[The Regulatory Plan and Unified Agenda of Federal Regulations]
[Department of Health and Human Services Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]


DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)
Statement of Regulatory Priorities
This statement of regulatory priorities is in two parts. Part I 
describes the overall regulatory priorities of the Department. Part II 
describes these priorities by agency, in greater detail.
I. Overall Priorities
The Department of Health and Human Services, the ``People's 
Department,'' provides direct services or assistance to one of every 
five Americans. With emphasis on children, the elderly, disabled 
persons, the poor and others who are most vulnerable, HHS is the 
Federal Government's principal agency for protecting health and 
providing essential human services to Americans. HHS activities are 
striking in their variety, ranging from the largest programs in 
Government (Social Security, Medicare, Medicaid) to some of the 
smallest. HHS responsibilities encompass a wide spectrum including 
improving infant health; providing care for the elderly; gathering 
basic national health and welfare statistics; providing job training, 
health clinics, and Head Start services; conducting health research at 
the National Institutes of Health; and regulating food and drug 
products that account for some 25 cents of every dollar spent by 
American consumers.
The Department's regulatory priorities reflect our broad strategic 
goals. These key goals include:

 Transforming the welfare system in this country from a system 
            of dependency to a system of transition to work;
 Improving and protecting the health of our citizens, 
            especially the Nation's most vulnerable populations;
Investing in the future of our Nation's children and youth;
 Increasing the independence and self-sufficiency of the 
            elderly and persons with disabilities; and
 Improving the management of our programs and delivery of 
            services to our customers.
Many of our significant regulatory initiatives address one or more of 
these Department-wide goals. For example, new Head Start regulations 
will not only strengthen the existing program as an investment in our 
nation's children, but will also implement the new component for 
infants and toddlers through performance standards.
Because of the importance of HHS's regulatory responsibilities, we are 
emphasizing the principles of Executive Order 12866 which include 
regulating only where required by statute or to meet a compelling 
public need, fully considering the costs and benefits of regulatory 
alternatives, increasing consultation with affected publics, and 
reducing regulatory burden.
HHS is committed to substantial reforms of our existing regulations to 
reduce burden on those we regulate while effectively meeting the health 
and human services responsibilities of this Department. To focus our 
efforts on those items in most need of revisions, we have asked the 
public for recommendations through a request published in the Federal 
Register on January 20, 1994. We continue to seek recommendations from 
the public.
Early consultation with those parties affected by rulemaking is 
critical to developing workable regulations. HHS will use a number of 
innovative approaches as we work on developing the most effective 
strategies for consultation with State and local governments and the 
wide variety of other groups and individuals affected by regulations 
issued by this Department. One approach that we plan to use for the 
first time in the upcoming year is negotiated rulemaking. This process 
will bring HHS together with external interests who would be 
significantly affected by a new rule to reach consensus through open 
discussions on some or all issues under consideration before a rule is 
formally published as a notice of proposed rulemaking.
HHS is taking a new approach to our relationship with State, local, and 
tribal governments. We are listening to officials of other levels of 
government concerned about the imposition of unfunded mandates and 
other significant changes on the way they must operate. Pursuant to 
Executive Order 12875, ``Enhancing the Intergovernmental Partnership,'' 
HHS is committed to avoiding where possible imposition of mandates--
funded, and particularly unfunded--and to consulting with appropriate 
levels of government as early as possible in the development of 
policies and regulations affecting them.
We are carrying out our decisionmaking and consultation with a full 
appreciation of State, local, and tribal governments as our partners in 
serving the public. One example of our efforts is the Medicaid 
regulation on home and community-based care which was published in July 
1994. We worked closely with States to craft less burdensome waiver 
requirements that will give States an opportunity to improve and expand 
these essential community-based services to provide home care for more 
individuals and to avoid unnecessary placement in nursing homes or 
other health care institutions.
There are additional samples of regulations meeting both HHS strategic 
goals and E.O. 12866 objectives. Under the Mammography Quality 
standards Act, the Food and Drug Administration is implementing a major 
initiative to upgrade the quality of mammography services. Higher 
quality services will help increase the number of women whose cancers 
are detected early and contribute directly to improving the health of 
women. Other PHS agencies are working on selected regulations that will 
also contribute to improving the Nation's health, such as regulations 
related to State enforcement of laws against selling tobacco products 
to minors.
Reengineering the Social Security Administration's disability insurance 
claims process will enable us to dramatically reduce serious backlogs 
and provide better service. The current process and procedures have not 
changed significantly since the 1950's. Proposed changes would affect 
types and locations of personnel in State agencies that serve as agents 
for the program, and adjudicative standards.
The Health Care Financing Administration is reviewing existing Medicare 
and Medicaid quality standards, known as ``conditions of 
participation,'' for health care facilities such as hospitals, home 
health agencies, and dialysis facilities to identify opportunities to 
reform these standards to emphasize performance, to make them more 
customer-centered, and to reduce burden on regulated entities. A number 
of other regulations to simplify management of HCFA programs and 
increase program integrity guarantees are also under development.
As a final example of the relationship of our regulatory initiatives to 
these goals, just this spring our new food labeling standards became 
effective, providing the American consumer with clear, useable, and 
understandable nutrition information. This empowers the consumer with 
the information needed to improve diet and health, and thus reduces his 
or her risk of certain diseases, including heart disease and cancer.
II. Agency Plans
Virtually all HHS regulations are issued by a handful of agencies 
within the Department. Descriptions of priorities for these are as 
follows.
Health Care Financing Administration (HCFA)
HCFA is striving to reduce unnecessary burdens that the Medicare and 
Medicaid programs have imposed on beneficiary populations, all levels 
of government, and the medical provider community. HCFA is also 
extending flexibility to the States where it will foster improved and 
less burdensome operations and facilitate State reform activities.
In order to provide the most responsive and effective services 
possible, HCFA is conducting rulemakings in an open manner, consulting 
with and obtaining early and continuous input from the various levels 
of government, as well as representatives of advocacy and provider 
organizations. HCFA is working with State and local governments through 
a continuous and ongoing consultation process in the development of 
Medicaid regulations. For example, regularly scheduled meetings are 
held with technical advisory groups that include HCFA and State 
Medicaid representatives. Regular meetings and consultations are also 
held by the ``Camden Yards Group'' that includes representation from 
the State Medicaid Directors' Association, the American Public Welfare 
Association, the National Governors' Association, and the Conference of 
State Legislators. Under this cooperative structure, HCFA can ensure 
maximum flexibility to State Medicaid programs.
Each major Medicaid regulation is being developed with extensive 
involvement from this representative structure to assure effectiveness 
and economy. Examples include: a proposed rule to clarify for States 
the process for making ``findings'' concerning the payment for 
inpatient hospital and long-term care facility services; a notice that 
will facilitate implementation of the Department's childhood 
immunization program; a rule that will make good on the President's 
commitment to the National Governors' Association to simplify the home 
and community-based services waiver process; and, a rule that will 
ensure the effective delivery of services under the early periodic 
screening, diagnostic, and treatment (known as EPSDT) program. These 
reforms will contribute to improving access and meeting the health 
needs of children, particularly disadvantaged and minority children.
 In accordance with the combined themes of reducing unnecessary burden, 
improving quality of care, and involving input from a full range of 
interests, HCFA is developing improved Medicare regulations that will 
govern conditions of participation for home health agencies and 
hospitals, and conditions of coverage for the payment of end-stage 
renal disease. Existing regulations in these areas are unnecessarily 
burdensome, outdated, and process oriented. They will be replaced with 
more universally applicable provisions that are patient/outcome 
oriented and driven by meaningful data to better ensure healthy 
outcomes for aged patients and those with disabilities. In developing 
these regulations, HCFA has met, and is continuing to meet, with a 
variety of provider and consumer representatives.
HCFA is also developing quality assurance regulations for nursing 
homes. The agency is considering an enforcement regulation that will 
use patient health status measures as benchmarks for determining 
whether nursing facilities are in compliance with Medicare and Medicaid 
participation requirements. For example, where deficiencies that do not 
harm people are involved, the focus will be on corrective measures. 
Conversely, for health and safety violations involving potential or 
actual harm to residents/patients, punitive measures can be expected, 
such as denial of payment, civil monetary penalties, and exclusion from 
the Medicare/Medicaid programs. By establishing enforcement remedies 
that realistically relate to the effects on patient health and safety, 
the rule will encourage facilities to achieve the highest level of 
health for the aged and disabled patients in these facilities.
In the area of fiscal responsibility, regulations are being developed 
to implement the statutory prohibition against patient referrals by 
physicians to health service entities (e.g., clinical laboratories, 
home health agencies, physical therapists, etc.) with which the 
physician has a financial interest or relationship. These regulations 
are significant because they address the concern that such referral 
relationships involve a potential for conflict of interest resulting in 
unnecessary services for Medicare patients and unnecessary costs to the 
Medicare program.
Several of HCFA's reform efforts are particularly supportive of the 
President's directive (in Executive Order 12866) to take burden-
reducing regulatory actions, and the Secretary's goal of significantly 
improving HHS management and customer service. Indeed, our efforts are 
already bearing fruit. For example, in March 1994 HCFA published a 
regulation that replaced the requirement for physicians to provide 
hospitals annually with a signed acknowledgement concerning penalties 
for misrepresenting certain information with a one-time signing 
requirement at the time a physician is initially granted hospital 
admitting privileges. One major medical association characterized this 
change as one that will alleviate the ``hassle factor'' for physicians 
and an important step toward restoring mutual trust between the Federal 
Government and the medical profession.
Public Health Service (PHS) Including the Food and Drug Administration 
(FDA)
The PHS agencies (which, other than the Food and Drug Administration, 
have minimal regulatory responsibilities) are working on selected 
regulatory initiatives that improve individual program areas and 
support the Secretary's goals. These include regulations on organ 
procurement, State enforcement of laws against selling tobacco products 
to minors, reducing potential conflicts of interest in biomedical 
research, improving respirators used in the workplace, and increasing 
tribal government responsibilities for managing health care programs.
Through the Food and Drug Administration, HHS has undertaken a number 
of new regulatory initiatives to speed the development of new drugs to 
treat serious diseases, particularly the development of drugs to treat 
and prevent HIV infection, one of the nation's highest health 
priorities. In support of this goal, FDA funds the National Task Force 
on AIDS Drug Development, which was established by the Secretary of 
Health and Human Services, and provides further support in terms of 
agency expertise in science and medical ethics. FDA has also acted to 
encourage labeling of prescription drugs for AIDS and other serious 
illnesses with dosing information for pediatric use, so that these 
therapies can be readily used to treat children.
Empowerment of the individual to participate in his or her own health 
care is also a high priority. FDA is developing regulatory initiatives 
to transform drug labeling into a readily understandable source of 
information for individuals who are not health professionals, which 
would help prevent the substantial waste and harm that occurs when 
patients do not understand how to use therapeutic drugs properly. The 
agency is completing implementation of the new food labeling at this 
time in a pioneering effort to provide consumers with information that 
enables them to use food products in a manner consistent with a healthy 
life style.
Consistent with the Vice President's recommendation for a new food 
safety program to reform regulatory oversight of the nation's food 
supply, FDA is working to replace its current oversight strategy with a 
cost-effective, state-of-the-art strategy. The agency's proposed new 
approach for oversight of seafood is based on the system of Hazard 
Analysis Critical Control Points (HACCP), and FDA plans to work with 
the food industry to explore expanding HACCP to other components of the 
food supply.
FDA has embarked on a number of initiatives to improve and focus on 
women's health. The agency is moving to implement the Mammography 
Quality Standards Act rapidly to facilitate the detection of breast 
cancer and is establishing an Office of Women's Health to provide 
leadership and monitoring in areas such as the application of the 
agency's revised clinical trial guidelines, the development of new 
contraceptives and products to protect women against sexually 
transmitted diseases, and the safety of cosmetics.
The United States leads the world in development of new technologies, 
and FDA has given priority to products of important new technologies, 
such as gene and somatic cell therapy and food plants genetically 
altered through use of recombinant DNA techniques, striking a balance 
between regulation and reliance on the private sector in a manner that 
encourages the rapid evolution of these technologies, their continued 
adaptation to health-related uses, and the building of public 
confidence in them. To help speed important new drugs and medical 
devices to patients, the agency has also developed new programs, such 
as user fees for drug approvals. In order to facilitate the electronic 
submission of marketing applications for such products, FDA plans to 
propose steps by which legally binding electronic signatures may be 
affixed to such applications, thus validating them. FDA will address 
concerns about the integrity of clinical data submitted to support 
marketing approval of new therapies by proposing the disclosure by 
clinical investigators of potentially biasing financial holdings.
Finally, FDA has undertaken the review of a large number of regulations 
for burdensome provisions that can and should be eliminated. As part of 
this process, the agency will work to assure that these regulations are 
effective, consistent, sensible, and understandable. Regulations that 
will come under scrutiny include a major portion of the general 
biologics regulations; the blood and blood products regulations; the 
regulations governing the investigation and review of new animal drugs; 
and the good manufacturing practice regulations for medical devices.
Social Security Administration (SSA)
 The Social Security Administration continuously reviews its 
regulations to ensure that its policies constitute a properly 
integrated program that conforms to the statutes, court decisions, 
public needs, and to the principles of economical, efficient, and 
effective administration.
SSA has three major initiatives under way. On September 8, 1994, 
Commissioner Chater issued an agency Disability Process Redesign Plan. 
Decisions on implementation, including the need for regulations, are 
not yet final.
 SSA is continuing a cooperative project with the Internal Revenue 
Service (IRS) and other government agencies to develop a simplified 
wage reporting system. Under the proposed system, Federal and State 
agencies would develop an integrated reporting approach whereby 
employers would file employment and wage-related information with a 
single processing entity. The processing entity would, in turn, be 
responsible for providing the data to Federal, State, and local 
agencies for which the submitted information was intended. This system 
would eliminate redundant wage reports and greatly reduce the 
complexity of wage and tax reporting requirements presently imposed 
upon employers.
SSA is currently evaluating findings and recommendations made by the 
MITRE Corporation to determine the next step toward implementation. The 
MITRE Corporation's preliminary economic analysis suggests that 
employers could save approximately $1 billion a year under the system's 
full implementation. Findings to date indicate that an agreement would 
be needed with each participating State to ensure that State needs are 
adequately met and to reach agreement on necessary cost-sharing 
arrangements.
In addition, SSA is continuing to work with the IRS to coordinate the 
timing of when employers are required to file wage and tax reports. 
Currently, employers are required to file Form 941 wage reports by the 
end of January and Forms W-2/W-3 by the end of February. SSA is 
attempting to reach an agreement with IRS to simplify these reporting 
requirements that will satisfy the information-reporting requirements 
of both IRS and SSA.
The Social Security Administration will become an independent agency, 
effective March 31, 1995, as a result of the ``Social Security 
Independence and Program Improvement Act of 1994,'' (Public Law 103-
296).
Administration for Children and Families (ACF)
Efforts to reinforce the values of work, family, opportunity and 
responsibility are the central focus of ACF's impending welfare reform 
agenda. Under the framework of regulations, this effort will include:

 Identifying and reengineering welfare-related regulations 
            using existing legal authority to facilitate early reform 
            and make way for more fundamental changes, beginning with 
            rules to promote program coordination and simplification. 
            Proposed child care rules were issued this spring to reduce 
            program differences and promote better coordination among 
            the various child care programs.
 A strategy for swift implementation of the President's welfare 
            reform bill upon enactment, consistent with the principles 
            of E.O. 12866.
Implementation of the quality, program expansion, and partnership 
provisions of the 1994 Head Start Amendments is a key investment 
priority of the Department. ACF is committed to re-engineering the Head 
Start program in terms of quality improvement and capacity expansion in 
concert with public input. As one example, during the next year, 
particular emphasis will be placed on developing performance standards 
related to infant and toddler care.
Other ACF regulatory efforts will expand and improve the quality of 
family support services. For example, in implementing the Family 
Preservation and Support Program, each State will be enabled to 
develop, or expand, and operate a program of family preservation 
services and community-based family support services to prevent child 
abuse and help parents acquire the skills and tools they need to raise 
their children. In these and other areas, ACF is relying heavily on 
consultation with State and tribal program administrators, advocacy 
organizations, and other interested parties to provide ideas for 
improving the effectiveness of its regulations.
_______________________________________________________________________
HHS--Social Security Administration (SSA)
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
33. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM; REVISED 
MEDICAL CRITERIA FOR DETERMINATION OF DISABILITY; HEMIC AND LYMPHATIC 
SYSTEM, AND MALIGNANT NEOPLASTIC DISEASES (399P)
Legal Authority:


 42 USC 1302; 42 USC 1383; 42 USC 405


CFR Citation:


 20 CFR 404.1500ff, app 1


Legal Deadline:


None


Abstract:


Sections 7.00 and 107.00 (hemic and lymphatic system), and 13.00 and 
113.00 (malignant neoplastic diseases) of appendix 1 to Subpart P of 
Part 404 of the Disability Regulations (404.1501 through 404.1599) 
describe those impairments which are considered severe enough to 
prevent a person from engaging in any gainful activity, or in the case 
of a child under age 18, age-appropriate activities. We are proposing 
revisions to these sections to ensure that the medical evaluation 
criteria are up-to-date and consistent with the latest advances in 
medical knowledge and treatment. The Supplemental Security Income 
program incorporates and uses the same medical criteria as the Old-Age, 
Survivors, and Disability Insurance program.


Statement of Need:


We propose to revise the criteria in the Listing of Impairments that we 
use to evaluate claims for disability benefits involving impairments of 
the hemic and lymphatic system and malignant neoplastic diseases of 
adults and children, under titles II and XVI of the Social Security 
Act. The revisions reflect advances in medical knowledge, treatment, 
and methods of evaluating impairments of the hemic and lymphatic system 
and malignant neoplastic diseases.


The current hemic and lymphatic system and malignant neoplastic 
diseases listings were last revised on December 6, 1985. There have 
been numerous advancements in medical science and technology in 
evaluation and treatment of hemic and malignant lymphatic and 
neoplastic diseases since then. Not to avail ourselves of the benefit 
of these advancements would mean that SSA's listings might not 
accurately identify those individuals who are too functionally impaired 
to work, or in the case of a child under the SSI program, to perform 
age-appropriate activities. Sections 205(a), 1102, and 1631(d) of the 
Social Security Act give the Secretary broad power to make rules to 
carry out the disability programs.


Alternatives:


The only option considered, other than the one selected, would have 
been to extend the expiration date of the current listings and not to 
propose to revise the rules at this time. This option was not selected 
because there have been medical advances since the current hemic and 
lymphatic system and malignant neoplastic diseases listings were 
promulgated which we believe should be reflected in the listings we use 
in adjudicating Social Security and Supplemental Security Income claims 
based on disability.


Anticipated Costs and Benefits:


The proposed changes will have negligible program and administrative 
cost impact because, despite changes in terminology and emphasis, the 
proposed changes describe a level of severity comparable to the level 
of severity contained in the current listings.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Final Action                                                   10/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Harry J. Short
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Boulevard
Baltimore, MD 21235
410 965-6243
RIN: 0960-AD67
_______________________________________________________________________
HHS--SSA
34. REVISED MEDICAL CRITERIA FOR DETERMINATION OF DISABILITY, ENDOCRINE 
SYSTEM AND OBESITY AND RELATED CRITERIA (436P)
Legal Authority:


 42 USC 405; 42 USC 1302; 42 USC 1383


CFR Citation:


 20 CFR 404.1500ff, app 1


Legal Deadline:


None


Abstract:


Sections 9.00 and 109.00 of appendix 1 to subpart P of part 404 of the 
Disability Regulations (404.1501 through 404.1599) describe those 
impairments which are considered severe enough to prevent a person from 
engaging in any gainful activity, or in the case of a child under age 
18, age-appropriate activities. We are proposing to revise the criteria 
in these sections to reflect advances in medical knowledge, treatment, 
and methods of evaluating endocrine impairments. The Supplemental 
Security Income program incorporates and uses the same medical criteria 
as the Old-Age, Survivors and Disability Insurance program.


Statement of Need:


We propose to revise the criteria in the Listing of Impairments that we 
use to evaluate claims for disability benefits involving the endocrine 
system and obesity in adults and children, under titles II and XVI of 
the Social Security Act. The revisions reflect advances in medical 
knowledge, treatment, and methods of evaluating impairments of the 
endocrine system.


The current Endocrine and Obesity listings were last revised on 
December 6, 1985. There have been numerous advancements in medical 
science and technology in evaluation and treatment of endocrine and 
morbid obesity conditions since then. Not to avail ourselves of the 
benefit of these advancements would mean that SSA's listings might not 
accurately identify those individuals who are too functionally impaired 
to work, or in the case of a child under the SSI program, to perform 
age-appropriate activities.


Sections 205(a), 1102, and 1631(d) of the Social Security Act give the 
Secretary broad power to make rules to carry out the disability 
programs.


Alternatives:


The only option considered, other than the one selected, would have 
been to extend the expiration date of the current listings and not to 
propose to revise the rules at this time. The option was not selected 
because there have been medical advances since the current endocrine 
system and obesity listings were promulgated which we believe should be 
reflected in the listings we use in adjudicating Social Security and 
SSI claims based on disability.


Anticipated Costs and Benefits:


The proposed changes will have negligible program and administrative 
cost impact because, despite changes in terminology and emphasis, the 
proposed changes describe a level of severity comparable to the level 
of severity contained in the current listings.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Final Action                                                   10/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Cassandra A. Bond
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Boulevard
Baltimore, MD 21235
410 965-1794
RIN: 0960-AD78
_______________________________________________________________________
HHS--SSA
35. REVISED MEDICAL CRITERIA FOR DETERMINATION OF DISABILITY, GROWTH 
IMPAIRMENTS (444P)
Legal Authority:


 42 USC 1302; 42 USC 1383; 42 USC 405


CFR Citation:


 29 CFR 404.1500ff, app 1


Legal Deadline:


None


Abstract:


Section 100.00 of part B of appendix 1 to subpart P of part 404 of the 
Disability Regulations (404.1501 through 404.1599) describe those 
impairments which are considered severe enough to prevent a child under 
age 18 from engaging in age-appropriate activities. We are proposing 
revisions to the criteria in Part B of the Listing of Impairments that 
we use to evaluate growth impairments of persons under the age of 18 
who claim Social Security or Supplemental Security Income benefits 
based on Disability under Title II and Title XVI of the Social Security 
Act. The revisions contained in these regulations reflect advances in 
medical knowledge, treatment, and methods of evaluating growth 
impairments. The Supplemental Security Income program incorporates and 
uses the same medical criteria as the Old-Age, Survivors, and 
Disability Insurance program.


Statement of Need:


We propose to revise the criteria in part B of the Listing of 
Impairments that we use to evaluate claims for disability benefits 
involving growth impairments of persons under the age of 18 under 
titles II and XVI of the Social Security Act. The revisions reflect 
advances in medical knowledge, treatment, and methods of evaluating 
growth impairments.


The current Growth Impairment listings were last revised on December 6, 
1985. There have been numerous advancements in medical science and 
technology in evaluation and treatment of growth impairments since 
then. Not to avail ourselves of the benefit of these advancements would 
mean that SSA's listings might not accurately identify those children 
unable to perform age-appropriate activities.


Sections 205(a), 1102, and 1631(d) of the Social Security Act give the 
Secretary broad power to make rules to carry out the disability 
programs.


Alternatives:


The only other option we considered was to extend the effective date of 
the current listings without proposing changes to update the listings. 
This option was not selected because there have been medical advances 
since the current growth impairments system listing were promulgated 
which we believe should be reflected in the listings we use in 
adjudicating Social Security and SSI claims based on disability.


Anticipated Costs and Benefits:


The proposed changes will have negligible program and administrative 
cost impact because, despite changes in terminology and emphasis, the 
proposed growth impairment listings describe a level of severity 
comparable to the level of severity contained in the current listings.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Final Action                                                   09/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Harry J. Short
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Boulevard
Baltimore, MD 21235
410 965-6243
RIN: 0960-AD80
_______________________________________________________________________
HHS--SSA
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
36. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM; REVISED 
MEDICAL CRITERIA FOR DETERMINATION OF DISABILITY; MUSCULOSKELETAL 
SYSTEM (143F)
Legal Authority:


 42 USC 1302; 42 USC 405; 42 USC 1383


CFR Citation:


 20 CFR 404.1500ff, appendix 1


Legal Deadline:


None


Abstract:


Sections 1.00 and 101.00 of appendix 1 to the Disability Regulations 
(404.1501 through 404.1599) describe those musculoskeletal impairments 
which are considered severe enough to prevent a person from doing any 
gainful activity or, in the case of a child under age 18, age-
appropriate activities. We are proposing comprehensive revisions to 
these sections to ensure that the medical evaluation criteria are up to 
date and consistent with the latest advances in medicine. The 
Supplemental Security Income program incorporates by reference and uses 
the same medical criteria as the Old-Age, Survivors, and Disability 
Insurance program.


Statement of Need:


These regulations revise the criteria in the Listing of Impairments 
that we use to evaluate claims for disability benefits involving 
musculoskeletal impairments of adults and children under titles II and 
XVI of the Social Security Act. The revisions reflect advances in 
medical knowledge, treatment, and methods of evaluating musculoskeletal 
impairments.


The current musculoskeletal listing was last revised on December 6, 
1985. There have been numerous advancements in medical science and 
technology in evaluation and treatment of musculoskeletal impairments 
since then. Not to avail ourselves of the benefit of these advancements 
would mean that SSA's listings might not accurately identify those 
individuals who are too functionally impaired to work, or in the case 
of a child under the Supplemental Security Income program, to perform 
age-appropriate activities.


Sections 205(a), 1102, and 1631(d) of the Social Security Act give the 
Secretary broad power to make rules to carry out the disability 
programs.


Alternatives:


The only other option is to extend the expiration date of the current 
listings without revising the listings at this time. This option was 
not selected because there have been medical advances since the current 
musculoskeletal system listings were promulgated which we believe 
should be reflected in the listings since we use them in adjudicating 
Social Security and Supplemental Security Income claims based on 
disability.


Anticipated Costs and Benefits:


These final regulations will have negligible program and administrative 
cost impact because, despite changes in terminology and emphasis, the 
proposed musculoskeletal system listings describe a level of severity 
comparable to the level of severity contained in the current listings.


Risks:


Not applicable.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            58 FR 67574                                    12/21/93
NPRM Comment Period End                                        02/22/94
Final Action                                                   12/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Richard M. Bresnick
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Blvd.
Baltimore, MD 21235
410 965-1758
RIN: 0960-AB01
_______________________________________________________________________
HHS--SSA
37. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM; MEDICAL 
CRITERIA FOR EVALUATING MENTAL DISORDERS FOR ADULTS (222F)
Legal Authority:


 42 USC 405; 42 USC 1382c


CFR Citation:


 20 CFR 404.1500ff, app 1; 20 CFR 404.1520a; 20 CFR 404.1528; 20 CFR 
416.920a; 20 CFR 416.928


Legal Deadline:


None


Abstract:


These amendments revise the medical evaluation criteria for mental 
disorders for the Social Security and Supplemental Security Income 
disability programs. The revisions will reflect advances in medical 
treatment and in methods of evaluating certain mental impairments and 
will provide up-to-date medical criteria for use in the evaluation of 
disability claims based on mental disorders.


Statement of Need:


These regulations revise the adult mental disorders listings we use to 
evaluate claims for disability benefits involving mental impairments 
under titles II and XVI of the Social Security Act. They reflect 
advances in medical knowledge, treatment, and methods of evaluating 
mental impairments and provide up-to-date medical criteria to evaluate 
disability based on mental impairments. The current adult mental 
listing was last revised on August 28, 1985. There have been numerous 
advancements in medical science and technology in evaluation and 
treatment of mental disorders since then. Not to avail ourselves of the 
benefit of these advancements would mean that SSA's listings might not 
accurately identify those individuals who are too functionally impaired 
to work.


Medical advancements in disability evaluation and treatment and program 
experience require that the medical listings be periodically reviewed 
and updated. The existing listing sunsets on August 28, 1994. It is in 
the public interest to be kept abreast of these advancements.


Sections 205(a), 1102, and 1631(d) of the Social Security Act give the 
Secretary broad power to make rules to carry out the disability 
programs.


Alternatives:


The only other option is to extend the expiration date of the current 
listings without revising the listings at this time. This option was 
not selected because there have been medical advances since the current 
adult mental listings were promulgated which we believe should be 
reflected in the listings since we use them in adjudicating Social 
Security and Supplemental Security Income claims based on disability.


Anticipated Costs and Benefits:


Due to an expected small increase in applications and/or awards, the 
program and administrative costs of these regulations are estimated to 
increase slightly and this has been budgeted for.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            56 FR 33130                                    07/18/91
NPRM Comment Period End                                        09/18/91
Final Action                                                   10/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Richard M. Bresnick
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Boulevard
Baltimore, MD 21235
410 965-1758
RIN: 0960-AC74
_______________________________________________________________________
HHS--SSA
38. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE AND SUPPLEMENTAL 
SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED; REPRESENTATIVE PAYEE 
REFORMS (295F)
Legal Authority:


 PL 101-508, sec 5105


CFR Citation:


 20 CFR 404.902; 20 CFR 404.2001; 20 CFR 404.2011; 20 CFR 404.2022; 20 
CFR 404.2024; 20 CFR 404.2025; 20 CFR 404.2030; 20 CFR 404.2041; 20 CFR 
404.2050; 20 CFR 416.601; 20 CFR 416.611; 20 CFR 416.622; 20 CFR 
416.624; 20 CFR 416.625; 20 CFR 416.630; ...


Legal Deadline:


None


Abstract:


These regulations, which reflect certain provisions of PL 101-508, 
modify existing representative payee procedures by requiring the Social 
Security Administration (SSA) to do a more extensive investigation of 
representative payee applicants; generally limit to 1 month the 
deferral or suspension of direct payment of benefits pending selection 
of a payee; provide stricter standards in determining the fitness of 
representative payee applicants to manage benefit payments on behalf of 
beneficiaries; require SSA to repay to the beneficiary or an alternate 
payee, an amount equal to any misused funds resulting from SSA's 
negligent failure to investigate or monitor a representative payee; and 
require SSA to compile and maintain a centralized file of certain 
beneficiary and payee information.


Statement of Need:


These regulations modify existing representative payee procedures by 
requiring the Social Security Administration to do a more extensive 
investigation of representative payee applicants; generally limiting to 
1 month the deferral or suspension of direct payment of benefits 
pending selection of a payee; providing stricter standards in 
determining the fitness of representative payee applicants to manage 
benefit payments on behalf of beneficiaries; requiring SSA to repay to 
the beneficiary or an alternate payee, an amount equal to any misused 
funds resulting from SSA's negligent failure to investigate or monitor 
a representative payee; and requiring SSA to compile and maintain a 
centralized file of certain beneficiary and payee information.


These regulations are needed to amend the Social Security 
Administration's regulations to reflect certain provisions of Public 
Law 101-508 (OBRA '90). Sections 205(a), 1102 and 1631(d) of the Act 
give the Secretary broad power to make rules to carry out these 
provisions.


Anticipated Costs and Benefits:


Any costs associated with these regulations are the result of 
legislation and therefore are reflected in the President's budget.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 11949                                    03/15/94
NPRM Comment Period End                                        05/16/94
Final Action                                                   12/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Cassandra Bond
Legal Assistant
Department of Health and Human Services
Social Security Administration
Office of Regulations
6401 Security Boulevard
Baltimore, MD 21235
410 965-1794
RIN: 0960-AD22
_______________________________________________________________________
HHS--SSA
39. OASDI AND SSI; TESTING MODIFICATIONS TO THE DISABILITY 
DETERMINATION PROCEDURES (359F)
Legal Authority:


 42 USC 405(a); 42 USC 1302; 42 USC 1383


CFR Citation:


 20 CFR 404.906; 20 CFR 416.1406


Legal Deadline:


None


Abstract:


We propose to add new rules which would establish authority to test 
modifications to the disability determination procedures that we follow 
under titles II and XVI of the Social Security Act. On a limited basis, 
we may test procedures designed to improve the disability claims 
process. These models are designed to provide us with comprehensive 
information regarding the effect of these procedures on the disability 
process. They would enable us to measure whether, and to what degree, 
the disability process may be improved, especially with respect to 
obtaining the correct decision earlier in the process and shortening 
aggregate processing times. We would measure costs and determine the 
feasibility of each model. The intended result of testing these models 
would be to enable SSA to make recommendations for national 
implementation of improvements to the disability process.


Statement of Need:


We propose to implement pilot projects designed to modify the 
processing of disability claims. These proposed models will be used in 
adjudicating claims for Social Security or SSI benefits based on 
disability. These models will provide SSA with comprehensive 
information regarding the effect of these interventions on the 
disability process and will enable us to measure whether and to what 
degree the disability process is improved, especially with respect to 
obtaining the correct decision earlier in the process and shortening 
processing times. we propose to add new rules to provide the authority 
to test one or more modifications to the disability determination 
procedures we follow under titles II and XVI of the Act. The tests 
would be conducted under a rigorous evaluation protocol.


The models in the proposed rules are designed to test enhancement of 
our current program goals which are to:

 Provide assistance to the disability applicant by making the 
            process of filing a disability claim simpler, more 
            responsive and more compassionate;
 Promote fairness in each disability determination by ensuring 
            that each disability applicant is given an opportunity to 
            provide all the necessary information to complete the claim 
            and is aware of his/her rights under the program; and
 Ensure that the Agency's determination is both thorough and 
            equitable.


These regulations are necessary to permit SSA to test new and 
innovative procedures for improving the disability claims process.


Sections 205(a), 1102, and 1631(d) of the Act give the Secretary broad 
power to make rules to carry out the Old-Age, Survivors and Disability 
Insurance and Supplemental Security Income programs.


Alternatives:


We examined but rejected seeking the authority for test variations to 
improve the claims intake process. We considered testing models which 
involved only selected medical impairments. We rejected this 
alternative and are not limiting the tests to selected impairments. We 
will gather specific data that will allow for equitable and fair 
treatment of all claimants.


Anticipated Costs and Benefits:


The effects of the demonstrations themselves will be very small. It 
would be speculative to estimate what system changes might later be 
made. What we hope to accomplish ultimately, however, are significant 
improvements in the disability determination process that ensure better 
developed and more timely decisions. Such improvements should promote 
greater public understanding and satisfaction with the disability 
program.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            58 FR 54532                                    10/22/93
NPRM Comment Period End                                        01/05/94
Final Action                                                   10/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Henry D. Lerner
Legal Assistant
Office of Regulations
Department of Health and Human Services
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235
410 965-1762
RIN: 0960-AD63
_______________________________________________________________________
HHS--Public Health Service (PHS)
            ___________________________________________________________
PRERULE STAGE
            ___________________________________________________________
40.  DEVELOPMENT OF HAZARD ANALYSIS CRITICAL CONTROL POINTS FOR 
THE FOOD INDUSTRY; REQUEST FOR COMMENTS
Legal Authority:


 21 USC 321 et seq; 21 USC 342(a)(4); 21 USC 371(a); 42 USC 264


CFR Citation:


 None


Legal Deadline:


None


Abstract:


In this advance notice, FDA is announcing for public comment its plans 
to develop regulations that would establish requirements for a new 
comprehensive food safety assurance program for both domestically 
produced and imported foods that would be based on the principles of 
Hazard Analysis Critical Control Points (HACCP). The new food safety 
program would respond to new challenges, such as new food processing 
and packaging technologies, new food distribution and consumption 
patterns, exposure to industrial chemicals and chemical waste, the 
increasing importation of foods, new microbial pathogens, and resource 
constraints. The most serious of these challenges is presented by food 
pathogens. The number of recognized food-borne pathogens has broadened 
considerably, as has awareness of long-term complications from certain 
food-borne illnesses--such as arthritis, heart disease, and kidney and 
neurological damage. To meet such challenges, FDA intends to shift the 
focus of its food safety assurance program away from periodic visual 
inspection and end-product testing and toward prevention of food safety 
risks and problems, utilizing the HACCP state-of-the-art preventive 
approach.


Statement of Need:


In this advance notice, the Food and Drug Administration (FDA) is 
announcing for public comment its plans to develop regulations that 
would establish requirements for a new comprehensive food safety 
assurance program for both domestically produced and imported foods 
that would be based on the principles of Hazard Analysis Critical 
Control Points (HACCP).


Although the current food safety assurance program has generally 
functioned effectively, it is facing new stresses and challenges.


New food processing and packaging technologies, new food distribution 
and consumption patterns, exposure to industrial chemicals and chemical 
waste, the increasing importation of foods, new microbial pathogens, 
and resource constraints all contribute to today's food safety 
challenge. The most serious of these challenges is presented by food 
pathogens. Between 1973 and 1988, the number of recognized food-borne 
pathogens broadened considerably, as did awareness of long term 
complications from certain food-borne illnesses--such as arthritis, 
heart disease, and kidney and neurological damage. To meet such 
challenges, FDA intends to shift the focus of its food safety assurance 
program away from periodic visual inspection and end-product testing 
and toward prevention of food safety risks and problems, utilizing the 
HACCP state-of-the-art preventive approach.


If the agency goes forward in a future rulemaking with an industry-wide 
standard for food manufacturing, packaging, and holding based on HACCP, 
such a rulemaking would allow for monitoring the records of a food-
processing facility to verify that systems of preventive controls are 
in place and functioning properly.


Alternatives:


The two principal alternatives to HACCP are end-product testing and 
comprehensive current good manufacturing practices (CGMP's). FDA 
concludes that both lack the distinct advantages of an HACCP-based 
approach. End-product testing does not address the root causes of food 
safety problems, is not preventive by design, and requires that a large 
number of samples be analyzed to ensure product integrity. CGMP's are 
not practical because of the breadth and diversity of the food industry 
to be covered, FDA's limited resources for preparing the large number 
of CGMP regulations that would be needed, and the time required to 
implement these regulations.


Anticipated Costs and Benefits:


FDA's intention in publishing an advance notice of proposed rulemaking 
with a specific request for comment is to gain information with which 
the agency can consider options for improving food safety, and to 
gather data for use in calculating quantitative costs and benefits. In 
general terms, HACCP focuses on prevention and is designed to prevent 
hazards from entering food; HACCP permits more effective and efficient 
oversight by Federal, State, and local governments; and HACCP places 
primary responsibility for ensuring food safety appropriately on the 
food manufacturer/distributor to analyze in a rational, scientific 
manner its production processes in order to identify critical control 
points and establish critical limits and monitoring procedures. FDA 
anticipates that costs to industry generated by implementation of HACCP 
would be offset in three ways: (1) by reducing the amount of food-borne 
illnesses (for example, total illness reduction benefits estimated to 
result from FDA's proposal to require an HACCP-based approach to 
seafood regulation are between $15 and $75 million per year); (2) by 
increasing public confidence in the Nation's food supply; and (3) by 
enabling U.S. food companies to compete more effectively in the world 
market (for example, current recommendations of the Codex Alimentarius 
Commission's Committee on Food Hygiene encourage the international use 
of the HACCP system, and the European Community (EC) has begun to 
require that foods produced within the EC be processed under HACCP 
requirements).


Risks:


Any potential for contamination of the food supply with industrial 
chemicals or microbial pathogens must be considered a highly serious 
risk because of the possibility that such contamination will be 
widespread, affecting whole segments of the population, causing some 
severe long-term effects and even loss of life. FDA made a decision to 
publish a proposal to adapt an HACCP-based approach to regulation of 
seafood, based on a considerable body of literature and expertise in 
this area. Less is known about risks posed by other foods, and FDA 
therefore intends to work with the Centers for Communicable Diseases 
and other Federal and State agencies to gather and evaluate data on 
such risks and the amount which they could be expected to be reduced by 
an HACCP-based approach. FDA is also requesting comment in this advance 
notice on whether all segments of the food industry merit a mandatory 
HACCP program, or whether such a program is needed only for certain 
segments of the industry.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
ANPRM           59 FR 39888                                    08/04/94
ANPRM Comment Period End                                       12/02/94
NPRM                                                           00/00/00
NPRM Comment Period End                                        00/00/00
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
John E. Kvenberg
Strategic Manager
Department of Health and Human Services
Food and Drug Administration
Center for Food Safety and Applied Nutrition (HFS-10), 200 C Street SW.
Washington, DC 20204
202 205-4010
RIN: 0905-AE60
_______________________________________________________________________
HHS--PHS
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
41. MAMMOGRAPHY QUALITY STANDARDS ACT OF 1992
Legal Authority:


 PL 102-539 Mammography Quality Standards Act of 1992; 42 USC 263b


CFR Citation:


 21 CFR 900


Legal Deadline:


 Final, Statutory, July 27, 1993.


Standards for accreditation bodies are required by July 27, 1993.


Abstract:


The purpose of the Mammography Quality Standards Act of 1992, enacted 
October 27, 1992, is to assure quality in all aspects of the practice 
of mammography. The primary mechanism for this is oversight of all 
mammography facilities through a certification and inspection program. 
Only facilities certified by the Secretary will be permitted to 
produce, process, or interpret mammographic images. The statute also 
requires the establishment of an advisory committee to set regulatory 
quality standards and also provides for the establishment of 
surveillance systems to evaluate breast cancer screening programs.


Regulations are required in several areas: Issuance and denial of 
certificates; standards for accreditation bodies; approval or 
withdrawal of approval of accreditation bodies; quality standards for 
facilities; certification of personnel, an inspection program, a user 
fee program, and an enforcement program. The statute mandates other 
activities for which regulations may also be necessary, although not 
specifically required.


Statement of Need:


Nearly 50,000 women die each year from breast cancer. While much 
research into causes and treatments still needs to be done, we do know 
that, for women over 50, mortality for lesions found by mammography is 
30 percent less than for larger lesions identified by physical 
examination. Unfortunately, not all mammography facilities offer 
services commensurate with the value of mammography in the abstract. To 
ensure quality control compliance, the Congress enacted the MQSA.


The primary mechanism established by the MQSA to ensure quality in 
mammography is oversight of all mammography facilities through a 
certification and inspection program. Only facilities certified by the 
Secretary will be permitted to produce, process, or interpret 
mammographic images. The statute also requires the establishment of an 
advisory committee to set regulatory quality standards and also 
provides for the establishment of surveillance systems to evaluate 
breast cancer screening programs.


The implementation of these regulations will ensure that mammograms are 
properly administered and interpreted, to provide adequate protection, 
diagnosis and treatment of breast cancer among women. FDA has worked 
with the Health Care Financing Administration, the Centers for Disease 
Control, and State and local radiation control officials to coordinate 
mammography quality assurance activities and the development of 
policies and regulations for implementation of the MQSA and will 
continue to coordinate its efforts with these agencies as appropriate.


Alternatives:


The statute is prescriptive and does not allow for a substantially 
different regulatory approach than is being taken by FDA. It allows for 
discretion in the details of individual standards, and FDA has sought 
to avoid unnecessary burden in devising these standards. In order to 
reduce the burden of complying with the MQSA regulations on mammography 
facilities, FDA incorporated existing standards to the maximum extent 
possible; is issuing Federal certificates, which are required for 
facilities to legally operate after October 1, 1994, to facilities 
already accredited by the American College of Radiology; is requiring 
facilities to submit information for certification only to the 
accrediting body--not to FDA; and allowing flexibility to accrediting 
bodies in developing their standards by requiring that accrediting body 
standards be ``substantially the same as'' FDA's standards, rather than 
identical.


Anticipated Costs and Benefits:


Direct Federal costs in fiscal year 1994 are $13 million. There are 
approximately 10,000 mammography facilities in the United States.


Approximately 8,200 already have accreditation or have applied for 
accreditation and will not incur significant additional costs. The 
remaining 1,800 facilities will incur approximately $26 million in one-
time costs and recurring costs of about $27 million. Amortizing the 
one-time costs, the annual cost of the interim rule is about $33 
million. Across 1,800 facilities, the average cost will be about 
$18,000 a year.


There are several benefits associated with these rules. High-quality 
mammography could significantly reduce breast cancer mortality. Early 
detection could reduce the morbidity associated with treating later 
stage disease. There may be a reduction in the number of malpractice 
claims filed for failure to diagnose early breast cancer. While there 
are insufficient data available to quantify the potential benefits of 
the MQSA, the potential magnitude is substantial. Using any 
conventional method of valuing lives saved, the benefits of these 
regulations are expected to be many times greater than their costs.


Risks:


The motivation for the MQSA was public response to concerns about 
breast cancer and to concerns about the quality of mammography services 
relied on for early detection of breast cancer. Breast cancer is the 
most prevalent nonskin cancer among women (and the second most deadly) 
with over 175,000 new cases and 45,000 breast cancer-related deaths 
occurring annually. The disease is most treatable in the early stages. 
Missed diagnosis of early lesions due to factors such as poor image 
quality or incorrect interpretation of images could result in delayed 
treatment, leading to otherwise avoidable increases in mortality or 
more complex and costly remediations.


Timetable:
_______________________________________________________________________
Accrediting Bodies and Quality Standards
NPRM 05/00/95
Approval of Accrediting Bodies
Interim Final 12/21/93 (58 FR 67558)
Mammography Quality Standards Act of 1992; Inspection Fees
Notice 10/00/94
Quality Standards for Mammography Facilities
Interim Final 12/21/93 (58 FR 67565)
Small Entities Affected:


Businesses, Governmental Jurisdictions


Government Levels Affected:


State, Federal


Agency Contact:
Richard E. Gross
Office of Health and Industry Programs
Department of Health and Human Services
Food and Drug Administration
Center for Devices and Radiological Health (HFZ-200), 1901 Chapman 
Avenue
Rockville, MD 20857
301 443-4600
RIN: 0905-AE19
_______________________________________________________________________
HHS--PHS
42. PRESCRIPTION DRUG PRODUCT LABELING; MEDICATION GUIDE
Legal Authority:


 21 USC 321; 21 USC 352; 21 USC 371; 21 USC 355; 42 USC 262


CFR Citation:


 21 CFR 201; 21 CFR 208; 21 CFR 314; 21 CFR 600


Legal Deadline:


None


Abstract:


This proposed rule would require that labeling, written in nontechnical 
language and directed at patients, be dispensed with prescription drug 
and biological products that are primarily used on an outpatient basis 
without the direct supervision of a health care professional. The 
patient labeling would inform the patient about the product and would 
include such information as the product's approved uses, 
contraindications, proper administration, adverse drug reactions and 
cautions for specific populations. The proposed rule would require 
manufacturers and/or distributors of these products to prepare patient 
labeling, and would require dispensers to provide the patient labeling 
to each patient or agent of the patient receiving a covered product. 
FDA is proposing this rule to promote the safe and effective use of 
prescription drug products by patients and to ensure that patients have 
the opportunity to be informed of a drug product's risks and benefits.


Statement of Need:


A fundamental principle of an effective health care system is that 
patients have a right and responsibility to participate actively in 
decisions affecting their own health. This requires that patients 
receive appropriate information, including information about their 
medicines. Despite the existence of numerous voluntary programs 
designed to improve patient knowledge, however, FDA has concluded that 
the number of consumers who receive patient information with their 
prescription drug products is unacceptably low. This proposed rule will 
establish a mandatory program of patient information distribution 
designed to ensure that consumers achieve maximum benefits from the use 
of prescription drugs and reduce the potential for harm caused by 
inappropriate patient drug use.


FDA is proposing new regulations that would require that labeling, 
written in nontechnical language that is directed to the patient, be 
dispensed with prescription drug and biological products that are used 
primarily on an outpatient basis without direct supervision by a health 
care professional. The patient labeling would inform the patient about 
the drug product and would include information such as the product's 
approved uses, contraindications, proper administration, adverse drug 
reactions, and cautions for specific populations (including pregnant 
women and children). The proposed rule would require prescription drug 
product manufacturers and/or distributors to prepare patient labeling 
for covered products. The proposed rule would also require dispensers 
to provide patient labeling to each patient or agent of the patient 
receiving a newly prescribed, covered product and to any patient or 
agent who requests patient labeling when receiving a refill. The 
proposed rule would not apply to prescription drug products 
administered in an institutional setting (such as a hospital or nursing 
home) or in emergency situations.


Alternatives:


FDA considered several alternative programs that could meet the 
objectives of this proposed regulation.


One alternative was to offer patients access to patient labeling 
through a catalogue or computer data base at the pharmacy or 
practitioner's office, but not necessarily dispense individual labeling 
with each product. FDA decided against this alternative because not all 
patients would be aware of or able to obtain sufficient information 
about the drug product, and because the information is needed at home 
where the drug product is consumed.


A second alternative was to require that patient labeling be dispensed 
without prior FDA review. FDA decided against this alternative because 
of the likelihood that the labeling dispensed would not be uniform and 
consistent with FDA-approved professional labeling, and that the 
labeling would be promotional and unbalanced in its description of the 
drug product.


A third alternative was to provide patient labeling with both new and 
refill prescriptions. FDA decided against this alternative because of 
the relatively large economic burden it would place on pharmacists.


Anticipated Costs and Benefits:


FDA has analyzed the economic consequences of the proposed rule and has 
determined that patient labeling will have associated costs near the 
$100 million threshold that defines a significant regulatory action. 
Therefore, in accordance with Executive Order 12866 and the Regulatory 
Flexibility Act (Pub. L. 96-354), FDA has developed a preliminary 
regulatory impact analysis (PRIA). The PRIA concludes that, even when 
utilizing very conservative benefit estimates, implementation costs 
will be more than offset by the health care savings that result from an 
increase in compliance with prescribed drug therapy, and a decrease in 
the number of adverse drug reactions.


Risks:


FDA has concluded from a review of the current literature that patient 
noncompliance with prescribed drug regimens ranges from 30 to 50 
percent. Patients who do not comply with prescribed regimens are 
subject to two types of risks: risk of therapeutic failure and risk of 
adverse drug reaction or drug interaction with other drugs and foods. 
Both types of risk are potentially very serious. The seriousness of 
therapeutic failure depends on the seriousness of the illness being 
treated, while the effects of drug reaction or interaction may range 
from mild and transitory to long-lasting and even life-threatening.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           00/00/00
Small Entities Affected:


Businesses


Government Levels Affected:


State, Federal


Agency Contact:
Louis A. Morris
Chief
Marketing Practices & Communication Branch
Department of Health and Human Services
Food and Drug Administration
Center for Drug Evaluation and Research (HFD-240), 5600 Fishers Lane
Rockville, MD 20857
301 594-6818
RIN: 0905-AE43
_______________________________________________________________________
HHS--PHS
43.  FOODS DERIVED FROM NEW PLANT VARIETIES; PREMARKET 
NOTIFICATION
Legal Authority:


 21 USC 331; 21 USC 342; 21 USC 343; 21 USC 348; 21 USC 371


CFR Citation:


 None


Legal Deadline:


None


Abstract:


The Food and Drug Administration is considering development of 
regulations to require the submission to the agency of information on 
foods derived from new plant varieties developed using recombinant 
deoxyribonucleic acid (rDNA) technology, prior to commercial 
distribution of such foods.


Statement of Need:


The Food and Drug Administration (FDA) is proposing to establish an 
administrative mechanism for premarket notification to the agency by a 
developer of the developer's intention to commercialize a food derived 
from a new plant variety developed using rDNA techniques.


FDA expects that rDNA techniques will be used increasingly to modify 
food source plants by adding substances that enhance adaptation to 
growing conditions, lengthen shelf life, improve nutritional 
characteristics, or lend to food plants a variety of other traits that 
they have heretofore not possessed. FDA believes that a premarket 
notification mechanism is needed initially because of the agency's 
relatively limited experience with foods modified using rDNA 
techniques. FDA does not expect food from rDNA-altered plants to 
present a level of risk above that of foods developed through 
traditional breeding techniques, but does seek to improve its 
understanding of rDNA-altered food source plants and to ensure that 
foods derived from such plants are in compliance with applicable legal 
requirements.


The premarket notification format FDA is proposing will include data 
and information on the safety and nutritional value of the rDNA-altered 
food that is developed in the course of developing the rDNA-altered 
food source plant.


Alternatives:


Alternatives FDA considered include: (1) Regulating foods from rDNA-
altered plants no differently from foods developed through more 
traditional breeding techniques, (2) adopting a less restrictive 
program, and (3) adopting a more restrictive program. The first two 
alternatives do not ensure the submission to FDA of scientific data and 
information on the safety and nutritional value of all rDNA-altered 
foods intended for commercialization. FDA does not find this 
alternative acceptable as the development of such information and data 
is in the interest of the public health and important to building 
public confidence in foods developed through this potentially promising 
new technology. The third alternative would be resource-intensive and 
inconsistent with FDA's belief that the key factors in reviewing safety 
concerns should be the characteristics of the food product, rather than 
the fact that new methods are used to develop it.


Anticipated Costs and Benefits:


The costs associated with premarket notification will be associated 
with the preparation of the notification in a format for submission to 
FDA, and FDA will focus on developing a streamlined format that 
industry may use without undue effort. For the most part, the data and 
information that premarket notification would include do not go beyond 
the data and information that will be developed through the process of 
developing the rDNA-altered plants. Only in very few cases does FDA 
anticipate that additional information will be needed to respond to 
unanswered scientific questions on these foods, and the agency believes 
that the costs of obtaining such information, as well as the costs of 
preparing the premarket notification submission, will be offset by the 
public confidence that a premarket notification program will help to 
build.


Risks:


FDA does not anticipate that rDNA-altered foods will present any novel 
or extraordinary risks to the public health. However, a body of data 
and experience with these foods is needed in order to address the 
public concern expressed about them and assure consumers that they pose 
no such risks.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           01/00/95
NPRM Comment Period End                                        04/00/95
Small Entities Affected:


None


Government Levels Affected:


Federal


Agency Contact:
James H. Maryanski
Biotechnology Strategic Manager
Department of Health and Human Services
Food and Drug Administration
Center for Food Safety and Applied Nutrition (HFS-13), 200 C Street SW.
Washington, DC 20204
202 205-4359
RIN: 0905-AE50
_______________________________________________________________________
HHS--PHS
44. ORGAN PROCUREMENT AND TRANSPLANTATION NETWORK RULES
Legal Authority:


 42 USC 1320b-8 sec 1138 of the Social Security Act; 42 USC 274 sec 372 
of the Public Health Service Act


CFR Citation:


 42 CFR 121


Legal Deadline:


None


Abstract:


Section 1138 of the Social Security Act requires Medicare and Medicaid 
participating hospitals that perform organ transplants to be members of 
and abide by the rules and requirements of the Organ Procurement and 
Transplantation Network (OPTN) as established by section 372 of the 
Public Health Service Act. Section 1138 also requires that for organ 
procurement costs attributable to payments to an Organ Procurement 
Organization (OPO) to be paid by Medicare or Medicaid, the OPO must be 
a member of and abide by the rules and requirements of the OPTN. No 
other entity (for example, a histocompatibility laboratory) is required 
to be a member of or abide by the rules of the OPTN under the 
provisions of the statute. It is the Department's position that no 
rule, requirement, policy, or other issuance of the OPTN will be 
considered to be a ``rule or requirement'' of the Network within the 
meaning of section 1138 unless the Secretary has formally approved that 
rule. The OPTN is currently in operation and these rules will impose no 
further cost or provide any benefit other than that which now exists.


Statement of Need:


Until the enactment of Public Law 99-509, membership in the OPTN was 
voluntary. A Federal Register notice of December 18, 1989, stated that 
no rule, requirement, policy, or other issuance of the OPTN will be 
considered a ``rule or requirement'' of the Network within the meaning 
of section 1138 unless the Secretary has formally approved that rule. 
The notice was necessary because policies establishing conditions of 
participation on coverage for Medicare and Medicaid hospitals and OPOs 
must be developed through rulemaking approved by the Secretary.


The Department's proposed rule of September 8, 1994, provides for 
Federal oversight of the processes by which the OPTN allocates organs 
for transplantation. It focuses the Federal role on ensuring that those 
processes are fair and equitable, and provide for public participation. 
It requires the OPTN to operate an automated system for managing 
information about organ transplant candidates, recipients, and donors, 
including a computerized waiting list. It requires membership in the 
OPTN by transplant hospitals and OPOs and allows membership of other 
organizations and individuals.


The proposed rule also establishes an OPTN Board of Directors to 
develop organ allocation policies that are patient-based and take into 
account established medical criteria for transplantation, the length of 
time potential recipients have been on the national list, and potential 
recipients whose immune system makes it difficult for them to receive 
organs. Policies developed by the OPTN must minimize wastage of the 
scarce supply of human organs for transplantation and improve the 
outcomes of transplantation. The NPRM also requires OPOs and transplant 
hospitals to maintain and make available records on patients and donors 
for whom they are responsible. Finally, the OPTN is required to report 
at least annually the information that the Department believes is 
needed to assess the effectiveness of the Nation's organ donation, 
procurement, and transplantation system.


Section 372 of the PHS Act specifically instructs the Secretary to 
operate the OPTN through a contract with a private entity. The NPRM 
retains at the Federal level final control over the authority delegated 
to the OPTN. In this regard, the Department was persuaded that the 
standards to be used in this rapidly evolving field are best developed 
by those with the expertise to do so.


Alternatives:


In lieu of Federal regulations, the OPTN would continue to operate on 
the basis of voluntary compliance by its membership. Without Federal 
regulation of the OPTN, transplant hospitals and OPOs are free to 
devise their own methods for allocating organs, with the potential for 
creating wide disparities among different localities and regions of the 
United States.


Anticipated Costs and Benefits:


As an measure relating exclusively to administration of the pertinent 
statutes, this rulemaking has negligible cost/benefit implications.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 46482                                    09/08/94
NPRM Comment Per59 FR 46482                                    12/07/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Judy Braslow
Director, Division of Organ Transplantation
Bureau of Health Resources Development
Department of Health and Human Services
Public Health Service
Room 11A-22, Parklawn Building
5600 Fishers Lane
Rockville, MD 20857
301 443-7577
RIN: 0905-AD26
_______________________________________________________________________
HHS--PHS
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
45. BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE 
(TOBACCO PROVISIONS)
Legal Authority:


 42 USC 300x-21


CFR Citation:


 45 CFR 96; 45 CFR 130


Legal Deadline:


None


Abstract:


Sets standards and procedures for enforcement of State law against sale 
of tobacco products to minors as a condition of full funding of Federal 
block grants to States for prevention and treatment of substance abuse. 
These requirements apply beginning in fiscal year 1994 except, under 
certain conditions, in fiscal year 1995.


Statement of Need:


Section 1932(d) of the Public Health Service (PHS) Act requires the 
Secretary to publish regulations on the standards that will be used in 
approving Substance Abuse Prevention and Treatment Block Grant 
applications. Section 1926 of the PHS Act requires that States, as a 
condition of receiving a grant, must have in place a law that prohibits 
the sale and distribution of tobacco products to minors. It further 
requires the States to enforce the provision in a manner that can 
reasonably be expected to reduce the availability of tobacco products 
to minors, and to conduct annual, random, unannounced inspections to 
ensure compliance with the law.


In addition States are required to report as part of their application 
for Block Grant funds the activities carried out in the previous year 
for enforcing the provision, the State's success in reducing the 
availability of tobacco products to minors, and the activities it plans 
to carry out during the year for which it is seeking funds. If the 
Secretary determines that a State has not complied with the 
requirements of section 1926, the Secretary shall penalize the State 10 
percent of its allotment the first year, 20 percent the second, 30 
percent the third, and 40 percent the fourth and all subsequent years.


These regulations set the criteria and standards for the Secretary's 
determination of compliance with section 1926.


A notice of proposed rulemaking was issued on August 26, l993 and the 
public was given 60 days to comment. The Department will respond to 
those comments and amend the proposed rule as appropriate.


Alternatives:


The Department has minimal discretion in establishing the criteria and 
standards to use for establishing compliance. States are statutorily 
required to carry out random inspections of outlets in a manner that 
provides an accurate, reliable and valid measure of how successful the 
enforcement of the provisions is being conducted throughout the State. 
The results of these inspections constitute an objective measure for 
the Secretary's use in determining compliance.


Anticipated Costs and Benefits:


The NPRM was considered a major rule for the purposes of carrying out 
an economic impact analysis. With regard to the States enforcing the 
State laws on the availability of tobacco products to minors and for 
conducting the inspections, States may only use the 5 percent of their 
allocation which they currently use for the purposes of administering 
the block grant. Thus little to no Federal funds are available to the 
States to enforce their statute.


We estimate the cost of a substantial enforcement effort at $50 million 
nationwide. The costs of training staff, moving vending machines, etc., 
we estimate will cost businesses about $100 million nationwide. The 
costs of carrying out the inspections we believe will be between $1 and 
$2 million nationwide. This suggests a total cost of a maximum effort 
at $152 million nationwide.


The annual benefit of the provision is in reduction of medical bills 
incurred by those who choose to stop smoking; reduced sick leave and 
group life-insurance subsidies, increased productivity and the taxes 
realized from people choosing to stop smoking; the value of lives 
gained; reduced costs for fire damage that would have been caused by 
the smokers; and the lives saved from those fires that would not 
happen. We estimate these savings at one-sixth to one-third of a 
billion dollars per year.


Risks:


Implementation of the above-cited statute leaves the Department no 
option other than issuing a regulation in this area. In any case, the 
risks in not acting against illegal sales of tobacco products are 
great. The Centers for Disease Control and Prevention (CDC) estimates 
that at present approximately 500,000 minors become regular smokers 
each year. A major cause is ready access to illegal tobacco. Three 
fourths or more of all outlets sell illegally to minors, due in part to 
insufficient enforcement efforts by many States, which encourage a 
scofflaw attitude among merchants. CDC estimates that 73 percent of all 
over-the-counter outlets and 96 percent of all vending machine outlets 
sell tobacco products to minors.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            58 FR 45156                                    08/26/93
NPRM Comment Per58 FR 45156                                    10/25/93
Final Action                                                   12/00/94
Small Entities Affected:


Businesses, Governmental Jurisdictions


Government Levels Affected:


State, Tribal


Additional Information:


Alternate Contact: Sue Martone, DLEA, SAMHSA, PHS, Room 12C-15, 5600 
Fishers Lane, Rockville, MD 20852; 301-443-4640


Agency Contact:
Joseph D. Faha
Director, DLEA, SAMHSA
Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
5600 Fishers Lane
12-C-15
Rockville, MD 20857
301 443-4640
RIN: 0905-AE05
_______________________________________________________________________
HHS--PHS
46. RESPIRATORY PROTECTIVE DEVICES
Legal Authority:


 30 USC 842(h); 30 USC 844; 30 USC 957


CFR Citation:


 30 CFR 11; 42 CFR 84


Legal Deadline:


None


Abstract:


The proposed rule is the first in a series of regulatory modules which 
will upgrade current respirator certification requirements. This first 
module will update testing requirements for air-purifying respirators 
with particulate filters. The existing requirements allow potentially 
excessive filter leakage. The proposed rule would also benefit health 
care settings implementing CDC recommendations for preventing the 
transmission of tuberculosis. These recommendations include performance 
criteria for respiratory devices. The proposed rule will enable the 
certification of a broader range of respirators that meet the CDC 
performance criteria.


Statement of Need:


A May 24, 1994, proposed rule offered for public comment revised 
performance criteria to be used for the certification of respiratory 
protective devices. This proposal sought to transfer existing 
regulations, oriented specifically to the mine safety field, to the 
broader public health area. (A complementary proposal was published in 
the same issue of the Federal Register by the Mine Safety and Health 
Administration, reflecting careful collaboration by the two agencies on 
this matter.) The proposal also sought to upgrade current testing 
requirements for particulate filters. This action is the first of a 
series of modules which will, over the next several years, upgrade 
current respirator requirements. This modular approach will allow 
improvements to be implemented on a priority basis, as well as 
facilitate adaptation to new requirements by the manufacturers and 
users of respirators.


The most commonly used respirators available today are air-purifying 
respirators with particulate filters. Current requirements for these 
respirators allow potentially excessive filter leakage, constituting a 
significant public health hazard. The continued existence of problems 
in currently certified respirators and in evaluating respirator safety 
and efficacy merits prompt attention.


In addition, adoption of performance criteria recommended by CDC for 
respiratory devices used in health-care settings for protection against 
Mycobacterium tuberculosis, the infectious agent that causes 
tuberculosis (TB), may largely depend on increasing the range of 
appropriate respiratory devices available, which in turn depends on 
promulgation of this module.


Alternatives:


The certification criteria in the current regulations do not provide 
sufficient evidence with which National Institute for Occupational 
Safety and Health (NIOSH) in the Centers for Disease Control (CDC) can 
reliably certify air-purifying particulate respirators. The present 
regulatory criteria cannot assure the safety and performance of these 
devices. If this rule is not promulgated, existing efficacy problems 
will continue unabated. The excessive filter leakage in some widely 
used respirators that are currently certified by NIOSH constitutes a 
significant public health hazard.


In addition, failure to promulgate this regulation would impede efforts 
in health care settings to meet the current performance criteria 
recommended by CDC for respiratory devices used in protection against 
Mycobacterium tuberculosis. The range of respirators available for this 
purpose would be substantially expanded as a direct result of 
promulgating this proposed rule.


Anticipated Costs and Benefits:


The Department did not view this rulemaking to be ``economically 
significant'' within the definition of E.O. 12866 (e.g., it would not 
have an effect on the economy of $100 million). The Department did 
prepare an Initial Regulatory Flexibility Analysis, which concluded 
that manufacturing costs associated with the proposed changes in 
certification requirements would be insignificant, and that there 
should be no increased costs to respirator users. Larger manufacturers 
are generally prepared for the new requirements and the timeframe for 
full implementation should allow smaller manufacturers and the 
respirator user community to prepare without disrupting the supply of 
certified respirators.


The anticipated benefits of promulgation of this regulation are the 
increased protection that will be afforded millions of respirator 
wearers. The certification of air-purifying respirators under these 
proposed requirements would also enable respirator users to select from 
a broader range of certified respirators that meet the current 
performance criteria recommended by CDC for respiratory devices used in 
health-care settings for protection against Mycobacterium tuberculosis.


Risks:


As many as 7 million American workers use NIOSH-certified respirators 
to protect themselves from hazards where they work. This number could 
rise to 10 million before the year 2000. Many of these workers must 
wear NIOSH-certified respirators as an involuntary condition of 
employment. Millions of respirators are worn in toxic and lethal 
environments in which lapses in safety and efficacy can result in 
injury or death.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            52 FR 32402                                    08/27/87
First Public Hea52 FR 37639                                    01/20/88
Second Public He52 FR 37639                                    01/27/88
NPRM Public Comm53 FR 5595 End                                 03/28/88
Second NPRM     59 FR 26850                                    05/24/94
Second NPRM Comm59 FR 27257End                                 07/22/94
Final                                                          10/00/94
Final Action                                                   00/00/00
Final Action Effective                                         00/00/00
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Richard Metzler
Chief, Cert. & Quality Assurance Br.
Division of Safety Research, NIOSH
Department of Health and Human Services
Public Health Service
Centers for Disease Control and Prevention
944 Chestnut Ridge Road
Morgantown, WV 26505
304 284-5713
RIN: 0905-AB58
_______________________________________________________________________
HHS--PHS
47. REVISION OF INDIAN SELF-DETERMINATION REGULATIONS
Legal Authority:


 PL 93-638; PL 100-202; PL 100-446; PL 100-472; PL 100-581; PL 101-301; 
25 USC 450


CFR Citation:


 42 CFR 36; 48 CFR 380.4; 48 CFR 352.280-4


Legal Deadline:


 NPRM, Statutory, May 5, 1989. Final, Statutory, August 5, 1989.


Abstract:


Public Law 93-638 passed in 1975, requires the IHS to turn over 
administrative responsibility for services delivery programs to tribes 
so requesting, using the mechanism of contracting. Public Law 93-638 
also authorizes the IHS to make grants to tribe(s) for the planning, 
development, and or operations of health programs. Public Law 100-472, 
enacted October 5, 1988, made significant changes to the statute and 
required that regulations implementing the amendments be promulgated in 
final within ten months of enactment. The law provides for tribal 
consultation and participation in the development of the regulations.


Statement of Need:


In response to the long-standing Indian interest in self-determination, 
Congress enacted the Indian Self-Determination and Education Assistance 
Act in l975. The Indian people have long sought more meaningful 
participation in the planning, conduct, and administration of their 
programs and services. The Act reflects a commitment to preserving the 
Federal relationship with and responsibility to the Indian people by 
promoting efforts to transfer the operation service delivery programs 
of the Federal Government to Indian tribes. The l975 Act requires the 
Indian Health Service (IHS) to contract with Indian tribes and tribal 
organizations for the operation of IHS service delivery programs.


The Act also authorizes IHS to make grants to tribes for the planning, 
development and/or operation of health programs.


On October 5, 1988, Congress amended the Act to expand its coverage and 
authorize a new nonprocurement contracting process which required 
revision of existing regulations. The Amendments (Public Law 100-472) 
provided that the regulations be developed with the participation of 
and in consultation with Indian tribes and tribal organizations.


The Department of the Interior and the Department of Health and Human 
Services, as directed, issued a joint notice of proposed rulemaking in 
the Federal Register on January 20, 1994 (59 FR 3166). An initial 
comment period of 120 days (May 20, 1994) was extended by 90 days to 
August 20, 1994 at the request of tribal leaders. Additionally, 
comments on the record were received at three regional meetings and a 
national meeting.


At the end of the comment period all comments received will be 
considered and in consultation with and participation of tribal 
representatives, final regulations will be issued.


Alternatives:


The Department must issue final regulations in this area. With the 
clear intent of the statute being to maximize Tribal control of the 
relevant programs, the Department's purpose must be to find the 
alternative mix of administrative structures in the rule that complies 
with the mandate as completely as possible. Tribal government views 
will be given the closest possible consideration.


Anticipated Costs and Benefits:


No additional costs are associated with this final regulation. It is 
anticipated that Indian tribes and tribal organizations will benefit 
from having all regulations required for ``638'' contracts and grants 
in one title of the Code of Federal Regulations.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 3166                                     01/20/94
NPRM Comment Per59 FR 26920                                    08/20/94
Final Action                                                   08/00/95
Small Entities Affected:


None


Government Levels Affected:


Tribal


Procurement:


This is a procurement-related action for which there is a statutory 
requirement. There is a paperwork burden associated with this action.


Additional Information:


The Act (P.L. 100-472) provides that except for construction contracts, 
the Office of Federal Procurement Policy Act and Federal Acquisition 
Regulations shall not apply to self-determination contracts. Therefore, 
implementing regulations for the Indian Self-Determination Act 
amendments will include a subpart on construction contracts which, 
unlike other self-determination awards, will be made subject to certain 
procurement rules (e.g., FARS, HSARS, FSARS).


Agency Contact:
Betty J. Penn
Chief, Regulations Branch, DLR
Indian Health Service
Department of Health and Human Services
Public Health Service
12300 Twinbrook Parkway
Suite 450
Rockville, MD 20852
301 443-1116
RIN: 0905-AC98
_______________________________________________________________________
HHS--PHS
48. RESPONSIBILITIES OF PUBLIC HEALTH SERVICE-FUNDED INSTITUTIONS FOR 
PROMOTING OBJECTIVITY IN RESEARCH
Legal Authority:


 42 USC 216; 42 USC 289b-1; 42 USC 299c-3


CFR Citation:


 42 CFR 50, subpart F; 42 CFR 309


Legal Deadline:


 Final, Statutory, December 8, 1993.


Final rules implementing 42 U.S.C. 289b-1 must be issued not later than 
180 days after June 10, l993


Abstract:


PHS proposes to issue regulations requiring the institutions that apply 
for or receive funding for biomedical, behavioral, and certain other 
health-related research under the PHS Act to assume full responsibility 
for ensuring that the financial interests of the respective institution 
and the employees of the institution do not compromise the objectivity 
with which PHS-funded research is conducted or reported.


Statement of Need:


Effective interaction between industry and institutions conducting 
research is essential to ensure the rapid application of scientific 
discoveries to the health needs of the Nation and to maintain 
international competitiveness. Nonetheless, prudent stewardship of 
public funds includes protecting federally funded research from being 
compromised by the conflicting financial interests of any investigator 
responsible for the design, conduct, or reporting of the Public Health 
Service-funded research.


Numerous statutes and programs demonstrate the Federal interest in the 
promotion of interactions among Government, academia and industry. For 
example, the Stevenson-Wydler Technology Innovation Act of 1980 (Pub. 
L. 96-480) encourages technology transfer, particularly through 
industrial-academic collaborations. The Patent and Trademark Act 
Amendments of 1980 (P.L. 96-517) allow universities and other funding 
recipients to apply for patents developed with Federal funding, and 
expressly promote collaboration between commercial concerns and 
nonprofit organizations. The Economic Recovery Tax Act of 1981 (P.L. 
97-34) is aimed at fostering research and development by small 
companies and associated university partners. The Federal Technology 
Transfer Act of 1986 (P.L. 99-502), which amended P.L. 96-480, and 
Executive Order 12592 provide similar patent and licensing authority to 
Federal laboratories, and encourage them to participate in cooperative 
research and development agreements with the private sector and 
nonprofit organizations, including universities.


These legal authorities facilitate the movement of intellectual capital 
between the Federal Government, academic institutions, and the private 
sector. This kind of cross-fertilization is critical to the development 
of the U.S. biotechnology industry. However, these and other 
inducements for collaboration, as well as the rapid growth of the 
biotechnology industry, have created a climate in which the stewardship 
of public funding for biomedical and behavioral research is 
increasingly complex and challenging.


The value of the outcomes of PHS-funded research to the health and the 
economy of the Nation must not be compromised by any financial interest 
that will, or may be reasonably expected to, bias the design, conduct 
or reporting of the research. The proposed regulations seek to maintain 
a reasonable balance between these competing interests, give applicants 
for PHS research funding responsibility and discretion to identify and 
manage financial interests that may bias the research, and minimize 
reporting and other burdens on the applicants.


The notice of proposed rulemaking for this purpose that was published 
in the June 28, 1994, Federal Register reflected an effort to maintain 
maximum possible consistency between HHS policy in this area and that 
of the National Science Foundation.


Alternatives:


There is no alternative to publishing regulations in this area, since 
regulations are statutorily required. The Department has attempted in 
this rulemaking to maximize the role of grantee institutions in 
protecting against the potential for biased research. The 
``assurances'' required by the statute could have been far more onerous 
than those envisioned in the regulations.


The rule was drafted to address these instances of abuse, while 
minimizing unnecessary burden to researchers. We did not consider any 
option that would routinely require all researchers to list all of 
their significant assets (unrelated to the research project), that 
would encourage searches for hypothetical or speculative conflicts, 
that would require divestiture of ownership of a product undergoing 
research, or that would discourage in any way funding grants or 
contracts to scientists to develop products with significant profit 
potential.


Anticipated Costs and Benefits:


We do not believe that the annual costs of implementing this rule will 
reach as much as $1,000 an institution in staff time, or as much as $1 
million a year across all institutions. Most of the cost will arise 
from the several seconds or minutes spent certifying the absence of 
significant financial interests for individual awards. Spread across 
thousands of grantee and contractor institutions, these costs are very 
small.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 33242                                    06/28/94
NPRM Comment Per59 FR 33242                                    08/29/94
Final Action                                                   01/00/95
Small Entities Affected:


Businesses, Organizations


Government Levels Affected:


None


Agency Contact:
Dr. George J. Galasso
Associate Director for Extramural Affairs
Department of Health and Human Services
Public Health Service
NIH, Shannon Building, Room 152
Bethesda, MD 20892
301 496-5356
RIN: 0905-AE01
_______________________________________________________________________
HHS--Health Care Financing Administration (HCFA)
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
49. INSTITUTIONAL PLAN AMENDMENT FINDINGS (MB-078-P)
Legal Authority:


 42 USC 1396a(a)(13)(A); PL 97-35, sec 2173


CFR Citation:


 42 CFR 430; 42 CFR 447


Legal Deadline:


None


Abstract:


This rule would provide guidance to States on institutional plan 
amendment findings and clarify the provisions of the regulations 
governing effective dates of plan amendments for Medicaid payments of 
hospital and long term care services. This proposed rule would promote 
increased economy in the administration of the Medicaid program while 
retaining State flexibility to the maximum extent possible.


Statement of Need:


This proposed rule comports with E.O. 12866 by reducing the 
administrative burden on States in their efforts to meet Federal 
requirements.


The Agency intends to publish a proposed rule that will allow States to 
more easily comply with the administrative requirements associated with 
institutional payment methodologies for facilities participating in the 
Medicaid program.


Current Medicaid regulations concerning the payment for inpatient 
hospital and long-term care facility services require States to make 
certain ``findings,'' acceptable to HCFA every time a State changes its 
payment methods and standards (but not less than annually). For 
example, if a State makes a payment rate change it must find that the 
rates are reasonable and adequate to meet the costs that must be 
incurred by efficiently and economically operated providers of 
services. Other findings must be made concerning upper payment limits. 
These regulations implemented section 1902(a)(13)(A) of the Social 
Security Act, know as the Boren Amendment.


The problem is that the term ``findings'' is not defined in the law or 
regulations; nor has HCFA previously provided States with written 
guidance as to processes that States could use in making them. In 
response to requests by States for guidance in this area, HCFA would 
provide clarification with respect to the procedural requirements with 
which States must comply in obtaining approval of their methods and 
standards for making payments for inpatient hospital services and long 
term care facility services. This clarification will ease the 
administrative burden on States in their efforts to meet Federal 
requirements and allow them, when necessary, to more readily 
demonstrate to the courts that they have complied with statutory 
requirements.


We are considering modification of existing public notice requirements 
so that States could avoid publication of notices under the Federal 
procedures if the State is already required to publish notices in 
accordance with State laws comparable to the Federal Administrative 
Procedure Act. Such State notices would satisfy our notice requirement 
and eliminate unnecessary duplication of effort by the States.


Alternatives:


In developing the proposed rule HCFA has met and will continue to meet 
with State representatives and provider groups to help ensure an 
effective and beneficial rule.


Anticipated Costs and Benefits:


There will be no significant costs associated with this rule. The 
benefits are described above in the Need section.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           01/00/95
Small Entities Affected:


None


Government Levels Affected:


State


Agency Contact:
Bernie Truffer
Director, Division of Payment Policy
Department of Health and Human Services
Health Care Financing Administration
Room 233, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-1357
RIN: 0938-AG60
_______________________________________________________________________
HHS--HCFA
50.  REVISION OF MEDICARE HOSPITAL CONDITIONS OF PARTICIPATION 
(BPD-745-P)
Legal Authority:


 42 USC 1395x; 42 USC 1302; 42 USC 1395(cc); 42 USC 1395(hh)


CFR Citation:


 42 CFR 482


Legal Deadline:


None


Abstract:


This proposed rule would revise the regulations containing Medicare 
hospital conditions of participation to reflect innovations in quality 
health care that have emerged in the last decade. Since the hospital 
conditions of participation have not been revised since 1986, there is 
a need to revise the conditions of participation to center on the 
patient, look at cross-functional hospital performance, reflect quality 
improvement, and be outcome-oriented. Specific areas for revision 
include patient assessment, patient rights information management, 
continuous improvement in quality, discharge planning and 
administration of organizational environment.


Statement of Need:


The planned regulatory action for the revitalization of the hospital 
conditions of participation should center on the patient, look at cross 
functional performance, reflect quality improvement, and be outcome-
oriented. The regulation should employ a cross-functional performance 
strategy. A patient encounters many services and is exposed to several 
processes that cut across hospital departmental lines. A cross-
functional view is more effective because it eliminates redundant and 
unnecessarily burdensome evaluation criteria and is a more accurate 
portrayal of patient outcomes vis-a-vis interdependent functions.


Specific areas for regulatory reform include the following: patient 
assessment, patient rights, information management, continuous 
improvement in quality, and discharge planning.


In order to make HCFA's requirements patient-centered and outcome-
oriented, the new hospital regulations should diminish the focus on 
procedural compliance and process. In order to ensure quality services, 
the shift in focus should be on actual organizational performance, the 
actual care delivered, and the impact and outcome of the treatment.


There is compelling evidence of the need to revise these regulations. 
They were last revised in 1986. Since then, there have been many 
changes in the state of the art for hospital activities, as 
demonstrated, for example, by the myriad of innovations in the hospital 
accreditation program of the Joint Commission on Accreditation of 
Healthcare Organizations (Agenda for Change, which includes patient-
centered standards and performance-focus standards that emphasize 
outcomes and quality of care.) To be consistent with contemporary 
standards, HCFA should transform regulations to reflect innovations in 
quality health care that have emerged in the past decade and to reduce 
unnecessary red tape and other burdens.


Earlier this year, HCFA held meetings with national experts and 
industry groups to discuss how we might proceed. We are analyzing input 
from these meetings and additional outside consultations will take 
place during this process.


Alternatives:


HCFA investigated the possibility of revising portions of the hospital 
conditions of participation. It was determined, however, that an 
overhaul of the entire regulation would be a more effective way to gain 
a strategic view of the internal and external organizational 
environments of hospitals and to achieve flexibility in the regulation 
to ensure future utilization.


Anticipated Costs and Benefits:


There would not be significant costs associated with this proposed 
rule. The benefits that would be derived from the rule are discussed 
under the Need section, above.


Risks:


By revising these regulations to focus on the quality of the actual 
care given to an individual and the effectiveness of that care for the 
individual patient, we hope to reduce risks to beneficiaries' health 
and safety. Revised procedures can better focus on ensuring that the 
care being given to a patient is the care that is actually necessary 
and effective for that patient. No quantitative estimates of risk 
reductions are available yet.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           00/00/00
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
Thomas Hall
Director, Division of Provider Services Coverage Policy
Department of Health and Human Services
Health Care Financing Administration
Room 401, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-4607
RIN: 0938-AG79
_______________________________________________________________________
HHS--HCFA
51.  PHYSICIANS' REFERRALS TO HEALTH CARE ENTITIES WITH WHICH 
THEY HAVE FINANCIAL RELATIONSHIPS--EXPANDED TO DESIGNATED HEALTH 
SERVICES (BPD-809-P)
Legal Authority:


 42 USC 1302; 42 USC 1395hh; 42 USC 1395nn


CFR Citation:


 42 CFR 411


Legal Deadline:


None


Abstract:


This proposed rule would provide that a physician who has (or has a 
family member who has) a financial relationship with a health care 
entity, may not make referrals to that entity for certain services 
(designated health services) under the Medicare program, except under 
specified circumstances. This proposed rule would also deny payment to 
a State for expenditures for designated health services furnished on 
the basis of a physician referral that all things being equal, would 
result in denial of payment under Medicare. The provisions of the 
proposed rule are based on sections 13562 and 13624 of the OBRA '93.


Statement of Need:


Proposed regulations are being developed to implement the statutory 
prohibition against patient referrals by physician to health service 
entities with which the physician has a financial interest or 
relationship. These proposed regulations address the concern that such 
referral relationships involve an inherent potential for conflict of 
interest resulting in unnecessary services for Medicare patients and 
unnecessary costs to the Medicare program.


OBRA '93 amended section 1877 of the Social Security Act (Act), 
``Limitations on Certain Physician Referrals.'' As amended by OBRA '93, 
section 1877, prohibits a physician from making a referral to an entity 
for the furnishing of designated health services for which Medicare 
would otherwise pay, if the physician or a member of the physician's 
immediate family has a financial relationship with that entity. The 
provision further prohibits an entity from presenting or causing to be 
presented a Medicare claim or bill to any individual, third party 
payor, or other entity for designated health services furnished 
pursuant to a prohibited referral.


Designated health services include the following: clinical laboratory 
services; physical therapy services; occupational therapy services; 
radiology or other diagnostic services; radiation therapy services; 
durable medical equipment; parenteral and enteral nutrients, equipment 
and supplies; prosthetics, orthotics, and prosthetic devices; home 
health services; outpatient prescription drugs; and inpatient and 
outpatient hospital services.


The provisions of the law related to designated health services other 
than clinical laboratory services are effective January 1, 1995.


Also, OBRA '93 amended section 1903 of the Act to deny Federal 
financial participation payments to a State for expenditures for 
designated health services furnished to an individual on the basis of a 
physician referral that, all things being equal, would result in the 
denial of payment under Medicare.


The Agency intends to publish a proposed rule that will set forth the 
general prohibition and explain provisions of the law that changed the 
way in which exceptions are applied. In addition, we will propose 
definitions of each of the designated health services.


(Note that this proposed rule is separate from the final rule, 
Physician Ownership of, and Referrals to, Entities that furnish 
Clinical Laboratory Services (BPD-674-FC, RIN 0938-AF40), that will 
address only referrals for clinical laboratory services.)


Anticipated Costs and Benefits:


This proposed rule is meant to expand applications of rule intended to 
eliminate certain financial incentives for physicians to order 
unnecessary and often costly designated health services.


HCFA believes that physicians and entities that perform designated 
health services, such as hospitals and durable medical equipment 
companies, are currently reviewing their financial relationships in 
order to ensure that their activities are not prohibited by provisions 
of this rule. Estimates of cost savings to be derived from 
implementation of the proposed rule are not available at this time, but 
savings are unlikely to be substantial.


Risks:


Not applicable.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           00/00/00
Small Entities Affected:


Businesses


Government Levels Affected:


None


Agency Contact:
Betty Burrier
Health Insurance Specialist
Department of Health and Human Services
Health Care Financing Administration
Room 401, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-4649
RIN: 0938-AG80
_______________________________________________________________________
HHS--HCFA
52.  HOME HEALTH AGENCY (HHA) CONDITIONS OF PARTICIPATION (BPD-
819-P)
Legal Authority:


 42 USC 1302; 42 USC 1395x; 42 USC 1395cc(a); 42 USC 1395hh; 42 USC 
1395bbb


CFR Citation:


 42 CFR 484


Legal Deadline:


None


Abstract:


This proposed rule would revise home health agency conditions of 
participation to center on the patient, using outcome-oriented 
measures. This focus is required by OBRA '87.


Statement of Need:


Most of the current HHA conditions of participation have remained 
unchanged since home health services became a Medicare benefit in 1966. 
Some limited modifications have been made over the years to comply with 
legislative changes. As a result, most of the conditions of 
participation continue to be structure and process oriented. They do 
not effectively support the mandate of OBRA '87 to develop a patient-
centered, outcome-oriented survey process which focuses on the 
organization and delivery of quality care services.


Because the existing survey process continues to focus on structure and 
process measures, the discrepancy between a congressional mandate for 
outcome-oriented care and the authority for measuring the actual 
performance capabilities of HHAs in patient care services remains a 
problem. It presents difficulties for both providers and surveyors in 
areas of survey/certification, medical review, developing data based 
performance standards for HHA management and monitoring, and 
implementing a continuous quality improvement system for outcomes of 
care.


Regulations containing the Medicare HHA conditions of participation 
must be revised in order to provide a regulatory basis for a patient-
centered, outcome-oriented system of home health quality assurance. The 
implementation of such a system will enhance Medicare's ability to 
ensure that high-quality care is furnished to the patients of Medicare-
certified home health agencies. The Social Security Act authorizes us 
to regulate this area and no improvements in the survey process can be 
made without underlying regulatory authority.


The Health Care Financing Administration has already met with a variety 
of provider and consumer representatives to discuss the development of 
revised standards. Representatives of consumers, providers and States 
participated in this effort. Additional consultations are ongoing and 
will continue during the development of the regulation.


Alternatives:


Congress has mandated the implementation of an outcome-oriented quality 
assurance system for home health. Therefore, the Medicare home health 
agency conditions of participation must be revised to provide the basis 
for implementation of such a system.


Due to this mandate, no alternatives to this action have been 
considered.


Anticipated Costs and Benefits:


The primary benefit of this rule will be the implementation of a more 
effective, efficient, and patient-centered system of quality assurance 
for HHAs. Costs and benefits associated with the implementation of the 
rule have not yet been estimated, but costs should not be significant.


Risks:


This rule would have the potential for reducing risks to patient health 
and safety. No quantitative estimates are available yet.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           00/00/00
Small Entities Affected:


Businesses, Organizations


Government Levels Affected:


Undetermined


Agency Contact:
Joanne Sinsheimer
Chief, Provider Services Coverage Policy Branch
Department of Health and Human Services
Health Care Financing Administration
Room 401, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-4620
RIN: 0938-AG81
_______________________________________________________________________
HHS--HCFA
53.  END STAGE RENAL DISEASE (ESRD) CONDITIONS OF COVERAGE 
(BPD-818-P)
Legal Authority:


 42 USC 1395rr


CFR Citation:


 42 CFR 405


Legal Deadline:


None


Abstract:


This proposed rule would revise current conditions of coverage for end-
stage renal disease (ESRD) services covered by Medicare. It would 
update the conditions to reflect new developments in technology and 
equipment, address the outcome-oriented standards process, emphasize 
the total patient experience with dialysis and develop performance 
expectations for the facility that result in quality, comprehensive 
care for the dialysis patient.


Statement of Need:


Section 1881(b)(1) of the Social Security Act stipulates that payment 
is made to individuals, providers of services, and renal dialysis 
facilities that meet the requirements for institutional dialysis 
services and supplies that are determined by the Secretary. These 
requirements are the end-stage renal disease (ESRD) conditions of 
coverage.


The ESRD conditions of coverage regulations have not been 
comprehensively revised since the regulation's inception in the late 
1970s. The current regulations are written in an outdated style that 
primarily focuses on process-oriented requirements, which are 
unnecessarily burdensome. They do not provide adequate support for a 
modern survey system based on an outcome-oriented approach. As a 
result, revised regulations must be issued to bring the ESRD coverage 
conditions up to current standards of practice in the ESRD community. 
The revised regulations must reflect new developments in technology and 
equipment, as well as address the outcome-oriented standards process.


The regulations need to be revised to reflect the innovations in the 
dialysis and transplant community. The purpose of revising the 
regulations is to focus on the patient and the results of the care 
provided to the patient. Thus, the emphasis should be on the total 
patient experience with dialysis and quality improvement. The revised 
regulations should focus on patient- centered, outcome-oriented 
standards where appropriate. In addition, they should emphasize patient 
functional well-being and indicate continuous quality improvement. 
Patient rights and satisfaction will also be key areas in the 
regulation. The revised regulations would develop performance 
expectations for the facility that would result in quality, 
comprehensive care for the dialysis patient.


The Health Care Financing Administration held an industry meeting to 
discuss the focus of the conditions of coverage revision. Additional 
discussions with the ESRD community will occur during the regulations 
process.


Alternatives:


In the past, HCFA has revised portions of the ESRD regulations. 
However, it was determined that a complete and thorough revision would 
be a more effective mechanism for developing a comprehensive approach 
to quality care for the dialysis patient. In addition, this approach 
provides the regulation with greater potential for future application. 
Another option is to update the current regulations and maintain the 
process-oriented standards without developing an outcome-oriented 
approach. However, we believe it is important now to move forward with 
the outcome-oriented approach.


Anticipated Costs and Benefits:


The purpose of this final rule is to ensure that ESRD beneficiaries are 
receiving quality care in both the areas of dialysis and 
transplantation. We believe that this regulation is a necessary step to 
ensure that all facilities are using the most effective technology and 
equipment. The primary benefit of updating the conditions of coverage 
is the development of performance expectations for the facility that 
will result in the comprehensive, integrated care and outcomes the 
patient needs and wants. As a result, the beneficiaries will receive an 
improved quality of care. In addition, the revised regulations will 
address the issue of adequacy of dialysis, and this would have a 
significant impact on ensuring that patients are not being 
underdialyzed.


Items that have the potential to affect the cost of the ESRD program 
include data gathering and infection control. However, at this time the 
cost or savings to the Medicare program are speculative.


Risks:


If the ESRD regulations are not updated, the regulations will not 
reflect new developments in technology and equipment. There are new 
issues that need to be addressed, such as adequacy of dialysis, to 
ensure that the Medicare beneficiary is receiving the highest quality 
of care possible.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           00/00/00
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
Lynn Merritt-Nixon
Office of Coverage and Eligibility Policy
Department of Health and Human Services
Health Care Financing Administration
Room 401, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-4652
RIN: 0938-AG82
_______________________________________________________________________
HHS--HCFA
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
54. PROHIBITION ON UNBUNDLING OF HOSPITAL OUTPATIENT SERVICES (BPD-426-
F)
Legal Authority:


 42 USC 1395y(a)(14); 42 USC 1395cc(a)(1)(H); 42 USC 1395cc(g); 42 USC 
1395x(w)(1)


CFR Citation:


 42 CFR 405; 42 CFR 409; 42 CFR 410; 42 CFR 411; 42 CFR 412; 42 CFR 
489; 42 CFR 1003


Legal Deadline:


None


Abstract:


These regulations will implement sections 9343(c)(1), (c)(2), and 
(c)(3) of OBRA '86, as amended by section 4157 of OBRA '90. This rule, 
issued jointly by HCFA and OIG, will prohibit Medicare payment for most 
nonphysician services furnished to a hospital outpatient by a provider 
or supplier other than the hospital, unless the services are furnished 
under an arrangement with the hospital. The hospital will be obligated 
by its provider agreement to furnish the services directly or under an 
arrangement. These regulations will also authorize OIG to impose a 
civil money penalty, not to exceed $2,000, against any individual who 
knowingly and willfully presents, or causes to be presented, a bill or 
request for payment for a hospital outpatient service under Part B of 
Medicare in violation of an arrangement.


Statement of Need:


The planned final regulations will prohibit Medicare payment for 
nonphysician services furnished to a hospital outpatient by a provider 
or supplier other than the hospital, unless the services are furnished 
under an arrangement with the hospital. The hospital will be obligated 
by its provider agreement to ``bundle'' the services, that is, to 
furnish the services directly or under an arrangement. The rule will 
also authorize the Office of Inspector General to impose a civil money 
penalty, not to exceed $2000, for violations of the requirement for 
billing in accordance with their provisions.


The regulations are needed to implement section 9343(c) of OBRA '86, 
section 4085(i)(7) of OBRA '87, and section 4157 of OBRA '90. They also 
will establish or help to formalize the referral relationships needed 
for the implementation of any prospective payment system for outpatient 
hospital services.


Alternatives:


Alternatives include bundling only those services that are furnished at 
the hospital to hospital outpatients, not services ordered during or as 
a result of an encounter at the hospital but provided elsewhere. This 
approach does not account for certain services (such as computerized 
tomography (CT) scans or magnetic resonance imaging (MRI) procedures 
available only outside the hospital) that are furnished as a direct 
result of the hospital outpatient visit and are integrally linked to 
the visit. Excluding those services from bundling could create an 
artificial financial incentive to hospitals to have the services 
furnished offsite.


We also considered rebundling all services, whether or not furnished on 
site, that are required for the diagnosis and treatment of the medical 
condition for which the patient sought outpatient care from the 
hospital. However, we do not now have the information needed to 
identify the services reliably. Therefore, we also rejected this 
approach in developing the proposal and also did not adopt it in the 
final rule.


Another alternative would be to exclude off-site tests for which 
results are not sent back to the hospital for analysis, and durable 
medical equipment (DME) delivered while the patient is at the hospital 
from the requirement. (DME delivered in other settings would not be 
affected by the requirement, even if it was ordered during an encounter 
at the hospital.) However, there are concerns that the first exclusion 
could create an artificial incentive to redirect test results, while 
the second is not supported by the statutory provisions.


Anticipated Costs and Benefits:


We do not have quantified estimates of the costs and benefits of the 
regulation, since they will depend greatly on many individual 
hospitals' decisions on whether to provide a bundled service directly 
or arrange for its provision. In general, we expect the highest level 
of cost to be incurred in the first year of hospital compliance, as 
hospitals and suppliers develop contracts to formalize their existing 
referral arrangements. Some costs will also be incurred for later 
years, since hospitals will be required to bill for services that 
previously were billed directly to Medicare patients. On the other 
hand, Medicare patients should benefit from consolidated billing for 
services, since it will be easier for them to understand what services 
were provided and what benefits were paid on their behalf. Since 
``bundling'' under these regulations does not require a single payment 
for each encounter, but only that all billings come through the 
hospital, there should be minimal changes required to existing hospital 
systems.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            53 FR 29486                                    08/05/88
NPRM Comment Per53 FR 29486                                    10/04/88
Final Action                                                   03/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


None


Agency Contact:
George Morey
Health Insurance Specialist
Div. of Provider Services Coverage Policy
Department of Health and Human Services
Health Care Financing Administration
Rm. 401 EHR
6325 Security Blvd.
Baltimore, MD 21207
410 966-4653
RIN: 0938-AD33
_______________________________________________________________________
HHS--HCFA
55. SURVEY AND CERTIFICATION OF SKILLED NURSING FACILITIES AND NURSING 
FACILITIES AND ENFORCEMENT PROCEDURES (HSQ-156-F)
Legal Authority:


 42 USC 1395aa; 42 USC 1395i-3(g); 42 USC 1396r(g)


CFR Citation:


 42 CFR 488; 42 CFR 431; 42 CFR 442; 42 CFR 489


Legal Deadline:


 Final, Statutory, January 1, 1988.


Abstract:


This rule will implement sections 4202, 4203, 4212, and 4213 of OBRA 
'87 (PL 100-203) which govern the process used by HCFA to survey long-
term care facilities, and to certify that the facilities meet the 
participation requirements for the Medicare and Medicaid programs. The 
rule would also specify a number of sanctions or remedies that could be 
used when a skilled nursing facility or nursing facility is out of 
compliance with Federal requirements as an alternative to or in 
addition to termination.


Statement of Need:


The nursing home reform provisions (sections 4203 and 4213) of OBRA '87 
expanded the alternatives to termination available to the Secretary and 
the States for skilled nursing facilities and nursing facilities out of 
compliance with program requirements. The new remedies can include 
temporary management, civil money penalties, denial of payment 
(different from that established by OBRA '80), emergency closure and 
transfer of residents, directed plans of correction, and any other 
sanctions that can be shown to be as effective in deterring 
noncompliance as those listed above.


Section 1902(a)(33)(B) of the Social Security Act, which existed prior 
to OBRA '87, is also relevant to the regulation under development. This 
statutory provision not only gave the States the authority to survey 
and certify facilities against Medicaid requirements, but also gave the 
Secretary authority to validate State determinations and make 
independent and binding determinations concerning the extent to which 
individual institutions and agencies meet the requirements for 
participation. OBRA '87 revised this validation authority of the 
Secretary for Medicaid-only facilities in the newly created section 
1919 of the Act, and gave the Secretary the authority to reduce 
administrative costs for substandard survey and certification 
performance by the State. Current regulations reflect preexisting 
statutory provisions, and regulatory change is needed to implement OBRA 
'87.


Sections 1395i-3(h) and 1396r(h) of title 42 of the U.S. Code require 
the Secretary to specify criteria as to when and how each of the 
remedies is to be applied, the amounts of any fines, and the severity 
of each of these remedies.


A study by the National Academy of Sciences' Institute of Medicine 
(IoM) on nursing homes focused on the chronic problem of nursing homes 
that fail to comply with Federal requirements. The IoM study found that 
many substandard nursing facilities could easily avoid termination if 
they came into compliance long enough to be recertified, but that these 
facilities had no commitment to sustain compliance. Therefore, the IoM 
study recommended that we implement a range of intermediate remedies to 
deter violations.


Alternatives:


This regulation will implement statutory requirements and represent the 
agency's interpretation of those requirements and the analysis of 
approximately 28,000 public comments. A range of alternatives to 
improve enforcement or make it more cost-effective are being 
considered.


Anticipated Costs and Benefits:


We expect that the implementation of these regulations will have the 
benefit of motivating previously noncompliant facilities to come into 
compliance with Federal participation requirements. The rule will 
establish compliance incentives by providing the policy for the 
imposition of numerous enforcement sanctions in the case of 
noncompliance.


This final rule will set forth a system capable of detecting and 
responding to noncompliance with any participation requirement, and is 
built on the assumption that requirements take on greater or lesser 
significance depending on the resident outcomes as a result of the 
deficient practice. While provider agreement terminations will continue 
to be an enforcement option for any level of noncompliance, alternative 
remedies are designed to motivate providers to comply quickly with the 
participation requirements so that they may continue to provide quality 
services to the residents; as well as to provide incentives for 
facilities to achieve and maintain compliance with health and safety 
standards before termination becomes necessary.


We do not expect any significant financial change in the administrative 
costs of the States. However, new State survey responsibilities may 
result in a reallocation of resources, particularly geared to more 
intensive monitoring of marginal facilities. We expect that while there 
will be incremental costs to States and the Federal Government as a 
result of hearings on terminations and alternative remedies as well as 
costs for negotiating civil money penalties, we do not believe that 
these costs will apply in most cases because of the incentive to 
achieve compliance before adverse actions are taken.


We expect that there will be some costs to facilities and concomitant 
benefits to patients as noncompliance is reduced. These costs and 
benefits were addressed in the regulatory analysis dealing with the 
standards themselves.


Risks:


Although OBRA '87 required States to implement alternative remedies 
under Medicaid, without uniform Federal requirements that cover both 
Medicaid and Medicare certified facilities these substandard conditions 
may continue to occur, thereby jeopardizing the health and safety of 
nursing home residents.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            57 FR 39278                                    08/28/92
NPRM Comment Per57 FR 39278                                    10/27/92
Final Action                                                   10/00/94
Small Entities Affected:


Undetermined


Government Levels Affected:


State, Federal


Agency Contact:
Pam Vocke
Director, Division of Program Operations
Office of Survey and Certification
Department of Health and Human Services
Health Care Financing Administration
Room 2-D-2, ME Building
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-7089
RIN: 0938-AD94
_______________________________________________________________________
HHS--HCFA
56. MEDICARE, MEDICAID, AND CLIA PROGRAMS: REGULATIONS IMPLEMENTING THE 
CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988 (CLIA '88) (HSQ-202-
F)
Legal Authority:


 42 USC 263a


CFR Citation:


 42 CFR 493


Legal Deadline:


None


Abstract:


Historically the Department regulated laboratories by ``location,'' 
rather than by types of tests they perform. CLIA '88 changed this 
approach. CLIA '88 requires that the Department ``regulate by test,'' 
using what is commonly referred to as the ``complexity model.'' A final 
rule with comment period was published February 28, 1992, that set 
forth standards for all laboratories based on complexity and responded 
to public comments on the proposed standards. The regulation was 
revised by a rule with comment period published on January 19, 1993, 56 
FR 5215. The comment period for this rule ended March 22, 1993. A final 
rule, which will respond to public comments on the February 28, 1992, 
rule and the January 19, 1993, rule, will also be issued.


Statement of Need:


On October 31, 1988, the Congress enacted comprehensive changes to 
existing laboratory regulations in CLIA '88. This statute requires the 
regulation of any facility (including physician offices) that performs 
tests on human beings for the purpose of providing information for the 
diagnosis, prevention, or treatment of any disease or impairment of, or 
the assessment of the health of, human beings. Historically, the 
Department had regulated laboratories by ``location,'' rather than by 
the types of tests they performed. In addition, CLIA '88 requires that 
the Department regulate by test, using what is commonly referred to as 
the ``complexity model'' to categorize individual laboratory tests 
based on the experience, skills, and judgment required to perform each 
test accurately. Requirements vary as a function of the complexity of 
the tests the laboratory conducts.


The law requires the Secretary to implement the numerous provisions 
through regulation to ensure the quality of laboratory testing, 
regardless of where it is provided or who is providing the testing. The 
law also requires the CLIA '88 program be operated through the 
assessment of user fees paid by entities subject to these requirements.


On May 21, 1990, the Department published proposed rules to implement 
CLIA '88 and received over 60,000 public comments. Based on an analysis 
of these comments, HCFA and the Public Health Service (PHS) developed a 
final rule with comment period that set forth standards for all 
entities performing laboratory testing based on test complexity. This 
rule was published on February 28, 1992, and was effective September 1, 
1992. This regulation was revised by a notice with comment period 
published on January 19, 1993.


Issues that will be addressed in the final rule include personnel 
standards, especially for rural laboratories; possible revisions to 
cytology; proficiency testing requirements; employee workplace drug 
testing; and other issues raised by commenters and early experience 
with implementation.


The Clinical Laboratory Improvement Advisory Committee (CLIAC), which 
is composed of members of professional organizations and private 
citizens, is actively involved in making recommendations regarding 
technical and scientific aspects of the regulations. In addition, we 
actively solicit comments from outside organizations such as the 
American Medical Association, the Association of State and Territorial 
Public Health Laboratory Directors, and other professional and medical 
organizations regarding the interpretive guidelines for surveyors and 
the content and design of the forms required to gather information 
necessary for the implementation of the regulations.


Alternatives:


HCFA and PHS are currently analyzing over 16,000 comments received on 
the final rule with comment period published February 28, 1992, and 
1,100 comments received in response to the January 19,1993, notice with 
comment period. As an interim measure, consideration is being given to 
publishing separate rules to address specific concerns that would 
otherwise be included in this final omnibus rule. The separate rule 
would be published prior to the omnibus rule.


A wide range of modifications to improve the cost-effectiveness of the 
CLIA '88 standards is under consideration.


Anticipated Costs and Benefits:


Since the content of the separate rule has not been determined, it is 
not possible to project costs and benefits of the omnibus rule at this 
time. However, it is possible to provide some examples of the types of 
costs and benefits of this rule. One example of a benefit involves 
decreased costs of providing unnecessary medical services when a 
laboratory providing Pap smear testing decreases its rate of false 
positive results. Conversely, there will be decreased medical costs due 
to treatment of an advanced stage of cervical cancer when a laboratory 
providing Pap smear testing decreases its rate of false negative 
results.


An example of the type of costs that could be associated with this rule 
is the added cost of testing, especially in medically underserved 
areas, when a laboratory decides to close, either due to failing to 
meet the requirements or the perception that it is too costly to 
continue testing. Patients would have to go to another laboratory that 
may be further away, or may cost more for the test to be performed. 
Also, the law requires the affected entities to pay user fees to 
support the program.


These regulations serve to ensure consistent, reliable laboratory 
testing which is an integral part of ensuring that individuals receive 
appropriate treatment.


Risks:


Inferior and inappropriate laboratory testing can result in 
misdiagnosis causing patient harm. CLIA reduces the potential for 
inaccurate diagnosis resulting from poorly performed laboratory testing 
since entities must meet requirements (e.g., quality assurance, 
proficiency testing, quality control, personnel requirements) which 
have a direct impact on laboratory testing results. Overly stringent 
standards could, however, discourage needed testing and reduce early 
detection of health problems. The Department does not at this time have 
an estimate of the magnitude and severity of these types of risks, but 
believes that both the original regulation and the revisions will on 
balance contribute to better diagnosis.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            55 FR 20896                                    05/21/90
NPRM Comment Per55 FR 34289                                    09/21/90
Final Rule With 57 FR 7002riod                                 02/28/92
Public Comment P57 FR 7002                                     04/28/92
Effective Date  57 FR 7002                                     09/01/92
Effective Date  58 FR 5215                                     01/19/93
Final Rule With 58 FR 5215riod                                 01/19/93
Comment Period E58 FR 6215                                     03/22/93
Final Action                                                   07/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


State, Federal


Agency Contact:
Anthony J. Tirone
Director, Office of Survey and Certification, HSQB
Department of Health and Human Services
Health Care Financing Administration
6325 Security Boulevard
2-D-2 ME
Baltimore, Maryland 21207
410 966-6763
RIN: 0938-AE47
_______________________________________________________________________
HHS--HCFA
57. EARLY AND PERIODIC SCREENING, DIAGNOSTIC, AND TREATMENT (EPSDT) 
SERVICES (MB-28-F)
Legal Authority:


 42 USC 1396a(a)(43); 42 USC 1396d(r)


CFR Citation:


 42 CFR 441.50; 42 CFR 440.40


Legal Deadline:


None


Abstract:


Section 6403 of OBRA '89 defines in new section 1905(r) of the Social 
Security Act the following EPSDT services: screening services, vision 
services, dental services and hearing services. It also extends EPSDT 
services to include such other necessary health care, diagnostic 
services, treatment, and other measures described in section 1905(a) of 
the Act to correct or ameliorate defects and illnesses and conditions 
discovered by the screening services whether or not the services are 
covered under the State plan. Section 6403 also amended section 
1902(a)(43) of the Act to require States to report to the Secretary 
certain information about EPSDT services provided under the plan during 
each fiscal year. This rule would set forth requirements to implement 
these statutory provisions.


Statement of Need:


Section 6403 of OBRA '89 added subsection (r) to section 1905 of the 
Social Security Act (Act) concerning early periodic screening, 
diagnostic, and treatment (EPSDT) services. The subsection incorporated 
into statute provisions that already existed in Medicaid regulations on 
minimum components of EPSDT services provided to most groups of 
Medicaid recipients under age 21. However, OBRA '89 also (1) modified 
the definition of screening services by including appropriate blood 
lead-level testing and health education; (2) required distinct 
periodicity schedules for screening, dental, vision, and hearing 
services and required additional interperiodic screening services as 
medically necessary; (3) added a new required services component for 
other necessary health-care, diagnostic, treatment, and other measures 
enumerated in section 1905(a) of the Act to correct or ameliorate 
defects and physical and mental illnesses and conditions discovered by 
screening services, whether or not such services are covered under the 
State Medicaid plan; (4) provided that nothing in Federal Medicaid law 
permits limiting EPSDT providers to those that can furnish all required 
EPSDT diagnostic and treatment services or preventing providers 
qualified to furnish only one such service from program participation; 
and, (5) required the Secretary to develop by July 1, 1990, and every 
12 months thereafter, EPSDT participation goals for each State. Section 
6403 of the OBRA '89 also amended section 1902(a)(43) of the Act to 
require States to report annually to the Secretary (by age and basis of 
eligibility) on the number of children receiving screening services, 
the number referred for followup treatment, the number receiving dental 
services, and results in attaining EPSDT participation goals. The OBRA 
'89 changes became effective April 1, 1990.


The requirements discussed above must be incorporated into regulations 
so that existing regulatory requirements will be consistent with the 
statutory criteria.


Criteria for meeting requirements have been developed by HCFA and 
presented formally for public comment in the notice of proposed 
rulemaking. HCFA is considering issues raised by the public comments as 
we prepare the final rule.


In the absence of final regulations, States are permitted to apply any 
reasonable interpretation of these complex statutory requirements. It 
follows that individual States may interpret and apply the statutory 
provisions inconsistently with the Federal interpretation, which could 
result in children being denied access to necessary health services.


Anticipated Costs and Benefits:


We estimate that total Federal/State costs and all transfer payments of 
the OBRA '89 changes were about $465 million in fiscal year 1992 and 
$525 million in fiscal year 1993; and will be $595 in fiscal year 1994 
and $685 million in fiscal year 1995. These figures reflect the 
estimate of Medicaid costs attributable to expansion of services.


With respect to benefits, the importance of EPSDT has been underscored 
by various studies that have documented the effectiveness of EPSDT in 
reducing medical costs, limiting hospital admissions and emergency room 
services, enhancing access to care, and improving the health status of 
participating children.


These regulations will not substantially alter either the costs or the 
benefits already being realized through expanded access to services.


Risks:


Not applicable. However, as indicated above these additional services 
will contribute to improved health status of children.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            58 FR 51288                                    10/01/93
NPRM Comment Per58 FR 51288                                    11/30/93
Final Action                                                   05/00/95
Small Entities Affected:


Undetermined


Government Levels Affected:


State, Local


Agency Contact:
Robert Wardwell
Director
Division of Coverage Policy
Department of Health and Human Services
Health Care Financing Administration
Room 400, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-5659
RIN: 0938-AE72
_______________________________________________________________________
HHS--HCFA
58. PHYSICIAN OWNERSHIP OF AND REFERRALS TO HEALTH CARE FACILITIES THAT 
FURNISH CLINICAL LABORATORY SERVICES AND FINANCIAL RELATIONSHIP 
REPORTING REQUIREMENTS (BPD-674-FC)
Legal Authority:


 42 USC 1395nn


CFR Citation:


 42 CFR 411


Legal Deadline:


 Final, Statutory, October 1, 1991.


Abstract:


This rule will incorporate into regulations the provisions of section 
6204 of OBRA '89 as amended by section 4207(e) of OBRA '90 and to some 
extent, as amended by section 13562 of OBRA '93. It will prohibit a 
physician from making a referral for the provision of clinical 
laboratory services to an entity with which the physician, or an 
immediate family member of the physician, has a financial relationship.


Statement of Need:


A final rule with comment period is being developed to implement the 
statutory prohibition against patient referrals by physician to 
entities that furnish clinical laboratory services when the physician 
has a financial relationship with such laboratory entities. These 
regulations will address the concern that financial relationships 
involve an inherent potential for conflict of interest resulting in 
unnecessary services for Medicare patients and unnecessary costs to the 
Medicare program.


OBRA '89 amended the Social Security Act (Act) by adding a new section 
1877, ``Limitations on Certain Physician Referrals.'' Section 1877 was 
further amended by section 4207 of OBRA '90 and section 13562 of OBRA 
'93. Some of the new provisions are effective as if they were included 
in OBRA '90. With certain exceptions, section 1877 prohibits a 
physician from making a referral to an entity for the furnishing of 
designated health services for which Medicare would otherwise pay, if 
the physician or a member of the physician's immediate family has a 
financial relationship with that entity. The provision further 
prohibits an entity from presenting or causing to be presented a 
Medicare claim or bill to any individual, third party payor, or other 
entity for designated health services furnished pursuant to a 
prohibited referral.


Although section 1877 was expanded by OBRA '93 to apply to referrals 
for designated health services, this final regulation will address only 
the provisions related to clinical laboratory services that have a 
January 1, 1992, effective date. The expanded provisions are being 
addressed in a separate rulemaking proceeding. (See Physicians' 
Referrals to Health Care Entities With Which They Have Financial 
Relationships--Expanded to Designated Health Services (BPD-809-P; 
Regulatory Plan entry 0938-AG80 in the Proposed Rule Stage.)


This regulation is necessary to address the many aspects of section 
1877 of the Act. Specifically, we will address when and how a physician 
has a financial relationship with an entity performing clinical 
laboratory services. Financial relationships can be through ownership/
investment interests or compensation relationships. This regulation 
will also define key terms found in the statute, such as fair market 
value, immediate family member, remuneration, group practice, and 
referral/referring physician.


Alternatives:


We are considering the requests made during the proposed rule comment 
period for the Secretary to approve additional exceptions.


Anticipated Costs and Benefits:


This final rule is meant to help eliminate certain financial incentives 
for physicians to order unnecessary and often costly laboratory tests. 
A recent report from the Office of the Inspector General to Congress 
estimated that at least 25 percent of the nearly 4,500 independent 
clinical laboratories are owned in whole or in part by referring 
physicians. We believe most physicians and laboratories have taken 
necessary steps to ensure that their activities are not prohibited by 
provisions of this rule. Savings are unlikely to be substantial and any 
estimate of savings would be purely speculative.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            57 FR 8588                                     03/11/92
NPRM Comment Per57 FR 8588                                     05/11/92
Final Action                                                   02/00/95
Small Entities Affected:


Businesses, Organizations


Government Levels Affected:


None


Agency Contact:
Betty Burrier
Program Analyst
Medical Services Branch
Department of Health and Human Services
Health Care Financing Administration
Room 401, EHR
6325 Security Boulevard
Baltimore, Maryland 21207
410 966-4649
RIN: 0938-AF40
_______________________________________________________________________
HHS--HCFA
59. MEDICARE AND MEDICAID PROGRAMS: REQUIREMENTS FOR PHYSICIAN 
INCENTIVE PLANS IN PREPAID HEALTH CARE ORGANIZATIONS (OMC-010-F)
Legal Authority:


 42 USC 1395mm(i); 42 USC 1396b


CFR Citation:


 42 CFR 417.01; 42 CFR 417.409; 42 CFR 417.495; 42 CFR 434.67; 42 CFR 
1003.100; 42 CFR 1003.101; 42 CFR 1003.102; 42 CFR 1003.103


Legal Deadline:


None


Abstract:


This rule would amend the regulations governing federally qualified 
health maintenance organizations (HMOs) and competitive medical plans 
(CMPs) contracting with the Medicare program, and certain HMOs and 
health insuring organizations (HIOs) contracting with States under the 
Medicaid program, by implementing changes made by sections 4204(a) and 
4731(a) of OBRA '90 concerning physician incentive plans. The changes 
are intended to allow HMOs, CMPs, and HIOs the flexibility to provide 
reasonable financial incentives to their physicians and physician 
groups in order to eliminate unnecessary care and protect enrollees 
from reduced quality of care or access to care.


Statement of Need:


Sections 4204(a) and 4731(a) of OBRA '90 require the Secretary to 
develop regulations for physician incentive plans. The managed-care 
industry has made great use of these incentive plans to control the use 
of unnecessary services. However, Congress developed this provision 
because of concerns that the incentive plans could lead to underuse of 
necessary medical services. Indeed, there is great concern about the 
potential use of incentive plans to restrict medically necessary care 
to patients.


In the proposed rule, we indicated that the provisions would apply to 
Medicare and Medicaid prepaid contracts, but not to commercial 
contracts by federally qualified HMOs regulated under section 1833 of 
the Social Security Act. The OBRA'90 provisions require prepaid plans 
to disclose their physician incentive arrangements to HCFA or to a 
State Medicaid agency. The Secretary will then determine whether the 
incentive plan places contracting physician groups at substantial 
financial risk. If the managed care organization's incentives are found 
to place contracting physicians at substantial risk, then the 
organization will be required to conduct annual beneficiary surveys and 
establish adequate stop-loss protection.


The final rule is intended to allow health maintenance organizations, 
and health insuring organizations contracting with States under the 
Medicaid program, the flexibility to provide reasonable financial 
incentives to their physicians and physician groups in order to 
eliminate unnecessary care and protect enrollees from reduced quality 
of care or access to care.


Alternatives:


In the proposed rule, we developed an outlier threshold approach to 
define substantial financial risk. We examined the distribution of 
withholds across the industry and determined that the threshold would 
be the value that exceeded the average withhold. We then proposed 
aggregate stop-loss requirements consistent with the threshold levels 
for substantial financial risk.


We considered alternative approaches to the development of substantial 
financial risk, including use of a median withhold, and assessment of 
various risk factors. In determining adequate stop-loss protection, we 
considered both aggregate and per-patient stop-loss limits.


Anticipated Costs and Benefits:


We anticipate that most prepaid plans are already, or will have no 
difficulty complying with, the final rules and we do not expect any 
significant associated costs. These rules will protect beneficiaries by 
ensuring that all necessary services are available and accessible 
without regard to the physician's financial considerations.


Risks:


If these final regulations are not published, beneficiaries are at risk 
of not receiving necessary services.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            57 FR 59024                                    12/14/92
Public Comment P58 FR 8568                                     04/13/93
Final Action                                                   01/00/95
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
Tony Hausner
Program Analyst
Office of Managed Care
Department of Health and Human Services
Health Care Financing Administration
Room 4360 Cohen Building
330 Independence Avenue SW.
Washington, DC 20201
202 619-2755
RIN: 0938-AF74
_______________________________________________________________________
HHS--HCFA
60. REVISIONS TO GEOGRAPHIC PRACTICE COST INDICES, PAYMENT POLICIES AND 
ADJUSTMENTS TO THE RELATIVE VALUE UNITS UNDER THE PHYSICIAN FEE 
SCHEDULE FOR CY 1995 (BPD-789-FC)
Legal Authority:


 42 USC 1395w-4


CFR Citation:


 42 CFR 414


Legal Deadline:


 Final, Statutory, January 1, 1995.


Abstract:


This rule discusses changes to the geographic practice cost indices, 
fee schedule payment areas, revisions to payment policies for specific 
physician services and adjustments to the relative value units. It also 
discusses the implementation of the OBRA '93 provisions regarding 
payment for antigens, which places antigens under the physician fee 
schedule and subjects them to charge limits.


Statement of Need:


OBRA '89 transformed the Medicare physician payment system from a 
reasonable charge system with wide variations among specialties and 
geographic areas to a fee schedule based on national relative value 
units (RVUs). The fee schedule was first implemented in 1992. This 
document will announce the RVUs upon which Medicare payment for 
physician services will be based in 1995, including interim RVUs for 
procedure codes that are new or revised for 1995. The public is given a 
60-day period to comment on the interim values. It will also explain 
the process by which interim 1994 RVUs were reviewed and, in some 
cases, revised as a result of public comments.


We are also announcing revisions to the geographic adjustment factor 
(GAF) values. The GAF is equal to a weighted average of the three 
geographic practice cost indexes (GPCI). These indices reflect 
justifiable differences in the costs of providing physicians' services 
among the fee schedule payment localities. The revised GPCIs are based 
on more recent and comprehensive data than those used to establish the 
initial indices. This notice also converts the multiple payment 
localities for Iowa into a single, statewide locality.


After two full years of experience with the physician fee schedule, we 
have reevaluated several payment policies related to the fee schedule. 
Proposed revisions to these policies were announced in a notice of 
proposed rulemaking on June 24, 1994. This final rule will respond to 
the public comments received on those proposals and announces the final 
policy decisions. Thus, it will discuss separate payment for care plan 
oversight of Medicare home health beneficiaries and an increase in the 
payment amount for certain multiple surgical procedures performed on 
the same day. This rule will also announce a final decision on the 
proposal to include clinical laboratory services performed in hospital 
outpatient settings in the Medicare Volume Performance Standards in 
fiscal year 1996. Finally, the rule will discuss inclusion of two 
additional types of service in the physician fee schedule: antigens, as 
provided for by OBRA 1993, and the monthly capitation payment for end-
stage renal disease patients.


This document also discusses the process for periodic review and 
adjustment of all RVUs. In this regard, we have and will continue to 
work with the physician community through the American Medical 
Association Relative Value Update Committee.


The legal basis for updating the RVUs is found in Section 1848(c) of 
the Social Security Act (Act), which requires the Secretary to 
establish GPCIs and to review those GPCIs at least every 3 years. 
Section 1848(c)(4) provides that the Secretary may establish ancillary 
policies for payment for physician services.


The rule will amend the following sections of title 42 of the Code of 
Federal Regulations: 414.2 to include antigens in the definition of 
physicians' services; 414.4 to recognize a statewide fee schedule area 
for Iowa; and 414.314 to provide for determination of the payment 
amount for the monthly capitation payment under the physician fee 
schedule. This regulation adds section 414.39 to describe special rules 
for payment of physician care plan oversight services.


Alternatives:


An alternative to this notice would be to continue to base payments on 
1994 RVUs. This would continue inappropriate payments for certain 
services and would not allow a national basis for paying for new 
services. By not revising the GPCIs or the payment policies described 
in this notice, we would continue inadequate or inequitable payments 
for certain physician services or fee schedule areas.


Anticipated Costs and Benefits:


These regulations affect mainly the amount paid by the Government to 
physicians for services they perform for Medicare beneficiaries. The 
regulations do not affect the level or type of real economic costs of 
goods and services.


Section 1848(c)(2)(B) of the Social Security Act requires that 
adjustments to RVUs for a year may not cause the amount of expenditures 
to differ by more than $20 million from the amount of expenditures if 
the adjustments had not been made. In general, the payment policies and 
other revisions included in this notice will be implemented in a 
budget-neutral manner. Thus, total Medicare expenditures will not be 
increased or decreased as a result of most of these changes. In order 
to maintain budget neutrality, we estimate the cost of these revisions 
and adjust the RVUs for all services.


The inclusion of clinical laboratory services performed in hospital 
outpatient settings in the MVPS for 1996 would result in estimated 
budgetary savings of $25 million in fiscal year 1998, $75 million in 
fiscal year 1999, and $125 million in fiscal year 2000.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 32754                                    06/24/94
NPRM Comment Per59 FR 32754                                    08/24/94
Final Action                                                   10/00/94
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
Elizabeth Holland
Health Insurance Specialist
Office of Payment Policy, BPD
Department of Health and Human Services
Health Care Financing Administration
1-H-5, ELR Building
6325 Security Boulevard
Baltimore, Maryland
410 966-1309
RIN: 0938-AG52
_______________________________________________________________________
HHS--HCFA
61. MEDICAID PROGRAM: FEES FOR VACCINE ADMINISTRATION UNDER PEDIATRIC 
IMMUNIZATION PROGRAM (MB-084-NC)
Legal Authority:


 PL 103-66, sec 13631; 42 USC 1396a(a)(62); 42 USC 1396s


CFR Citation:


 None


Legal Deadline:


 Final, Statutory, October 1, 1994.


Abstract:


This notice with comment period establishes a regional maximum fee that 
a Medicaid provider may charge for the administration of qualified 
pediatric vaccines under the Medicaid Pediatric Immunization Program. 
It also specifies the methodology used to develop this maximum fee and 
allows a State to pay a rate lower than the maximum fee if the State 
can ensure federally vaccine-eligible children adequate access to the 
vaccines at the lower rate. This notice implements section 
1928(c)(2)(C)(ii) of the Social Security Act, as added by section 13631 
of OBRA '93.


Statement of Need:


OBRA '93 created the Pediatric Immunization Program, which went into 
effect as of October 1, 1994. While the program is designed to provide 
vaccines at no cost to the provider for a federally eligible child, 
section 1928(c)(2)(C)(ii) of the Social Security Act specifies that a 
provider may impose a fee for the administration of a vaccine. The fee 
cannot exceed the provider's cost of administration as determined by 
the Secretary based on actual regional costs for such administration.


HCFA has just published a public notice with comment period. The public 
notice sets forth the maximum fees for administration of vaccines and 
will discuss related issues. In addition, it includes methodologies for 
documenting access to immunizations.


Without this notice, providers would not know the maximum charge 
allowed for the administration of vaccines and could decide not to 
participate in the program, which would deny needy children access to 
immunizations; thereby risking exposure to preventable disease.


Anticipated Costs and Benefits:


Projected costs are not available at this time. Information on how many 
program-eligible providers will elect to administer the vaccine and how 
many States will be able to demonstrate equal access with lower fees is 
not available at this time. There are potential costs associated with 
the notice if States cannot or do not elect to demonstrate equal access 
in order to set lower fees.


Under the Medicaid program, most States currently pay lower fees for 
vaccine administration than the proposed maximum amounts under the 
Vaccines for Children program, and there is no requirement that they 
pay at the maximum rate.


These potential costs could be offset if States elect to set lower 
fees. Medicaid vaccines are currently covered under the obstetric and 
pediatric access care requirements. It is difficult to estimate how 
much, if any, increase in fees would be attributable to this notice as 
opposed to the obstetric-pediatric access requirement.


The benefits are to successfully carry out the intent of the Pediatric 
Immunization Program, thereby raising immunization rates and reducing 
morbidity from contagious childhood diseases.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Effective Date  59 FR 50235                                    10/01/94
Notice With Comm59 FR 50235                                    10/03/94
Final Action                                                   00/00/00
Small Entities Affected:


Governmental Jurisdictions


Government Levels Affected:


State


Agency Contact:
Marge Sciulli
Health Insurance Specialist
Medicaid Bureau
Department of Health and Human Services
Health Care Financing Administration
Room 349, EHR
6325 Security Blvd.
Baltimore, MD 21207
410 966-4513
RIN: 0938-AG77
_______________________________________________________________________
HHS--Administration for Children and Families (ACF)
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
62.  AUTOMOBILE RESOURCE LIMIT
Legal Authority:


 42 USC 301; 42 USC 602; 42 USC 606; 42 USC 607; 42 USC 1202; 42 USC 
1302; 42 USC 1352; 42 USC 1382


CFR Citation:


 45 CFR 233


Legal Deadline:


None


Abstract:


This proposed regulation would increase the automobile resource limit 
to a $3,500 equity limit from the current $1,500 automobile maximum 
resource limit. The change is proposed as a first step toward bringing 
conformity between the AFDC and Food Stamp program's automobile 
resource limit. It is intended to eliminate some of the administrative 
complexity involved with valuing vehicles under varying criteria and 
would result in greater effectiveness and efficiency in administration 
of both programs.


Statement of Need:


These regulations are proposed in order to make timely reforms that 
will simplify and streamline the AFDC program. They are designed to 
achieve consistency in the administration and operation of the AFDC and 
Food Stamp programs, and are part of the welfare reform initiative.


We are proposing to amend existing regulations to increase the 
automobile limit to an equity value that is compatible with the current 
Food Stamp fair market value (FMV) limit with the goal of assuring that 
a vehicle will meet the requirements of both programs.


Also in keeping with our over-arching goal of improving government 
assistance, we are working on revised regulations to increase State 
administrative flexibility.


In developing these regulations, we have had numerous discussions and 
meetings with Department of Agriculture staff, as well as with 
representatives from a wide variety of advocacy groups, NGA, NCSL, and 
APWA.


Anticipated Costs and Benefits:


Estimated actual Federal and State costs are under development. These 
regulations promote program coordination and simplification and will be 
beneficial to States and to recipients. They are designed to achieve 
consistency in the administration and operation of the AFDC and Food 
Stamp programs.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Small Entities Affected:


None


Government Levels Affected:


State, Local, Tribal, Federal


Agency Contact:
Mack A. Storrs
Director, Division of AFDC Program
Office of Family Assistance
Department of Health and Human Services
Administration for Children and Families
370 L'Enfant Promenade SW.
Washington, DC 20447
202 401-9289
RIN: 0970-AB48
_______________________________________________________________________
HHS--ACF
63.  HEAD START INITIATIVE ON FAMILIES WITH INFANTS AND 
TODDLERS
Legal Authority:


 42 USC 9801 et seq


CFR Citation:


 45 CFR 1307


Legal Deadline:


 NPRM, Statutory, December 30, 1994.


Abstract:


This proposed rule will establish a new part 1307 setting forth 
performance standards that must be used in providing Head Start 
services to infants, toddlers and pregnant women. The Head Start Act 
Amendments of 1994 authorize a new program of comprehensive, 
developmental services for low-income families with infants and 
toddlers. The statute requires the Department of Health and Human 
Services to publish performance standards governing the projects to be 
funded under this authority by the end of this calendar year.


Statement of Need:


The Head Start Act Amendments of 1994 authorize a new program of 
comprehensive, developmental services for low-income families with 
infants and toddlers. The statute requires the Department of Health and 
Human Services to publish performance standards governing the projects 
to be funded under this authority by the end of this calendar year.


An advisory committee has been established in keeping with the 
Administration's commitment to consult with program stakeholders and 
customers in advance of promulgating regulations. The first meeting was 
held on July 7th.


Anticipated Costs and Benefits:


Any costs associated with this regulation are the result of legislation 
and therefore are reflected in the President's budget.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Small Entities Affected:


Organizations


Government Levels Affected:


None


Agency Contact:
Douglas Klafehn
Deputy Associate Commissioner
Head Start Bureau
Department of Health and Human Services
Administration for Children and Families
P.O. Box 1182
Washington, DC 20013
202 025-8569
RIN: 0970-AB50
BILLING CODE 4150-04-F