences in the cost sharing limits in the later years of the multiyear transition schedules in most cases.
Our rational for selecting this finalized approach is multifaceted. It—(1) improves the methodology CMS uses to calculate copayment limits to ultimately reflect actuarially equivalent values based on updated Medicare FFS data projections; (2) helps to mitigate potentially substantial increases to cost sharing or premium, and/or benefit reductions if copayment limits are not adjusted to reflect updated Medicare FFS data projections; (3) incentivizes MA organizations to adopt lower MOOP amounts; and (4) implements changes in a transparent, incremental approach to provide more stability and predictability to the MA program. This rationale and the aspects of operationalizing this transition are discussed in greater detail in section II.B. of this FC (for example, see Table 13 for the annual change in coinsurance limits for service categories subject to § 422.100(f)(6)(iii) for contract years 2023 to 2026 and future years). As shown in Table 33, finalizing a 4-year transition to the range of cost sharing limits results in nominal changes for the physical therapy and speech-language pathology service category compared to the second alternative discussed in this section (using the same contract year 2023 Medicare FFS data projections). Specifically, the coinsurance limit for the intermediate and mandatory MOOP limit is 1 percent less than what would be applied if the second alternative was implemented. This outcome holds true in contract year 2023 for all professional services subject to paragraph (f)(6)(iii) as coinsurance limits are applied consistently across these service categories. As a result of applying a requirement to set copayment limits at the lower value and the rounding rules in paragraph (f)(6)(ii), Table 34 shows that the contract year 2023 partial hospitalization copayment limit for the lower and intermediate MOOP limits changes by $5 between the second and third alternatives.
Finalizing a 4-year transition does not change the emergency services cost sharing limits in comparison to implementing the second alternative discussed in this section for contract year 2023 (as shown in Table 35). This is due to the rounding rules, which are being applied consistent with the February 2020 proposed rule. CMS calculated the proposed and final emergency services cost sharing limits using those same rounding rules. As discussed in relation to the second alternative in this section, the requirement that CMS set copayment limits at an amount that is the lesser of: (1) An actuarially equivalent value to the applicable cost sharing standard; or (2) the value resulting from the actuarially equivalent copayment transition for that service category does not apply to emergency services.
Table 36 shows how finalizing a 4-year transition also reduces the contract year 2023 Part B drugs—chemotherapy/radiation drugs service category copayment limit compared to the first alternative in this section. Specifically, the increase from the $75 copayment
Table 37 shows how finalizing a 4-year transition from current copayment limits to copayments that are aligned to the longstanding 20 percent coinsurance limit for the “Part B drugs—other” service category significantly reduces the contract year 2023 copayment limit for this service category compared to the first alternative in this section (based on the same contract year 2023 Medicare FFS data projections). Specifically, the increase to the “Part B drugs—other” service category copayment limit from the prior year ($50 for contract year 2022) for this alternative is $70 (for all MOOP types) which is significantly lower than an increase of $750 in the first alternative for a plan that establishes a lower MOOP amount). In addition, the $120 copayment limit resulting from this alternative reflects an increase of only $15 in comparison to the second alternative discussed in this section as a result of applying a requirement to set copayment limits at the lower value and the rounding rules in paragraph (f)(6)(ii).
As discussed previously, the potential administration burden for each service category for which CMS does not set a copayment limit would remain the same. As discussed in the second alternative in this section, if CMS does not apply the methodology and rules in § 422.100(f)(6), (f)(7), (f)(8) and (j) to set a copayment limit during the multiyear transition period for a service category subject to paragraph (f)(6)(iii) or (j)(1), MA organizations may establish copayment amounts for that service category that may be higher or lower than the projected values in Tables 33, 34, 36, and 37, depending on the MA organization's calculation of a value that is an actuarially equivalent to the applicable coinsurance limit.
As a result, CMS calculated and set contract year 2023 copayment limits for the majority of service categories that had copayment limits in contract year 2022 (as shown in Tables 25A, 25B, and 28). Specifically, for benefits subject to § 422.100(j)(1), calculating actuarially equivalent copayment limits based the most recent Medicare FFS data projections available to CMS for these service categories ensures that MA cost sharing does not exceed cost sharing in original Medicare for those benefits. This allows CMS to ensure MA organizations comply with these limits and that the plan cost sharing does not discriminate against or discourage enrollment in an MA plan by beneficiaries who have high health care needs.
We acknowledge that a multiyear transition that is shorter than 4 years, but longer than 1 year as described in the first alternative, would result in more substantial increases to the copayment limits for the service categories subject to §§ 422.100(f)(6)(iii), (j)(1), and 422.113(b)(2)(v) compared to the contract year 2022 limits. For example, a $5 increase to the partial hospitalization service category copayment limit for the mandatory MOOP limit in comparison to contract year 2022 (as shown in Table 34 for this alternative) is not necessarily substantial by itself. However, CMS considered the combined potential effect of the increases to MOOP limits and copayment limits across service categories. For example, we were especially aware of the substantial increases to the copayment limits for benefits subject to paragraph (j)(1) from contract year 2022 as a result of calculating actuarially equivalent values to the cost sharing in original Medicare using contract year 2023 Medicare FFS data projections based on 2017-2021 Medicare FFS data (as shown in Tables 36 and 37) could negatively impact enrollees as described in the introduction to section V.H. of this FC. In addition, prior to this FC, CMS has only updated MOOP limits, inpatient hospital, skilled nursing facility, and emergency services cost sharing limits in recent years. Under this FC, we will be updating MOOP limits and cost sharing limits for most service categories each year during the transition period, which reflects more significant changes to our standards compared to recent years, in order to reach the proposed MOOP and cost sharing limits in a reasonable timeframe.
Based on the considerations discussed in this section, we are implementing this alternative to: (1) Codify our longstanding 20 percent coinsurance limit for the “Part B drugs—other” service category; (2) apply a 4-year transition to reach the proposed cost sharing standards (for professional services, emergency services, and benefits for which cost sharing must not exceed cost sharing in original Medicare); and (3) require that CMS set copayment limits at an amount that is the lesser of: an actuarially equivalent value to the applicable cost sharing standard or the value resulting from the 4-year actuarially equivalent copayment transition for that service category. We expect implementing the policies based on this alternative will (for the reasons discussed in this section and in section II.B. of this FC: (1) Ensure beneficiary access to affordable and sustainable benefit packages; (2) protect enrollees from discriminatory levels of cost sharing; (3) limit potential rapid cost and benefit changes; (4) encourage MA organizations to establish lower MOOP amounts; and (5) streamline the updates to MOOP limit and cost sharing requirements, which will also provide stability for MA organizations. We reiterate that the copayment limits set for contract year 2022 have been in place for a number of years and that CMS expects that this 4-year transition to the proposed cost sharing limits will ultimately result in stable benefit packages by ensuring limits are calculated following established actuarial methods, using the most recent Medicare FFS data projections available, and by aligning copayment limits with coinsurance limits. In other words, CMS is making the changes necessary to reach actuarially equivalent copayments that reflect plan costs associated with the variety and expense of services included in the cost sharing limit while protecting beneficiaries from discriminatory levels of cost sharing.
This FC rule finalizes provisions on the coinsurance and copayment limits for professional service categories, the cost sharing limits for emergency services, copayment limits for service categories for which cost sharing must not exceed cost sharing under original Medicare, and presents a multiyear transition for ESRD costs for MOOP limits and inpatient hospital cost sharing limits. As discussed in this RIA section, a combination of three reasons drives the conclusion that in aggregate this FC has no cost: (1) The MA requirement of actuarial equivalence to coverage in original Medicare, implying that plans can shift costs, but not create additional out of pocket costs for enrollees compared to the original Medicare program; (2) many of the provisions of this FC are codifications of existing practice, which because of the annual bid cycle and review, we are confident plans are complying with; and (3) with regard to the MOOP provisions, analysis of bid changes shows that plans in general have not been charging the highest MOOP amount.
As a result, although in aggregate there is no estimated impact, Medicare Advantage plans may shift cost sharing costs provided they do not create additional costs. This is because actuarial equivalence refers to an equivalence with all original Medicare beneficiaries and all services provided by original Medicare. It follows, that a more detailed analysis on particular cohorts of enrollees and particular collections of services may reveal gains or losses to these groups. Because of the challenges with making such an analysis, including the proprietary nature of bids, we are unable to provide quantification in this FC; however, because of the possibility that some of these cohorts might have a gain or loss exceeding the threshold, we have classified this rule as major.
This summary serves as the accounting statement required by Circular A-4.
This FC makes policy changes in alignment with federal laws related to the Medicare Advantage (MA or Part C) program from the 21st Century Cures Act (Pub. L. 114-255). The rule also includes regulatory changes to strengthen and improve the Part C program by codifying in regulation several CMS policies previously adopted through the annual Call Letter and other guidance documents to interpret and implement rules regarding benefits in MA plans. The provisions in this FC do not have an aggregate cost impact.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on February 8, 2022.
Administrative practice and procedure, Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
42 U.S.C. 1302 and 1395hh.
The revisions and additions read as follows:
(f) * * *
(1)
(2)
(3)
(4)
(i)
(A)
(B)
(C)
(ii)
(iii)
(iv)
(A)
(B)
(C)
(v)
(A)
(B)
(vi)
(A) For 2023, CMS uses projected Medicare FFS beneficiary out-of-pocket spending for beneficiaries without diagnoses of ESRD plus 70 percent of the ESRD cost differential.
(B) For 2024 and subsequent years, CMS uses the Medicare FFS data projections.
(5)
(i)
(ii)
(iii)
(6)
(i)
(ii)
(A) For service categories subject to paragraph (f)(6)(i) of this section, professional services subject to paragraph (f)(6)(iii) of this section, and benefits listed in paragraph (j)(1)(i) of this section, the final actuarially equivalent copayment value is rounded to the nearest whole $5.
(B) For inpatient hospital acute and psychiatric and skilled nursing facility cost sharing limits subject to paragraphs (f)(6)(iv) and (j)(1)(i)(C) of this section, the final actuarially equivalent copayment value is rounded to the nearest whole $1.
(C) When the actuarially equivalent copayment value is projected to be exactly between two increments, the final figure is rounded to the lower dollar amount.
(iii)
(B) When calculating copayment limits for purposes of this paragraph, CMS calculates an actuarially equivalent value to the coinsurance limits in this paragraph (f)(6)(iii), subject to the requirements in paragraph (f)(7) of this section and the restrictions on increases to copayment limits in paragraph (f)(8) of this section. If CMS does not calculate a copayment limit for a professional service category, the MA plan must not establish a copayment that exceeds the actuarially equivalent value to the coinsurance limits in this paragraph (f)(6)(iii) based on the estimated total MA plan financial liability for that benefit for that contract year.
(C) For 2023, MA plans must not exceed the cost sharing limits for professional service categories, as follows:
(
(
(
(D) For 2024, MA plans must not exceed the cost sharing limits for professional service categories, as follows:
(
(
(
(E) For 2025, MA plans must not exceed the cost sharing limits for professional service categories, as follows:
(
(
(
(F) For 2026 and subsequent years, MA plans must not exceed the cost sharing limits for professional service categories, as follows:
(
(
(
(iv)
(B) Cost sharing limits for inpatient hospital acute and psychiatric service categories are calculated for the following seven length-of-stay scenarios for a period for which cost sharing would apply under original Medicare: Inpatient hospital acute stay scenarios of 3 days, 6 days, 10 days, and 60 days and inpatient hospital psychiatric stay scenarios of 8 days, 15 days, and 60 days.
(C) CMS calculates the inpatient hospital acute and psychiatric service category cost sharing limits annually using projections of Medicare FFS out-of-pocket costs and utilization for the applicable year and length of stay scenario and factors in out-of-pocket costs incurred by beneficiaries with diagnoses of ESRD on the transition schedule described in paragraphs (f)(4)(vi)(A) through (B) of this section and may also use patient utilization information from MA encounter data.
(D) Provided that the total cost sharing for the inpatient benefit does not exceed the MA plan's MOOP limit or overall cost sharing for inpatient benefits in original Medicare on a per member per month actuarially equivalent basis, cost sharing applicable to inpatient hospital acute and psychiatric service categories is permitted up to the following limits (based on original Medicare cost sharing for a new benefit period):
(7)
(A) In applying generally accepted actuarial principles and practices, actuarial judgment and discretion may be used, including taking into account information such as changes in legislation (such as changes in Medicare benefits), Medicare payment policy, trends over several years of data, and external variables (such as public health emergencies); selecting among different approaches (such as weighting for utilization and using average or median values); and in selecting data or data samples.
(B) MA organizations must use generally accepted actuarial principles and practices in complying with the regulations in paragraphs (f)(6) and (j) of this section.
(C) CMS applies generally accepted actuarial principles and practices in evaluating MA plan compliance with paragraphs (f)(6) and (j) of this section.
(ii)
(A) Using Medicare FFS data projections, as defined in paragraph (f)(4)(i) of this section, for the applicable year and service category.
(B) Using patient utilization information from MA encounter data, in addition to the Medicare FFS data projections (including cost and utilization data), if available and where appropriate to consider utilization differences between Medicare FFS beneficiaries and MA enrollees to reach a value that most closely reflects an actuarially equivalent copayment for the benefit and beneficiary population.
(C) Selecting a particular approach to calculate an actuarially equivalent copayment value in situations where there may be multiple or a range of actuarially equivalent copayment values for a service category in order to carry out program purposes, including: Setting copayment limits that most closely reflect an actuarially equivalent copayment for the benefit and beneficiary population, protecting against discriminatory cost sharing, and avoiding unnecessary fluctuations in cost sharing that may confuse beneficiaries.
(D) Applying the actuarially equivalent copayment transition in paragraph (f)(8) of this section.
(E) Applying rounding rules in paragraph (f)(6)(ii) of this section.
(iii)
(8)
(i) CMS
(A) For cost sharing at the mandatory and lower MOOP limits, the difference between, first, the copayment limit set for a plan benefit package service category based on the MOOP type for 2022 and second, the copayment value for the same service category that is actuarially equivalent to the coinsurance limits in paragraphs (f)(6)(iii) and (j)(1) of this section that apply in 2026 based on the MOOP type, using the Medicare FFS data projections that are updated each year to reflect the costs of the contract year for which the copayment limit will apply.
(B) For cost sharing at the intermediate MOOP limit, the difference between, first, the copayment limit set for a plan benefit package service category based on the mandatory MOOP type for 2022 and second, the copayment value for the same service category that is actuarially equivalent to the coinsurance limits in paragraphs (f)(6)(iii) and (j)(1) of this section that apply in 2026 for the intermediate MOOP type, using the Medicare FFS data projections that are updated each year to reflect the costs of the contract year for which the copayment limit will apply.
(ii)
(A) For 2023, CMS uses the copayment limits set for 2022 plus 25 percent of the actuarially equivalent copayment differential.
(B) For 2024, CMS uses the copayment limits set for 2022 plus 50 percent of the actuarially equivalent copayment differential.
(C) For 2025, CMS uses the copayment limits set for 2022 plus 75 percent of the actuarially equivalent copayment differential.
(D) For 2026 and subsequent years, CMS calculates service category copayment limits at the projected actuarially equivalent value to the cost sharing standards in paragraphs (f)(6)(iii)(F) and (j)(1) of this section and subject to paragraph (f)(7) of this section.
(9)
(j)
(A) Chemotherapy administration services to include chemotherapy/radiation drugs and radiation therapy integral to the treatment regimen.
(B) Renal dialysis services as defined at section 1881(b)(14)(B) of the Act.
(C) Skilled nursing care, defined as services provided during a covered stay in a skilled nursing facility during the period for which cost sharing would apply under original Medicare, when the MA plan establishes the mandatory MOOP type; when the MA plan establishes the lower MOOP type, the cost sharing must not be greater than $20 per day for the first 20 days of a SNF stay; when the MA plan establishes the intermediate MOOP type, the cost sharing must not be greater than $10 per day for the first 20 days of a SNF stay.
(D) Home health services (as defined in section 1861(m) of the Act), when the MA plan establishes a mandatory or intermediate MOOP type; when the MA plan establishes the lower MOOP type, the cost sharing must not be greater than 20 percent coinsurance or an actuarially equivalent copayment.
(E) The following specific service categories of durable medical equipment (DME): Equipment, prosthetics, medical supplies, diabetes monitoring supplies, diabetic shoes or inserts when the MA plan establishes the mandatory MOOP limit. For all MOOP limits, total cost sharing for the overall DME benefit must not be greater than the per member per month actuarially equivalent cost sharing for the DME benefit in original Medicare.
(F) Other drugs covered under Part B of original Medicare (that is, Part B drugs not included in paragraph (j)(1)(i)(A) of this section).
(ii)
(2)
(i) MA plans must have cost sharing for the following specific benefit categories that does not exceed the cost sharing for those benefit categories in original Medicare on a per member per month actuarially equivalent basis:
(A) Inpatient hospital acute and psychiatric services, defined as services provided during a covered inpatient stay during the period for which cost sharing would apply under original Medicare.
(B) Durable medical equipment (DME).
(C) Drugs and biologics covered under Part B of original Medicare.
(D) Skilled nursing care, defined as services provided during a covered stay in a skilled nursing facility during the period for which cost sharing would apply under original Medicare.
(ii) CMS may extend flexibility for MA plans when evaluating compliance with the requirements in paragraph (j)(2)(i) of this section regarding actuarial equivalent cost sharing for all basic benefits and specific categories of basic benefits to the extent that it is actuarially justifiable provided that the MA plan's cost sharing is based on generally accepted actuarial principles and practices (consistent with paragraph (f)(7) of this section), supporting documentation included in the bid, and the MA plan's cost sharing for specific service categories otherwise satisfies applicable cost sharing standards.
(d) * * *
(2)
(i) Establish a catastrophic enrollee MOOP amount for basic benefits that are furnished by in-network providers that is consistent with § 422.100(f)(4).
(ii) Have the same MOOP type (lower, intermediate, or mandatory) for the catastrophic (in-network MOOP) limit and total catastrophic (combined in-network and out-of-network expenditures) limit under paragraph (d)(3) of this section.
(3)
(i) The total catastrophic limit may not be used to increase the catastrophic limit described in paragraph (d)(2) of this section.
(ii) CMS calculates the total catastrophic limits by multiplying the respective in-network MOOP limits (before the rounding rules in § 422.100(f)(4)(iii) are applied and after application of the 10 percent cap on increases to the mandatory and lower MOOP limits from the prior year in § 422.100(f)(4)(iv) and (v)) by 1.5 for the relevant year, then applying the rounding rules in § 422.100(f)(4)(iii). The dollar ranges for the three total catastrophic MOOP limits are as follows:
(A)
(B)
(C)
(iii) An MA organization must establish the total catastrophic MOOP amount (mandatory, intermediate, or lower) within the dollar range specified in paragraphs (d)(3)(ii)(A) through (C) of this section for purposes of paragraph (d) of this section and §§ 422.100(f)(6), (j)(1), and 422.113(b)(2)(v).
The revision and addition read as follows:
(b) * * *
(2) * * *
(v) With a dollar limit on emergency services costs for enrollees that is the lower of—
(A) The cost sharing established by the MA plan if the emergency services were provided through the MA organization; or
(B) A maximum cost sharing limit permitted per visit that corresponds to the MA plan MOOP limit as follows:
(
(
(
(vi) For each year beginning on or after January 1, 2023, with a cost sharing limit on urgently needed services that does not exceed the limits specified for professional services in § 422.100(f)(6)(iii).